The Housing Choice Voucher program—often called Section 8—is the federal government’s most effective tool for combating homelessness, keeping more than 2 million families housed each year. While it is effective, it also needs repair. After all, Section 8 is so underfunded that 8.2 million households that qualify for a voucher can’t get one.
But that’s not the only problem.
Universal Housing Vouchers:
This is the second installment in a series of articles about universal housing vouchers. Did you catch parts 1 and 3? If not, we’ve got you covered:
Nearly one in three households that do get a voucher can’t find a suitable home with a landlord willing to accept it. These households often lose their voucher and their place on a yearslong waiting list, which can be mentally and emotionally damaging, says Vincent Reina, an associate professor in the Department of City and Regional Planning at the University of Pennsylvania.
“People are on the waitlist for decades,” he says. “They’re making decisions that are affected by something that may never happen, and their outcomes may actually be worse because they’re waiting.”
It’s for that very reason that a new housing system is needed, says Andreanecia Morris, executive director of HousingNOLA, a New Orleans-based housing advocacy group. “Universal vouchers are absolutely a part of that new system, but it needs to be a system that would guarantee housing for all voucher holders.”
To make the Housing Choice Voucher program truly work—that is, give the maximum number of eligible households a voucher and the ability to find a clean and habitable home they can afford in an area that has access to basic amenities like groceries and transportation—housing advocates like Andrew Aurand, vice president for research at the National Low-Income Housing Coalition (NLIHC), say the program needs a combination of changes on both the demand and supply sides.
“We need subsidy programs to increase the supply of units available to voucher holders,” Aurand says. “And we need to preserve the affordability and the quality of these units.”
To get to the appropriate combination of systemic changes to fix the Section 8 program “we need to be thinking about different ways to implement things we’ve already tried, and also thinking about new things to make it work from the landlord side,” says Katherine O’Regan, faculty director of New York University’s Furman Center for Real Estate and Urban Policy.
“It’s almost like there’s a three-legged stool. You’ve got private market landlords, the voucher households themselves, and the local housing authorities,” she says. “And there are things that we are going to need for each of the legs of that stool to make it work.”
What are some of the most pressing changes that would be needed to allow the Section 8 program to provide stable housing to as many low-income families as possible?
Increase Housing Supply
New home construction tanked after the housing crash of the late 2000s, leaving the nation short 5.5 million homes. To make up for what hasn’t been built over the past decade, it’s estimated developers need to build 2.1 million homes every year for the next 10 years. The gaping development backlog coupled with the sharp increase in renters as fallout from the 2008 financial crisis has made existing rentals in most places unaffordable even for full-time workers.
“We don’t have enough supply of housing. And when I say supply I mean all housing supply, not just affordable housing,” O’Regan says. “In addition to greatly expanding the voucher program, we need to acknowledge that all levels of government need to be working to increase housing supply.”
Federal investment in affordable housing is more likely in the coming years than it has been in decades, with President Joe Biden’s introduction of the $3.5 trillion “human infrastructure” package, which includes billions earmarked for expanded rental assistance, public housing preservation, and affordable housing investments. The Department of the Treasury is also calling for government spending: In a June memo, Deputy Secretary Wally Adeyemo endorsed government-funded supply-side help, stating, “inadequate supply is perhaps the greatest problem in the housing market today.”
The good news is that universal vouchers could actually help. Giving every qualified renter a Section 8 voucher could incentivize developers to ramp up production by making construction of low-income housing projects more economically feasible. A 2014 NLIHC analysis of rental revenues found that renting to voucher families allows developers to collect higher rents than they can from units without rental assistance and “assures sufficient revenue to operate the property.” In fact, low-income tenants with vouchers got far less behind in rent during the pandemic than did unassisted tenants, keeping some mom and pop landlords afloat.
“Voucher holders should have been in demand during COVID,” Morris says. “It’s guaranteed income when a tenant loses their job.”
A recent study conducted in New York City predicted that a switch to universal rental assistance would spur affordable housing development by increasing developers’ net operating incomes in subsidized projects, which would both encourage developers to invest and reduce the amount of city or county tax money a project would need.
The report found universalizing housing vouchers could increase the amount of affordable housing built by 33 percent, according to Phillip Kash, a partner with HR&A Advisors who worked on the study. “That’s a big level of impact,” says Kash, “and can be part of how you address access to opportunity . . . in addition to just addressing supply of quality affordable housing.”
