The city’s public housing agency board will entertain a proposal today to reduce the number of Section 8 vouchers by more than 1,000 over the next few years.

The Middletown Public Housing Agency, which manages the city’s Section 8 voucher program, is not in compliance with federal requirements of the U.S. Department of Housing and Urban Development, according to a Sept. 24 letter from the federal agency. The city is required to have at least 95 percent of its 1,662 vouchers awarded to an applicant. However, the city is around 82 percent.

To gain compliance, Community Revitalization Director Doug Adkins is proposing the city reduce, through attrition, the number of vouchers the city offers either by transferring them to another public housing agency or return them to HUD.

“The demographics show that the city can only effectively support 654 housing choice vouchers within the MPHA program,” Adkins wrote in a draft summary.

In the proposal, Adkins writes that the city should not allow subsidized housing stock to exceed 10 percent of total available housing, or 23,296 units. Further saturation beyond that, he writes, would cause more problems than benefits to the city.

Adkins said the Middletown Public Housing Agency generally turns over 200 vouchers a year for various reasons.

“The proposal given to the (public housing agency) board specifically states that all families that have vouchers will get to keep their voucher and remain where they are for as long as they remain compliant with program regulations,” Adkins said.

If HUD finds the city is in violation of the Fair Housing Act, then the federal government “would then have to decide to punish additional low income families by cutting funding,” Adkins said.

“HUD would not take those actions quickly or without careful consideration of the consequences to the low/moderate income people affected,” he said.

The city has about 500 Section 8 landlords with about 1,400 Section 8 properties, which includes housing from both the Middletown and Butler public housing agencies, low-income tax credits and other HUD-funded projects.

“Taken together, subsidized housing represents 3,337 housing units, or 14.3 percent of our total housing,” Adkins said.

Middletown has 2,255 subsidized housing units, which is 9.7 percent of the city’s total households. That’s the highest percentage in Ohio, according to the city. Chillicothe Housing Agency is second with 8.5 percent of all households that are subsidized housing. Butler County Public Housing Authority is at 1.7 percent and Warren County Public Housing Authority is at 0.8 percent. The state average is 2.6 percent.

The plan is being presented on the heels of a letter received from HUD’s Midwest Region office in Cleveland. It states the city has not issued any vouchers since Jan. 1, even though there were two applicants on a waiting list, and it is not in compliance with the 95 percent level. The letter requested the city submit a “formalized corrective action plan.”

HUD spokeswoman Laura Feldman said the agency is unable to comment at this time as they have not seen a proposal. A proposal, according to the Sept. 24-dated letter from HUD, requested a plan be submitted within 30 days which would be Oct. 24.

“This is not a typical situation,” Feldman said. “Normally housing authorities want to increase their vouchers because they have a waiting list.”

Landlord Missy McCall, who said she’s not familiar with the proposal, would be okay with a reduction in Section 8 vouchers so long as those who need the assistance get the assistance.

“What about those people who are having crises that is just developed,” she said. “We can’t always budget our crises when we need assistance.”

But she said the administration needs to do what’s best for the city, the people on the program and the landlords “so there’s a balance.”

From a landlord perspective, McCall said it doesn’t appear it wouldn’t make a big difference as a housing provider. She said a demand for rental properties is up over the past four years, but that’s a combination of people who can’t buy homes and a slightly improving economy.

Landlords and utilities receive more than 90 percent of the city’s Section 8 funding.

The 2012 program is budgeted to receive about $11 million. Of that funding, Adkins said about $1 million is designated for administration and the remainder is distributed to landlords and utilities as rental and utility assistance to voucher holders. More than 50 percent of the rental assistance funding is made to out-of-town landlords.