A family of four in New York City makes $497,911 a year but pays $1,574 a month to live in public housing in a three-bedroom apartment. In Los Angeles, a family of five that has lived in public housing since 1974 made $204,784 last year but paid $1,091 a month for a four-bedroom apartment. And a tenant with assets worth $1.6 million — including stocks, real estate and retirement accounts — paid $300 a month last year for a one-bedroom apartment in public housing in Oxford, Nebraska.
In a report, the watchdog for the Department of Housing and Urban Development describes these and more than 25,000 other "overincome" families as an "egregious" abuse of government-subsidized housing. While the family in New York with an annual income of almost $500,000 raked in $790,500 in rental income on its real estate holdings in recent years, more than 300,000 families that really qualify for public housing lingered on waiting lists.
But HUD has no plans to kick these families out, because its policy doesn't require overincome tenants to leave. In fact, it encourages them to stay in public housing. "Since regulations and policies did not require housing authorities to evict overincome families or require them to find housing in the unassisted market, (they) continued to reside in public housing units," investigators for Inspector General David Montoya wrote.
About 1.1 million families in the country live in public housing. The overincome tenants represent 2.6 percent of the system, and the report estimated that taxpayers will pay $104 million over the next year to keep all these families in public housing, money that it said otherwise could have been used for those in need of assistance.
Under HUD regulations, public housing tenants can stay as long as they want, no matter how much money they make, as long as they are good tenants. The agency is only required to consider a tenant's income when an individual or family applies for housing, not once they are in the system. This is different from the housing choice voucher program that used to be called Section 8, which gives families subsidies for rentals in private apartment buildings. That program has an annual income limit; tenants who go above it get less money.
HUD tweaked its policy on high-earning tenants in 2004, encouraging housing authorities to move families out of public housing if they earn more than the income limit for their area. While HUD gives money to the housing authorities, they are run by states and local governments.
But the 15 authorities that investigators looked at told them that they had no plans to evict these families, because if they did, poverty would continue to be concentrated in public housing. The goal, they said, was to create diverse, mixed-income communities and allow tenants who are making good money to serve as role models for others.
"Forcing families to leave public housing could impact their ability to maintain employment if they are not able to find suitable housing in the neighborhood," Milan Ozdinec, HUD's deputy assistant secretary for public housing and voucher programs, wrote in a lengthy rebuttal to the inspector general. "Further, for families with children, it may be more difficult to find affordable child care, and it may impact school-age children's learning if they are forced to change schools during a school year."
The watchdog said it didn't believe that HUD should kick out every family that earns more than the income threshold. But at the very least, the agency should create "limits to avoid egregious cases."
— Washington Post