Low-income families going upscale at taxpayer expense

The Obama administration is changing the program through which very low-income families are paid rent subsidies at taxpayer expense so they can live in more upscale neighborhoods.

HUD Secretary Julian Castro recently confirmed the plan to raise the rent subsidies.

"Today, we embark upon a new approach to offer more choice and greater opportunity for families struggling to find a decent place to call home," Castro said. "Moving to this approach will offer these voucher-holding families more opportunities to move into higher opportunity neighborhoods with better housing, better schools and higher paying jobs."

The Washington watchdog Judicial Watch said the final rule change was recently announced in the Federal Register by the Department of Housing and Urban Development, which "annually spends tens of billions on rent for the poor."

It is the Housing Choice Voucher program that is being changed.

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It will let beneficiaries of the taxpayer grants "choose housing in the private market," and it will have the government pay subsidies based on local circumstances.

"Under the new rule, which goes into effect in January, fair market rents will now be calculated by zip code so Uncle Sam will pay a lot more for people to live in nicer areas," Judicial Watch said.

The new regulation states: "This final rule establishes a more effective means for HCV tenants to move into areas of higher opportunity and lower poverty by providing the tenants with a subsidy adequate to make such areas accessible and, consequently, help reduce the number of voucher families that reside in areas of high poverty concentration."

Judicial Watch said the government decided to spend more taxpayer money to move the poor upscale after "a group of Ivy League social scientists published a study on the effects of moving families away from neighborhoods with deeply concentrated poverty to low-poverty environments."

"They found that children who moved to low-poverty neighborhoods before the age of 13 did better as adults, had significantly higher earnings and a greater likelihood of attending college."

The watchdog group said that "to justify the added expense HUD is playing the race card, asserting that the current method of doling out vouchers 'has not proven effective in addressing the problem of concentrated poverty and economic and racial segregation in neighborhoods.'"

It said the Obama administration thinks the new system will help families move toward opportunity and away from poverty.

"To some this may sound like social engineering and yet another Obama administration example of spreading the wealth around," Judicial Watch said. "For instance, the 'better jobs' argument is a huge red herring, particularly in the area surrounding the capitol, which will be deeply impacted by the new rule. For example, the highest new fair market rent areas in the District of Columbia are in the northwest while the lowest are in the southeast. Commuting to downtown is actually easier from the southeast because of its proximity, metro rail coverage and bus routes. Also, the highest rent allowances in the area are in places like Fairfax – again, far less accessible to employment centers than anywhere in the district."

Judicial Watch said the decision to hand out more money will cost taxpayers.

"As an example: In 2016, the fair market rent for the entire D.C. metropolitan area for a two-bedroom apartment was $1,623. Under the new rule, voucher amounts in the D.C. area will range up to $2,420 a month for a two-bedroom apartment in northwest D.C and parts of Fairfax and Arlington counties. Among the areas that will implement the new system are the nation's largest cities, including Chicago, Dallas, Atlanta, Philadelphia and San Antonio. HUD claims that its current system artificially inflates rents in some higher poverty neighborhoods rather than incentivize voucher holders to move to higher opportunity neighborhoods."

Katherine O'Regan, a HUD official working on research, said the "new method of looking at Fair Market Rents offers real choice to voucher-assisted families."

"The final rule we announce today is the product of a lot of listening. In the end, this new smaller area approach focuses on expanding housing opportunities for families, safeguarding current tenants, and ensuring housing agencies continue to have enough flexibility and discretion to address local circumstances."

Fair Market Rents are estimates used to calculate subsidies HUD provides to people getting rental help, including the 2.2 million households under the Housing Choice Voucher program.

Those households generally contribute 30 percent of their adjusted monthly income toward rent, and the taxpayers pay the rest. FMR levels are usually set at the 40th percentile of all rents in the area, although in some areas it's 50 percent.

Now, HUD will be working within ZIP code areas, so that payments can be higher for families who want to move to "low-poverty/high-rent areas."

Judicial Watch found this will let aid recipients "choose housing in the private market" and have the federal government "pay a lot more for people to live in nicer areas."