Project-based Section 8 has been a successful public-private partnership that helps provide affordable housing to very low-income households while also investing in jobs and improving communities. Any rational housing policy starts with such place-based strategies. However, place-based strategies, while absolutely essential, are not sufficient for a national housing policy. More is needed, and it starts with tenant-based Section 8 assistance.
Tenant-based Section 8 vouchers, commonly known as Housing Choice Vouchers, are provided directly to very low-income households to find an affordable home in the private market.
Over 3 million extremely low-income senior, disabled, and family households reside in project- or tenant-based Section 8 assisted housing in every nook and cranny in the United States. The public policy lesson of this reality is that with public support, the private market is an excellent vehicle for the delivery of affordable housing.
One might presume that such a successful, market-based program would deliver basic housing affordability for eligible households, but that’s not the case. Being eligible for Section 8 assistance does not guarantee that a household in need will receive it. Securing Section 8 assistance is more akin to winning the lottery—the odds are always against you. Less than one in four households actually receives Section 8 assistance. Put another way, 74 percent of U.S. households who are eligible do not receive Section 8 assistance. Usually, the household is placed on a very long Godot-like wait list, and the household waits. And waits. And waits. The average wait time on such a list is not months, but years.
According to HUD’s Picture of Subsidized Households, a renter household that used a voucher in 2015 waited more than two years on average to move into a unit, with the wait time in the San Diego metro area as long as seven years. Waiting lists in Cleveland, Detroit, and the Washington, D.C. metropolitan areas were about two years, while the wait in Los Angeles was four. This lack of universal application of Section 8 is a housing injustice. According to the U.S. Census Bureau’s American Community Survey (ACS), 20.7 million U.S. renter households are cost burdened, spending more than 30 percent of their income on housing. This number represents slightly more than half of all renter households.
And yet there is another pernicious outcome of the dearth of Section 8 resources for every eligible household.
Lack of Section 8 fuels racial inequality. The ACS data shows that non-Hispanic whites make up 71 percent of all households in the United States but only 47 percent of ELI renter households. In contrast, African-American households compose 12 percent of all households, but they are overrepresented among extremely low-income (ELI) renter households at 26 percent. One in four African Americans is extremely low income, a rate three times higher than white Americans. The lack of Section 8 consigns them to waiting—and more often than not never receiving the housing assistance that would help them.
The answer: Universal vouchers. The Bipartisan Policy Commission (BPC) has recommended making federal rental assistance available to all eligible extremely low-income households (with incomes at or below 30 percent of Area Median Income) who apply. According to the BPC, the cost of making vouchers an entitlement, like food stamps or Social Security, is approximately $22.5 billion to serve 3.1 million additional extremely low-income households.
The BPC cost estimate for universal vouchers, however, did not take into account the savings that accrue from a universal voucher approach. Though more research is needed, early studies show that providing permanent housing actually reduces public costs associated with meeting the needs of the homeless. For example, researchers in Los Angeles found that providing permanent supportive housing to homeless individuals produced net monthly public cost savings of $1,190 per resident per month, or $14,280 annually. Three-quarters of that cost savings was attributed to a reduction in the use of health services. Based on these findings, we estimate that providing Housing Choice Vouchers for the 3.1 million extremely low-income households in need would save approximately $44 billion per year.
Surely the benefits of meeting the housing needs of our lowest income citizens plus the added savings associated with no longer needing to provide emergency health care and other services is worth the investment. Providing stable housing for these underserved millions—many of them families of color—will better enable access to education, steady jobs, health care, and opportunities for a brighter future.
(Image: Courtesy of Hilary, via flickr, CC BY-NC-ND 2.0)