BOSTON--The federal government is poised to dramatically reduce the value of publicly-funded housing vouchers in Boston and other Massachusetts cities, a move that would force many low-income families out of their apartments and might prompt some landlords to withdraw from the program.

In a state already starved for affordable housing, the prospect of federal payments dropping by as much as a third has united housing advocates, landlords, and city and state officials, all of whom are planning to petition the US Department of Housing and Urban Development to scrap the change. In Boston alone, there are 9,000 households using the federal vouchers to pay part of their rent.

"This is the most significant change in rent levels we've seen in 30 years," said Aaron Gornstein, executive director of the Citzens' Housing and Planning Association, a Boston-based advocacy group. "It seems like an arcane technical change, but it actually has very serious implications for the program."

Donna White, a spokeswoman for HUD, declined to comment on the change or the motivation for it, saying it is not yet final and the agency is still soliciting comments.

According to housing specialists and HUD's website, the agency is planning to redraw the districts where it offers subsidies.

The agency determines average rents in each of 19 districts and comes up with voucher rates for each. The system groups high-rent cities such as Boston with neighboring cities like Cambridge and Newton, where expensive rents have kept voucher values high. But under the proposed changes, set to go into effect Oct. 1 across New England, Boston would be grouped with lower-rent cities such as Revere and Quincy, bringing the rates down.

Voucher values for a two-bedroom apartment in Boston would drop 15 percent, from $1,409 to $1,203; vouchers for four-bedroom apartments would plunge 27 percent, from $2,084 to $1,516.

Across the state, the effect will be to lower the subsidies for cities and raise the subsidies in many suburban areas, but the vast majority of the state's rental units are in areas where the subsidies will be cut, according to the Citizens' Housing and Planning Association.

The Section 8 program, which is about 30 years old, was designed as an alternative to traditional public housing and the problems associated with concentrating low-income people in giant housing complexes.

The program represents one of the largest sources of affordable housing for low-income tenants, with some 70,000 units across the state. By comparison, the federal government subsidizes 35,000 units of traditional public housing in Massachusetts. The state funds another 50,000 units.

Under terms of the Section 8 program, tenants pay a third of their monthly incomes to landlords who have registered in the program. HUD, which determines how much landlords should receive in different areas based on market rates, pays the rest.

Landlords have liked the program because it provides guaranteed income, often without some of the costs or problems of renting on the open market. But if rates paid by HUD drop significantly below market rents, landlords could defect en masse.

"The displacement this is going to cause is mind-boggling," said Christopher Reilly, vice president of Equity Residential, which owns 22 properties in Massachusetts with large numbers of Section 8 tenants. "We will not, as good business people, be able to take Section 8 holders -- the rents [being proposed by HUD] are so far below what is reasonable."

While there has been softening in the rental market in places such as Boston and Cambridge, the proposed federal changes go far beyond those rent reductions, opponents say. As a result, they warn, voucher recipients will be forced to move to substandard housing in poorer neighborhoods, the very situation the Section 8 program was designed to prevent.

"They're not going to be competitive in the market," Marilyn O'Sullivan, the Boston Housing Authority's Section 8 specialist, said of Boston voucher recipients. "Most neighborhoods of Boston we will not be able to lease in."

Gornstein said he is not sure why HUD proposed the change. But Sunia Zaterman, who heads the Washington-based Council of Large Public Housing Authorities, said the Massachusetts changes, along with other adjustments affecting large cities, are part of an effort by the Bush administration to spend less money on the Section 8 program.

"The administration has made a high priority of reducing the cost of the program and contracting the size of the program," Zaterman said. "We have the opposite of a transparent system here. We're struggling to find out how they got to these numbers."

White, the HUD spokeswoman, declined to respond to that charge.

© 2004 The Boston Globe

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