House Votes to End Millionaires’ Abuse of Low-Income Housing

‘Our country is $19 trillion in debt yet we're giving subsidies to rich people?’

/ AP

The House of Representatives voted Tuesday to end fraud within the Department of Housing and Urban Development that has allowed millionaires to live in low-income housing for as low as $300 per month.

Rep. Vern Buchanan (R., Fla.) added an amendment to the Housing Opportunity Through Modernization Act, which unanimously passed the chamber Tuesday, to improve the way landlords of public housing authorities verify tenants’ income.

An audit last summer by the agency’s inspector general revealed that the government has been giving low-income housing to millionaires. The inspector general identified more than 25,000 families who were living in subsidized housing even though they earned too much to qualify, costing taxpayers $104.4 million last year.

One man lived in low-income housing for five years in Oxford, Nebraska, paying only $300 a month. He had assets over $1.6 million.

"Public housing should be for those who need it, not wealthy people with large bank accounts," Buchanan said upon the passage of his amendment. "Our country is $19 trillion in debt yet we're giving subsidies to rich people?"

Buchanan said the legislation was "long overdue."

"Why does it take the threat of federal legislation for HUD to make sure that only low-income people receive housing subsidies?" he said. "The American taxpayer is footing the bill for these rip-offs and it needs to end."

 The legislation would give landlords and public housing authorities access to existing income verification databases. "Under current law, local [public housing agencies] PHAs and landlords rely on tenants self-reporting this information, which is time-consuming to collect and verify," Buchanan’s office said.

The department is also looking at its options to evict wealthy individuals from public housing, issuing a proposed rule on Tuesday seeking public comment on the matter.

Public Housing Authorities have only been able to evict over-income tenants since 2004, though they are not required to do so under current regulation.

The agency said it is considering changing its regulations while giving landlords the discretion on whether to evict wealthy tenants. The notice asked for public input on how the agency should define "income that ‘significantly’ exceeds the income limit for public housing residency," and how long an individual could stay while earning above the income limits before being evicted.

The agency said not all individuals who are earning beyond the income requirements should be kicked out of low-income housing.

"Currently, the regulations do not prohibit a family from continued occupancy when their income rises above the limit for initial admission," the agency said. "An increase in income is a good and welcomed event for families, and when a family’s income steadily rises, it may be an indication that the family is on its way to self-sufficiency."

"However, an increase in income may be minimal or temporary, and a minimal or temporary rise in income should not be the basis for termination of public housing assistance," the agency said.