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Federal Housing Vouchers

Written by Dr. Madeleine Roberts
Published on April 18, 2024
Research Highlights

The Housing Choice Voucher Program makes housing more affordable and reduces homelessness for low-income people.

On average in MO, 56% of people who received a housing voucher were able to rent a unit using their voucher.

Voucher programs have higher use rates when there are protections in place from voucher discrimination.

Federal housing vouchers assist low-income people in securing safe, affordable housing.

The U.S. Department of Housing and Urban Development administers Housing Choice Vouchers (HCV) Program (Section 8), which is the largest federal program to assist low-income people in affording safe and sanitary housing in the private market. Over 35,000 Missourians used voucher in 2023 (HUD 2023).

Within HCV, special programs vouchers target specific populations, including:

Other HUD programs include Emergency Housing Vouchers for victims of domestic violence, dating violence, sexual assault, stalking, or human trafficking or those who are homeless, and Housing Opportunities for Persons with AIDS, for low-income and housing insecure people with AIDS.

To be eligible for a voucher, a tenant’s family income must not exceed 50% of the area median income (HUD). A PHA must give 75% of its vouchers to tenants whose income is below 30% of the area median income.

To get a housing voucher, applicants join the waiting list for their PHA. Tenants often spend more than 2 years on a waiting list before receiving a voucher (Collinson 2016). Once given a voucher, the tenant has a set amount of time (at least 60 days, set by the PHA) to find a unit that meets program requirements with a landlord willing to rent to them. The voucher holder pays 30% of their income for rent and utilities, and the PHA subsidizes the difference up to a cap based on a fair standard payment, that is set by the PHA and HUD.

According to MO PHA public data from 2018 and 2019, 56% of unit searches were successful within 180 days (HUD 2021, Supplementary Table 1). Success rate depends on PHA policies and practices, the local housing market, and the share of landlord willing to accept vouchers (Bell 2018).

Source-of-income protection laws increase landlord acceptance of housing vouchers.

Under the Fair Housing Act, landlords may not refuse to rent to a tenant based on race or color, religion, sex, national origin, familial status, or disability. Housing voucher users are not a protected class under the Fair Housing Act, so landlords may choose not to accept housing vouchers under federal law.

More than 100 localities (5 MO localities), 16 states, and D.C. have added source-of-income to their list of protected classes that covers federal housing assistance (PRRAC 2024, Figure 1). IA, IN, KY, and TX prohibit localities from requiring landlords to accept vouchers.

Adding source-of-income to protected classes does not require a landlord to rent to a voucher holder and allows for consideration of credit history, rental history, and criminal background.

Some cities give incentives for landlords that accept housing vouchers (PRRAC 2024). Kansas City Ordinance 231019, passed but not yet in effect, provides landlords access to a Risk Mitigation Fund to reimburse losses from participating in the voucher program. Other cities provide a landlord hotline, access to special loan programs, fee waivers, or tax reductions to participating landlords.

Figure 1. Map of state policy on requiring landlords to accept federal housing vouchers. Data from PRRAC 2024 and Bell 2018.

The housing voucher program improves housing affordability for very low-income people.

Housing vouchers are a private-market alter-native to government-run public housing projects to provide affordable housing to very low-income people and reduce poverty concentration. The success of housing vouchers towards these goals depends on landlords choosing to accept vouchers.

Studies of the federal voucher program have found that (Bell 2018, HUD 2018):

  • Less than 1 in 4 eligible people receive voucher subsidies.
  • Most landlords (75-92%) do not accept vouchers but are more likely to accept them in high-poverty areas and places with protections from voucher discrimination.
  • PHAs have voucher use rates 5-15 percentage points higher in places with voucher non-discrimination laws.
  • There is mixed evidence that voucher non-discrimination laws help voucher holders rent in areas with better schools and more economic advancement opportunity.

Housing vouchers have improved housing affordability, reduced homelessness, provided low-income people housing options in less disadvantaged neighborhoods than residents of public housing, but had limited success in reducing the concentration of poverty (Ellen 2017, HUD 2015, HUD 2006).

