July/August 1997

Section 8: Points of View
A Historic Opportunity

By Alice Basey, President, National Alliance of HUD Tenants

As a resident of Lake June Village Apartments, a 221(d)3 property in Dallas, Texas, and representative of NAHT member organizations in Region VI, I am one of 2.1 million lower income families served by HUD's multifamily portfolio. While advocates do a fine job in working with us, tenants need to speak for ourselves to make our voices fully heard in Washington.

The Section 8 program should be reformed to require owners to renew project-based Section 8 contracts for 20 years in exchange for mortgage debt restructuring. This approach would preserve affordable housing and minimize the risk of displacement to tenants.

HUD's approach is inadequate. Since December 1994, the Clinton administration has proposed a series of radical measures to voucherize and deregulate HUD multifamily housing, putting at risk thousands of low-income families and the nation's entire assisted housing stock.

Tenants' objections to voucherization are well known. Voucherization will destabilize and destroy the affordable housing stock over time. If the affordable housing stock shrinks, market rents will rise, costing HUD more money to maintain the same number of certificate holders in private, unassisted housing.

In many markets, tenants with vouchers or certificates are unable to find decent housing due to lack of available units, discrimination, moving costs, access to transportation, and high rental cost.

HUD should preserve affordable housing with more flexible enforcement strategies and transfers of Section 8 contracts to tenants and tenant-endorsed nonprofit groups.

Reform of HUD-assisted multifamily housing should seek to do the following:

• Promote transfers to tenant/nonprofit purchasers. All nonprofit purchases should be required to obtain support from at least 50 percent of the residents.
• Strengthen provisions for permanent affordability requiring owners to accept Section 8 contracts for 20 years, if Congress provides the funds.
• Encourage lowering of Section 8 contract rents.
• Uncap allowable rehab expenditures.
• Strengthen enforcement provisions.
• Restore one year notice of renewals to tenants.
• Let tenants be HUD's "Eyes and Ears" in enforcement.
• Let tenants assist in oversight of HUD-assisted housing.
• Allow tenants to repair and be reimbursed by HUD where HUD withholds Section 8 payment.
• Allow Section 8 tenants to withhold rent and pay into escrow fund for repairs.
• Clarify that tenants and their organizations are third-party beneficiaries to HUD Section 8 and mortgage contracts with the power to sue for enforcement.
• Allow tenants and tenant-based organizations to sue for enforcement under the Federal False Claims Act which will allow tenants to collect for damages in cases where properties are mismanaged.
• Provide technical assistance funds for tenant organizations to participate fully in project restructuring and oversight.

By empowering citizen volunteers to be partners with HUD in enforcing and enlisting residents as HUD's "Eyes and Ears" we can arrest problems before they require more expensive solutions, and Congress will save money otherwise needed for more expensive repairs in the future.

On behalf of the 4.5 million families of low-income living in HUD-assisted housing at risk of losing their homes, we urge HUD and Congress to use our Tenant Section 8 Reform Bill.