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"Creating a Nondiscriminatory Section 8 Allocation System,"

by Barbara Sard July/August 1995 issue of Poverty & Race

Using PRRAC-funded research by William Apgar and Christopher Herbert of the Harvard Joint Center for Housing Studies on the process for allocating tenant-based Section 8 subsides, both within Massachusetts and across the country, I and other colleagues in Legal Services programs and other public interest groups have succeeded in persuading HUD to fundamentally revise the system. If there are future additional Section 8 subsidies to allocate (more than 50,000 will be distributed shortly under the new allocation rules unless the current or a compromise version of the FY95 rescission bill is enacted), or if all or part of existing contract renewals are made subject to the new allocation system, a historical pattern of giving disproportionate amounts of Section 8 assistance to the suburbs, at the expense of central city residents, will begin to be reversed.

In 1990 and 1991, in the course of representing hundreds of homeless families throughout the 23 Massachusetts cities and towns that comprise Greater Boston Legal Services' geographic service area, our Homelessness Unit staff noticed what appeared to be a shocking pattern: our homeless clients who were white and who tended to be from the outer suburban portions of our service area seemed to be receiving tenant-based Section 8 subsidies far more quickly than our homeless clients who were African-American, almost all of whom were from the City of Boston. The disparate waiting times ranged from about two months for some of our white clients to a year or more for our minority clients.

We decided to gather waiting list information from the housing agencies that administer the Section 8 program, to see if the experiences of our clients in fact represented a system-wide problem. We focused initially on the Section 8 program statewide, administered by the state's Executive Office of Communities and Development (EOCD) through nine non-profit regional agencies, each of which maintains a separate waiting list, although they all use an essentially uniform tenant selection plan. While EOCD contracts with HUD for only 14,000 of the state's 53,000 Section 8 subsidies, we focused on their program, both for the convenience of investigating one agency and because EOCD gave top priority to homeless applicants under its tenant selection plan. Based on documents gathered through Freedom of Information Act requests, we determined that the waiting time for "first-preference" applicants generally was far shorter at the agencies outside of Boston than at the agency administering the EOCD Section 8 program in Boston. (Federal law requires that first-preference for 90% of admissions to the Section 8 certificate and voucher programs be given to families who are involuntarily displaced, live in substandard housing-which includes homelessness-or pay over 50% of household income for rent and utilities.) Because of the state's racial demographics, and because families tended to apply only at the regional agency located nearest to them (although they are permitted to apply at all nine), African-American families with first-preference status experienced a far longer wait for Section 8 subsidies from the state housing agency than did white homeless applicants.

In July 1991, on behalf of an African-American homeless mother of three, we notified EOCD and HUD of our intent to bring suit to challenge the separate regional waiting lists and their racially disparate effects. Although HUD responded immediately, asking us to file an Administrative Complaint under Title VIII of the Fair Housing Act, in order to facilitate its factual investigation of our claims (which we did), and facilitated a partial settlement with EOCD, whereby our client obtained a Section 8 subsidy, HUD ended up issuing a Determination of No Reasonable Cause.

HUD defended the EOCD regional waiting lists as based on or required by the underlying process of allocating Section 8 subsidies, which reinforced our suspicions about the adverse effects of HUD's residential preferences system (giving priority to those living or working in the community receiving the subsidies) on central-city minorities, and led us to further investigate both of these issues.

By the Spring of 1993, with the skillful and insightful assistance of Bill Apgar and Chris Herbert and the indefatigable investigative efforts of Jeff Lubell, then a student at Harvard Law School, we were able to make several key determinations.

First, while we still believed we were correct about the racially disparate effects of the EOCD system of separate waiting lists, the real cause of the problem was not EOCD and its separate waiting lists, but HUD's method of allocating Section 8 assistance.

Second, while HUD's formula for allocating the national pot of additional Section 8 money to states and sub-state allocation areas, known as the "fair share" formula, has methodological and possibly legal problems, the key factors, for poor people in Massachusetts, were the virtually invisible ways in which, within each allocation area, HUD applied the selection criteria to choose which applicant housing agencies were to receive assistance each year, and how much they would get. The total amount of assistance for which housing agencies can compete in each allocation area is based on housing need factors in the entire allocation area, not on need factors in any one city or town. Since most poor people and people with greatest housing needs in metropolitan areas live in central cities, the needs of central city residents drive the overall allocation available to the area.

From the perspective of homeless African-American families from Boston seeking Section 8 housing assistance, it turns out that the reasons they wait far longer to receive a Section 8 subsidy than a comparable homeless white family in central or western Massachusetts are a combination of the fol-lowing. While the Boston region receives slightly more than 50% of the state's share of additional Section 8 assistance, nearly half of the 125 public housing authorities (PHAs) in Massachusetts that administer their own separate Section 8 programs are in the Boston allocation area. Because most of these housing agencies-about 40-employ the residency preference noted above, and other agencies have what in effect are exclusionary administrative practices (such as insisting that applications be picked up in person or submitted in person during particular hours), Boston residents are effectively excluded from receiving subsidies ad-ministered by most of the region's PHAs, with the exception of the Boston Housing Authority and the EOCD regional agencies. Only EOCD and its regional agencies gave fast preference to applicants who are homeless through no fault of their own.

