The Administration’s budget proposes two major changes to the voucher program—namely, cutting funding and transforming the program into a block grant to the states—that could significantly hurt low income families.
The US Conference of Catholic Bishops opposes these changes to the housing voucher program. The proposed cut of Section 8 funding by over $1 billion this year and block granting it to state and local housing agencies, leaves local agencies with three unacceptable choices:
- Cut at least 250,000 families from the program; or
- Charge higher rents to low-income families who already struggle to make ends meet; or
- Transfer vouchers from poorer families to higher income families.
Housing Choice Vouchers
What are Housing Choice Vouchers?
Housing Choice Vouchers evolved out of the old Section 8 rental assistance program established in 1974. Housing vouchers now are one of the major federal programs that are intended to bridge the gap between the cost of housing and the incomes of low wage earners and people on limited fixed incomes. Families eligible for The Housing Choice Voucher program receive vouchers to help them pay rent. Yet, the number of vouchers is woefully inadequate; three-fourths of those households eligible for federal housing assistance receive no assistance. While Congress has authorized 2.1 million vouchers, about 2.05 million vouchers are currently being utilized.
Who is eligible to receive vouchers?
In1998, Congress determined that 75 percent of those receiving the new voucher holders must have extremely low incomes, that is, income at or below 30 percent of the income average for their area. The remaining 25 percent of new vouchers can be distributed to tenants with incomes up to 80 percent. Local Public Housing Authorities can decide who gets the vouchers depending on local housing needs. Over six million households meet the income criteria for the voucher program. Most metropolitan areas of the country have long waiting lists of families seeking this assistance.
What has led the Administration to make this proposal?
The Administration believes that the housing voucher program has grown excessively in recent years. Yet total funding for the program has grown because of two factors: (1) Congressional decisions to expand the program to serve more of the families eligible for it; and (2) a widening of the gap between housing costs and the incomes of low-income families, especially during the recent economic downturn. The good news is that the Congressional Budget Office and other analysts expect the growth in voucher costs to slow markedly in the next few years, due primarily to the cooling of the housing market.
How would the block grant affect housing for low income families?
The Administration’s proposal to block grant the housing voucher program would change it from a program that receives funds from Congress based on the actual cost of housing low income families to one that receives funds according to a formula set by Congress based on the money that is available. This is a fundamental shift in the design of the program from market-based funding to whatever Congress determines it can afford.
Wouldn’t Public Housing Authorities still have to serve low income families?
The proposal does not protect families currently using vouchers. Since local authorities would be under pressure to serve the same number of families with fewer dollars, families with extremely low incomes would be at risk of losing their vouchers to families with higher incomes. HUD officials are explicit in their preference that the program serves more people with higher incomes, who require less of a subsidy.
Additionally, the local housing authority would be granted wide latitude in use of these housing dollars as many of the program’s current features would no longer be mandatory. For example, under the current system, 75% of new vouchers are targeted to extremely low income households (30% of average area income or less). Under the new proposal, all new vouchers could go to households with incomeup to 80% of average area income. Also local housing authorities would be allowed to develop their own rent systems which could require tenants to pay more than 30% of their income in rent.
For More Information:
Thom Shellabarger at the USCCB, 202 541 3189 or firstname.lastname@example.org
Douglas Rice, Catholic Charities USA 703 549 1390 X195 or drice@CatholicCharitiesUSA.org