By: RG Yamba
Published on: October 1, 2024
In 2023, the Department of Housing and Urban Development (HUD) announced that it will take action to address the availability and affordability of homes in our country.[1] Its plan includes promoting building low-income housing, preserving of existing housing units, and developing programs to increase homeownership. Notably, HUD plans to increase funding for the Housing Choice Vouchers (HCV) program to help provide more government subsidies to low-income households for rental assistance. With the rising housing costs in the United States, the program would alleviate the financial burden low-income households face to maintain stable housing. However, receiving an HCV does not guarantee automatic placement in a rental home due to landlords’ hesitancy to accept voucher holders. This issue thwarts the very purpose of the program if it is not addressed. This blog argues that increasing the budget of the HCV Program alone is insufficient to provide housing to low-income families. Instead, there needs to be concerted efforts in the form of passing source of income anti-discrimination laws, eliminating unnecessary bureaucratic processes, and providing financial incentives to landlords to increase their participation in the HCV Program.
The HCV Program was established in Section 8 of the United States Housing Act of 1937.[2] The program’s goal was to aide low-income families in obtaining a place to live. Congress granted the Department of Housing and Urban Development the authority to develop the overall structure of the HCV program. Meanwhile, state and local housing authorities administer the program in their respective regions. They determine the exact percentage of government subsidy based on the fair market rent of a specific area.
When the government provides financial assistance to voucher recipients, it alleviates a huge financial burden. One in three households are currently cost-burdened in the United States.[3] This means that they spend more than one-third of their income on housing alone.[4] So, when HUD provides rental assistance to these families, they can spend their money on other needs such as food, medicine, and transportation and, consequently, relieving some financial stress.
A growing problem is the inability of low-income households to efficiently use their vouchers due to the lack of program participants. Under federal law, the Section 8 Program is voluntary for both landlords and tenants. Landlords who opt to participate in the program are required to enter into a Housing Assistance Payments Contract with HUD.[5] Once entered, landlords are then subject to certain rules and restrictions that apply only when landlords lease to voucher holders. These include minimum length of initial lease terms and housing quality standards.[6] As long as the landlords meet these requirements, they are guaranteed payment by HUD. However, many of them do not find this program worthwhile. For example, landlords experience delays when they schedule inspections prior to the move-in date of a voucher holder. Landlords often find it more financially beneficial if a non-voucher holder were to move in instead. Furthermore, landlords believe that voucher holders are likely to have behavioral problems that may affect the culture of the property.
To address the concerns of the program, there are potential areas of reform. First, source of income anti-discrimination laws are a viable tool to combat landlords who refuse to rent to voucher holders. In Washington, DC, landlords cannot discriminate against rental applicants who hold housing choice vouchers.[7] Second, encouraging landlords to accept households with vouchers is another area of reform. The Choice in Affordable Housing Act, which was recently introduced in the House, provides several strategies to encourage private landlord participation.[8] It would allow an increase in the value of rental assistance and inspection delays and allow vouchers to be accepted in more areas. Finally, exploring possible housing financing options for landlords may encourage HCV program participation. Entities like Freddie Mac and Fannie Mae are considering strategies to engage with real estate developers and landlords to provide favorable financing options contingent on them accepting voucher holders.[9]
Although there are no clear solutions to addressing the issue with the HCV Program, measures such as passing source of income anti-discrimination laws and encouraging landlord participation are simple ways to help voucher holders find long-term, sustainable, affordable housing.
[1] Press Release, U.S. Dep’t of Hous. & Urb. Dev., HUD Releases Fiscal Year 2024 Budget in Brief (Mar. 13, 2023).
[2] See 42 U.S.C § 1437f (2022).
[3] Peyton Whitney, More Than 42 Million US Households Were Cost Burdened in 2022, Joint Ctr. for Hous. Stud. of Harv. Univ., (Jan. 19, 2024), https://www.jchs.harvard.edu/blog/more-42-million-us-households-were-cost-burdened-2022.
[4] Id.
[5] See 24 C.F.R. § 982.451 (2024).
[6] See id. at § 982.401.
[7] Equal Rights Ctr. v. Belmont Crossing Apts., LLC, No. 2017 CA 003774 B, 2018 D.C. Super. LEXIS 8, at *2-3 (Oct. 22, 2018).
[8] H.R. 4606, 118th Cong. (2023).
[9] Laurie Goodman, et al., Leveraging Financing to Encourage Landlords to Accept Housing Choice Vouchers, Urb. Inst., (Sept. 2022), https://www.urban.org/sites/default/files/2022-09/Leveraging%20Financing%20to%20Encourage%20Landlords%20to%20Accept%20Housing%20Choice%20Vouchers.pdf.