Officials: Public housing would take a hit from Pawlenty's welfare cuts

Gabriella Raspa
Gabriella Raspa talks about budgeting ideas with her case manager, Kayla Dotson, at Lindquist Apartments in Minneapolis, Monday, March 1, 2010. Raspa receives a housing subsidy to live at Lindquist Apartments.
MPR Photo/Jeffrey Thompson

After overcoming drug and alcohol addiction two years ago, Gabriella Raspa said her life finally seemed to be headed in the right direction.

She was 20, and barely scraping by on $203 a month in welfare payments, but she was getting ready to find a job, and had dreams of going to college to become a journalist.

Perhaps most importantly, Raspa said, she had moved into a low-income apartment building in north Minneapolis. She had made friends with other residents, adding that the building was "kind of like a dorm, with lots of people my same age. I finally felt like I belonged somewhere."

But then her welfare benefits abruptly ended. Her doctor said she had sufficiently recovered from her addiction, and was able to work.

"I kind of freaked out," she said.

Raspa worried that she would become homeless. She had no income, and didn't think she'd be able to find a job fast enough to afford her $61 rent payment.

Luckily, Raspa said, a caseworker helped her apply for hardship waiver from the public housing authority. The waiver allowed Raspa to stay in her apartment, rent free, until she found a job.

After several months, she found work at a bagel shop and started paying rent again. She recently returned to college, and is working toward her goal of becoming a journalist.

"I don't think I'd be back on my feet without the assistance I had," she said.

Raspa said the hardship waiver program worked well for her, and the cost to the public housing authority was minimal.

But housing officials warn that the system could face a devastating hit under Gov. Tim Pawlenty's proposed welfare cuts.

Living on General Assistance
This graphic shows a rough example of how people who receive General Assistance and live in public housing use the funds each month, based on interviews with GA recipients and providers.
MPR Graphic/Steve Mullis

Two weeks ago, Pawlenty proposed eliminating General Assistance, a state program that provides up to $203 a month to adults without children who cannot work due to an illness or disability.

Pawlenty has said that cuts to programs for low-income Minnesotans are necessary to fix the state's budget deficit and pay for tax cuts he says will create jobs.

If approved, Pawlenty's budget would leave 15,000 of the state's poorest residents without any monthly income other than food assistance, starting Dec. 1.

The cuts would mean that hundreds, perhaps thousands, of Minnesotans would be in Raspa's situation: Living in subsidized housing with no income, unable to pay rent.

"It's just unconscionable," said Bob Boyd, director of policy and special initiatives at the Minneapolis Public Housing Authority. "This would be devastating to people in our community."

Housing officials say they would be required to provide hardship waivers to tenants who used to receive General Assistance, and would work with tenants to prevent evictions.

"If this program goes away I wouldn't be able to pay my rent."

And although that's good news for people living in public housing, officials say the increased costs would lead to cuts in other areas.

"If you have a limited amount of money, then you can do the math," Boyd said.

Some agencies may be forced to trim operating budgets or delay repairs to public housing buildings.

"Like a homeowner, maybe we're not going to get some of the improvements we were going to make because we don't have the money anymore," Boyd said.

But if the revenue losses are more drastic, officials say they might have to cut the number of low-income housing vouchers they offer, and potentially even take vouchers away from households that currently receive them.

Unlike public housing, the voucher program, known as Section 8, allows low-income people to live in private rental housing. The voucher pays about 70 percent of the rent.

Already, the waiting time for a housing voucher in the Twin Cities metro area can be up to nine years, according to a 2008 study conducted by HOME Line, a nonprofit statewide tenant advocacy organization.

Right now, tenants like Raspa who live in public housing or receive a low-income housing voucher pay about 30 percent of their income for rent. But most programs also have minimum rent requirements, ranging from $25 to $75.

And although agencies can use hardship waivers to prevent evictions, housing officials say the programs were not set up to accommodate large numbers of people with no income.

"It could be a tidal wave," said Dana Kitchen, a public housing specialist at HUD's field office in Minneapolis.

Gabriella Raspa
Gabriella Raspa does homework at her apartment in Minneapolis, Minn. Monday, March 1, 2010. Raspa has been living in subsidized housing at Lindquist Apartments since October 2008.
MPR Photo/Jeffrey Thompson

The situation is complicated by the fact that the state and federal agencies apparently do not routinely track the total number of Minnesotans who receive General Assistance and live on subsidized housing.

In an e-mail sent to providers, housing officials, and this reporter, Peter Bast, an operations specialist at the HUD field office in Minneapolis, writes that the federal housing agency "is desperately trying to determine" a statewide number, but gathering that data has proved difficult. Over 100 different agencies administer various subsidized housing programs throughout the state.

Minneapolis officials calculated their numbers last week. The Minneapolis Public Housing Authority reports that 461 Minneapolis households receive both General Assistance and a low-income housing voucher. Another 295 households receive General Assistance and live in public housing throughout the city.

For smaller public housing authorities, like the St. Cloud Housing and Redevelopment Authority, the potential impacts are more difficult to discern.

"We do not track how many people receive GA," said Louise Reis, the agency's housing director, via e-mail. "We have only one household at the present time on a hardship waiver."

The governor's office has declined requests for more specific comment. "We won't be issuing separate statements on each of the proposed reductions, including General Assistance," said Pawlenty's spokesman Brian McClung via e-mail, after the budget proposal was released.

Cal Ludeman, the commissioner of the state's department of human services, defended the governor's budget in an interview shortly after Pawlenty announced his proposed cuts, but Ludeman does not dispute that the change could negatively impact public housing agencies.

"There could be some effect on the public housing reimbursements," he said. "Certainly, if someone is at a truly zero income level, that would be true."

But Ludeman also admits that his agency has "no idea of knowing how much of those current dollars are being used for housing, for example."

Sen. Linda Berglin, DFL-Minneapolis, who chairs the Health and Human Services Budget Division, has already said she opposes the elimination of General Assistance. But with a large budget deficit, combined with Pawlenty's record of using his unallotment power to veto funding for human services programs, the proposal's future remains uncertain.

The situation has also confused many General Assistance recipients who live in public housing.

"It's simple," said Duyane Jernagin, who has lived in Minneapolis public housing for six years. "If this program goes away I wouldn't be able to pay my rent."

When Jernagin was informed about the hardship waiver program, he expressed relief.

Still, he said, he dreads having to deal with additional bureaucracy. Jernagin said he's already been stressed out about the cuts to the state's low-income health insurance program, called General Assistance Medical Care. He has been spending several hours a week protesting the health insurance cuts.

Jernagin said he struggles with mental health problems, and has applied for Social Security disability benefits. He hopes to be approved soon, although he has already been waiting over a year.

"At a certain point, you just get tired," Jernagin said. "With the cuts to GAMC, I mean, at a certain point, there's only so much you can take."

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