Making sense of subsidized housing and calls for a moratorium

Russ Dillingham/Sun Journal

Exterior of the Bates Mill Lofts project at the Bates Mill in Lewiston.

LEWISTON — When Bob Macdonald said he wanted to do away with subsidized housing in the city's downtown, it got a lot of attention.

Russ Dillingham/Sun Journal

Exterior of Birch Hill Apartments at the corner of Birch and Bates Streets in Lewiston.

Russ Dillingham/Sun Journal

Centerville Commons on Knox Steet in Lewiston.

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.

staylor@sunjournal.com

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Comments

Dan Auger's picture

D'avincis

I'm surprised Mr. Patry was in favor of this. What's going to happen when his customers are sitting outside on the patio eating while these kids are gonna be playing / skateboarding and pretty much hanging out right around where they are eating. This will be the start of the demise of his fine eatery.

John Beaulieu's picture

This guy is scary

If this guy clears out the deadwood without screwing people who ACTUALLY NEED IT. Then I am ok with that.

My Aunt has been in section 8 housing most of her life, she fell out of a 5th floor window and was brain damaged. She also has diabetes and is unhealthy and NEEDS help.

The mentally ill already got screwed when they cut several State funded services in the 80s. I lived next to section 8 housing before and it was for the mentally disabled. I never saw anyone abusing the system.

If he is the new mayor he had better walk a fine line and do it right or else he will get an earful from many extremely pissed off relatives of those who actually need the help!

DONALD FERLAND's picture

It seems to me that Mr.

It seems to me that Mr. Macdonald doesn't have a clue as to what a mayor's job is. He has consistently targeted the poor of Lewiston to show the rich that he is on their side. Subsidized housing isn't the issue, welfare reform isn't the mayors job, he doesn't have a say in how the food stamp program is implemented or what is allowed to be purchased with food stamps. He should be telling us how he intends to bring businesses to the city that would hire people, he should be telling us how he intends to better the city by enforcing the codes and laws, he should be telling us how he intends to handle the issues to bring this community together as one, and he should stop putting the blame on one class of people. I lived downtown, in a non-subsidized apartment, which took almost all of my income to pay my rent. The building was full of lead, the bathroom was falling down around us, the floors were like a roller coaster, the windows would not open....if the apartment had been subsidized maybe it would have been safer for me to raise my children there as someone would have been there to oversee what my landlord was doing with all the money he was making. It took me 3 years to get a subsidized apartment and have a safe home for my children. Another issue Mr. Macdonald should be talking about is education...he claims to be a former teacher in our school system and has put the blame on lazy students who are not willing to work. How would he fix our failing schools? It seems like every issue Mr. Macdonald talks about is the fault of the poor of this community. My one piece of advice for Mr. Macdonald is to stop the blame game and start talking about what you brind to the table as solutions but keep in mind just what it is a mayor does...maybe if you want welfare reform you should run for a seat in Augusta or Washington instead of for local government.

Linda Sherwood's picture

Re: It seems to me...

I wish I could click on the Agree button more than once in response to Tina Hutchinson's comments. Section 8 is not only for those who do not "want" to work, but for those with varying circumstances have had no alternative but to accept assistance from the government, people like the elderly and disabled, and single mothers with children who need safe housing. From the list of issues Hutchinson points out about Bob McDonald's agenda, all I hear is his negative rants. I hope the citizens of Lewiston will vote for a mayor with positive solutions and a vision for moving the city into the 21st Century.

MICHAEL LEMAY's picture

If my math is correct, almost

If my math is correct, almost $192,000.00 per apartment. Can't we get a better deal than this?

Jake Paris's picture

What's the problem with that?

What's the problem with that? That's about the price of a good house. Assuming that these are somewhat nice apartments. And we're investing in the city as a whole when we develop our old buildings, so that's added value. I used to work in one of the mill buildings right in that area, and let me tell you: the interior is nice! I would definitely want to live in that building.

Carl Kimball's picture

$192,000.00 Per Apartment

Show us your figures. If that was the amount for every apt. the landlords would be rich in a year. I don't see it. Being a landlord is not a get rich scheme, believe me i know. So show us how you came to that amount.

Carl Kimball's picture

Low Income Housing

First thing i wish to say is i dislike the term "underclass", i worked all my life, either full time or part-time, i served my country 1970-1977 in the Army,(i fought to get in, because of a heart murmur). In this country there are only three income classes:High, Middle and Low. There is NO underclass. The low-income are people who are elderly, disable or have very little income. It's not the housing program that is a problem, it's the lack of being able to screen the people going into housing, in the proper way. Because like any other program, you have the few who can play the game and get a free ride. If the city is so worried about low-income people, then stop looking for short cuts and get business interested in having "US" work for them. Give companies a real reason to come back. There was a reason they left, look at it and correct it. We don't need to be know as L/A of the east coast or Las Vegas. Just because i'm classified as elderly, doesn't mean i can't work. I've been working seasonal for LL Bean sice 2005 and held cleaning job at Pineland thru a contract company. Part-time isn't the only thing i can do, i can do full time, but they only want younger people,(which i understand). So stop pointing your finger, just because your better off then i am, because believe it or not you could end up here, too (believe me it don't take much to end up here, i didn't think i'd be here either).

Blaming the poor

For their life circumstances is a pretty mean-spirited way to run a campaign, city, or country.

There's been too much of it, and it has got to stop.

Stop blaming the poor for the way life really is. Stop making them pay for someone else's mistakes in financing, the economy or your hidden agenda. Stop making them the scapegoats for everything that is wrong in this world.

After all, nobody ever grows up thinking "Gee whiz, when I grow up I want to be poor and live a miserable existence. It's so much fun!"

They deserve to be treated like human beings, not trash that you can throw away. Affordable housing is not a handout.

Sue Crosby's picture

blaming the poor

I am a 62 disabled woman. I would rather be working and supporting myself as I have done all my life. Things happen and you end up without work and living in low income rents. I resent the fact we are all labeled as poor etc. We all had our share of working and supporting our families. For me it was hard to admit I needed help because my ssi checks would not civer everything. Subsidized housing was my only was my only way to go, or I would have been homeless. The government should freeze the rents to an affordable price and we would not have to seek out subsidized rentals. They froze rents way back in 72 or 73 and it was affordable then, now it is outrageous. Thank you for listening to me and I do agree with you all on this.

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