The Cincinnati Metropolitan Housing Authority is facing a budget shortfall that could limit availability of Housing Choice Vouchers (often called Section 8), according to a letter sent to housing providers last month.
Officials with CMHA declined an interview with WVXU but answered questions about the shortfall via email.
They say rising rents in the region mean CMHA faces a $245,000 funding gap by the end of the year. In order to close the gap, officials say they've been instructed by the U.S. Department of Housing and Urban Development to take cost-saving steps, freezing the issuance of new vouchers in many cases.
HUD funds CMHA's Housing Choice Voucher program, which provides rental payments to participating private landlords on behalf of eligible families. The program serves about 7,100 families in Hamilton County. There are currently about 3,000 families on the voucher waitlist. They'll keep their places on the list during the pause in issuing new vouchers.
In addition to freezing new vouchers, CMHA is also looking at expiring vouchers for families that haven't recertified their eligibility. That means about 350 families who haven't gone through a recertification process could lose their expiring vouchers.
In addition, CMHA is pausing new project-based vouchers that go with affordable housing developments. Officials say no projects currently in progress using project-based vouchers will be impacted.
It's unclear how long the funding crunch will last, CMHA says.
"CMHA anticipates this lasting throughout 2024 and cannot predict beyond that due to not knowing the federal budget and HUD funding levels for CY 2025," CMHA Senior Communications Coordinator Missy Knight said in an email. "Real estate costs combined with housing maintenance fees makes this issue unpredictable to know for the future."
About a third of housing authorities across the country like CMHA anticipate similar shortfalls, according to HUD.
CMHA says it's working with HUD to close the funding gap. They say the authority has applied for a portion of a $200 million pool of funding allocated by Congress to shore up housing choice voucher availability.
The shortfall comes as Cincinnati sees big increases in rental rates. In recent years, those increases have been among the largest in the country. Between June 2023 and June 2024, they rose at a more modest 5.2%, according to real estate tracking site Zillow. That's still the seventh-highest increase in the U.S.
The budget gap also comes as housing supply affordable to lower-income residents remains strained.
Studies suggest the region needs tens of thousands of units of housing affordable for low-income people to meet demand, though the exact amount varies from study to study.