Shays Frustrated with HUD’s Late Payments to Section 8 Housing Assistance Program
HOUSING
The Norwalk Hour
Kelly Carroll
Boston University Washington News Service
10/17/2007
WASHINGTON – Rep. Chris Shays (R-4th) berated the Department of Housing and Urban Development Wednesday for what he called its inability to provide timely monetary assistance to all participants in the department’s Section 8 project-based rental assistance program.
“I happen to be a Republican, with a Republican administration, and I am more offended than my Democratic colleagues, who I think are being very nice to you,” Shays said, addressing a senior department official during a House subcommittee hearing. “You’ve made a fool of yourself.”
In the past months, the department has been two to eight weeks late in providing subsidized rental assistance to some owners of Section 8 housing. Owners are then in turn late in making payments to mortgage lenders and service and utility providers, something members of the Financial Services Subcommittee on Housing and Community Opportunity deemed intolerable.
“Telling an owner that they have no guaranteed funding is simply unacceptable,” said Rep. Maxine Waters (D-Calif.), chairwoman of the subcommittee.
John Cox, the department’s chief financial officer, cited lack of technology as the cause of late payments. According to Cox, the processing of owner contract renewals, a stipulation for receiving payment, is done manually and takes some time. If owner contracts are not processed in a timely manner, payments can’t be made.
“I apologize on behalf of the department,” he said. “[The department] is committed to improving systemic needs. Improved administration is critically needed.”
According to David Wood, director of financial markets and community investment for the U.S. Government Accountability Office, 75 percent of the department’s payments to owners are on time. However, eight percent are late by two weeks or more, leading to loss of services and even abandonment of the program out of frustration.
Wood, like Cox, attributed these late payments to the department’s lack of a Web-based, paperless contract renewal process, but included the department’s uncertainty about the amounts that should be attributed to each contract and inaccurate or incomplete monthly vouchers submitted by property owners.
For some subcommittee members, the real reasons for late payments were not being stated.
“I figure it’s not happening because somebody doesn’t want it to,” said Rep. Keith Ellison (D-Minn.) during questioning. “Is this… really a reflection of the administration’s basic contempt for public housing programs? When smart people do dumb things, something else is going on.”
According to Tom Hickey, director of finance for the Norwalk Housing Authority, Norwalk’s 200 rental-assistance units have not been heavily affected by the late payment problem.
“We received a letter from HUD [the Housing and Urban Development Department] saying that there would be some late payments, and there were some earlier in the fiscal year. But they caught up,” he said.
Cox assured the subcommittee that the late payments will not happen again once the department adopts a new technological system for processing contract renewals. His testimony, however, was not enough to convince subcommittee members.
“We are going to have to take some very direct action to ensure that this late payment problem does not continue, and make sure that we don’t continue to allow HUD to use late payments as a way to under-fund,” said Waters, who vowed she was going to contact everyone in her district as a way of monitoring the department’s progress. “We don’t like this. We don’t like this at all.”
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