Housing Vouchers

Basic Principle:

  • The Housing Choice Voucher program is a federally funded program designed to help individuals and families with very low incomes afford housing in the private market.

Eligibility Requirements: 1

  • To be eligible, a family’s income must be below 50% of the median income for the county or metropolitan area in which they live

  • 75% of new households accepted to the program each year must have “extremely low income”

  • This means families must have incomes at or below the federal poverty line or at 30 percent of the local median income, whichever is higher

  • After going through an application process with local public housing agencies, most eligible families are placed on a waiting list. The management of waiting lists varies by housing authority:

  • If a family gets off the waiting list and receives a voucher, they have 60 days to find a home

  • -A family may be subject to a second application and screening process from a landlord

Program Participants: 2

  • Roughly 2.2 million households (over 5 million people) receive Housing Choice Vouchers

  • According to the Center on Budget and Policy Priorities, 44% of people who receive vouchers are in households with children (see chart)

  • 24% of households include elderly adults and 27% include disabled adults

  • In 2015, 56,033 formerly homeless veterans used a Housing Choice Voucher as part of a specific initiative jointly funded by the Department of Housing and Urban Development and the Veterans Affairs Department

How the Housing Choice Voucher Program Works: 3

1) Most vouchers are tenant-based: families select their own unit to rent in the private market

  • A housing agency accepts the unit a family has chosen if it is in good condition and moderately priced given the local market

  • An agreement is struck between the renting family, the agency, and the landlord

  • The family pays 30% of their monthly income, and the rest is paid by the housing agency directly to the landlord with funding from HUD

  • If the rent exceeds the agency’s payment standard, then the family must pay the difference up to 40% of their monthly income

  • A year-long lease is signed initially with the potential for extension

2) A smaller number of families (up to 30%) receive Project-Based Vouchers (PBVs)

  • Unlike most vouchers which are tied to the tenant, these are tied to a specific housing unit

  • Landlords contract with a housing agency to set aside units for low income individuals

  • Recipients of PBVs move into these specific units and pay 30% of their income

  • If a low income family moves out of a PBV unit, the apartment will be given to another voucher recipient

  • Depending on the housing agency, PBVs may have their own separate wait list

Benefits Provided by the Housing Choice Voucher Program:

  • The Housing Choice Voucher program represents the largest form of federal rent assistance

  • The program is estimated to lift over a million people out of poverty 4

  • Recipients have some control over choosing their housing situation (both location and unit)

  • There is more flexibility than in public housing as recipients can direct their voucher towards a different unit if they choose to move

  • Vouchers allow some families to move into low poverty neighborhoods

  • Housing vouchers also help reduce homelessness

Shortcomings of the Housing Choice Voucher Program:

  • The program was designed in part to eliminate concentrations of poverty, but most voucher recipients are effectively forced to live in very poor neighborhoods

  • HUD determines if rent is “moderately priced” using the “Fair Market Rent” formula. 5

  • Rent must fall at or below the 40th percentile of rents for recent movers in non-luxury units in an entire metropolitan area

  • Because rents in wealthier neighborhoods and far out suburbs are included in this calculation, “Fair Market Rent” is typically lower than the rent in low-poverty areas

  • While voucher recipients can theoretically live anywhere, the relatively low price of “Fair Market Rent” restricts many recipients to the same poor neighborhoods

  • In most places, landlords can choose not to accept Housing Choice Vouchers

  • This effectively allows landlords to discriminate against voucher recipients

  • A study showed that voucher recipients in Austin, Texas could potentially afford 78,217 units, but only 8,590 of those units (10.98%) accepted vouchers. 6

  • The vast majority of units in more affluent neighborhoods refused to take vouchers

  • While 12 states and cities such as Washington DC and Chicago have passed laws outlawing discrimination against voucher recipients, many places have not

  • Just like public housing, the Housing Choice Voucher program is severely underfunded

  • There is a cap on the number of vouchers each housing agency can offer

  • Demand far exceeds the supply of Housing Choice Vouchers

  • The Housing Choice Voucher program leaves many unserved as just one-quarter of the 20 million Americans who qualify for rental assistance receive it. 7

  • The National Low Income Housing Coalition estimates that 585,000 Americans are still homeless and 6.7 million are on the verge of homelessness. 8

Public Housing

Basic Concept:

  • Public Housing is a federally run program that provides low income families with affordable homes. Public Housing is housing stock that the federal government owns.

