Massachusetts could lose $30m in US housing aid

WASHINGTON -- Massachusetts stands to lose more than $30 million in federal housing assistance under President Bush's 2007 budget proposal, a cut that would cripple the state's ability to provide enough new housing for a growing population of needy elderly and disabled residents.

A 25 percent cut in housing for the aged, along with a 50 percent reduction in units for the disabled, mean that the Bay State would be unable to serve all eligible applicants for those programs, according to budget analysts and congressional staff. The cuts would largely affect new construction, not existing developments, but the decision to cut housing programs for the elderly and disabled shocked advocates, since both programs are politically popular.

A month before the federal budget plan was released, housing secretary Alphonso Jackson praised the two programs.

''Our senior citizens have given us so much, and Americans with disabilities make remarkable contributions to our society every day," Jackson said. ''Neither group should ever have to worry about being able to afford a decent place to live."

A HUD spokesman said Jackson supports the programs but ''some tough budget decisions had to be made."

Housing advocates said the cuts would not displace any elderly and disabled people who are currently living in subsidized units. But they said the need for senior housing, especially, is growing dramatically. Nationally, nine seniors are on a waiting list for each available unit, said Nancy Libson, director of housing policy for the American Association of Homes and Services for the Aging.

Despite substantial support for the programs on Capitol Hill, Libson said, budget pressures may force Congress to follow many of Bush's recommendations, making it unlikely that full funding will be restored.

The cuts continue a five-year trend by the Bush administration to move the federal government away from its role as landlord for the poor while helping more people buy homes. Home ownership -- especially among minorities -- has increased over the past few years, and the administration's budget blueprint is meant to advance the president's goal of an ''ownership society," administration officials said, by shifting resources to programs for buyers.

But low-income housing advocates say that while this goal is laudable, thousands of needy families and elderly and disabled people will be frozen out of a market that is fetching higher and higher home prices, especially in Massachusetts.

''The administration has assumed that you can just kind of become a homeowner" by taking advantage of federal programs meant to give technical and financial help to first-time buyers, said Aaron Gornstein of the Boston-based Citizens' Housing and Planning Association, a nonprofit housing advocacy group. ''Maybe that's true in other parts of the country, but it's not true in the Northeast."

In addition to the proposed cuts in housing for the elderly and disabled, the state would also lose substantial resources for renovating existing housing and redeveloping neighborhoods.

With its aging infrastructure, Massachusetts relies more than other states on such programs as Community Development Block Grants -- slated for a 20 percent cut next year -- as well as rehabilitation funds for public housing, which faces a cut of nearly 11 percent, Gornstein said. If the proposed cuts were enacted, Massachusetts would lose an estimated $24.5 million in block grants and $8.3 million in rehabilitation funds.

Boston Housing Authority officials said they are not accepting new applications for public housing, which already has a waiting list of 14,000 individuals and families. As public housing deteriorates and the need for affordable units grows, the gap between the number of needy families and the number of subsidized units available will only grow, they said.

''Ten years from now, if they [in the Bush administration] have their way, there will be virtually no units set aside for affordable housing," said Representative Barney Frank, Democrat of Newton and the senior Democrat on the Financial Services Committee, which handles housing matters.

Administration officials say their goal is to increase home ownership, thereby building more stable neighborhoods while phasing out massive public housing projects. The Department of Housing and Urban Development plans to give credit counseling and some financial assistance to help new buyers with closing costs and down payments -- often the single barrier to purchasing a place to live, according to Jackson.

''The ownership of property helps human beings prosper. . . . Ownership promotes financial independence, the accumulation of wealth, and healthier communities," Jackson told a Senate subcommittee earlier this month, defending his agency's budget request.

''What they're looking for is a way to turn the marginal buyer into a real buyer, to help people on the cusp," said Ronald Utt, a housing specialist with the Heritage Foundation, a conservative think tank. But he said some of those buyers might not have the steady income required to avoid defaulting on their loans, especially if they do not have the financial anchor of a down payment.

The administration has also supported increased funding for Section 8 rental housing vouchers for low-income families, an approach preferred by many conservatives because it bolsters the private market, while allowing tenants to choose their neighborhoods.

But according to a recent study by the Center for Budget and Policy Priorities, the funding formula does not work in Massachusetts' favor. The money would be distributed based on what each housing agency received in previous years, adjusted for inflation. However, it does not take into account how many vouchers were actually issued, or whether rents have gone up or down.

Overall, based on an analysis by the center's Barbara Sard, Massachusetts agencies next year would get funding for only 98 percent of the vouchers they issued this year.

Congress has balked in the past at some of the administration's efforts to cut long-running housing and development programs. The block-grant program is popular, and lawmakers in both parties are already saying they will restore at least some of the proposed 20 percent cut.

With the exception of the American Dream program to promote homeownership, Capitol Hill has done little in the area of housing in the past five years, advocates and congressmen in both parties note.