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Louisville Section 8 Experiment is Optional and Lower Rents | By: KREIA Newsletter

from Courier Journal Aug 1st

Section 8 Test Would Be Optional, Rent Lowered


After criticism from fair housing advocates about a rent reform study that would set a minimum rent for some Section 8 recipients, the Louisville Metro Housing Authority is proposing an alternative that would allow residents to opt out and would reduce the minimum rent.

The housing authority is now proposing a $50 minimum rent, instead of the $75 originally planned for Section 8 recipients taking part in the study.

Also, recipients randomly selected for the program would be able to decline to take part. The original proposal would not have allowed them to opt out unless they filled out paperwork and demonstrated a hardship.

The revised study would also exclude those who now receive a deduction for child care. Under the original study, those paying the minimum rent would have eventually lost access to a child-care deduction that lowers their rent payment. Advocates criticized the loss of the deduction, arguing that the U.S. Department of Housing and Urban Development was saying it wants more Section 8 recipients to work, but making it harder for them to arrange child care.

About 10 percent of those who would be eligible for the study take advantage of the deduction, according to the authority.

Tim Barry, executive director of the housing authority, said the changes addressed the three major concerns — the lack of consent, the minimum rent, and the child care deduction. But he said the study would still be effective in trying to determine ways to stretch housing funding.

He said the first time the revised proposal could be considered is at the Aug. 19 meeting of the authority's board of commissioners.

Section 8 rent is based on income and there is currently no minimum. One benefit of the proposed changes is that recipients wouldn't risk a rent increase for three years. Currently, rent is set annually based on income. If a recipient's income decreased, rent could be lowered.

The board overseeing the authority has delayed action on the original proposal twice.

Several advocacy groups for low-income residents and several University of Louisville professors spoke against the original proposal — blasting the housing authority for implementing the minimum rent and for not allowing residents to decide whether they wanted to participate.

Those selected for the study, in the new proposal, would have 30 days to inform the authority they want to opt out.

The housing authority also indicated it will work with advocates to ensure recipients know about the potential benefits and risks of participating in the three-year study.

Barry said officials are still working with groups to determine the best way to inform recipients about the opt-out provision and about the additional services offered for those selected for the program.

Barry said they reached the revised plan after hearing from the public, from advocacy groups and after discussions with HUD, which he said was "very receptive and accommodating."

"In this particular case, they were very good to work with and helpful," he said.

Local advocacy groups protest a HUD policy experiment by the Louisville Metro Housing Authority because they say it will primarily affect the rent payments of African-American women on assistance programs. Sam Upshaw Jr., The Courier-Journal

Louisville is one of four authorities selected by HUD for the rent reform study, which is intended to stretch public housing dollars and encourage more household heads to get jobs. The other cities are Lexington, San Antonio and Washington, D.C.

The study is for those who receive Section 8 vouchers for housing and not for public housing residents.

About 9,000 people receive Section 8 vouchers through the Louisville authority and about 1,000 of those would be selected for the study, according to the housing authority.

HUD originally proposed a minimum rent of $150.

Sebastian Kitchen can be reached at (502) 582-4475. Follow him on Twitter at  (Kentuckiana Real Estate Investors Association) does not give legal, tax, economic, or investment advice. KREIA disclaims all liability for the action or inaction taken or not taken as a result of communications from or to its members, officers, directors, employees and contractors. Each person should consult their own counsel, accountant and other advisors as to legal, tax, economic, investment, and related matters concerning Real Estate and other investments.   

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