Eligibility Requirements: 9

  • HUD program assistance falls under three categories: tenant-based, public housing, and project based

  • Currently tenant-based assistance is the most common form of public housing assistance

  • Program participants are chosen by local Housing Authorities, independent agencies governed by the US Department of Housing and Urban Development (HUD)

  • To qualify for public housing, a family’s income must be below 80% of the local median income

  • A minimum of 40% of new families that an authority admits to receive public housing each year must have “extremely low income”. "Extremely low income” individuals either have incomes at or below the federal poverty line OR less than 30 percent of the local median income, whichever threshold is higher

  • Typically, “extremely low income” families make up well over 40% of new recipients

  • To receive public housing, a written application must be given to the local housing authority

  • References from previous landlords are needed to help determine a tenant’s “suitability”

  • If a family is deemed to be eligible for Public Housing, they are placed on a waiting list

  • A local housing authority may give preference to specific groups of families based on the needs of the community

  • Preferences are published in a housing authority’s written policy manual

  • Long waits are common and waiting lists are sometimes closed if demand is too high

Program Participants: 10

  • Approximately 1 million households (2.1 million individuals) live in public housing

  • In 2016, households with children made up 38% of all families in public housing

  • 31% were made up of elderly individuals or couples (see chart)

  • Just under 1 in 5 public housing units were in non-metropolitan areas

  • In 2016, only 40% of public housing units were in areas with low to moderate poverty rates meaning less than 30% of residents in these areas were poor

Benefits of Public Housing: 11

  • Residents typically pay 30% of their income for rent (minus deductions for dependents)

  • Alternatively, housing agencies can have families pay a minimum rent up to $50 even if this exceeds 30% of income

  • Public housing helps families avoid homelessness and other forms of housing instability

  • The location of some public housing facilities offers recipients greater access to jobs

  • Housing assistance allows families to direct income towards other necessities such as food

  • Families can generally stay in public housing for as long as they comply with the lease

Shortcomings of Public Housing:

  • Public housing is severely underfunded

    • In 2010, a HUD study estimated a shortfall of $26 billion in renovations. 12

    • Partly because of underfunding, the number of public housing units has declined

    • 250,000 public housing units have been torn down since the mid 1990s due to disrepair

    • No funds have been provided to build new public housing since that same time

    • Starting in 2013, 60,000 public housing units have been converted to be Section 8

    • Project-Based Voucher and Project-Based Rental Assistance units to attract more private funding. 13

    • Generally, the waiting list for public housing is extremely long

      • According to a National Low Income Coalition study conducted in 2015 and 2016, the average public housing waiting list had 847 households

      • The median wait time for public housing was 9 months. 14

      • Public housing does not allow for much mobility as eligibility can differ from one housing authority to another

      • Overall, just one-quarter of the 20 million people who qualify for rental assistance receive it (including both housing vouchers and public housing). 15

Endnotes

1. Information from the U.S. Department of Housing and Urban Development.

2. Information from the Center of Budget and Policy Priorities.

3. Information from the U.S. Department of Housing and Urban Development.

4. Statistic cited by the Center of Budget and Policy Priorities.

5. Statistic cited by the Center of Budget and Policy Priorities.

6. Statistic from the National Low Income Housing Coalition.

7. Statistic from a Congressional Budget Office Report.

8. Statistics from the DC Office of the Inspector General cited by the Washington Post. 9. Information from the U.S. Department of Housing and Urban Development “Housing Choice Voucher Fact Sheet.”

10. Statistics from the Center on Budget and Policy Priorities.

11.. Information from the Center on Budget and Policy Priorities.

12. Statistic from the Center on Budget and Policy Priorities.

13. Information from the U.S. Department of Housing and Urban Development.

14. Study conducted by the Austin Tenant’s Council.

15. Statistic from the National Low Income Housing Coalition.