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Center on Budget and Policy Priorities:
The nation's public housing units provide affordable homes to about 1.1 million low-income households, approximately half of which are headed by people who are elderly or have disabilities.
The local housing agencies that administer these units are required by federal law to rent them to low-income families at rents the families can afford.
Utility inflation eased during early 2006 and projections from the Department of Energy suggest that utility prices will dip somewhat in late 2006.
The Department of Housing and Urban Development (HUD) did not request funding for fiscal year 2007 to reflect growth in utility costs since the start of 2005.
Housing agencies have substantial discretion to set utility allowance levels, and not every agency provides sufficient allowances to cover tenants' reasonable utility costs.[7] Agencies also have some flexibility to decide which appliances will be subject to a surcharge and the amount of the surcharge.[8] Housing agencies that face shortfalls will face strong pressure to use this discretion in ways that maximize their revenues.
Because of a shortfall in 2006, for example, the St. Paul Housing Agency delayed an allowance increase of close to 10 percent that the agency believed was needed to reflect higher utility rates.
In some cases, higher utility costs can pose difficult burdens for public housing tenants, most of whom are poor and already struggling to make ends meet.
Some agencies will likely conclude that they cannot reduce their operating costs enough or squeeze sufficient revenues from tenants to make up the shortfall in federal operating subsidies --- or that such steps would cause unacceptable harm.
Posted on October 12, 2006 04:23 PM
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