What if Vouchers Aren’t the (Only) Answer?

Since the federal government mostly scrapped its crumbling public housing tenements in the mid-1970s and focused on providing low-income renters with housing vouchers and other need-based (rather than supply-based) assistance, it’s failed to provide enough funding to house the nation’s poor. As a result, the U.S. currently has more than 11 million cost-burdened households who pay more than half their income on rent, leaving them on the verge of homelessness. If the government finally took concrete steps to provide housing for every low-income family, what would be the best way to do it?

Federal rental assistance today is provided via a combination of housing vouchers, public housing developments, rural rental assistance, and a smattering of other programs. The Housing Choice Voucher program, better known as Section 8, receives the most money, and works by offsetting the cost of private-market rent and creating standards that force landlords to maintain their units at a certain level of habitability.

But the program has its fair share of problems, including stigma from landlords and neighbors, sky-high rents that segregate voucher-holders to the most poverty-stricken neighborhoods, and voucher scarcity; just one in five households that qualify for the program receive a voucher. Many housing advocates have prioritized getting to “universal housing vouchers”—i.e., providing a voucher to everyone who qualifies—as a major goal.

But should universal vouchers be the answer? Some affordable housing and tenant advocates say the voucher program uses taxpayer money to subsidize private-market landlords’ personal investment portfolios. Though the government sets a maximum “fair market rent” level the voucher program will cover (after which a tenant either can’t use their voucher or must cover the difference), the rents themselves remain unregulated.

Additionally, the fair market rent standard is unrelated to actual costs and is subject to the whims of the market.

Rather than continue finding ways to make Section 8 work better, some affordable housing and tenant advocates argue the federal government should invest heavily in addressing the affordable housing shortage at its root. This could be done by reining in skyrocketing rental rates through rent control and taxation or, better yet, by removing large swaths of the existing housing stock and available real estate from the speculative market altogether.

The Problems with Section 8

Jeremie Greer, co-executive director of Liberation in a Generation and a contributing author to the New Deal for Housing Justice legislation, is one such advocate. Greer and others argue that housing vouchers don’t fix—and in many ways exacerbate—the fundamental problems for low-income renters because they fail to shift any power away from landlords and toward renters.

“[Vouchers] don’t actually provide any agency or choice to those who do have them,” Greer says. “The fact that they’re called Housing Choice Vouchers is a misnomer because there is no choice. The ‘choice’ is that you can continue to work and to live in substandard housing in segregated neighborhoods at the will of a landlord who can kick you out for any reason.”

He’s not wrong that the aspiration of providing choice has not been fully realized. When it was created in 1974, Section 8 was touted as the federal government’s way of liberating low-income renters from substandard public housing developments. At the time, the public-private partnership seemed like a better option than warehousing poor people in intentionally underfunded, poorly located, crumbling housing projects. The idea was to remove government-run public housing from the equation, thereby allowing families to use their voucher to choose where they lived. Along with giving voucher holders a choice about where they rented, the program’s secondary intention was to facilitate low-income families’ ability to move out of disinvested areas to better neighborhoods.

It rarely worked that way. (Though certain areas that offer active housing mobility counseling have seen some success.) In practice, many voucher holders struggle to find landlords who will rent to them. When low-income renters do find a landlord who accepts their voucher, nearly half are in neighborhoods with concentrated poverty. In short, nearly 50 years after its inception, the program remains inadequate, imprecise, and expensive.

Still, the Housing Choice Voucher program is effective, keeping millions of low-income families housed and lifting children out of poverty. Section 8 recipients see long-term health outcome improvements. Eva Rosen, author of The Voucher Promise and a strong advocate for expanding the program, calls Section 8 “one of the sharpest tools” the nation currently has to keep low-income renters housed.

Though even Rosen acknowledges its flaws. “The program cannot do everything. And the program itself, it fundamentally works within the system that we have,” she says. “So if we want to be creative about how to solve the housing crisis we should be thinking outside the box and we should be thinking about what models we can use to create a different way of providing people with housing.”

Public Housing Doesn’t Have to Be Substandard

If the United States wanted to rely less on private landlords, it could look to several other countries that have long-standing, incredibly successful public housing programs (most of the rest of the world calls it social housing). Take, for instance, Vienna, Austria, where approximately 40 percent of the residential stock is public housing. Vienna’s 100-year-old social housing program offers units that are available to and sought after by people of all income levels. The buildings are architecturally renowned, located near amenities like public transportation and parks, and administered under a system where higher-income renters pay more for their units so lower-income renters can afford to live in similar-quality homes.

Vienna isn’t the only model the U.S. could tap for ideas on how to structure a new type of public housing: Several other countries—including Spain, Denmark, and Germany—house large segments of low- and moderate-income renters in government-owned housing developments.

