City councillor E. Denise Simmons says she's been getting panicked calls from people who are worried about losing their housing” or their place on the Cambridge Housing Authority waiting list.

City councillor E. Denise Simmons says she’s been getting “panicked calls from people worried about losing their housing” or a place on the Cambridge Housing Authority waiting list.

The number of families that will pay higher rent after a sweeping rehabilitation of Cambridge’s public housing units has risen to 87, compared with the original estimate of 72 families, Cambridge Housing Authority officials said Wednesday.

The disclosure came at a meeting of the City Council’s Housing Committee, and councillors peppered the authority delegation with questions about the higher rents and the decision to close public housing waiting lists next month to deal with relocations caused by construction.

“I’m receiving panicked calls from people who are worried about losing their housing” or their place on the waiting list, committee chairwoman E. Denise Simmons said.

The discussion exposed the tremendous impact of skyrocketing Cambridge rents, not just on middle-income families, but on the poor. Councillors seemed surprised that the waiting list for CHA units is around 9,500, with only 250 or so apartments available in a year. The authority’s executive director, Gregory Russ, said previously that an applicant must wait almost 20 years for a one-bedroom apartment at the Putnam Gardens development.

No new applicants

Russ said the waiting list will be closed to new applicants, except for emergencies, for two to three years. During that time, people on the waiting list won’t get an apartment, again except for emergencies. The authority needs vacant apartments for tenants displaced by the enormous construction project, expected to take five years in two phases.

“What should I tell my constituents when they come to me [seeking public housing]? Should I send them to you?” Simmons asked Russ.

“Well, we’ll talk to them,” he replied.

“Will they get an application?” Simmons asked.

“No,” he said, adding that the authority would still consider emergency applicants.

Almost lost in the concern about the freezing of the huge public housing waiting list was the announcement that the authority plans to reopen another waiting list in the spring – for tenant-based Section 8 rent vouchers, which help poor families pay rent in the private market. The federal subsidy allows low-income families to pay 30 percent of their income for rent, with the government paying the remainder up to a specified maximum.

Officials closed the Section 8 waiting list April 30, 2003, when it had 8.537 applicants on it, CHA Deputy Executive Director Michael Johnston said. Now there are about 250 on the list, and officials expect all of them to get vouchers by the time the list reopens.

The opportunity could be brief. Russ told the committee that the list will open “for a limited period.” And these days, around 40 percent of Section 8 voucher holders who are looking for an apartment end up renting outside Cambridge; the maximum rent the authority will subsidize is too low, even though it’s higher than federal standards.

Higher rents

The Cambridge Housing Authority’s executive director, Gregory Russ.

The Cambridge Housing Authority’s executive director, Gregory Russ.

As for the 87 public housing families that now face higher rents – the highest earners in public housing – they still may not make enough to rent an apartment in the private market, officials agreed. Most amass their higher income because multiple family members work in “a lower-income job,” not because one person earns big pay, Russ told the committee.

These families met income limits when they moved into public housing and, under federal rules, were allowed to stay when their earnings increased. Now they pay “ceiling rents,” the highest the authority can charge. Yet their income has increased to the point that the “ceiling rent” is less than 30 percent of their income, while much poorer families pay the required 30 percent, CHA Director of Property Management James Comer told the committee.

For example, one family has a total income of about $120,000 and pays $1,280 a month, Comer said. Its rent will increase to $1,946 – a hefty increase of $666 a month. That still represents only 19 percent of income, Comer said.

Phased in

One woman at an authority public hearing Dec. 11 put a more personal face on these families, though she gave no numbers. Speaking softly, she said she had been on welfare and used an education option for welfare recipients to go to college. “I became a teacher,” she said, and her income grew. But two adult sons among her six children are disabled, she said; they are now on the waiting list for public housing. And despite her teacher’s salary, “I don’t make enough to leave,” she said.

A total of 167 families now pay ceiling rents, and it’s likely that all of them will have their rent increased by the time the project ends, Comer said. The 87 now on the list live in developments that are part of the first phase of redevelopment; ceiling rent families living in Phase 2 developments will probably have to pay higher rents later, he said.

All households facing higher rents will have the increases phased in over three years and possibly more, officials said.

Until last month, the authority had assured tenants no one would pay higher rents as a result of the $360 million project, which will change the ownership and financing of almost all 2,600 public housing units in the city. Seeking big money to preserve deteriorating units as federal aid dwindled, CHA turned to private investors. Without repairs, officials say, public housing could become so dilapidated that no one could live in it.

Authority wasn’t required

Under a federal program called Rental Assistance Demonstration, or RAD, the authority is transferring its housing to nonprofit corporations controlled by the authority. They will continue to manage and operate the developments. Wells Fargo, the nation’s fourth-largest bank, which is investing private money in return for tax credits, will own the lion’s share of the property during the 10-year term of the tax credit, but won’t manage or control it. After the credits expire, the authority expects to take back ownership through the non-profits.

In addition to tax credit financing, mortgages from Citibank will help pay for construction. The authority will no longer get federal public housing subsidies; instead, the government is granting Section 8 rental vouchers attached to each unit rather than to individual tenants. That money will help repay the mortgages and operate the housing.

These changes don’t require the authority to increase maximum rents. But staff members noticed that the RAD program as well as the tax credit rules allow higher maximum rents than the ones now in place, and decided to raise them to reduce the inequity between the ceiling rent families and the rest of tenants who pay 30 percent of their income.

In addition, the higher maximums will increase operating revenues, probably by about $250,000 during the first phase, Comer said. Although that doesn’t seem like much compared with total costs, “it can make a difference” in the financial picture for a particular development, he said. Most of the ceiling rent families live in Washington Elms and Newtowne Court, CHA has said.

“Each extra dollar we collect [from the higher rent] reduces the need for other subsidies” to fill funding gaps, such as money set aside to fund tenant-based Section 8 rent subsidies, he said.

Other changes coming

Asked by councillors how the authority would ensure that the housing remains low-income despite private ownership, Russ said the authority will continue owning the land beneath the buildings, has put protections into property records and will still manage the housing.

But current tenants as well as applicants face changes that will affect the availability of low-income housing. Cheryl-Ann Pizza-Zeoli, a tenant activist and member of the Cambridge Affordable Housing Trust, pointed out that financing the rehabilitation with tax credit investments means that families earning more than 60 percent of area median income will no longer qualify for most public housing. The limit now is 80 percent of median income.

Current tenants above the limit won’t have to move, but “far fewer units will be available” for those on the waiting list who earn between 60 percent and 80 percent, Pizza-Zeoli said. In addition, the authority is rebuilding the last remaining state-financed public housing, Jefferson Park State, and transferring it to federal funding. That bars families whose members are all undocumented immigrants.

“It’s for the city to think about” subsidizing housing for families who will be affected by the changes, she said. Simmons, with committee support, said she would introduce a policy order seeking the construction of 1,000 additional affordable housing units in the city.