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Tenants have heard what the feds want to do with a popular low-income housing subsidy and they like it–for the most part.

In a six-and-a-half hour hearing last Thursday, tenants from New York and Boston commented on the federal Department of Housing and Urban Development’s plan to overhaul its project-based Section 8 program. Under the plan, HUD designs mortgages and rent subsidies to cover the gap between what poor tenants can afford and what landlords need to run their buildings.

In order to slow runaway costs, HUD is going to cut its landlord subsidies under its “mark to market” plan. To keep landlords from raising rents–or defaulting on their mortgages–the agency will give landlords sweeter mortgage deals. The program is supposed to save HUD some $4.6 billion and preserve the Section 8 subsidy.

But the reform also substitutes HUD management with state and local housing agencies. Tenants at Thursday’s hearing worried that they’ll get shut out of key decisions on building maintenance, inspections and rent increases. “We need to be brought in on the ground floor,” said Marie Christopher, tenant association president of a 171-unit building on Stanton Street on the Lower East Side. “It’s vitally important that tenants are able to participate.”

There are 91 buildings in New York City eligible for the restructuring, which could reduce some of the highest rents that private landlords collect from HUD.

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