The congressional deal to raise the federal debt ceiling imposes new spending caps that could have an impact on the reach of housing assistance programs.
That's according to Bob Palmer, the policy director at Illinois Housing Action. He said in the upcoming fiscal year, the U.S. Department of Housing and Urban Development will need a $13 billion increase to maintain current service levels due to inflation, soaring rents, and interest rate hikes.
"It's going to be very challenging, one, just to make sure that everyone who's currently getting federal assistance out pay their rent is going to be able to keep it, and it's going to be even more challenging to create new resources like adding on new Housing Choice Vouchers, of which there's a desperate need for all throughout Illinois and around the around the country," Palmer said.
Also known as Section 8, Housing Choice Vouchers are rent subsidies for low-income renters, seniors, and people with disabilities. The program is administered by local public housing agencies.
Palmer said when similar spending caps were implemented in 2011, many public housing agencies found themselves unable to issue new housing choice vouchers.
The way the program works, vouchers are returned by households that no longer qualify for assistance and then redistributed to the next family on the waitlist.
"But if there's not more money from the federal government, it's going to be harder to give those vouchers back out to households that are waiting," he said.
A new study by Housing Action Illinois and the National Low Income Housing Coalition found a full-time worker in Peoria or Tazewell County needs to earn at least $17.23 an hour to afford a regular two bedroom apartment at fair market rent. That's without spending more than a benchmark 30% of income on housing costs.
Statewide, the report found the housing wage in 2023 is $24.59 an hour. Costs are generally less expensive outside the Chicago area, Palmer said, but still above the Illinois minimum wage of $13 an hour.