There is no evidence that increasing the number of voucher holders in an area impacts crime (Ellen 2012). Units rented with vouchers have a slight negative impact on neighborhood property values, mostly in low-income areas associated with poorly managed properties (Galster 2010, Lee 2010).

 

References

Bell A, Sard B, Koepnick B (2018) Prohibiting Discrimination Against Renters Using Housing Vouchers Improves Results Lessons From Cities and States That Have Enacted Source of Income Laws. Center on Budget and Policy Priorities. https://www.cbpp.org/sites/default/files/atoms/files/10-10-18hous.pdf

Collinson R, Ellen IG, Ludwig J (2016) Low-Income Housing Policy In “Economics of Means-Tested Transfer Programs in the United States” Vol. 2. University of Chicago Press. https://www.nber.org/books-and-chapters/economics-means-tested-transfer-programs-united-states-volume-2/low-income-housing-policy

Ellen IG (2017) What Do We Know About Housing Choice Vouchers?  New York University Furman Center. https://furmancenter.org/files/fact-sheets/HousingChoiceVouchers_ige.pdf

Ellen IG, Lens MC, O’Regan K (2012) American Murder Mystery Revisited: Do Housing Voucher Households Cause Crime? New York University Furman Center. https://furmancenter.org/files/publications/American_Murder_Mystery_Revisited_32012.pdf

Galster GC, Tatian P, Smith R (2010) The impact of neighbors who use section 8 certificates on property values. Housing Policy Debate, 10(4), 879–917. https://www.tandfonline.com/doi/abs/10.1080/10511482.1999.9521354?src=recsys

Lee C, Culhane DP, Wachter SM (2010) The differential impacts of federally assisted housing programs on nearby property values: A Philadelphia case study. Housing Policy Debate, 10(1), 75–93. https://www.tandfonline.com/doi/abs/10.1080/10511482.1999.9521328?src=recsys

Office of Policy Development and Research (2006). Effects of Housing Vouchers on Welfare Families. U.S. Department of Housing and Urban Development. https://www.huduser.gov/portal/publications/commdevl/hsgvouchers.html

Office of Policy Development and Research (2016). Family Options Study 3-Year Impacts of Housing and Services Interventions for Homeless Families. U.S. Department of Housing and Urban Development. https://www.huduser.gov/portal/publications/Family-Options-Study.html

Office of Policy Development and Research (2018) A Pilot Study of Landlord Acceptance of Housing Choice Vouchers. U.S. Department of Housing and Urban Development. https://www.huduser.gov/portal/portal/sites/default/files/pdf/Landlord-Acceptance-of-Housing-Choice-Vouchers.pdf

Office of Policy Development and Research (2021) Using HUD Administrative Data to Estimate Success Rates and Search Durations for New Voucher Recipients. U.S. Department of Housing and Urban Development. https://www.huduser.gov/portal//portal/sites/default/files/pdf/Voucher-Success_Rates.pdf

Poverty & Race Research Action Council (2024) State, Local, and Federal Laws Barring Source-of-Income Discrimination (originally published as Appendix B to Expanding Choice: Practical Strategies for Building a Successful Housing Mobility Program, 2013). https://www.prrac.org/pdf/AppendixB.pdf

U.S. Department of Housing and Urban Development (2023) Housing Choice Voucher (HCV) Data Dashboard. https://www.hud.gov/program_offices/public_indian_housing/programs/hcv/dashboard

U.S. Department of Housing and Urban Development. Housing Choice Vouchers Fact Sheet. https://www.hud.gov/topics/housing_choice_voucher_program_section_8

 

Supplemental Table 1. Most recent data on the success rate (searches that resulted in leasing to a voucher holder) and average length of a successful search in days of MO local public housing authorities (HUD 2021). PHAs with too few searches to be considered a representative sample, determined by HUD, are marked with an asterisk.

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