LEWISTON — When Bob Macdonald said he wanted to do away with subsidized housing in the city's downtown, it got a lot of attention.
Macdonald, one of two candidates for mayor in a Dec. 13 runoff, made the federal housing program a key part of his mayoral campaign. He believes his vow to pass a moratorium on new Section 8 housing in the downtown helped him win a runoff spot in the Nov. 8 election.
"People are angry," Macdonald said. "They see people down there and they expect other people to work for them, that are not willing to help themselves. People are tired of it."
But the Section 8 may not be what Macdonald is talking about — not by itself, at least. The 74-year-old program, a federal housing program that grew out of the Great Depression, isn't what it once was.
"People often talk about affordable housing using names or terms that in context represent a specific program but may not be what the speaker is referring to," said Jim Dowling, executive director of the Lewiston Housing Authority. "They may be generalizing."
Targeting subsidized housing projects is one way to fix Lewiston's downtown and bring it back to life, Macdonald said. If you eliminate subsidized housing, you eliminate places for a permanent underclass to live. People would have to get jobs and survive on their own or go somewhere else.
"But we continue to get more and more of these people," Macdonald said. "Why? These developers come in and they put some of their money down, but they take our tax money and they create these apartments — and we fill them with people. That's what I object to."
Macdonald isn't the first to blame public housing for Lewiston's blighted downtown, and he's not the only one to use Section 8 as a shorthand for publicly assisted, low-income housing.
Most public housing built in Lewiston over the past 10 years is reserved for the elderly and the handicapped — people Macdonald says deserve help — using a combination of federally sponsored tax credits.
"As far as a moratorium on Section 8, I don't believe that the program has been a huge factor in the development of housing in the last few years," Dowling said. "It certainly is a useful tool and contributes to the viability of a project. But it's not being used on the scale it was in 1980-82 when some of the city's large projects were built."
The federal Section 8 housing program currently is administered by the U.S. Department of Housing and Urban Development and is designed to help low-income people pay rent.
The program's focus 40 or 50 years ago was providing higher-quality housing with three programs aimed at different types of construction: moderate building rehabilitation, substantial rehabilitation and new construction. Within those categories, the program helped renovate and repair a number of apartment buildings across the city.
"So, an owner would find a suitable property, agree to enter in a Section 8 contract on some or all of their units and agree to bring them up to a certain standard," Dowling said. The projects included Centreville Commons, Oak Park, Place Ste. Marie and Chestnut Place.
"Congress is no longer appropriating new money for substantial rehab and new construction, and there may be a small amount of moderate rehabs," Dowling said. "For the most part, the spigot has been shut off. These projects can still operate and they are still subsidized. But this was the mechanism for building housing in the '70s and '80s, and we haven't seen anything like it in a long time."
Since 1983, the program's philosophy changed from providing housing to providing fair rents and the premise that housing costs ideally should account for 30 percent of household income.
Today, the bulk of the Section 8 program centers on housing vouchers, which are awarded to qualified, low-income people. They can give the vouchers to their landlords and then pay 30 percent of their annual income in rent. HUD makes up the difference to the landlord, up to fair market rents.
"The less income a family has, the less they pay in rent and the more the voucher makes up," Dowling said.
To qualify, tenants must make less than 50 percent of the local median income, which is $25,200 for a family of three, $27,950 for a family of four.
HUD determines what a fair market rent is for a particular area. Currently, fair market rents in Androscoggin County are $475 per month for a studio, $595 for a one-bedroom, $727 for a two-bedroom and up to $1,020 for a four-bedroom.
Landlords can charge more for individual units, but the fair-market rents are the limit of what HUD will reimburse.
The vouchers are generally tied to individual tenants and go where they go. A person who qualifies for a Section 8 voucher in Lewiston can use that voucher anywhere suitable housing is available: Lewiston, Auburn, Rumford, Augusta, Portland and even out of state. Housing authorities usually swap vouchers when tenants leave, but in some cases they end up paying out-of-town rents.
Landlords can't turn away Section 8 renters if they meet the rental requirements.
"In the state of Maine, it's illegal to discriminate against a tenant just because of the source of their income," Dowling said. "For a landlord to say they won't house a family because they have a voucher is illegal, but the landlord does have a right to do normal background screening, based on past behavior."
The number of vouchers is limited. The Lewiston Housing Authority has been allowed to distribute between 1,000 and 1,100 at one time. Those vouchers bring roughly $5 million per year to the city in the form of rents paid to local landlords.
"The number floats, depending on federal funding and the amount of money that Congress appropriates year by year," Dowling said. That number doesn't change drastically, and a Section 8 tenant must leave the program before a new person can be added.
But not all vouchers are tied to tenants. HUD allows housing authorities to convert some of their portable, tenant-based vouchers to help new housing projects operate. Section 8 vouchers were a key factor in supporting Birch Hill Apartments, which opened in 2010.
"They don't help build it, but they help it operate year to year," Dowling said.
Other federal programs are used to help build the housing. Those include tax credits for affordable housing, elderly housing, historic renovations and grants. But Section 8 vouchers help a project survive economically, giving the landlord a certain amount of guaranteed income.
"If you know that the housing is going to have Section 8 assistance, you know that a significant amount of rent will be paid by the housing subsidy and you have a larger pool of tenants because the rents will be affordable to virtually everyone," Dowling said. "It improves the viability of a housing project."
Section 8 vouchers also have figured heavily in cinching the Bates Mill Lofts project, which is scheduled to close Dec. 11.
That $9.2 million project will renovate part of the Bates Mill complex, creating 48 apartments. About $5 million of the cost was financed by selling low-income-housing tax credits. Investors will be repaid out of rental payments.
Payments on about 33 units will be subsidized by Section 8 vouchers. The remaining 15 will be unsubsidized, market-rate rental units.
That's exactly the kind of use to which Macdonald objects, and something he vows to stop.
"We've now essentially bought a building and we're going to spend the next 99 years supporting these people," Macdonald said. "Meanwhile, someone else is making a profit, and I find that objectionable."
Opponent Mark Paradis said the problem is more complex than Macdonald thinks.
"It sounds like a great idea, but this is a federal program and the mayor has no control over it," Paradis said.
He said he favors an economic-development solution — bringing in developers and making the downtown more valuable — instead of targeting one group and chasing them out of the city.
"What we don't need are leaders who shoot and ask questions later, and don't really know how to resolve the problems," Paradis said. "We want to be very careful so we don't create a whole new set of problems that all of us will pay for one way or another."
Dowling said it probably isn't possible for a city to stop its residents from taking Section 8 money, but it is possible to limit new publicly funded housing programs through zoning.
"That's a decision of the city and how they want to see the downtown developed," Dowling said. "Where does the community want to see rental housing and where does it want to see affordable rental housing?"
It's a difficult answer to the problem, Dowling said, but it's not a simple problem.
"To just blithely assume that the people in these programs are somehow undeserving or could just change their life circumstances if they only put their mind to it, it isn't that simple," he said.