Enact and Enforce Tenant Protections
Renters who are lucky enough to get a voucher must next find a landlord who will accept their voucher. While tenants are more vulnerable to discrimination and displacement than homeowners, low-income renters are much more likely to face landlord or property owner abuse; accept substandard, unhealthy, or unsafe housing conditions; and have fewer support resources available to them if they are mistreated.
Section 8 recipients tend to be Black and Brown folks, and single moms—groups that multiple studies have shown are evicted at higher rates, turned down for housing more often, and face more discrimination than white and/or childless renters. Systemic racism, prejudice against the formerly incarcerated, and stereotypes about single mothers all make it hard for people to find homes, HousingNOLA’s Morris says.
“When you hear about affordable housing, the image that’s conjured up now, thanks to the great communicator, Ronald Reagan, is the welfare queen,” she says. “That [image] is a poor Black woman with too many children, and that is a very specific and very ugly stereotype.”
Vouchers provide a convenient way for landlords to express prejudices like these without running afoul of the Fair Housing Act, which prohibits discrimination based on race and family status. Voucher-holding tenants are often turned away because landlords in most places can legally refuse to rent based on a person’s source of income.
Several jurisdictions have enacted source-of-income protections that bar landlords from denying a rental application based on how the applicant plans to pay the rent. But those laws can be easy to work around, says Peter Sabonis, human rights development program director at Partners for Dignity and Rights.
“They don’t say ‘Section 8 not allowed’ in their ads,” Sabonis says. “They weed [voucher holders] out through their credit report, or by requiring their income to be three times the rent. You could write a whole article on how to avoid accepting Section 8.”
O’Regan of the Furman Center echoed that statement: “We know from research that source-of-income protections matter, but we still see discrimination when those laws are adopted.”
Stronger tenant protections across the board would make it easier to prohibit source-of-income discrimination—and for voucher holders to both find and keep a place to live. Organizers from KC Tenants, an organization in Kansas City, Missouri, have been calling for a national tenants’ bill of rights. “If we are going to spend a ton of public money on subsidizing private markets’ role in our housing, we need to at least come up with some regulations and tenant protections guaranteed as part and parcel of an extended voucher program,” says Tara Raguvheer, founding director of KC Tenants. “We shouldn’t actually just give away public money with no strings attached, no conditions to protect tenants who live in privately managed, privately controlled homes.” The group is currently conducting a massive tenant survey to learn what protections tenants would need the most, were a national bill of rights ever enacted.
Make the Process Make Sense
The U.S. Department of Housing and Urban Development (HUD) administers the Housing Choice Voucher program’s annual appropriated budget, doling it out to local public housing authorities (PHAs) that set local program income standards and determine which applicants receive a voucher. There are approximately 3,400 PHAs in the U.S. responsible for administering 2.3 million Section 8 housing vouchers (they also oversee 1.3 million units of public housing). Local PHAs operate independently of one another, and also independently from other local housing-related government authorities, such as property inspectors.
PHAs are the local conduits between landlords and Section 8 tenants. But many PHAs don’t have the funding or the people power to keep up with inspections, complaints, and tenant placement. Much as with any underfunded or poorly administered government program, the clients suffer the most. With Section 8, this often means it’s hard for voucher holders to find a place to live before their voucher expires. For example, when a property owner or landlord wants to begin accepting Section 8 renters, it’s on the landlord to have the unit inspected by a local PHA, but they are often severely backlogged on inspections and other administrative duties.
The inspection backlog in New Orleans has helped to cause a “hemorrhaging” of vouchers there, Morris says, because it limited the supply of available units to use the vouchers in. More than 1,000 vouchers out of the 18,000 the PHA was allotted weren’t being used, despite the overwhelming need.
In response, HousingNOLA, the Housing Authority of New Orleans, and several other financial partners in 2020 created a Landlord Incentive Program that offered New Orleans landlords a one-time $500 payment to sign up Section 8 renters. Between September and the end of the year when the program ended, more than 170 landlords signed up, adding 200-plus units to the city’s affordable housing stock.
The problems can’t all be laid at the feet of insufficient administrative funding though. Morris says there’s also an attitude on the part of some PHA leaders that they are “there to warehouse the poor.” Those leaders resist talking about solutions like mobility counseling that would help voucher holders find homes in neighborhoods that offer access to transit and other resources. “They kind of go, ‘That’s never going to work,’” she says.
