New Castle News

Closer Look

May 5, 2013

Housing agencies cut staff, rent aid

NEW CASTLE — Pennsylvania’s local housing authorities are absorbing federal funding cuts that are prompting them to shed employees, cut back rent vouchers or put off repairs to housing they own.

A deeper worry is that the automatic federal funding cuts known as the sequester that took effect March 1 will never be replaced, and that their finances and ability to serve the poor will be permanently diminished.

The cuts have forced the Lawrence County Housing Authority to lay off two administrative and three maintenance employees, according to executive director Gene DiGennaro.

The remaining 15 administrative and 10 maintenance employees will be required to take one day off a month without pay, he said.

DiGennaro said the 10 percent “across the board” cuts affect daily operating costs, the capital fund — which covers building improvements and renovations — and the Section 8 program. The authority, he said, may have to postpone some landscaping work scheduled to be done by the maintenance staff this summer.

“It’s appearing more and more that the sequester is the new baseline,” said Daniel Farrell, the Allentown Housing Authority’s executive director. “So going down the road, that’s what we have to anticipate to run our programs on.”

Housing authorities report they already have been absorbing funding cuts for the past decade, before the latest cuts took effect. But the latest one was significant for its depth and suddenness.

Initially, housing authority executives might have anticipated the federal government would deliver the missing part of the money once Congress reconsidered the cuts — about $37 million statewide in Pennsylvania, or 5 percent, according to the U.S. Department of Housing and Urban Development.

But Congress has not acted to undo the cuts and that worries Farrell and others.

“They’ll say, ‘You functioned during the sequester, and therefore you’ll be able to continue to function,’” he explained.

Another problem is that the cuts are deepest in the money that housing authorities are allowed to use to operate the units they essentially own and the Section 8 rent-aid vouchers they give to private landlords.

The cuts leave some housing authorities without enough money to pay rent aid to private landlords for existing tenants on lease agreements, although HUD has suggested it will cover those deficits, said Joel Johnson, executive director of the Montgomery County Housing Authority, which is among those authorities facing that dilemma.

DiGennaro said his authority has funding for 300 Section 8 vouchers. He added he anticipates the authority being able to keep the 300 renters currently in the program for the rest of this year.

Regardless, Farrell said, the uncertainty of the authority’s revenues makes it harder to get private developers to get involved in partnerships to build housing units.

The federal government finances all or nearly all of the authority budgets in the state.

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