Families and individuals in poverty often struggle to afford housing, adding yet another obstacle in the attempt to break out of the perpetual cycle of financial and housing instability. To help aid in breaking those barriers, the government offers several housing assistance programs to those who are low-income, allowing families to avoid housing instability or homelessness. Programs such as Section 8 Project-Based Rental Assistance (PBRA) allow tenants access to affordable units in which their rent is paid based on their income. Section 8 PBRA has allowed those who are low- or no-income, disabled, elderly, and those who may be escaping domestic violence or homelessness the ability to maintain affordable housing, easing the burden of the inability to meet the expenses of Fair Market Rent. While the program has proven to be a useful tool with the virtue of aiding millions of people [perhaps about 11 million?] who may have been facing homelessness, there are concerns with the efficacy of the program due to the lengthy process of signing up for the program, the massive wait time to be approved for Section 8 PBRA, and the lack of funding to assist more low-income families who may fall just barley outside of the eligibility requirements who will continue to struggle to afford housing. [Those who believe housing is a human right point out that the five to six million households receiving vouchers are only a fraction of the thirteen to twenty million households that either qualify or at least seem to need help securing stable and decent housing]. To understand both the benefits and disadvantages of the program, I should clarify what Section 8 Project-Based Rental Assistance fully consists of.
Section 8 Project-Based Rental Assistance, named after Section 8 of the Housing Act of 1937, was created in 1974. The program consists of multi-year rental assistance contracts between for-profit and non-profit private owners and the Department of Housing and Urban Development (HUD). The subsidized rental assistance program allows tenants to pay rent based on their income. In contracts between private owners and HUD, HUD agrees to pay the difference between income-based rents and agreed upon contract rents, while owners of Section 8 PRBA units agree to manage units upheld by federal housing rules. Owners are responsible for the management of these properties during the length of the contract, which generally have 20-year terms that can be renewed at the discretion of both private owners and the HUD. Most entities who own Section 8 PBRA properties are private for-profit agencies, although some public housing agencies and non-profit entities own a large share of these properties.
The Project-Based Rental Assistance program differs from the Housing Choice Voucher Programs in that it is not a tenant-based program, where low-income families have more freedom in where they can use their vouchers (essentially, anywhere a landlord will accept them charging a rent in a reasonable range and has a place to offer them that meets HUD’s quality standards). Tenant-based programs allow tenants to rent any privately owned home that meets the programs guidelines while project-based programs only allow tenants to stay units that have been designated as PBRA properties. Still, the program serves nearly 2 million people (1.2 million households) today, a number that has been increasing since the 2012 Rental Assistance Demonstration (RAD) permitted public housing properties to be converted to the PBRA program.
Individuals and families must be considered low-income to qualify for Section 8 PBRA. According to Center on Budget and Policy Priorities, “low-income” refers to income that is less than 80 percent of the local Area Median Income (AMI). Very-low income families and individuals are those who are at or below 50 percent of local AMI. Unauthorized and temporary immigrants are ineligible for Section 8 PBRA housing, unless their household is one with mixed immigration status members. Mixed households with members who are eligible can be given prorated assistance. Participating housing developments must have at least 40 percent of the annually available subsidized units designated for extremely low-income families (those who are 30 percent of local AMI) while most of the remaining units are for those with incomes below 50 percent of the local AMI. Tenants are required to pay either $25 per month, or no more than 30 percent of their income for utilities and rent. There is no time limit on how long one can receive assistance, except if their income increases to where they no longer qualify. If income increases significantly to a point that they no longer quality for Section 8 PBRA vouchers, tenants are generally allowed to pay market rent out of their own pocket if they want to remain in their unit.
Families who want to live in PBRA properties must apply to the property directly, giving property owners full discretion on how to screen potential tenants. Some criteria for property owners can be a tenant’s rental history, criminal background, and credit history. This may suggest that a person who has experienced extreme poverty, and who thus would be more than likely to lack a stable rental history, could be denied based on the owners’ preferences, despite being eligible for the PBRA due to having low-income. Though this is not a common event, property owners’ preferences for their waitlists have affected the characteristics of their tenants; in 2023, roughly 36% of PBRA households had children while 65% of those households did not. Many properties designate their units for the elderly or for those with disabilities, making additional services needed for these subgroups to be easily attainable since they have the potential to be in one area together. While this can be beneficial for those groups when funding for the program is limited, this can exclude a considerable amount of people in poverty who are struggling to pay for and maintain their own housing.