The variable reputation of PHAs makes the system inconsistent and hard to navigate for voucher holders. “There’s anecdotal evidence that in markets that have more than one local housing authority that when voucher recipients are searching and they ask the landlord whether they’ll accept the voucher, the landlord will say it depends on which PHA [they’ll be working with],” O’Regan says.
Were PHAs to get a budget boost, it could come with incentives for improving current voucher use success rates. PHAs could make it easier for landlords to participate and to get inspected, provide more support for housing search assistance, and address fair market rents.
Incentivize Landlord Participation
COVID showed the irony of landlords avoiding leasing to Section 8 voucher holders.
While many landlords faced extended loss of rental income, voucher holders who lost their incomes were still able to pay rent, because when they reported the income loss, their PHA adjusted their rent responsibility downward and paid the difference.
“You go to the housing authority and show them your pink slip and they’re going to do a new income calculation, and they may need to cover 100 percent for you,” Morris says, but your rent will get paid. “It’s guaranteed income. For guaranteed income, you should put up with a lot as a landlord.”
So why aren’t landlords participating? Many landlords discriminate against Section 8 renters for ill-informed, often ignorant or racist reasons—the stereotype that voucher holders are dirty and damage property or increase crime by moving to a neighborhood (actually, studies show the opposite), for example.
But some of the landlords who refuse to accept vouchers do so for less insidious, more practical reasons. Property owners who restrict tenancy can simply advertise their unit and enter a private lease arrangement at a rent they set with a tenant they choose. Property owners who accept Section 8 vouchers must set rent at a predetermined amount based on local Fair Market Rents, register with their local PHA, and pass a physical property inspection—which they sometimes wait months to have done. If the property fails the inspection, it’s on the landlord to fix the issues before it can be rented to a voucher holder.
“In fact, they might have to forgo rent [while they wait] in order to participate in the program, or they might have to undertake certain modifications or changes that may not be required otherwise by local law,” O’Regan says. “So to expect that from private market landlords, and for them not to be compensated for those burdens, might be a harder ask than necessary.”
It’s a deterrent for “a whole universe of small landlords” who’d like to participate in the program but don’t have the time or money to complete the work that needs to be done after a failed inspection, says Nora Bloch, senior adviser of community investment at the Center for Community Investment at the Lincoln Institute of Land Policy.
“It’s important because I think there are a lot of small, [private]-market landlords who don’t have access to support programs or connections to the universe of folks who need vouchers,” she says. “It’s an untapped resource of potential availability.”
Pittsburgh, which has an estimated 20,000-unit affordable housing shortage, has decided to try to tap that resource. Small landlords in Pittsburgh who’d like to accept Section 8 vouchers but don’t have the capital or resources to improve their rental units so they’ll pass a PHA inspection have a new resource available: the Small Landlord Fund. Folks at the Urban Redevelopment Authority (URA) of Pittsburgh along with several financial partners, including a hospital, launched the program in early 2020 to provide property owners who own 10 or fewer rental units with a zero-interest loan for as much as $20,000 per unit or $100,000 per project.
The fund serves local property owners who may not have stellar enough credit to secure rehab financing on the open market. It requires owners have a credit score of just 580, offers simple loan terms, and is being primarily marketed along seven major avenues in the city that have been historically disenfranchised and disinvested from. Bloch says along with expanding access to voucher holders, the fund can help stabilize Black and Brown property owners “who have not really been served or looked at by the public sector.”
Landlords who participate in the program must agree to keep the units income restricted for the term of the loan (even if they pay it off early). In some cases that restriction will look like a limit on rents to be affordable to renters who make no more than 80 percent of local AMI, while landlords whose properties are in “high-opportunity areas,” also known as “voucher mobility areas,” will be required to accept housing choice vouchers.
“If the property is in one of those zones, we’ll require them to work with Section 8 because we want to incentivize and encourage voucher mobility in those zones as much as possible,” says Jeremy Carter, URA’s manager of community housing programs. “You then can get higher rents in those zones. So, it is a benefit to the landlord . . . and we wanted to put an equity lens on the program design, meaning we knew that a lot of our mom and pop landlords, they depend on their one or three units for income. They may not have the best credit or the most equity, but we still want to support them because these units are important.”
“There are two pathways a landlord can take” to end up in the program, Progar says (UPMC Center for Social Impact is one of the project partners). “One is being proactive and securing the loan to position the unit to be an affordable unit. The other is starting the voucher process with the housing authority, failing the quality standard, and being referred to the program by an inspector.”
