Honolulu needs a nimble and tenacious team to push for affordable housing opportunities amid our daunting housing crisis. But one key team member needs to work on its game: the Department of Community Services (DCS), which administers a federally funded program that subsidizes rents for low-income households.
A city audit of the Tenant-Based Assistance Program for Section 8 housing raised serious concerns relating to landlord recruitment and fraud prevention:
>> Delinquent accounts in fiscal year 2016 more than doubled to $1.5 million since 2010, but the program has no debt collector, and doesn’t use a collection agency or write off debt. Also, it has no fraud investigator and lacks set practices for fraud prevention, detection and reporting.
>> Since 2010, landlord participation has dropped by 8.5 percent, to about 1,500. A lack of policies, procedures and landlord outreach plans have yielded inconsistent reporting of statistics.
The drop in landlord participation can be blamed on market conditions. Given tight rental inventory, some landlords opt for easy-to-find tenant applicants who don’t rely on the assistance program, also known as the Housing Choice Voucher Program.
Mayor Kirk Caldwell says Oahu needs some 24,000 affordable housing units to meet pent-up demand. Most of the demand — 75 percent — is for households earning less than 80 percent of area median income. That translates to $80,450 for a family of four, according to data calculated by the U.S. Department of Housing and Urban Development (HUD).
And that’s precisely the income bracket targeted by the city-managed Section 8 program, which serves about 11,210 individuals and nearly 4,000 families. Typically, participants apply a minimum of 30 percent of their monthly income toward rent while Section 8 pays the balance directly to the landlord.
Two years ago, Gov. David Ige and Caldwell teamed up for a “landlord summit” at which property owners shared a mix of stories, including some about Section 8 helping to pull people out of homelessness. Others were about troubled tenants, skipped rent and property damages.
City and state housing officials are pushing landlords to rent units to homeless people using the national “Housing First” model, which assures rent will be paid, any damage will be covered and tenants in need of help with alcohol, drug and mental health problems will receive assistance.
Unfortunately, DCS appears ill-equipped to put more Section 8 tenants into rental housing. For one thing, the department is hindered by outdated record-keeping practices. For example, auditors found that scholastic composition books were being used in place of electronic spreadsheets for file management logs. Also, the audit correctly warned that the voucher program’s light staffing for database administration heightens vulnerability to fraud, waste and abuse.
That’s unacceptable in a city in which homelessness is largely driven by the high cost of housing. Hawaii has the highest per capita homeless population in the country, with most of it residing on Oahu. There’s no room for fraud or other abuse; the demand for Section 8 assistance is too great. In 2014, when the city reopened a waiting list it had closed nine years earlier due to excessive demand, it received 14,000 applications in a single week.
In response to the audit’s findings, DCS Director Gary Nakata, who will be leaving his job at the end of the week, conceded that the program needs fixes and noted that several are already in the works. Plus, both the audit and Nakata pointed out that the program is generally meeting its federal requirements.
Even so, more needs to be done. The audit’s findings are expected to go to the City Council’s budget committee this month. The city must find a way to swiftly put in place effective program improvements as part of its ongoing effort to reduce homelessness in Honolulu.
