Housing Vouchers Work: Efficiently Helping Families Afford Homes

This is the next post in our “Housing Vouchers Work” blog series, which provides the latest facts and figures about the Housing Choice Voucher program, the largest rental assistance program to help families with children, working people, seniors, and people with disabilities afford decent, stable housing.

As we’ve explained throughout this series, Housing Choice Vouchers are very effective at helping a wide range of groups — such as the homeless, working families, children, the elderly, and people with disabilities — live in decent, stable housing. They’re also very efficient.

Vouchers reduce rents for low-income families at a lower cost to the government than other forms of housing assistance, research shows. That’s partly because vouchers mainly help families rent existing housing, which generally costs less than building new housing developments. The program also comes with cost controls. Housing agencies check the rent for each voucher unit to make sure it’s in line with the local market. The U.S. Department of Housing and Urban Development (HUD) also sets rent standards that are used to cap voucher subsidies in each metropolitan area and rural county, and HUD is expanding its use of neighborhood-level standards that could raise efficiency further.

Voucher administrative costs are modest, and streamlining measures that policymakers enacted in 2015 and 2016 will trim costs more once they’re implemented. Waste and abuse in the voucher program are also low, partly due to aggressive efforts by HUD and state and local agencies to strengthen income verification and ensure that rent calculations are accurate. By 2014, the last year for which data are available, erroneous payments had dropped 64 percent since 2000 and only added about 0.5 percent to program costs.

Families generally can use vouchers in a modest private-market unit of their choice. As a result, they can pick units that provide the most value given their circumstances, which further raises vouchers’ efficiency compared to programs that assign families to units. For example, parents can rent a unit near a school they would like their child to attend, and an elderly or disabled person can live near a relative who can provide needed support.

Some individual households cannot use their vouchers, partly because most owners don’t have to accept vouchers. But agencies reissue returned vouchers to other families, and they’ve put 99.9 percent of their voucher funds to use on average over the last five years (excluding agencies in a HUD demonstration that lets them shift voucher funds to other purposes).

Vouchers are also tightly targeted on the families that need them most. Housing agencies must issue 75 percent of their vouchers each year to those with incomes below the federal poverty line or 30 percent of the local median income — those who, without assistance, would face the greatest risk of homelessness, eviction, and other hardship. And program rules tie a family’s rent to its income, so the lowest-income families receive adequate subsidies to afford housing but somewhat better-off families don’t get more than they need.