Funding for Section 8 PBRA is primarily controlled by congress through annual discretionary appropriations, funds approved each year by the president and congress for discretionary spending, which are then issued to the project based rental assistance account. This funds the annual renewal of PBRA contracts, rental subsidies paid to property owners monthly, and administrative fees for Performance-Based Contract Administrators (PBCAs) chosen by HUD. Appropriations for the PBRA program have grown from $11.75 billion in 2019 to $14.91 billion in 2023, an increase of 27%. This is a result of rents being annually adjusted to reflect inflation, creating cost growth and increasing subsidies of per-unit costs, as well as an increase in the number of units (the increase in contracts is attributed to the 2012 RAD program). Still, there is inadequate funding for the program that has led to massive wait times for families who need immediate assistance. Nationally, families spend almost two and a half years on average on waitlists, while some areas have average wait times of up to eight years. In the meantime, they face additional hardship sinking deeper into poverty and may face homelessness. If individuals or families manage to get off the waitlist, the program is very effective in aiding those with low-income to avoid homelessness and ensure housing stability. Allocating more funds to the program would decrease waitlist times and aid a larger pool of individuals to obtain affordable housing.
Section 8 Project-Based Rental Assistance programs give low-income individuals and families an advantage in allowing them to begin rising out of poverty through stable housing. While the program has improved the lives of millions of Americans, it is not without its disadvantages. The program has many potential benefits if it is properly funded with reasonable oversight on the management of privately owned properties. If funding was increased, we may be able to broaden the eligibility requirements for Section 8 PVBA’s to assist more people and shorten the amount of time on waitlists to prevent any additional hardship to already struggling families.
This is a good paper for an undergraduate. You have a neutral tone, and the writing meets my standards. I couldn’t help but jotting off some more ideas and facts (which follow) to offer some more insights into housing vouchers as they exist in 2024. I’ve tried to add some attention to the complaints about the Section 8 PVBA voucher program from persons like myself (who think it’s obscene and abusive that the program only covers about 20% of the households that need this assistance), and those who have insisted in deep cuts in discretionary public spending based on some ideological opposition to the Federal Government promoting the general welfare and securing domestic tranquility with public funds raised through taxes or else some perverse hatred and contempt directed against persons with low incomes.
Persons in poverty are stressed by the threats they face to their well-being. Lacking money, they can find it difficult to purchase food, pay rent, handle utility bills, or insure and maintain a vehicle to get them to their jobs. Conveniences and pleasures that middle-class and wealthier people take for granted, such as having access to phones, internet service, streaming services, and other pleasures of modern life can be difficult to secure. Always there is the threat of disaster; some loss of income, perhaps caused by an illness, or reduced hours at a workplace, that could make housing, food, or heat unaffordable. This insecurity, instability, and constant exposure to risk causes high levels of stress, which can damage the mind/brain, and raises chances of suffering from almost all illness not caused by genetic abnormalities. Coping with this situation, many of the 10% to 15% of Americans who meet the definition of poverty, or the other 20% who live with incomes that put them slightly above poverty, remain in an intergenerational cycle of diminished life chances.
The good news is that in recent years the inflation-adjusted incomes of Americans, even those at the lowest percentiles of the income distribution, have been increasing. The bad news is that upward mobility is decreasing, and even with increasing incomes, basic needs such as housing are unaffordable for the households at the lowest 20-30% of the income distribution. With 131 million households, there are over 13 million households (over 25 million persons) in the bottom 10% of the income distribution, and 39 million households (over 89 million people) in the bottom 30%.
Generally, the American economy has been expanding, which allows inflation-adjusted incomes to rise for people, even if they do not move up in the income distribution. However, the historical trends are not good. Raj Chetty and associates (in 2016) found that 50% to 55% of children born in the late 1970s and early 1980s were earning higher inflation-adjusted incomes than their parents had done when their parents were in their 40s. However, over 60% of persons born in the 1950s were earning more than their parents, and among those born in the 1940s, 80% to 90% earned more than their parents. Michael Strain estimates that about 36% of children who grow up in households with incomes in the bottom income quintile end up as adults who have remained in the bottom quintile, and another 27.5% rise up to the second quintile, which implies over 63% (nearly two-thirds of children who grow up in households with low incomes) become adults with low or modest incomes. For families at the 10% income percentile, incomes in 2023 were at nearly $19,000, while the 10% income percentile families had earned only $15,500 in 2013 (in inflation-adjusted 2023 dollars), or $16,600 in 2003. Families at the 20th percentile earned $33,000 in 2023, compared to $26,700 in 2013, and $28,400 in 2003. In 2023, families at the 40th percentile earned $62,200 (See Table A-4a in the 2023 Income Report from the Census Bureau).
In 2023, the average American household (technically, the average “consumer unit”) spent $25,400 on housing alone. Statista reported that average two-bedroom housing units cost $1,317 per month ($15,804 per year) in November 2023. In other words, families at the 40th percentile would spend 25% of their income on an average two-bedroom apartment (which is very affordable), but a family at the 20th percentile would spend 48% of their income on that average two-bedroom apartment (a sign of extreme housing insecurity) while a family at the 10th percentile would need to spend 83% of their income on an average-rent two-bedroom apartment.
