Today, this Butler County city of 48,962 has more subsidized housing per capita than any municipality in Ohio.

That’s a statistic that Middletown officials have been anxiously working to change in recent years. Reducing Section 8 housing has become such a priority that the city administration and City Council are willing to risk the ire of and legal action from the U.S. Department of Housing and Urban Development by eliminating 1,008 vouchers and falling out of compliance with the agency’s regulations.

Fourteen percent of the city’s housing stock, or 3,300 units, is subsidized housing, said Community Revitalization Director Doug Adkins. Too much Section 8 “is not the root of our problems,” he said, but it can impact the overall image of the city and hinder progress and economic development.

“The city can only support 654 housing choice vouchers within the (Middletown Public Housing Authority) program,” Adkins said. “Any further saturation would … cross a tipping point where the additional subsidized housing creates more problems than benefits to the city as a whole.

“At that point, families of all incomes suffer because the city cannot provide adequate services to its residents,” he said.

But landlords like Jeff Faulkner, who rents several of the properties he owns to Section 8 tenants, disagree. They say Section 8 is big business in Middletown, bringing in millions of dollars to the city and serving hundreds of vulnerable, low-income and elderly residents who need decent, affordable housing.

The city pays about $10 million in funds it receives from HUD to the hundreds of landlords who rent to Section 8 voucher-holders. The city’s proposed voucher cuts would eliminate $6 million in payments to those landlords.

Faulkner said Middletown’s Section 8 program had “always been a strong, community-friendly program” until the city terminated its former administrator, Consoc Housing Consultants, and replaced them with Cleveland-based Nelson & Associates in March 2011. Since assuming more local control, he said, City Hall has been “beating up” Section 8 landlords with its strenuous property inspections and regulations.

Faulkner the city’s plan would not only run hundreds of low-income residents out of the city, it would also create an almost equal amount of vacant housing. That’s why he and other landlords favor transferring the program out of the city’s control.

“I think the Section 8 program needs to be moved to Butler County,” he said.

HUD had made a similar suggestion to Middletown officials in response to the city’s proposal to reduce its vouchers from 1,662 to 654. The federal housing agency objected to the city’s plan in a Dec. 18 letter, telling officials to fill 95 percent of its available vouchers, transfer its voucher program to the Butler County Metropolitan Housing Authority or face possible legal action.

The Middletown Public Housing Authority, which is made up of all seven city council members and the city manager, has told HUD it intends to proceed with its plan. About 1,300 vouchers, or less than 80 percent of those available, have been issued to date, and that number will continue to decrease through attrition over the next five years, officials have said.

Adkins said the data shows that — outside of the low-income housing tax credits — Middletown has almost twice as many subsidized housing units as Hamilton County and more than four times as many as other southwest Ohio housing agencies. He added that Middletown also has almost four times the state average.

“The city suffers from an overabundance of rental property, beyond what the existing market can support and a corresponding lack of home ownership in distressed neighborhoods,” Adkins said. “During the past 10 years, the city implemented a policy of increasing the number of Section 8 vouchers to assist low-income residents.”

Before Dec. 1, 1999, the city had 774 Section 8 vouchers. But because the city wanted to reduce the vacancy rates of older and less-desirable homes, and to ensure that housing remained in compliance with city code, Middletown officials began to accept additional vouchers, Adkins said.

The city added 888 over the next six years, with 56.9 percent of the vouchers having been added in 2000 and 2001. The last increase came on Oct. 1, 2005 when they accepted 108 vouchers.

In March 2011, Middletown terminated its contract with Consoc, which had managed the Section 8 program since 1996. The change happened because of 13 deficiencies related to operation of the program.

At about the same time the city was changing program administrators, the Middletown Division of Police and the Office of the Inspector General started an ongoing investigation of Section 8, which has so far resulted in the arrest of 10 landlords — five in 2011 and five in 2012 — after they uncovered tens of thousands of dollars in alleged improper rental payments made on behalf of voucher-holders, said police spokesman Lt. Scott Reeve.

The investigation, which is being lead by Middletown police Detective Ken Rogers, and tighter controls on the Section 8 program have had a positive effect, Reeve said.

“Crime was down last year for the first time in a few years, and I think the Section 8 investigation has something to do with that,” he said. “The program was not supervised at all for many years, and when Doug took over the program, he enlisted our help to clean it up.”

Some of the charges included landlords living in properties where tenants were to be living, or collecting Section 8 money when the property was vacant, Reeve said.

“There was a lot of abuse going on, in addition to the fact we have a disproportionate amount of Section 8,” Reeve said. “It hurts the crime rate, it hurts the school system, and it’s difficult to talk about because it comes across that we’re anti-poor. We’re not anti-poor, but we shouldn’t be disproportionate.”

Real estate, rental and leasing is the largest private sector service industry in the state, Adkins said. And while home sales were on the upswing in the Cincinnati Metropolitan Area, according to 2012 and 2011 data, Middletown has not benefited from positive home growth, he said.

“In the wake of the housing market collapse and the decrease in available credit, the city of Middletown suffers from a substantial oversupply of vacant, undesirable housing, leading to almost complete disinvestment in many neighborhoods,” Adkins said.

Councilman A.J. Smith, who cast the lone dissenting vote on the city’s plan to cut vouchers, agrees there is a need to fix the Section 8 program. But he disagrees with the way the city is going about doing it.

Smith said Middletown will likely see some decline in the number of vouchers because of sequestration, the across-the-board federal spending cuts enacted March 1. HUD Secretary Shaun Donovan testified last month before Congress that the sequester would result in about 125,000 vouchers losing funding.

“But I don’t think it (voucher reductions) should be initiated by us,” he said. “I think we have an obligation to care for our constituents, and we should care for those who can’t care for themselves.”

Smith said the city’s Section 8 vouchers should be spread out better. While vouchers are peppered throughout Middletown, the highest concentrations are in the western and central portions of the city. Many of the vouchers are in the city’s 2nd Ward, which Smith represents.

“The way we’re doing (voucher reduction) is by any means necessary,” Smith said. “I don’t think we’re taking a very diplomatic approach.”

Smith said he doesn’t think Middletown should bear the burden of all Butler County’s low-income housing, but he worries about the public perception of the city’s current actions.

“I don’t think our message should be to get rid of all the poor people,” he said. “That is what the community is feeling City Hall is trying to do.”

This is the first of a three-part series looking at the past, present and future of Section 8 in Middletown.

Showing its age

Middletown has some of the oldest homes in Butler and Warren counties:

Middletown:

52.7 percent of the city’s homes were built before 1960

11.4 percent of the city’s homes were built after 1990

Butler County:

31.2 percent of the county’s homes were built before 1960

32.3 percent of the county’s homes were built after 1990

Warren County:

16.6 percent of the county’s homes were built before 1960

51.9 percent of the county’s homes were built since 1990

Source: U.S. Census Bureau

Residential sales

Here is the 2011 and 2012 sales data on Butler County:

2011 | 2012|% change

No. of sales: 3,259|3,812|14.51%

Average home price: $134,464.00|$136,675.00|1.62%

Median home price: $122,000.00|$125,000.00|2.40%

Source: Multiple Listing Service of Greater Cincinnati

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