Sen. Charles Schumer is calling on the federal Department of Housing and Urban Development to increase its fair-market rent rate for Long Island, saying superstorm Sandy and its effects have reduced rental stock, in turn driving up rents.
The fallout has hurt the finances of scores of local agencies that provide housing for the disabled and homeless, said the senator and the leader of the Long Island Coalition for the Homeless, an umbrella group representing 40 of those local groups.
Greta Guarton, executive director of the Garden City-based coalition, said HUD's 2013 fair-market rent, which took effect earlier this year, declined by a range of 3 percent to 18 percent from the 2012 rate, depending upon a house's number of bedrooms.
The reduction in the fair-market rent, which affects Section 8 housing programs, means the agencies face reduced reimbursement from HUD even as rents for some clients have increased.
Those reimbursement reductions are estimated to total $538,000 over the fiscal year 2013-14 for the agencies' housing programs and other services.
"Some agencies are considering reducing or closing down some of their permanent housing units because they can't afford the additional financial burden, and others are scrambling to find housing [with] these new fair-market rents," Guarton said.
Those local agencies don't administer Section 8 vouchers -- public housing authorities do -- but their housing assistance programs must adhere to Section 8 standards, such as the fair-market rent.
Under Section 8 rules, eligible clients must pay 30 percent of their income toward the rent, with HUD money paying the rest. Guarton said, however, that local agencies have had to make up the difference between what HUD will pay under the fair-market rent and what the rents actually are, causing the financial squeeze.
"Rents have gone up because of Sandy and HUD's reimbursement has gone down, because of the FMR decline . . . So, we've gotten a double whammy here," Guarton said.
Schumer wrote to HUD in response to those concerns. "We're grateful he's championing this cause," Guarton said.
In his letter to HUD this week, Schumer said, "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 [fair market rent] for Long Island."The senator noted that in past disasters, HUD increased its fair-market rent in communities that experienced housing stock loss, such as New Orleans after Hurricane Katrina.
"I respectfully request that Long Islanders be granted the same consideration," Schumer wrote.
Schumer's letter also said HUD's reduction in the fair-market rent was based on the 2010 American Community Survey by the U.S. Census Bureau, data he said is outdated.
A HUD spokesman said the agency uses other information in its annual adjustment of the fair-market rent, including "local, random digital dialing survey data."
"We will answer the senator very quickly," said the spokesman, who provided information on background. He said "HUD can make exceptions to the FMR" based on "current market conditions. Usually these requests come to us through housing authorities."
He added, "We appreciate the fact that the housing rental market on Long Island has been further stressed by damage to the housing stock. This results in costs going up."
"Since this change in the fair-market rent, our tenants have not had difficulty in locating and leasing a place to live," said Marianne Garvin, president and chief executive of the Community Development Corp., which administers more than 4,000 Section 8 vouchers, primarily in Suffolk County.
John Sarcone, director of Housing and Intergovernmental Affairs for Nassau County, said in an email, "We have not had to change our payment standard because it was already within the acceptable range when HUD lowered the FMR. We have already had multiple Section 8 tenants who have successfully found new housing within our payment standard limits after they were permanently displaced by Hurricane Sandy."