Facing a $200,000 cut in its $10 million federal Housing and Urban Development budget, the territory’s Housing Authority will reduce utility allowances in the Housing Choice Voucher program effective Sept. 1. Housing Choice is the old Section 8 program that helps subsidize rent and utility costs for tenants who live in private housing.

The change impacts 1,310 families across the territory, according to Jennifer Laslovich, the Housing Authority’s deputy director for St. Thomas.

According to a press release from the Housing Authority, the agency is making the cuts to prevent the possibility of terminating voucher participants from the program.

Laslovich said that making cuts in the utility allowance portion is the place to start because a study showed that utility costs decreased by more than 10 percent since the last review a year ago.

While this change would typically take effect at each voucher holder’s next annual re-examination, the Housing Authority has changed the policy so that this change will be effective for all voucher holders on Sept. 1.

Laslovich suggested that utility costs have gone down for Housing Choice renters because the Levelized Energy Adjustment Clause portion of their V.I. Water and Power Authority bills decreased.

Under the Housing Choice program, Laslovich said that participants are allowed to pay between 30 and 40 percent of their annual income for rent and utility costs.

“We’re trying to avoid them becoming rent burdened,” Laslovich said.

How the Housing Authority calculates how much subsidy families receive in the Housing Choice program is a complicated formula that also involves what it calls payment standards. They are set at 120 percent of fair market rents in the St. Thomas/St John district and 130 percent of fair market rents in St Croix.

According to the press release, if the implementation of the new utility allowance is insufficient to address the funding shortfall, the Housing Authority may need to also decrease the payment standard in both districts. These allowances may need to be reduced to 117 percent and 127 percent respectively, the press release indicated.

The Housing Authority is committed to do whatever is necessary to work within funding limits to have the least adverse impact on the voucher participants, the press release said.