Federal officials are pondering how to tighten regulations on the tens of thousands of formerly low-income individuals and families, including several hundred in Massachusetts, who still live in government-subsidized homes even though they now make too much money to qualify.
A nationwide audit by the US Department of Housing and Urban Development found that as of July 2014 there were 25,226 “over-income” families — those living in public housing despite having incomes “slightly,” “moderately,” or in some cases, “substantially” above income limits that they had initially met when they applied.
The majority of those families, 17,761 or about 70 percent of them, had earned more than the limits for more than a year, according to the audit conducted by the department’s Office of Inspector General.
When the department released the results of the audit in July, it estimated that it “will pay $104.4 million over the next year for public housing units occupied by over-income families that otherwise could have been used to house low-income families.”
“Although it would be reasonable to expect that a minimum number of over-income families would reside in public housing at any time, HUD can significantly reduce the number of over-income families that reside in public housing,” the department said.
The audit identified 621 over-income families in Massachusetts, including 184 in Boston, 100 in New Bedford, 96 in Cambridge, 38 in Fall River, and 34 in Lowell.
The worst example statewide was a family living in public housing in New Bedford with an income of $200,768, or $157,818 above the $42,950 limit for that home, according to data collected for the audit.
The most extreme case in Boston was a family living in public housing in Boston’s Roxbury neighborhood with an income of $191,773, or $124,023 above the $67,750 income limit for that home.
The audit report noted that there were 117,663 families on the Boston Housing Authority’s waiting list for public housing and 1,219 families on the New Bedford Housing Authority’s waiting list.
Nationally, the worst case was a family in New York City that had an income of $497,911, or $430,811 above the income limit of $67,100 for that home, data shows.
Currently, there is no regulation barring families from continuing to live in public housing if their income rises above the limits.
In the wake of the recent audit, the Housing and Urban Development sent a letter in September to public housing authorities around the country “strongly recommending” that they adopt “reasonable policies that clearly define ‘over-income,’ provide a safety net for fluctuating incomes, and offer protections for hardship cases.”
Also in response to the audit, the department last week announced that it is considering federal rule changes to ensure that people living in public housing actually still need the assistance.
“Given the urgent need for affordable rental housing in many communities, HUD is considering ways to possibly limit public housing residency to those households that actually require housing assistance,” the department said.
The agency asked for ideas on how it “can structure policies to reduce the number of individuals and families in public housing whose incomes significantly exceed the income limit and have significantly exceeded the income limit for a sustained period of time after initial admission.”
The department acknowledged that increased income for families is “good and welcomed,” noting that a steady rise in income “may be an indication that the family is on its way to self-sufficiency.”
At the same time, the department also cautioned that families whose incomes rise above the limits should not automatically be forced from public housing.
“An increase in income may be minimal or temporary, and a minimal or temporary rise in income should not be the basis for termination of public housing assistance,” the department said.
“The public housing program is an essential resource for some of the nation’s most vulnerable families,” the department added. “Any changes that would require the termination of tenancy for over-income families should be enacted with caution so as not to impede a family’s progress towards self-sufficiency.”
The department is seeking public suggestions and other public feedback through March 4.
Meanwhile, the US House of Representatives approved a bill last week that includes new limitations on over-income residents in public housing, including requiring public housing authorities to either charge rent to, or evict, any families making more than 120 percent of the area’s median income for two straight years.
The bill moved to the Senate, where it has been referred to the Committee on Banking, Housing, and Urban Affairs.
Comments about HUD’s potential rule changes can be submitted online at www.regulations.gov, or they can be mailed to: Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW, Room 10276, Washington, DC 20410–0500.
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