Housing Authority: Post-Storm Rent Hikes Hitting Low-Income Residents

VIHA Director Robert Graham testifies at the Senate Tuesday on the state of V.I. public housing. (Photo by Barry Leerdam for the V.I. Legislature)
VIHA Director Robert Graham testifies at the Senate Tuesday on the state of V.I. public housing. (Photo by Barry Leerdam for the V.I. Legislature)

With the influx of off-island contractors working on recovery after the 2017 hurricanes, low-income residents relying on the Section 8 Housing Choice program are grappling with inflated rental costs, V.I. Housing Authority officials told lawmakers on Tuesday.

Robert Graham, director of Housing Authority, led a team of testifiers Tuesday to update members of the Senate Committee on Housing, Transportation and Infrastructure/Communication, chaired by Sen. Marvin Blyden (D-STT).

“We do have challenges competing with market-rate rent,” Graham said about the effects of the significant increase in private rental costs.

Akala Anthony, director of the Housing Choice Program, said that in the St. Croix district alone the agency has seen as much as a 40 percent increase in the cost of private rental units, compared with the period prior to Hurricanes Irma and Maria.

Housing Authority’s Section 8 Housing Choice Program helps individuals earning less than 30 percent of the area median income, now set at around $40,000, find affordable housing in the private market. If the rent exceeds 30 percent of an individual’s income, Housing Authority, through HUD funding, provides the balance of the rent, as long as it is below the Fair Market Rent set by HUD. Section 8 benefits can be issued to the tenants themselves, or to participating properties that would extend the benefits specifically to qualifying tenants of that property.

Sen. Javan James (D-STX) said one of his constituents is suffering from the drastic increase in rent, telling him the landlord is not renewing her lease and raising the rent to accommodate other tenants. Sen. Novelle Francis (D-STX) said rent control is direly needed and criticized property owners who benefited from the Section 8 program for years and are now closing their doors to low-income residents in need of housing.

“Especially those individuals who have been able to capitalize on our section 8 program for a number of years and now they are pricing renters out of the market,” Francis said.

“It’s unfair and it’s unconscionable and I think we need to make sure that there is some recourse for those individuals who were there for them when they needed Section 8 and we should not be doing that to our renters,” he said.

Francis also hinted that in this legislative session he would address the rent control statutes that have been on the books since 1969.

There are 2,400 applicants on its tenant-based voucher waiting list. The hurricanes worsened the imbalance of supply and demand, taking more than 100 units from the list of HUD-acceptable housing, but V.I. Housing Finance Authority, a separate agency, has about $5 million to provide rental rehabilitation grants of up to $50,000 per rental property.

VIHA receives approximately $14 million in subsidies paid directly to about 800 landlords in the territory and on the mainland. In 2019, the agency expects to pay $700 per month per family, or $8,400 annually to landlords for each of roughly 1,750 families. To accommodate rising rental costs, the agency can increase the voucher payment standard based on Housing and Urban Development’s fair market rate, Graham said, and while post-hurricane waivers from HUD allowed the agency to increase voucher amounts to 150 percent of the HUD-designated fair market rate, that waiver has already expired.

“The agency is in the process of evaluating the economy and the cost of rental units, and applying through our HUD field office to try to increase those standards again in order to put the program to compete and give our participants a fair chance of finding suitable units,” Anthony said.

Housing Authority has 2,047 Housing Choice Vouchers to provide subsidy for low income families. There are 1,655 families participating in the program in the territory, and with the completion of the Louis E. Brown III community in St. Croix, another 90 families will join the program.

Graham also reported that in a 2016 HUD-administered Real Estate Assessment Center, or REAC, inspection, six of the nine public housing communities on St. Thomas failed to reach the 60 points needed to pass. On St. Croix, seven of the fifteen public housing communities failed REAC inspection.

The agency’s public housing inventory consists of 3,012 public housing units in 26 complexes. Graham said the failed inspections were due to various factors, including inconsistent management and maintenance practices at the communities, and failure to implement preventative maintenance.

The old structures also impact the maintenance backlog, said Graham, with 93 percent of the structures built before 1980, most of which are between 40 and 50 years in age. Graham admitted that the agency can do better with performing needed maintenance.

“Our maintenance function across the territory is not acceptable,” said Graham. “We are doing poor preventive maintenance and we are doing poor regular maintenance.”

No REAC inspections were scheduled for 2017 or 2018 due to the 2017 hurricanes, but HUD will schedule physical inspections in 2019.

Looking forward, VIHA aims to reposition its portfolio, with the goal of decentralizing and deconcentrating poverty, and diversify housing options by helping people obtain vouchers or own homes.

VIHA has an unmet capital need of $200 million for about 3,000 old public housing units. With the help of a 2012 Congress-approved Rental Assistance Demonstration, aging public housing properties may be converted to housing complexes that would extend Section 8 benefits to qualifying tenants. It shifts the method of funding to Section 8 Housing Assistance Payment instead of the Public Housing Fund.

“We have an opportunity to transform the entire old public housing portfolio to lower density, energy-independent, attractive, amenity-rich environments designed to support family self-sufficiency,” said Graham.

Graham added that VIHA needs to increase its affordable-housing inventory by 1,000 units over the next 10 years to make a dent in some 3,000 applicants in both the Housing Choice Voucher waiting list and and public housing waiting list. Half of these affordable housing units should also be reserved for the senior population, said Graham.

Gov. Albert Bryan has signaled support of VIHA’s portfolio repositioning strategy, according to Graham, and is considering additional funds from the Community Development Block Grant Disaster Recovery program to support the 10-year replacement plan.