HUD's allocation system has hurt homeless families from Boston in two key ways. Within the Boston allocation area, HUD gave only a very small share (13.8%) of the total regional allocation to EOCD in the years 1990-1993. In contrast, 40% of central Massachusetts subsidies, and 70% of the western Massachusetts subsidies, went to the respective EOCD regional agency. As a result, relative to the number of homeless Section 8 applicants, the EOCD regional agencies outside of Boston had far more subsidies to distribute. Second, the Boston Housing Authority also fared poorly at HUD's hands, receiving only 19.3% of the additional subsidies in the Boston area in the years 1990-93, despite the city having about 45% of the metropolitan area's fair share need, and the fact that more than 70% of the region's African-American and Hispanic poverty population lives in Boston. The bulk of the additional assistance distributed by HUD in the Boston region from 1990 to 1993 went to suburban housing agencies, most of which used residency preferences that excluded applicants from Boston.

This discriminatory distribution of assistance resulted from HUD's selec-tion criteria for additional Section 8 assistance and the manner in which the HUD Boston-area Field Office applied the criteria. We believe four factors had the most significant effect: 1) a decision to give a maximum of 50 and a min-imum of 25 new subsidies to any PHA; 2) the award of points based on the relative percentage of unmet housing need, rather than the absolute number of persons with unmet housing needs; 3) the substantial number of points given based on administrative capability of the PHA, which tended to reward suburban PHAs that have small public housing programs; 4) the fact that no points were based on whether or not a PHA used a residency preference in its Section 8 program, regardless of its potential adverse fair housing effects.

Based on this work, we submitted extensive comments to HUD in April 1993 on its proposed revisions of Sec-tion 8 rules, pointing out the results of HUD's current practices, why they violated the letter and intent of the Section 8 statute, and laying out several alternative models. These comments were endorsed by the group of Legal Services attorneys from across the country who submitted comments. In July 1993, when HUD issued its "NOFA" (Notice of Funding Availability) for additional funds, repeating all of the previous errors, we again pointed out to HUD officials what was wrong. Again, we were ignored.

In the Spring of 1994, after the decisions had been announced on which PHAs would receive additional FY93 funds but before new contracts were signed, Judith Liben of the Mass. Law Reform Institute and I wrote HUD indicating our clients' intention to sue HUD if it entered into contracts with PHAs with discriminatory residency preferences. That letter finally produced some action. HUD began an aggressive investigation of the fair housing effect of the residency preferences used by more than 20 of the PHAs which received initial notices of the award of additional FY93 funds, and found that 17 of them had residency preferences with a statistically significant discrim-inatory impact on minorities. Before HUD could take further action, how-ever, Massachusetts Congressman Barney Frank intervened and persuaded then-Assistant Secretary for Fair Housing Roberta Achtenberg to release the FY93 funds, because of the apparent unfairness to the PHAs of HUD taking back what it had promised the year before.

The July 1994NOFAforincremental federal FY 94 funds again repeated most of the past errors. But HUD realized that after reneging on an agreement with us, any future agree-ments would require substantial revis-ion of the allocation process in order to avoid litigation. Achtenberg agreed to a day-long meeting in September, 1994 so that her Fair Housing & Equal Opportunity staff and the Section 8 program staff, with the responsible political appointees, would give serious time and attention to the issues we had been raising for years about the Section 8 allocation process and residency preferences.

Due largely to the efforts of Achtenberg, Asst. Secretary for Public Housing Joseph Shuldiner and then Deputy General Counsel for Fair Housing Eliz-abeth Julian (recently promoted to replace Achtenberg, who resigned in order to run for mayor of San Fran-cisco), truly significant changes were made by HUD in the current NOFA, ending the discrimination against large city housing agencies that had resulted from the four key factors discussed above, each of which was significantly revised or eliminated (see the March 3, 1995 Federal Register). In addition, the Field Office policy of applying a 50-subsidy maximum regardless of housing agency size was eliminated for the FY94 decisions, so that the BHA received 117 additional subsidies, and the EOCD Boston regional agency received 119, rather than the prior year's 25 each.

To make this victory real and sustained, two key things must happen: sufficient political support for the tenant-based Section 8 program must exist, in order to ensure that there are additional funds to distribute; and the voices of fairness must prevail over the voices of prejudice on the issue of residency preferences.

Barbara Said is the Senior Managing Attorney of the Housing Unit of Greater Boston Legal Services. The Apgar Herbert study, "Fair Housing Access to Housing Assistance Resources: An Examination of the Allocation Process for Section 8 Vouchers d Certificates, " is Working Paper W94-2, available ($10) from the Joint Center for Housing Studies, 79 JFK St., Cambridge, MA 02138.

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