Priced Out

Not even the federal government can afford to rent in Santa Fe

Continued increases in the cost of housing in Santa Fe and ongoing cuts to funding for federal housing assistance mean authorities here are unable to make full use of a voucher program designed to help the city’s lowest income residents.

Federally funded Section 8 Housing Choice Vouchers can be used to cover the difference between 30 percent of a resident's income and the rent of a market-rate apartment. These vouchers are available for residents who make between 30 percent and 80 percent of the area household median income, set for the city at $49,380 and for the county at $67,800.

"We have 1,200 [vouchers] allocated to us, but we have the actual budget to house somewhere in the neighborhood of 950 units," says Ed Romero, executive director of the Santa Fe Civic Housing Authority. "It doesn't do any good to have a big allocation but no budget to match up to it, but we spend 100 percent of our budget, and that's just kind of where we sit."

That difference arises as the US Department of Housing and Urban Development (HUD) separately sets numbers for vouchers and budgets, and the program has gone underfunded for years. Santa Fe gets a $7 million budget (as of 2015), of which they're able to spend about 99 percent, losing just a small margin to the time that passes between when someone is issued a voucher and when they lock in a suitable rental.

"I guess what they're telling you is that the money that comes from Washington isn't enough to meet the demand," says Brian Sullivan, supervisory public affairs specialist with HUD. "That is true, and it's true everywhere across the country."

The federal government annually sets a fair market rent for housing rented by voucher recipients. The latest numbers for the Santa Fe metro area are $782 for a one-bedroom, $943 for a two-bedroom and $1,252 for a three-bedroom unit. That means based on the data the government has gathered and assessed, 40 percent of the city's apartments should rent at those rates or lower. But that data often lags behind real time, Sullivan says, as HUD has to wait until the end of the year to collect the numbers, analyze them, and open them to public comment before they're finally set. Those numbers can be challenged and adjusted, if local staffs commit time and effort to that task.

The trouble on the Santa Fe County Housing Authority's end cuts the other direction for their roughly 241 housing choice vouchers—they have the funding for all of them, but don't have all of those vouchers leased up.

"Oftentimes, it's very difficult for our clients to find housing, and as a result, we have enough money to house all our vouchers," says Ron Pacheco, executive director of the Public Housing Authority for Santa Fe County Housing Authority. "Now what we're trying to do is house them all up so we use up all that money, because the way HUD works is, if you don't use up all that money, they take it."

Renters have 30 days from the time their voucher is issued to find a rental, and Pacheco says he's constantly issuing extensions as people struggle to find a place that fits their family size and income level and is also in the right price range.

Both the city and county face multiyear waiting lists for the voucher program. The Civic Housing Authority last opened that wait list in 2014, and those on it expect to wait up to three years for a voucher. The county continues to add names to the list but estimates it can take up to five years for an applicant to secure a voucher.

As many as 11,313 households, or 37 percent, in Santa Fe are cost-burdened by housing that requires them to spending more than 30 percent of household income on rent or a mortgage payment, according to the city's Affordable Housing Plan released in April. That report also found an ongoing shortage in the number of affordable rentals available, particularly for those who make 30 percent or less of the area's median income.

Congressional funding for HUD has fallen short of what the housing agency estimates it needs and is approaching a 40-year low, according to Douglas Rice, senior policy analyst with the Center on Budget and Policy Priorities. While rents have continue to rise and wages remained stagnant, Rice reports, federal housing assistance remained below 2010 levels—though the cut wasn't as deep in 2016 (down from 2010 by 4.6 percent) as it was in 2013 (down by 13.3 percent).

The amount of funding housing agencies receive is based on the number and cost of vouchers they issued in the prior calendar year, adjusted for inflation.

"Agencies deal with cuts like that by reducing the number of families they serve, then that also reduces their funding eligibility in the subsequent year," Rice says. "So unless Congress makes a subsequent effort to provide additional funding to make up for those losses, in effect, those losses get locked in."

The Obama administration's 2017 budget request includes an $11 billion initiative to eliminate family homelessness by 2020, an unprecedented detailed proposal to tackle that issue, Rice says. A core piece of that plan calls for a significant expansion of the voucher program. Yet the lion's share of federal housing program funding goes to supporting homeowners rather than renters, Rice contends, and often to help families that make $100,000 or more pay off their mortgages or receive tax breaks for capital gains when they sell a home.

"There really is this imbalance in resources in federal housing policy that could be addressed in a way that would free up resources to help more low-income, working families that are really struggling to make ends meet," Rice says.

HUD has requested $1.2 billion more for housing vouchers for 2017 and is even exploring changes to the model for how fair market rents are established in high-cost areas of the country, which tend to concentrate voucher users in a few neighborhoods. Instead of a regional method, the department has proposed moving to a ZIP code approach for setting those rates, Sullivan says.

How that would affect Santa Fe isn't yet clear. The city and county haven't received the designation HUD uses to mark high-cost metro areas. But making those changes could also effectively see these housing agencies able to help even fewer people.

"It's ultimately about how much money is available to help housing authorities across the country," Sullivan says, "and that money is never enough to meet demand."

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