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Section 8

The crisis in affordable housing, however, was spread throughout the Bay Area. It reached its most critical stage in increased rents, which in turn sharply impacted HUD’s assistance to tenants in private housing.

The largest HUD single affordable housing program is Section 8 leased housing, which subsidizes a tenant to live in privately owned housing. Under the program, the tenant pays no more than thirty percent of the family income, and HUD provides the balance of the rent money up to a ceiling called a “fair market rent” level.

By 1998, the fast paced San Francisco rental market saw sharp increases that took place rapidly – more rapidly than HUD’s system re-calculated the new fair market rent level.

As a result, low-income applicants who sometimes had waited years to obtain a voucher with the right to a subsidy were then unable to find housing that was within HUD’s rent guidelines. By 1998, an estimated half of all applicants had to turn back the vouchers because they could not find housing within the allotted ninety days.

The California State Office, working with Rep. Nancy Pelosi, began its own review of local rents in order to provide new information in advance of the annual review to HUD’s headquarters. In addition, the California State Office urged the local San Francisco Housing Authority to undertake a full survey of rental prices to document the much higher local costs.

In December 1999, HUD announced it agreed with the requests to increase the Fair Market Rent level for San Francisco – a decision hailed by tenants and landlords alike. The new levels became the highest in the nation, understandable in view of the high rent costs in San Francisco. The revamped policy also included allowing applicants to use the voucher for 120 days in order to extend the opportunity to locate housing in the tight market. In the first review of the effect of the new policy, SFHA reported that over 90 percent of applicants now were able to locate housing in the community.

“With HUD’s new higher rent subsidies, section 8 tenants can now compete in the rental market...,” wrote the Commercial Property magazine. “But the benefits are more dynamic that just handing out more rent money...With the new rent subsidies, owners of properties in low income neighborhoods with section 8 tenants won’t have to struggle with the choice of whether to keep their section 8 tenants...”.

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