Department of Housing and Urban Development Provides Subsidies for Those In Need of Housing, But Subsidies Are Far Too Low For Long Island’s Expensive Market; They Have Even Been Reduced In Recent Years
HUD’s Calculation of “Fair Market Rent” Relies On Old Data and Doesn’t Take Into Account Rent Spikes After Hurricane Sandy – Schumer Calls For Immediate Recalculation Using New, Better Data, Like Feds Did After Hurricane Katrina
WASHINGTON, D.C. – April 26, 2013 – (RealEstateRama) — U.S. Senator Charles E. Schumer today called on the U.S. Department of Housing and Urban Development (HUD) to increase the Fair Market Rent (FMR) for victims of Superstorm Sandy on Long Island—one of the nation’s most expensive housing market. A wide variety of people use this program including homeless veterans and victims of domestic violence fleeing their abusers.
For participants in HUD’s Section 8 housing programs, HUD pays the difference between what the renter can afford and the FMR. The FMR was recently reduced in Nassau and Suffolk Counties even though Long Island suffered a loss of housing stock as a result of Superstorm Sandy. In the past, HUD has responded to regions, like New Orleans and Baton Rouge, facing natural disasters by increasing the area’s FMR. Schumer today urged HUD to increase the FMR on Long Island and take into account the damage to rental inventory and the increased demand for remaining inventory as a result of Sandy.
“In a part of the country where rental housing is so expensive, especially after Superstorm Sandy destroyed so much housing stock and cast thousands into an already tight rental market, HUD shouldn’t be reducing their support for those in need,” said Schumer. “In the wake of Superstorm Sandy, people across Long Island, including victims of domestic violence, the disabled and homeless veterans rely on this program to find decent housing, and HUD needs to make sure their needs are being met. New Yorkers pay far more in taxes than they get back, and the federal government shouldn’t be short changing New Yorkers in need.”
“The combination of the reduction in Fair Market Rents in the Long Island region, along with the devastation of much of our housing stock in the wake of Super Storm Sandy, has had the worst impact on our most vulnerable populations, including homeless and disabled families,” said Greta Guarton, Executive Director of Long Island Coalition for the Homeless.
“The lack of rental housing in Nassau County, especially after Super Storm Sandy, makes looking for housing a difficult task. Victims of domestic violence face many obstacles while fleeing and relocating, therefore housing is a major issue. With the lowering of the Fair Market Rents (FMR), securing rental housing has become extremely difficult, since they do not reflect what Nassau rental units actually cost. It would be a tragedy if victims and their children could not locate safe, affordable housing through these programs due to the lower FMRs,” said Susan Hirchstein, Director of Client Services, Nassau County Coalition Against Domestic Violence.
HUD calculates the FMR in each geographic region to determine the maximum amount of rent that can be covered by the government for individuals and families who are part of Section 8. According to the National Low-Income Housing Coalition’s annual housing study, Long Island is the fourth most expensive metropolitan area in the country and has the most expensive 2-bedroom housing market in New York State.
HUD recently reduced the 2013 FMR for Nassau and Suffolk Counties based on data retrieved from the American Community Survey in 2010. According to the Long Island Coalition for the Homeless, the average asking price for a 1-bedroom apartment is $1,968. In 2012, HUD’s FMR for a 1-bedroom rental unit was $1,425 and in 2013, it was reduced by 10% to $1,285. In 2012, HUD’s FMR for a 2-bedroom rental unit was $1,682 and in 2013, it was reduced to $1,583. The FMR for a 3-bedroom rental unit was $2,232 in 2012 and has now been reduced to $2,058.
HUD’s FMR is adjusted to reflect inflation and other factors, but does not reflect the unique circumstances affecting Long Island following Superstorm Sandy. Since the 2010 American Community Survey, Long Island’s rental market has experienced significant change. First, rental demand increased in the wake of the foreclosure crisis. Then, due to Superstorm Sandy, Long Island has experienced a significant loss of housing stock because many rental units were damaged by the storm and there is now increased demand for the remaining inventory. Right now, approximately 1,000 households are still displaced and living in hotels. At least 30% of these are renters.
In past natural disasters, HUD has responded by increasing the FMR. For example, HUD increased the FMR in the New Orleans metropolitan area by 35 percent and the Baton Rouge area by 25 percent after Hurricane Katrina.
Schumer today called on HUD to grant Long Island the same consideration as New Orleans and Baton Rouge after Hurricane Katrina by conducting the necessary examination to determine whether Long Island’s FMR should be increased. Schumer explained that Superstorm Sandy’s devastation seriously impacted Long Island and some of the most vulnerable citizens are now being priced out of housing.
A copy of Schumer’s letter can be found below:
Dear Secretary Donovan:
I am writing to you about a topic of great concern for many Long Islanders: the difficulty of finding safe, stable housing under the current Fair Market Rent (FMR) as determined by the Department of Housing and Urban Development (HUD). Long Island is already one of the most expensive areas in the country in which to live, a situation made more dire by the significant loss in housing stock due to Superstorm Sandy and a recent reduction in the FMR for Long Island. The reduction in area FMR was based upon a survey of the area, using data from the American Community Survey from 2010. Two important factors have changed since the 2010 ACS survey: The cost of rental housing has surged and Long Island experienced a significant loss of housing stock due to Superstorm Sandy.
The result is that our most vulnerable citizens are being priced out of housing – often losing units in which they are currently living, or remaining in shelters due to their inability to find rental units within the FMR. This includes households with Section 8 vouchers; disabled and homeless or formerly homeless households, including veterans; and low income families supported by a variety of programs following the Section 8 model.
As you know, HUD has responded in the past when other regions experienced similar natural disasters that resulting in a similar loss of housing stock. For example, HUD increased the FMR in the New Orleans metropolitan area by 35 percent and the Baton Rouge area by 25 percent after Hurricane Katrina.
I respectfully request that Long Islanders be granted the same consideration, and that HUD conduct the necessary examination of Long Island’s rental market to determine whether an increase in the FMR is warranted, taking into account both the damage to the rental inventory and the increased demand for the remaining inventory as a result of Superstorm Sandy.
As our region attempts to recover from the devastation caused by Sandy, I hope you will take another look at the cost of housing in the Nassau-Suffolk region and consider increasing the FMR to more closely reflect the current rents.
Thank you for your attention to this matter. Please feel free to contact me or my staff if you have any questions.
Sincerely,
Charles E. Schumer
United States Senator
