Laconia Housing Authority warns voucher funding shortfall could reduce local housing access

Laconia Housing Authority Executive Director Kathy Bowler and Housing Director Kelly Bocan told the Laconia City Council on Feb. 10 that the agency faces a shortfall in federal Housing Choice Voucher (HCV) funding that already forced it to suspend issuing vouchers and could lead to vouchers being recalled.

The shortfall stems from rising market rents and federal funding that has not kept pace, Bowler said. Laconia Housing began 2024 with about $82,000 in reserves and received approximately $4,118,000 in HUD funding for the HCV program but spent roughly $4,347,000, resulting in about a $146,000 shortfall for the calendar year 2024, Bowler said. The authority currently holds 509 vouchers assigned by HUD but used 445 last year; to fully utilize 509 vouchers at the authority’s 2024 average subsidy ($833 per voucher) the authority would need about $5,222,000.

Why it matters: the HCV program — commonly known as Section 8 — helps low-income households afford private-market housing by paying the landlord the difference between a tenant’s share (typically about 30% of adjusted income) and a HUD-approved rent. Laconia Housing warned that if Congress or the Senate provides a reduced allocation this spring, the authority could face a deeper deficit and be required to stop issuing vouchers or, in a worst-case scenario, pull vouchers from households already using them.

Bowler and Bocan described two possible federal funding scenarios communicated to the authority: an estimated Senate allocation at about 97.5% of last year’s award that would leave the authority roughly $343,000 short for the year, and a House-proposed allocation near 88.6% that would create a shortfall near $731,000. Under those shortfall models, Bowler said as many as 42 voucher holders could lose vouchers under the Senate scenario and about 79 under the House scenario, numbers tied to how many vouchers the authority could fund under reduced allocations.

Bowler outlined local impacts and mitigation steps. The authority’s portfolio includes 10 properties (most in Laconia, two outside the city), with its largest property, Sunrise Towers, holding 98 units. The authority has converted some units to project-based vouchers (PBVs) — which tie subsidy to a specific unit rather than follow a tenant — to protect funding for those properties; the Tavern Apartments (50 units) and Sunrise Towers were noted as PBV-secured, and the authority plans further conversions for Sunrise House and Sunrise Place. Bowler said properties such as Pearly Pond 2, Normandian Square and Summer Street are most at risk because they do not have guaranteed project-based funding.

Bocan described how the HCV program operates locally and why demand is high. “The HCV program provides rent subsidies to eligible individuals or families so they can afford decent, safe, and sanitary housing,” Bocan said, describing HUD’s Housing Quality Standards inspections, negotiation of reasonable rents, and how a Housing Assistance Payment (HAP) contract functions once a unit passes inspection.

Laconia Housing also runs support-service properties — Sunrise Towers, Sunrise House and The Tavern — that receive Medicaid funding for on-site services (about $1.3 million annually), and it received state general funds last year for a congregate housing services grant. That grant’s original award was $750,000; Bowler said the authority will have spent about $400,000 of that grant during the current budget year and will seek continuation but noted the funding is discretionary and depends on the state.

Council members asked how many people are on the authority’s wait list and who would be affected; Bowler said the authority’s wait list stands at about 821 applicants and that issuing times will grow. “If it was taking two to two-and-a-half years before, you’re going to be three-and-a-half to four years before you come up on our wait list now,” Bowler said. She gave an example of a recently housed veteran who arrived with no furniture and lapsed Medicaid coverage; the authority used support services to stabilize that tenant and connected him to benefits.

Bowler described recent local efforts to add housing stock: Pearly Pond 2 was built with a $1.2 million grant under a state program promoted by then-Gov. Sununu, the authority converted a former Lakes Region Mental Health building on Summer Street into apartments, and it built Sunrise House (16 units). She said conversions to PBV are one tool to protect local inventory but do not increase total HUD funding.

On next steps, Bowler and Bocan said the authority is actively notifying federal and state elected officials of its situation and asking for additional funding, and they urged council support for outreach. They asked the council to help connect them with state and federal lawmakers and to consider hosting site visits so legislators can see local needs.

Discussion-only items: the presentation included numeric summaries of past HUD subsidy trends (average subsidy rose from about $575 in 2018 to $833 by the end of 2024) and scenarios for calendar-year funding; these figures were presented as context and are not council action. There was no council vote tied to the presentation itself.

Ending: Councilors expressed concern and offered to help facilitate meetings with state and federal representatives; Councilor Cheney volunteered to work with the city manager on next steps and to identify possible counsel or advocacy routes. The authority asked to return to the council as the funding picture develops.