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

Rather than rely on expanding Section 8 vouchers, some affordable housing and tenant advocates argue the federal government should invest heavily in addressing the affordable housing shortage at its root.

Vienna’s 100-year-old social housing program offers units that are available to and sought after by people of all income levels. Photo by Ludovic Hirlimann via Wikimedia Commons, CC BY-SA 2.0

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?

Universal Housing Vouchers:
A Three-Part Series

This is the third installment in a series of articles about universal housing vouchers. Read the first two parts:

Part 1: “Universal Housing Vouchers: A Promise or a Pipe Dream?

Part 2: “How to Make Universal Vouchers Actually Work”

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.”

Shelby R. King is Shelterforce's investigative reporter. She began her reporting career in 2010 covering cops/public safety and has been writing about housing and community development since 2014.

5 COMMENTS

  1. Expansion both of supply and subsidies are needed to address different problems with the market. it is not an either/or problem. However, I can’t imagine a reversal of the decline of public housing. The right wing in this country sees it as socialism, while many of us who see this as a theoretically appropriate solution would question whether any level of government has the capacity to develop housing at scale. I think it is going to take us up to 20 years to implement the infrastructure bill, much less taking on a politically fraught housing program in people’s neighborhoods. Given the decline we reluctantly should acknowledge in public sector capacity, programs utilized by the private sector, like the LIHTC, perhaps augmented with with expanded HOME and/or NHTF, may be the best we can do. At least these are tools we know how to use and hopefully we can shrug at the inefficiencies in these programs.

    • It’s sadly true that the public sector’s capacity to implement change has shriveled significantly over the decades, but how many people, even die hard republicans and libertarians, would object to removing swaths of land from the speculative market if the sole purpose was to provide housing for low/moderate income households that is desperately needed? If it was presented in an easy to comprehend, logical narrative (always a difficulty for dems), as was done above by Zamudio -(“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.”) — what exactly would be the objection?

      • I think you and Roy L. are both right. We already have subsidies–the LIHTC, HOME, CDBG, locally-generated funds that more and more voters are approving directly–and we have the institutions (nonprofits). They are generating subsidized housing that is on the whole much better designed, much better managed, and much more accepted by surrounding communities than public housing ever was. What we need is to get this existing system to scale up its production by 5X. We need to expand the existing funding streams, and both the govt and the philanthropic sector need to embrace the unsexy but hugely important imperative to boost the capacity of nonprofits so more of them can function at bigger scales. Basically we need a lot more entities like BRIDGE Housing in California IMHO. We are going to have make some other reforms, like local land use regulations. Also, it would be great if nonprofits could operate some middle income housing, maybe even some market rate housing, to cross-subsidize their operations and give them more financial strength, as I think Jeremie Greer is suggesting. I don’t exactly know what’s stopping that from happening now but if anything is it should be addressed.

  2. A reply from someone who has a Section 8 Voucher: I’m 73 and live in Vermont. Perhaps I should say that I’m college educated, never married and worked all my life until the age of 62. At that point, Social Security was more than what I was making, so I took it early. In 2014, after 7 years on the Section 8 list, I turned 65 and received a voucher for an apartment. In Vermont 48% of Section 8 vouchers go to people over 65.

    For the first seven years after moving here, I rented a room in a house through Homeshare Vermont, a nonprofit started 20 years ago because there was already a housing squeeze. I learned quickly that in the Burlington area, the University of Vermont has controlled housing availability and rents for the past 30 years. UVM students push out workforce renters and seniors alike and keep the rents high because they will pay more to live off campus. UVM refuses to build more dorms. I repeat, UVM is the single biggest thing driving high rents in this area.

    I have been President of a Habitat for Humanity board in a poor rural county and put people making $25,000 into nice three bedroom homes. I have also been temporarily homeless myself. And I say emphatically, just as there is NO SINGLE CAUSE of the housing crunch, there is no SINGLE solution. Americans fool themselves in thinking there is. We like to name a single panatoxin, and then go looking for a single panacea. The local economies don’t work that way.

    A regional approach between the state government and local municipalities might have a chance of working. A nationwide approach will only fail again because it does not allow for vast differences in education, types of jobs available and local economics in different regions of the U.S. Stop looking for one panacea and start looking at building local and regional community solutions.

    .

  3. OK, so I know I am late to this discussion, but public housing in the US was originally just what we are talking about. Federal funds to local agencies to acquire land and build housing, with rents set to be affordable, but also to cover operating costs. It was not until the Brooke Amendment in 1968 that limited public housing rents to a percentage of income – and set the stage for the massive underfunding that followed and was perhaps the single most significant factor in the physical deterioration of the public housing stock. And lets not forget that both the redlining and other discriminatory practices relating to capital access, as well as the bias of many private landlords restricted choices for non-white voucher holders, adding to the concentration of poor, minority households in this underfunded public housing. I could go on. LIHTCs, like the HOME, CDBG and project-based Section 8 programs, have expiring affordability requirements. What happens at the end of the 15 – 30 year affordability period of this affordable housing? In all too many cases, it goes away. Government entities CAN be effective. Public housing agencies are state-chartered locally controlled independent government entities – like Port Authorities and transportation authorities and parking authorities – that are only beholden to federal requirements via the funding the feds provide. Many, if not most, are doing a fantastic job with the limited resources available to them from all of these sources. I realize the reputation of “public housing” will not be quickly changed, but the original public housing program was very much like what Greer suggests: Here’s some money, build some housing (no debt and no profit to help keep costs down), charge rents that are affordable but generate enough revenue to maintain the housing and possibly build more. Perhaps not politically possible right now, but we are closer to that possibility than we have been in 50 years. And remember, non-profit, and even charitable, is not the same as public.

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