HELENA — Montana leaders say a change in federal funding allocations will require them to close the state’s waitlist for Housing Choice Vouchers – commonly known as “Section 8 vouchers” – later this month.
Montana Housing executive director Cheryl Cohen says they currently have about 3,000 households on the waitlist to be considered for the rental assistance program. Starting Aug. 15 and until further notice, none of those applicants will receive vouchers and no new households will be added to the list.
“As we receive calls, we have resources prepared for our staff to try to direct individuals or families to what would best meet their needs,” said Cohen.
The Montana Department of Commerce is sending out letters to people on the waitlist this week, announcing the change.
Housing Choice Vouchers help eligible recipients – including low-income families, older people and those with disabilities – pay for housing on the private market. Cohen said roughly 3,300 households are currently receiving vouchers through the state’s program, and another 4,000 are receiving federal assistance through subsidies for specific properties.
State leaders say they heard last month from the U.S. Department of Housing and Urban Development that Montana’s monthly budget authority for the voucher program would be reduced to less than $1.5 million. They said the state is currently spending closer to $2 million a month.
In a release Thursday, Commerce said the state’s share of the budget was reduced because of shortfalls in other states’ programs.
“Commerce, having responsibly managed Montana’s HCV program, must now spend down its HUD-held reserves and close its waitlist to ensure the program remains solvent and able to serve current participants,” the release said.
Cohen said leaders are making a last push to qualify some of the waiting applicants for vouchers.
“We just pulled about 850 as one last draw from the waitlist, to try to lease up as many individuals as we can, knowing that this closure was going into effect,” she said.
Michael O’Neil, executive director of the Helena Housing Authority, says he regularly sees people spending well over a year on the waitlist. He says one major reason is that it’s getting harder for those receiving vouchers to find housing using them.
“Only 40% receiving a voucher are able to lease up using that voucher, which I think is a broken promise,” he said. “That's why we have to fix some of the fundamentals in the program.”
A Washington Post analysis of nationwide data provided by CoStar Group found the average rent in Lewis and Clark County is now $1,493 – up 3.7% since last year and up a whopping 58.8% since 2019. Over those same five years, the average rent rose 30.3% in Missoula County, 35.2% in Flathead and Yellowstone Counties, 43.4% in Cascade County and 48.8% in Gallatin County.
How much a voucher will pay is determined by the “fair market rent,” an amount calculated by HUD that is intended to mirror how much it would take to rent a “moderately-priced dwelling” in a given area. However, O’Neil believes data on Montana rents aren’t being collected accurately because of the state’s low population, and the current “fair market” rates are far short of where they should be.
This week, Gianforte approved a recommendation from a state behavioral health commission to spend $1 million on a study of fair market rents in Montana.
“We think it will make a tremendous difference for some of our most vulnerable being able to afford a place to live, and making sure that we're receiving in our communities the federal rental assistance dollars that we need – and that our landlords are getting paid to help address the high costs they're facing, as well,” O’Neil said.
The waitlist is remaining open until Aug. 15, and Cohen said they’ll continue to accept applications through that time.
“There's no harm, and we would certainly encourage people to apply – just with the knowledge that we won't be pulling names off the waitlist to do lease-ups until we have a better understanding of the financial position and what we will be receiving from HUD in the future,” she said.
