Seen in decades past as a solution to housing low income residents, units that fall under federal or state subsidy is under increasing scrutiny and faces opt-outs by owners over the next several years.
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Community activists say a mass opt-out by landlords would leave many poor people with only the alternative of receiving HUD vouchers to help pay their rents. While the voucher system has advantages, the current wait to qualify for it is already extremely long. And while renters can try to use the vouchers to pay for the housing they currently occupy, landlords are not required to accept them.
Larry Gross, executive director of the Los Angeles-based Coalition for Economic Survival, says as many as 12,000 units in the city will have subsidy contracts expire by 2013, most within the Section 8 program. "This is a tidal wave of disaster headed our way, unless we take emergency action," says Gross. "Most of these buildings are in areas that have gentrified over the years. [The landlords] see the dollar signs and think they can get more money."
Cities like Los Angeles and New York face the biggest problems because they have more people living under subsidy of some type, including those provided by their states. According to HUD, New York City has 124,000 project-based units, the most in the nation — and the Section 8 deadlines are compounded by the fact that the New York State-sponsored Mitchell-Lama initiative is expiring as well. A total of 40,000 Mitchell-Lama units are vulnerable to buyout under the program, meaning owners can raise the cost of occupied housing to market rate.
Amy Chan, a low-income housing activist in New York, has been struggling to help residents of subsidized buildings in New York, but says it is an uphill battle in a city where market rates are far above what HUD would provide a landlord or property developer. "What happens is that some buildings go straight to market rate and tenants must negotiate some alternative to the increase," she says. "Sometimes there are vouchers that are issued to help, but that isn't true for all cases."
Despite stereotypes of poor families living in unkempt tenements, Chan says, threats to subsidized housing affect largely middle- and working-class residents. Says Chan: "In a worse-case scenario, owners [would] buy out all the Mitchell Lama [New York State's housing subsidy] program buildings; they go straight to market rate and no government agency would regulate the buildings, and people might not get Section 8 vouchers, so the question becomes whether it can sustain working and middle class people."