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City cuts housing subsidies

Facing loss of federal money, officials dip into reserves for part of shortfall.

October 25, 2011|By Brittany Levine, brittany.levine@latimes.com

Facing a $1.1-million deficit for a federally funded affordable housing program, members of the Glendale Housing Authority on Tuesday voted unanimously to reduce the amount of subsidies given each month to clients, rather than dropping people altogether.

The Housing Authority is set to receive about $12.5 million from the U.S. Department of Housing and Urban Development for about 1,500 Section 8 housing vouchers. But it typically costs $13.6 million to cover the subsidies, according to a city report.

Starting in January, recipients of Section 8 housing subsidies can expect to see their vouchers decrease by as much as $61 a month, depending on the size of the apartment they’re in. The move is expected to save about $420,000 over one year.

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The Housing Authority will dip into its $3.9-million reserve to cover the remaining shortfall — nearly $600,000.

The city has done what it could do — minus cutting the number of recipients — to reduce the deficit, but to no avail, said Deputy Director of Housing Peter Zovak.

“It’s a shared burden that we have,” he said.

Although the measures get the city through coming months, City Manager Jim Starbird said that since the federal cuts could get worse in coming years, the city should prepare for the worst.

“We also need to be thinking long-term,” Starbird said, adding that the Housing Authority could run out of reserves in about 2 1/2 years if it continues to use the reserve account to cover budget shortfalls.

When housing advocates suggested last month that the city dip into its reserves to get people off the long voucher wait list, Zovak said using the money for everyday operations wasn’t good practice.

“Any reserves that you have are there for emergencies. This is a big emergency,” Zovak said, citing advice from federal housing officials.

Glendale officials decided last month to purge the 5,700-person wait list by clearing those who don’t respond to city correspondence and asking about 120 people who receive vouchers from other agencies to voluntarily exit.

Officials may also run criminal background checks on the 4,400 people who currently receive help, removing those who break the rules.

City officials also plan to ask landlords to decrease rents or skip increases next year, since Section 8 clients are already grappling with the recession, Zovak said.

The federal government offered some relief when it announced last week that 2012 Social Security benefits would increase 3.5%, which would boost the income of some Section 8 households, thereby decreasing the amount of their housing subsidy. That change could mean about $70,000 in savings for Glendale, Zovak said.

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