HUD reverses plan to reduce
'Fair Market Rents' subsidies    

Low-income seniors and families spared moves

[SEPT. 29, 2004]  CHICAGO -- On Tuesday Gov. Rod Blagojevich praised the announcement by the U.S. Department of Housing and Urban Development that it will not change the way it determines fair market rents in Illinois and across the country. HUD's originally proposed changes would have affected more than 76,000 families and seniors in Illinois who depend on federal rental assistance. It would have forced many of these renters to either pay more in rent than they could afford or seek cheaper housing, which may only be found in areas with high concentrations of poverty, where jobs and other opportunities are often lacking.

"I applaud HUD for listening to the outcry in Illinois and across the country and for taking a step back from its proposed changes to the rent structure," said Gov. Blagojevich today. "Low-income families do not have the extra income to make up the shortfalls that would have been created by their action. I also want to praise the Illinois Housing Roundtable, the Statewide Housing Action Coalition and the other Illinois organizations that stepped forward to join me in urging HUD to reconsider its policy changes."

Last week the governor sent a letter to HUD Secretary Alphonso Jackson, pointing out that Illinois landlords face rising utility, property tax and insurance costs and that landlords could not be expected to remain in a program that not only does not keep pace with these increased costs, but reduces the rental subsidy available. More than 80 percent of Illinois vouchers would have been affected with reduced "Fair Market Rents" in fiscal 2005.

On Friday, HUD will publish its new schedule of fair market rents, which will be based on the 2000 census and local rent surveys, as has been the case in the past. Under the federal program, known as Section 8, tenants pay 30 percent of their income toward rent and use vouchers to cover the difference. The voucher is capped, however, at the fair market level, and any additional shortfall becomes the responsibility of the tenant.

[News release from the governor's office]