Housing programs
might combine

A troubled state agency is
attempting to transfer its
subsidy program to the city

The state's housing agency, which is under scrutiny from the federal government to improve or face sanctions, is in talks to transfer its rent subsidy program for Hawaii's neediest residents to the city.

The vouchers program, commonly known as Section 8, is one of the largest the state agency administers, with about 3,000 low-income families getting rent aid monthly.

Analyzing the waiting list In its five-year and annual plans draft reports released this year, the Housing and Community Development Corporation of Hawaii included statistics on the nearly 1,200 needy families on its waiting list for Section 8 rental subsidy vouchers, which was closed in April 1999. The agency reported that: » 75 percent of those on the list are "extremely low income," who make less than 30 percent of the area's median income. For a four-person family in Honolulu, 30 percent of the median income is about $20,000. To qualify for Section 8, a family needs to receive 50 percent of an area's income. » 66 percent, or 709 on the list, are families with children. » 2.6 percent, or 221, are seniors. » 143 people on the list are disabled.

The city has its own Section 8 program, which manages 4,400 rent subsidy vouchers.

The talks come after funding for the state's housing agency, known as the Housing and Community Development Corporation of Hawaii, was cut by $800,000 in this fiscal year after a change in the way the federal government calculates allocations for Section 8 programs.

The city fared better after the federal change, which bases funding on how many vouchers are being used during a random evaluation period rather than how many an agency has been allotted.

Gary Iwai, administrator of the city's Community Assistance Division, said if the city were to take over the state's Section 8 program, it would be responsible for ensuring that as many vouchers as possible were being used.

State housing officials could not be reached to provide details on their reasons for wanting to hand over the program, but in the past have blamed their Section 8 program's problems on staffing shortages and the state's lack of affordable housing.

Derek Dahilig, spokesman for the state Department of Human Services, did confirm that the talks were ongoing.

"We are nowhere near making a decision," he added.

The state's housing agency was labeled "troubled," partly because of problems with its Section 8 program, after a 2004 U.S. Department of Housing and Urban Development review.

By September, HCDCH must fulfill 120 directives set out by HUD. Some of the mandates pertain to bettering performance of the agency's Section 8 program. If the mandates are not met, the agency could face sanctions, cutbacks or even a federal takeover. It is still unclear how the transfer would affect the directives, but Iwai did say that the change would require approval from HUD, as well as the City Council.

Both housing agencies have considerable Section 8 waiting lists, which would be combined according to application dates if the transfer were to go through, Iwai said.

About 10,000 families are on the waiting list to get city Section 8 vouchers, while the state's list, which is closed, numbers 1,200. It takes about eight years to get a city voucher. The wait for a state subsidy is about two years.

State housing officials approached Iwai recently about the possible transfer. He has set a tentative Jan. 1 deadline for the change -- which officials will know if they can meet by September or October.

He said the transfer will likely not affect Section 8 recipients. Though statewide, all of HCDCH's Section 8 recipients are on Oahu, Iwai said.

Iwai also said there are still a number of issues with the hand-over that need to be addressed, including making sure there is enough staff to handle the increased number of vouchers. If the problems are not resolved, he said, the city will not take the state's program.

"There are some initial upfront costs involved," Iwai said. "We're looking at how much the state is going to take care of all that."

The state's $15 million allotment from HUD to run its Section 8 program would go to the city under the transfer. For its Section 8 program, the city gets $29.8 million in federal funds.

The allocations cover the vouchers as well as administrative costs.

Sen. Ron Menor (D, Mililani), Senate Commerce, Consumer Protection and Housing Committee chairman, questioned the transfer, saying that the state should not be giving up on Section 8.

"HCDCH must not abdicate its responsibility for administering Section 8 programs," Menor said, adding that "a state agency, such as HCDCH, has greater leverage and clout to be able to lobby Congress and the federal government for additional resources than the respective counties."

But he also said he sees the reasons for turning over the ailing state program to the city, whose Section 8 program has had relative success, with more than 90 percent of its vouchers being used despite Hawaii's tight housing market.

Darlene Hein, chairwoman of Partners in Care, a group dedicated to ending homelessness in the islands, said she supports the transfer if it will make more vouchers available.

She also said the city seems more able to administer the program. "Right now, when you look at the two programs, the city ... has a better program because they were able to change their administrative rules much quickly than HCDCH," she said.

The city's biggest concern before taking over the state's program, she added, should be hiring enough people to handle the increase in vouchers.