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Low-Income Housing Crisis in Santa Monica Poised to Worsen Under Proposed White House Budget
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By Niki Cervantes
Staff Writer

March 22, 2017 -- When the City of Santa Monica re-opened its application list for subsidized housing on January 31 from 8 a.m. to 8 p.m., some 18,000 applications poured in -- for 1,167 vouchers.

Federal funds couldn't begin to meet demand, so a City lottery system was established for the top 500 applicants, those financially stressed enough to qualify and either already working or living in Santa Monica.

“There are just so many people out there we can’t help,” said City Housing Manager James Kemper. “It is very discouraging.”

It is also a problem that could intensify significantly under the proposed “America First” budget blueprint for 2018, released March 16 by President Trump.

While details have not been released, the budget plan, among other things, prioritizes military and infrastructure spending, and reduces many traditional domestic programs to pay for it.

Among the areas hard hit is the U.S. Department of Housing and Urban Development (HUD). The budget proposes cutting the agency by $6.2 billion, or 13.2 percent, for total spending of $40.7 billion next year.

More than two-thirds of the agency’s budget now goes primarily to Section 8 vouchers subsidizing the rent of about 4.5 million people, ranging from poor individuals and families to the working-poor and disabled.

Analysts say such a big cut to HUD could trigger the loss of 200,000 Section 8 vouchers.

Of those, as many as 5,000 would be in the City of Los Angeles, analysts said.

Santa Monica has not determined the possible impact on the City and is waiting to see the final budget, Kemper said.

Trump's proposed budget, he noted, must still navigate an arduous path of landmines in Congress as the Democratic Party fights back and Trump’s own party gages the reaction of its constituents.

The President also proposes to eliminate Community Development Block Grant programs, used by local governments like Santa Monica to fund community organizations (the City distributed $8 million in such funds in 2015); the HOME Investment Partnerships Program, which the City also uses for low-income housing, and other similar programs.

Kemper said HUD this year allocated $12.6 million to the Santa Monica Housing Authority for Section 8 vouchers, with another $1 million for administrative costs. The Authority has about 15 employees, he said.

The possible budget cuts come at a time when the City is suffering a housing shortage, particularly for lower-income earners, and officials are scurrying in search of funds -- mostly outside of the City’s own biennial budget of more than $1 billion.

Meanwhile, the City is fighting an uphill battle to find apartments it can afford to subsidize in this era of skyrocketing rents, Kemper said.

It’s also hard to find landlords to participate, he said.

Under Section 8, HUD pays landlords (through the Housing Authority, in Santa Monica’s case) 75 percent of the rent of those eligible. By law, those individuals cannot earn more than 30 percent of the metropolitan area median income.

For Santa Monica and metro Los Angeles, Section 8 units are limited to those earning from $30,400 for a household of one and $43,400 for a household of four to $57,300 for a household of eight.

Vouchers are limited to U.S. citizens and specified categories of non-citizens who have eligible immigration status.

Sky-high rents that are among the nation's highest make it hard for Santa Monica officials to stretch HUD’s funding.

“The days of paying $1,000 a month for rent are gone,” Kemper said. “Now you’re looking at $2,000 and more. We might have three (Section 8) vouchers available, but we might only be able to afford two. We don’t know.

"It’s like trying to hit a moving target, trying to determine how many people can be helped.”

The vouchers come available rarely -- only four or five times a month, when those who hold them move out of the program or die, Kemper said.

Although providing affordable housing is one of the City’s priorities, activists and other critics often question its dedication.

They say if so much of the budget -- about two thirds -- wasn’t devoted to employee salaries and benefits (among California’s highest), Santa Monica could use its own City money to help more ("Santa Monica Ranks Third in County for City Employee Compensation Costs, Survey Finds," June 23, 2016).

Officials deny that accusation ("Santa Monica Defends High City Salaries as Key to Quality Services," December 6, 2016).

At the same time, though, the City is getting a glimpse of just how difficult -- and expensive -- trying to step-in can be sometimes.

Santa Monica is, in fact, breaking ground with a one-year pilot project providing City-funded subsidies for some desperate renters facing homelessness.

Cities -- at least small ones like Santa Monica -- traditionally leave the complex and costly business of rent subsidies to the federal or state governments.

But the City's program, called Preserving Our Diversity (POD), is still already proving a test of the City’s avowed commitment to its poorest, most vulnerable, renters.

Designed as a City rent subsidy of “last resort,” the project was originally aimed at 74 long-time tenants, many of them elderly, who could no longer afford their rent-controlled apartments and faced being displaced.

The City Council earmarked $300,000 (a third of it for administrative costs) in City funds for POD in its $614.1-million budget for the 2016-2017 fiscal year.

Then it got a reality check. Experts warned the program could spend up to $21,319 to subsidize just two individuals, leaving many others with far too little.

To do as first planned, the City was told it must spend $579,228 for POD subsidies (not including administrative costs).

POD was delayed in November as the city decides how best to cover costs("Cost of Rent Subsidies for Poor Elderly Tenants Delays Santa Monica Program," November 28, 2016).

But even so, a City housing commissioner noted the council would barely impact the actual need.

HUD estimates that there are slightly more than 4,000 extremely low-income Santa Monica renter households that are severely rent burdened, the commissioner, Michael Soloff, told the council.

Subsidizing just 567 of the renters would cost about $5.5 million a year, he said.

The City, he said, “must not create false expectations.”

Still, Kemper said if Section 8 funding does take a big hit in the final federal budget, the City will look into its own purse for money to shore-up the program.

“That could well be something the council would be interested in looking at,” he said.


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