To help the lower income households, states and the federal government provide a variety of supports, such as food assistance (SNAP benefits, WIC, the National School Lunch Programs), income supports (the Earned Income Tax Credit, the Child Tax Credit, TANF, SSI, SSDI, Social Security), and health benefits (Medicaid). When it comes to housing, the largest program provided by the federal government is the Housing Choice Voucher program, which gets slightly over $30 billion ($30.25 billion in 2024). The Project-Based Rental Assistance (a sort of housing choice voucher program where the choice is limited to affordable housing projects, or in other words, “public housing”) accounts for about $15 billion ($14.9 billion in 2024). Another $8 billion goes to maintaining and improving the affordable housing in public housing areas (things like new roofs or removing asbestos and lead paint). Together, the $45 billion spent on the two largest voucher programs and $8 billion spent on public housing make up $53 billion (74%) of the total $72 billion dollar budget of the Department of Housing and Urban Development. The housing choice vouchers help about 2.3 million households, while the project-based housing vouchers help about 1.2 million. Another 856 thousand households get helped by the public housing fund, leaving about 153 thousand households to get subsidized housing earmarked for the elderly or housing for persons with disabilities. Some populations, such as young adults who age out of foster care and any veteran who has a very low income should receive housing vouchers so that those populations are entirely covered, but for the rest of the low-income Americans struggling to pay for rent, there is no promise that they will get a voucher, or find a landlord willing to take the voucher if they do get one.
If you sum up all the households getting housing vouchers or public housing of one type or another, and notice that the total is about 4.5 million households, and then compare that to the approximately 13 million households in the bottom 10% of the income distribution, or the approximately 26 million households if we include the bottom fifth of the income distribution, it should become clear that the current housing policy is in no way comprehensive. Clearly, most people who require help securing stability in their housing situation (situations where they can afford housing without it taking up too much of their income and placing them in a situation where eviction or foreclosure is a constant threat) are not getting helped by the housing choice vouchers or project-based vouchers or public housing.
To help these millions of households who struggle to obtain secure and sustainable housing where they won’t risk getting kicked out when they can’t afford to pay their rent, the HUD budget also offers a billion dollars for Native American Programs, another billion for Housing for the Elderly, $360 million for persons with disabilities, $175 for self-sufficiency programs.
There are some studies of the beneficial influences enjoyed by low-income households who gain access to housing vouchers. A primary benefit is that families are less likely to become homeless, and this is especially true for families who are exhausting their TANF benefit limits. Families also are subjected to less crowding and were able to enjoy living in one place for a longer period.
Some persons may object to the housing voucher program on the basis of fairness. Such critics may point out that the billions of dollars spent on housing low-income households are taken from households with higher incomes, depriving them of the ability to keep and spend or save their own money. As the HUD budget is discretionary, it is vulnerable to large cuts. However, laws mandate that vouchers are provided to very-low income veterans and young adults recently aging out of foster care, and most vouchers are provided through contracts between local housing authorities and landlords, with these contracts lasting usually for about 20 years, so the Federal government could not suddenly eliminate the voucher programs or cut them too deeply. Yet, if the programs were cut, this could help reduce the federal budget deficit, and help allow taxes to be reduced. The consequences to low-income families would be perhaps harsh, as they would face more housing instability, crowding, and possibly homelessness. Yet, the general panic and desperation this could trigger in the lower-wage population would drive people to work harder, possibly taking two jobs, (nearly 70% of non-elderly non-disabled adults using housing vouchers are employed or recently employed, but perhaps the 30% who aren’t working could be pushed back into the labor force). The desperation for jobs to achieve stable housing when housing vouchers are eliminated could drive potential workers to take any job offered, allowing those who hire workers to offer lower wages and less satisfactory working conditions. Thus, the persons who own businesses could make higher profits from low-wage workers while also enjoying lower taxes resulting from reducing spending on housing vouchers. While many people may think that the owners of businesses already are doing well enough, and should not begrudge housing voucher assistance to the 5 to 6 million persons who benefit from these programs, some may oppose such government involvement in the housing market on principle, or out of self-interest.
References
Acosta, S., & Gartland, E. (2021, July 22). Families Wait Years for Housing Vouchers Due to Inadequate Funding. Center on Budget and Policy Priorities. https://www.cbpp.org/research/housing/families-wait-years-for-housing-vouchers-due-to-inadequate-funding
Fiscal Data explains federal spending. Federal Spending | U.S. Treasury Fiscal Data. (n.d.-a). https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/#:~:text=Discretionary%20spending%20is%20money%20formally,as%20science%20and%20environmental%20organizations.
Policy basics: Section 8 project-based Rental Assistance. Center on Budget and Policy Priorities. (n.d.). https://www.cbpp.org/research/housing/section-8-project-based-rental-assistance
McCarty, M. (2023, December 11). The Section 8 Project-Based Rental Assistance Program. Congressional Research Service. https://crsreports.congress.gov/product/pdf/IF/IF12545
Policy basics: Section 8 project-based Rental Assistance. Center on Budget and Policy Priorities. (n.d.). https://www.cbpp.org/research/housing/section-8-project-based-rental-assistance
