President Reagan will propose deep cutbacks in funds for operating and repairing the nation's 1.2 million public housing units and elimination of eight other housing and urban aid programs, according to documents obtained yesterday.
The proposed reductions would tighten the squeeze on big-city housing authorities, which have been plagued by decaying buildings, vacant apartments, rising fuel costs and declining federal aid while waiting lists have stretched to as long as 25 years.
One program that would receive no money under Reagan's fiscal 1986 budget, scheduled for release next week, finances construction of housing for the elderly and the handicapped. Reagan praised this program, which he previously tried to eliminate, during a September campaign visit to a Buffalo senior citizens housing project.
Other programs slated for elimination include housing vouchers for the poor, urban development action grants, housing development grants, rental rehabilitation grants and a small housing program for Indians.
The proposed budget represents a major defeat for Housing and Urban Development Secretary Samuel R. Pierce Jr., who has fought for some of these programs as an alternative to costly housing construction.
Barry Zigas, president of the National Low-Income Housing Coalition, said, "It's a complete abandonment of a 50-year bipartisan commitment to low-income housing. At a time of rising homelessness in all parts of the country, it would be unconscionable for Congress to approve a budget like this."
An Office of Management and Budget spokesman, while declining to discuss specifics, said "the major rationale . . . is that we have a $200 billion deficit."
Local public housing authorities rely on federal subsidies for about half their operating expenses. Reagan would cut this aid by $240 million to $1 billion, in part by limiting funds for up to 40,000 vacant apartments and restricting hiring.
Gordon Cavanaugh, attorney for the Council of Large Public Housing Authorities, said the cutback would be "drastic" because public housing officials are prohibited from raising rents and must spend half their federal aid on utility costs.
"We can't have the lights turned off," Cavanaugh said. He said the reduction "comes entirely from operating and maintenance activities."
Reagan would make sweeping changes in the $1.7 billion modernization fund used to repair aging projects. In a complicated switch from long-term borrowing to direct cash outlays, he would allocate $175 million for "emergency" repairs next year.
Cavanaugh said that compares with roughly $850 million in available cash under the current system. "They're going to cut off subsidies to vacant units, and then they're going to take away the very money you would use to repair the vacancies," he said.
New construction of public housing, which dropped to 5,000 units this year, would be ended.
Among the other proposals:
* Pierce's plan for 100,000 housing vouchers to help the poor pay their rent would be slashed to 3,500. "Here's an administration arguing that vouchers . . . is how we target the program to the truly needy," Zigas said. "Then to say 'Surprise, there are no vouchers,' is a complete repudiation of all their rhetoric of the last four years."
* Rehabilitation grants to fix up rental apartments ($300 million), another Pierce initiative, would receive no funds for two years.
* The new housing development program to subsidize mostly middle-class apartments ($315 million) would be killed. HUD announced the grants with some fanfare two weeks before the Nov. 6 elections.
* Politically popular Section 202 grants, which financed 14,000 units for the elderly and the handicapped this year, would be eliminated.
* A program that financed 2,000 Indian housing units this year would be ended.
* Urban development action grants ($440 million), which cities use to obtain private investment for downtown projects, would be dropped.
* Community development block grants ($3.5 billion) would be cut by 10 percent, but a formula shift favoring rural areas would mean a 24 percent reduction for cities with populations exceeding 50,000.
* Two programs that provide $240 million in low-interest loans to homeowners and cities would be dropped.
* Fair-housing efforts would receive a $3 million increase.