Rice calls on HUD to probe spending of aid in Hempstead

Rep. Kathleen Rice on Tuesday called on the U.S. Department of Housing and Urban Development to investigate a federally funded housing assistance program run by the Town of Hempstead Department of Urban Renewal.

In a letter to Rae Oliver Davis, the federal agency's inspector general, Rice (D-Garden City) expressed "deep concern" about the large reserves of unspent federal funding for Housing Choice Vouchers that Hempstead accumulated despite high local demand for the subsidies.

"I believe a swift and thorough investigation is necessary," Rice wrote.

Rice cited a recent Newsday report on $1.3 million in federal funding for the vouchers, also known as Section 8, that has gone unused in Hempstead since 2014, despite town waitlists for the subsidies numbering more than 3,500 households. The town has around 200 unused vouchers.

Federal guidelines say public housing agencies should spend all their voucher funding to help as many people as possible and keep reserves relatively small.

Hempstead Town Supervisor Don Clavin said in a statement almost all the unspent funding in Hempstead accumulated before he assumed office in January. Clavin, a Republican, questioned why Rice did not raise the issue previously.

"Perhaps Congresswoman Rice should focus her energies on securing federal CARES Act relief funding for the villages and the City of Long Beach in her district rather than trying to distract the public’s attention from the fact that she has 'dropped the ball' and has been absent during this difficult time," the statement read.

The CARES Act was a $2 trillion relief bill passed by Congress in March in response to the coronavirus pandemic.

Clavin also said he has “set up meetings with former supervisors as well as organizations on Long Island to address the Section 8 housing. And we are going to try to deal with that as well as the pandemic."

A spokesman for the federal housing agency did not respond to a request for comment.

The Section 8 program helps poor, elderly and disabled people pay for housing. The federal government funds the program while public housing agencies administer it locally. Families with vouchers pay 30% of their income on rent and utilities, while the government covers the rest.

Public housing agencies on average spend nearly all their voucher funding and keep modest reserves, unlike Hempstead.

From 2014 through February, Hempstead received $19.7 million to fund vouchers but spent only $18.4 million. The untapped funding flowed into the town's Section 8 reserves, which now total $1.8 million. Compared to the town's Section 8 budget, its reserves are among the largest kept by any public housing agency in the country.

The federal government penalized Hempstead for its large reserves by cutting its voucher funding from $2.9 million in 2018 to $1 million in 2019. The town's Section 8 budget this year is $2.1 million — about half what it was in 2014.

"I am concerned that without further examination, this may result in additional voucher budget reductions that will ultimately harm the many households in need of housing assistance," Rice wrote.