“When a landlord receives a failed inspection from the housing authority, they’re almost always referred to us,” Carter says. In those cases, the fund uses the failed inspection report to create a work scope for the project, and “streamlines and coordinates the inspection process to make sure it’ll pass permitting, licensing, and inspections, and will also pass PHA requirements. . . . When the project is done, the property is Section 8 ready.”
For all participants, URA coordinates with both City of Pittsburgh inspectors and the local PHA to ensure the post-construction inspection process goes quickly and smoothly. This connection means landlords don’t lose potential rental income while waiting for an inspection. It’s a win-win-win for landlords, tenants, and the PHA.
The program got a slow start thanks to the COVID-19 pandemic’s arrival during its second month in operation, but Progar says 10 projects have been approved and several others are in the pipeline.
Make Fair Market Rents Fair
When the federal government in the 1990s pivoted away from housing low-income renters in dilapidated high-rise buildings and instead moved toward a voucher system that placed the responsibility of housing the nation’s poor on the private market, the hope was renters would use their vouchers to move to better neighborhoods. That didn’t happen.
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Low-income renters, and voucher holders in particular, have historically been concentrated in high-poverty neighborhoods, mostly because that’s what they can find and afford. Voucher holders’ options are limited by HUD-determined Fair Market Rents (FMRs), which cap the amount of subsidy in a particular geographic area at a level meant to “represent the cost of a moderately-priced dwelling unit in the local housing market.” Local voucher values are set by PHAs using FMRs as a guide.
The problem is HUD traditionally set FMRs to cover large swaths of land. An area’s FMR could include multiple districts with several types of neighborhoods and a wide range of home values. Using averages has kept voucher holders out of more costly areas. In an attempt to level the financial playing field, HUD in 2016 introduced Small Area Fair Market Rents (SAFMRs), which calculate rent caps based on individual ZIP codes rather than whole regions in 24 metro areas where rent prices were particularly limiting for voucher holders, including Pittsburgh, Pennsylvania.
Kevin Progar, senior project manager at the University of Pittsburgh Medical Center’s Center for Social Impact, says that in a “hyperlocal” market like Pittsburgh’s, where “you can go down an arterial street, on this side homes sell for $500,000 and on that side they sell for $125,000,” SAFMRs have made a noticeable difference in social outcomes for voucher holders, such as by providing opportunities for families to move to areas with “better school feeder patterns for the local elementary school” from which they’d been previously priced out.
There’s a health benefit too. “The high-market units are more likely to be remediated for lead, mold, asbestos, et cetera, whereas with units in lower-income neighborhoods there is going to be a lot more exposure,” says Progar. “Getting the affordable access to the higher market neighborhoods is critical—that’s really where we want to be and where we want to preserve as many affordable units as possible.”
Putting the Pieces Together
Despite its shortcomings, Section 8 prevents homelessness. It’s not broken beyond repair. If Congress were to solve the basic issue of voucher scarcity by universalizing the program, a substantial handful of other systemic changes at the federal, state, and local levels would be needed so as many families as possible are able to find, rent, and remain in clean, safe homes.
“We need to preserve that housing that’s at fair market rent or below so it’s available to the voucher holders, and we need to invest in our housing programs to a greater extent,” says NLIHC’s Aurand.
Vouchers are just a single tool in what must be a multifaceted fix to the nation’s disjointed and sprawling yet cash-strapped rental assistance programs. Getting a voucher to every family who qualifies for one is an admirable (and achievable) goal, but there’s little use in holding a voucher if there’s nowhere to use it. And doling out vouchers isn’t the overarching goal, keeping as many folks as possible in stable, clean, safe units is.
Making the nation’s smorgasbord of housing assistance programs—including the Housing Choice Voucher program—work, and work together, means financially supporting functional administrative systems, changing discriminatory stereotypes about who’s poor and why, and yes, even offering carrots and sticks to incentivize developer and landlord participation in housing assistance efforts for low-income tenants. And it’s going to take coordinated government and private-market efforts, “because the government can’t be nimble at all, but this could be a place for philanthropy and putting in some flexible capital,” O’Regan says.
“We have to really think and take on unsexy things like streamlining permitting and zoning change approvals,” she says. “We have to get creative on different types of housing. We need to recognize that the majority of housing that’s affordable in this country isn’t subsidized, and we need to protect that. We really need to keep the fight on to increase the supply of housing at the same time we expand vouchers.”
Editor’s Note: An earlier version of this article incorrectly stated the percentage that a voucher holder pays for rent. Renters who receive a voucher and find a place to live with that voucher pay 30 percent of their income on rent.