Program to issue $1.4M in refunds

The Charleston Housing Authority will pay more than $1.4 million in refunds to clients of a rent-subsidy program because federal authorities concluded the authority had improperly reduced subsidy payments from 2005 until early 2009.

As a result, 2,045 families who can't afford to pay rent without assistance will get checks this week, ranging from $25 to $1,225.

Housing Authority Executive Director Donald Cameron said the refunds stem from a well-intentioned policy decision in 2005 that was meant to keep families from being abruptly cut off from rent subsidies because of federal budget cuts.

"We woke up one day and found we had more people (in the voucher program) than had been authorized, and the people in the program needed more support than was available," he said.

The subsidies, which are based upon income, are used to help low-income residents rent privately-owned apartments. When the authority found it did not have enough money for all the families in the program, it considered and rejected the idea of cutting off subsidies to 76 families on about one month's notice.

"It would have been draconian if we had cut those people off," Cameron said.

"Besides the 76 participant families, that would have been about landlords who we would have broken faith with, who would have lost faith in the program," he said. "Some of them might have sued us."

So, the Charleston Housing Authority decided it would be better to reduce rent subsidies for all clients in the voucher program by $25 a month.

The decision could have been a temporary fix, and the authority could have raised the subsidy payments as the number of clients in the program decreased through attrition. Instead, the policy continued until 2009, when federal inspectors told the Housing Authority that it should not have reduced the rent subsidy payments, and ordered the $1.4 million in refunds.

Official with the U.S. Department of Housing and Urban Development could not be reached for comment.

Cameron said the Housing Authority has enough non-federal money in its reserve accounts to pay the refunds. The authority also has reduced the number of participants in the voucher program, by eliminating slots as clients leave, in order to make up for having to pay higher subsidies going forward.

The refunds will be paid to 1,279 current participants in the program and 766 former participants.

Cameron said 259 families will get the maximum payment of $1,225, and because it's a refund, the income won't count against their rent subsidy.

"For these families, this will be kind of a windfall," he said.

The recipients of the checks haven't been notified yet. They will get them in the mail, with no strings attached.

Reach David Slade at dslade@postandcourier.com or 937-5552.