Expanding Housing Choice Vouchers Would Strengthen the Safety Net

An expanded housing voucher program is needed to address the medium- and long-term economic consequences of COVID-19

close-up image safety net of rope
Photo by Chad for flickr, CC BY 2.0

It’s time to mend the housing safety net. The COVID-19 crisis has thrown light on the fragility of millions of American families for whom a missed paycheck forces a decision between paying rent and buying food. An eviction moratorium will help temporarily but will not solve the long-term housing problems associated with COVID-19. Temporary rent subsidies, similarly, would help only for a short time. The economic disruption of COVID-19 cannot be reversed overnight; there will likely be high levels of unemployment for some time – at least months and potentially years. Even after people get back to work, low wages compared with rents will likely persist. This is what happened during the Great Recession; incomes fell faster than rents, leading to larger numbers of people with severe housing cost burdens. Rents generally cannot fall to the level needed to allow the lowest-income people to afford them. Landlords need enough rent to cover their mortgages and keep the housing in adequate condition.

Already before COVID-19, the affordability crisis was starting to get more attention. Some presidential candidates had proposals for expanding the Housing Choice Voucher program, which helps pay the rent in private market housing, including housing that a family may already occupy. Others have proposed rent subsidies that would operate through the tax system.

The Housing Choice Voucher program is a proven winner. Strong scientific evidence shows that it can prevent the homelessness experienced by about 1.6 million Americans each year. The program is similarly effective for the millions of additional low-income Americans with fragile housing situations. In the voucher program, public housing authorities make payments to owners of housing that cover the difference between the full rent and the rent a family can afford. The family pays roughly 30 percent of its cash income; the housing authority uses federal funds to pay the balance. The maximum rent on which the subsidy is based (the Fair Market Rent) varies by geographic area, because rent levels vary widely—much more than the costs of any other necessity.

The ideal approach would be to make the Housing Choice Voucher program available to all renters whose income is low enough to qualify. Several years ago, my Abt colleagues and I helped the Bipartisan Policy Committee estimate the cost of such an approach at $31 billion. That estimate was based on several assumptions—notably that the program would be offered only to renters with poverty-level incomes (below 30 percent of the area median) and that the current stock of 5 million units of vouchers, public housing, and other federally assisted housing would be back-filled with eligible households as those units or subsidy slots turned over. Other analysts, using different assumptions, have come up with cost estimates for an open enrollment housing voucher program about twice that high, but still within levels that the United States can afford. The stimulus funds appropriated to mitigate the effects of the COVID-19 crisis should put those numbers in perspective.

It is not even necessary to go to an open enrollment voucher program to have a substantial impact. In the late 1970s, Congress was approving funds to add about 300,000 units per year to the housing voucher program (at that time brand new) and other federal rent subsidy programs. A return to that approach, adding 300,000 vouchers a year, would dramatically shorten waiting lists. With a short wait for a voucher, many families and individuals could avoid the need to go to homeless shelters by finding temporary help from family and friends.

The infrastructure of public housing authorities could handle increases in the volume of the Housing Choice Voucher program of that magnitude. They have done it in in the past, when large increments of vouchers were provided for families displaced by earthquakes in California and hurricanes on the Gulf Coast. While there could be challenges associated with finding enough landlords willing to accept the vouchers, keep in mind that many families offered assistance would not need to find new housing units but instead could use the voucher to rent their existing units. In addition, during a recession, landlords are likely to be more receptive to the voucher program because of the benefits of getting a partial federal guarantee for monthly rents.

A society based on a competitive, free market economy must acknowledge that a strong safety net is needed to help those at the bottom of the wage distribution. A key element of that safety net is safe, decent affordable housing, which could be provided cost effectively through an expansion of the existing Housing Choice Voucher program.

2 COMMENTS

  1. Of course! Yes, we ALSO need construction of millions of federally funded new units, but a phased plan as proposed should be an essential element of a strategy to make housing stable for low-income families

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