On Wednesday morning, March 27, low-income housing advocate John Fox, the tireless director of the Seattle Displacement Coalition, filed a complaint against the Seattle Housing Authority (SHA). Fox's complaint, filed with the federal Department of Housing and Urban Development Office of Inspector General, claims that the SHA (an estimated $115 million government organization that builds and operates low-income housing in Seattle, largely with HUD dollars) mismanaged its low-income housing voucher program, bilking the federal government and poor people out of nearly $4 million.
Here's the deal: The SHA runs a federal voucher program--the Section 8 Housing Choice Voucher Program--that helps low-income tenants cover their rent. Federal housing programs are based on the idea that people should pay about 30 percent (sometimes 40 percent) of their monthly income on rent. When a poor person's rent exceeds that marker, the SHA voucher program picks up the difference.
For this program, "poor" is defined as someone making about $16,000 a year--or about $23,000 for a family of four. And, of course, there are rent ceilings (called "payment standards") based on average rents, so voucher recipients can't just get a swank pad in Belltown and expect SHA to pick up the difference. However, Fox claims that the SHA was misusing the payment standard guideline to hoard cash.
According to Fox's complaint, the SHA--which administers the voucher program for over 3,000 recipients--was not picking up the difference for the majority of its voucher recipients, forcing low-income tenants to pay an average 42.5 percent of their monthly income, and sometimes up to 60 percent, on rent. SHA didn't skim funds, Fox asserts, by blatantly withholding payments, but rather by failing to raise the payment standard in concert with Seattle's climbing rents. This lackadaisical approach, Fox says, forced the majority of SHA's vouchers recipients to spend too much of their monthly income on rent. Voucher recipients, you see, have to cough up the difference between the payment standard ceiling and the actual rent.
Fox's complaint states: "If the payment standard is set too low--for example, at $930 a month for a two-bedroom unit in the Seattle area [SHA's 2001 standard for this sized unit]--and these units actually are renting at $1,100 [roughly what tenants actually are paying in many Seattle neighborhoods], then the tenant must pay 30 percent of their income plus the difference between $930 [the payment standard] and $1,100 [what they're actually paying in rent]."
"[SHA] is playing fast and loose with the program," Fox says, "and it has allowed them to withhold $4 million in payouts to voucher recipients who need money to afford housing in Seattle."
The complaint goes on to assert that SHA took the extra cash and invested it--through a state program--in the stock market. Fox points out that SHA's money in the state investment program jumped 190 percent in the past two years.
(SHA spokesperson Virginia Felton says there are a host of factors contributing to the agency's increased investments that have nothing to do with the voucher program--including selling bonds for newly acquired low-income buildings.)
Fox's complaint relies on public records of all 3,000-plus voucher clients, showing how much participants pay in rent; and also on interviews with three dozen Section 8 recipients like Rochelle Johnson, a woman who was forced to move to a low-income neighborhood in the south end of West Seattle, near White Center--where she ended up paying 42 percent of her monthly income on rent.
Johnson's story highlights the philosophical crux of Fox's complaint--the idea that SHA's misuse of the voucher program ushered low-income people into segregated low-income neighborhoods like southern West Seattle.
Indeed, using a five by two-and-a-half foot map of Seattle that plots out all the voucher housing in Seattle with red markers, the complaint literally maps out how the voucher program undermines one of HUD's goals: "deconcentrating poverty" so low-income people aren't ghetto-ized in traditional "projects." Despite SHA's intentions, as Fox's map shows, people like Johnson have simply been rerouted via vouchers back into concentrations of Section 8 housing. "The red dots are stacked like mountains in White Center, Southeast Seattle, and all along [Martin Luther King Jr. Way South]," Fox says.
The connection between SHA's misuse of the voucher program and the "reconcentration" of poverty is this: The SHA is supposed to adjust its voucher payment guidelines when too many clients are spending too much on rent, because it's obviously a signal that the market doesn't have enough apartments priced within the payment standard. (HUD's Section 8 voucher guidelines do state that HUD can force SHA to fix the payment standards when 40 percent of the voucher recipients are spending over 30 percent of their monthly income on rent. Fox, as we already said, found that over 50 percent of SHA's voucher recipients were spending too much on rent.)
Since tenants have to pick up any rental costs that fall above the payment standard, they will smartly choose the lowest priced apartments they can find. Those apartments, obviously, are in poorer neighborhoods and outside of Seattle. In Seattle's poor neighborhoods, those "cheap" apartments can (and often do) top the payment standard. For example, average rents in White Center for a two-bedroom were 13% higher than the SHA's voucher standard in 2001 and 64% higher in Beacon Hill.
SHA spokeswoman Virginia Felton had not seen Fox's complaint at press time, but says her agency actually upped the payment standard in January 2002 to address the very concerns Fox is highlighting. Felton says SHA bumped the payment standard to 110 percent of HUD's recommended market average for everything except studio and one-bedroom apartments. The last time SHA tweaked the payment standard, however, was August 2000.
Ultimately, Fox's complaint relies on the HUD Office of Inspector General's interpretation of the payment standard guidelines that say HUD can (as opposed to must) take action if too many voucher recipients are spending too much on rent. Perhaps the inspector general will be swayed by the testimony of women like Rochelle Johnson, a mom who brought home $3,835 a month only to spend $1,611 on rent.