[RELATED ARTICLE: Why Nonprofit Cooperatives Are Thriving in Europe]

The housing system couldn’t be more starkly different in the U.S.—especially in urban areas like New York and San Francisco—where only the lowest-income renters live in public housing units and market-rate rents are at an all-time high, making it impossible for a full-time minimum wage worker to afford a two-bedroom unit in an unsubsidized housing unit. And while some argue the U.S.’s astronomical rents are only the result of inadequate supply, Maria Zamudio, organizing director at Housing Rights Committee of San Francisco, says that argument is a red herring. She says the real barrier to affordable housing is misallocation of capital.

“I live on a block in Oakland where we have had almost 10,000 units dumped in a two-block radius in the last five years. All of those units are incredibly expensive. I also live a block and a half from an encampment of unhoused folks,” Zamudio says. “So the reality is that we are building, but we’re not building at the levels or the price where the supply is actually needed. And at the same time, the federal investment that we’re making isn’t federal investment to fix any of that, it’s investment right into landlords’ pockets.”

Patrick Condon, a professor of urban design at The University of British Columbia and author of Sick City: Disease, Race, Inequality and Urban Land, says the U.S. could create its own “Vienna experience,” as he calls it. Doing so would require the federal government to begin setting (and possibly collecting) property taxes with the intention of driving down the cost of urban land so that constructing affordable housing developments would be less expensive for developers. Without government intervention in the nation’s artificially inflated land prices, he says, investors will continue to buy large parcels of land and hold them vacant in order to increase the scarcity of land and drive prices up.

“If you only have, say, $100 billion to spend and you had a choice between Section 8 or getting land and making the land available for nonprofit corporations, I would mostly do the latter,” Condon says. “And if I was the federal government, I would favor those communities that were doing something to hold down land prices such that $100 billion wouldn’t simply enrich the fantastically wealthy land speculators.”

“Decommodifying” Housing

Housing that’s insulated from speculation due to different forms of ownership exists and thrives at a much smaller scale in the United States’ localized examples—community land trusts, tenant-run housing cooperatives, and other programs often run by private nonprofits. The problem is, few (if any) of those programs are self-sustaining, and none are yet big enough to make any headway in America’s deep lack of affordable housing. The current market-rate costs of construction, maintenance, and administration often prove to be insurmountable barriers that make projects that include affordable units too expensive to meet private-market developers’ desired profit margins.

What we need is “a different class of housing that is not beholden to the return on investment that the private market demands, which is really what’s driving a lot of this systemic racism and inequality,” Greer says. “In an ideal world, I’d like to see social housing as the creation of a new set of housing stock that is outside of the private market and is helping people well up the income scale, not just very low-income people.”

To do that, Greer says, federal, state, and local government agencies would need to partner with both nonprofit and for-profit entities, because the federal government is the only entity that’s large enough and equipped to handle development of millions of units. The federal government taking on this role isn’t impossible. It’s not even unprecedented. Once upon a time, before the U.S. Department of Housing and Urban Development (HUD) became a Cabinet-level agency, the U.S. government funded development of huge swaths of suburban homes.

“It’s not the HUD we know today, but post-World War II HUD built a lot of homes for poor, working-class and moderate-income households,” Greer says. “Is HUD in its current construction able to do that? Probably not. But that doesn’t mean HUD or some other iteration of a government agency couldn’t take on this monumental effort and share that responsibility with state and local governments to work with communities and determine what type of housing is needed, where it’s located, and who’s served by it.”

The key to the whole equation, advocates argue, is removing the need for housing to generate excessive profits for developers and landlords. Housing vouchers cover a large portion of market-rate rents with no restrictions on where that money goes or who benefits from it. Zamudio argues landlord profits eat up federal affordable housing subsidies that should be invested in creating, rehabilitating, or preserving additional affordable units.

“If we were able to regulate the market, housing wouldn’t be so expensive, because it doesn’t have to be,” Zamudio says. “We could subsidize rents at a market value that was regulated and covered just what the housing cost to build and maintain and pay the taxes.”

Community organizations across the U.S. have been working for decades to insulate housing and land from speculation by shifting power and ownership—establishing tenants’ unions, passing tenant opportunity to purchase (TOPA) legislation, and forming cooperatives.

Tenant organizers at City Life/Vida Urbana (CLVU) in Boston have been successful at not only winning fights against slumlords by forming tenant unions, but also raising money to buy multifamily buildings. The group is currently working to pass TOPA legislation in the city.

“We should see each example of getting housing out of the market as a base for a liberation movement,” says CLVU organizing coordinator Steve Meacham. “It shouldn’t be seen as an island that’s going to work by itself in the sea of predators. It should be seen as the basis for launching the ongoing struggle.”