Policy Basics: The Housing Choice Voucher Program
Updated January 25, 2013
Created in the 1970s, the “Section 8” Housing Choice Voucher Program has become the dominant form of federal housing assistance.
What Is the Housing Voucher Program?
Low-income families use vouchers to help pay for housing that they find in the private market. The program is federally funded but run by a network of about 2,300 state and local housing agencies. More than 5 million people in 2.1 million low-income families use vouchers.
Who Is Eligible for Vouchers?
Federal rules ensure that vouchers are targeted at the families who need them most. Seventy-five percent of new households admitted each year must be “extremely low-income,” with incomes not exceeding 30 percent of the local median. (Nationally, on average, this limit is roughly equivalent to the poverty line.) Other new households may have incomes up to 80 percent of the area median.
Housing agencies may set admissions preferences based on housing need or other criteria. Undocumented immigrants are not eligible for voucher assistance.
How Does a Family Use a Voucher?
Once a family receives a voucher, it has at least 60 days to find housing. A family can use a voucher to help pay the rent either for its current unit or for a new unit. In either case, the housing agency must verify that the unit meets federal housing quality standards and that the rent is reasonable compared to market rents for similar units in the area.
How Much Rent Do Vouchers Cover?
A family with a voucher generally must contribute the higher of 30 percent of its income or a “minimum rent” of up to $50 for rent and utilities. The voucher pays the rest of those costs, up to a limit (called a “payment standard”) set by the housing agency.
Are Vouchers Used Only for Units That Tenants Select?
No. Up to 20 percent of voucher funds can be used for subsidies — called “project-based” vouchers — that are tied to a particular property rather than a particular family and thus can help pay for the construction or rehabilitation of housing for low-income families. Also, vouchers are sometimes used to help with mortgage payments, enabling low-income families to purchase homes.
How Are Vouchers Allocated to Housing Agencies?
Each agency has a cap on the number of vouchers it is authorized to administer. An agency’s number of “authorized vouchers” is essentially the sum of the vouchers the agency has been awarded since the start of the voucher program. Each year, Congress provides some new vouchers in addition to renewing existing ones. Since 2003, new vouchers have been either “tenant-protection” vouchers (which replace public housing that is demolished or sold or other affordable housing units that lose federal subsidies) or “special purpose” vouchers (which are aimed at particular types of households, such as homeless veterans).
While most vouchers are used in metropolitan areas, approximately 11 percent are used in non-metropolitan areas.
How Are Vouchers Funded?
Most agencies’ voucher funding each year is based on the number of their authorized vouchers in use in the prior year and the actual cost of those vouchers, adjusted for inflation. Funding for new vouchers and administrative costs is provided separately. Agencies participating in the Moving-to-Work demonstration are funded under their agreements.
How Effective Are Vouchers?
Research has shown that vouchers are more cost-effective than federal programs that build affordable housing for low-income households. Vouchers have been found to sharply reduce homelessness and housing instability, both of which have been linked to a variety of developmental, health, and education problems for children.
In addition, the large majority of voucher households that can reasonably be expected to work, do work. Some 88 percent of voucher recipients are elderly, disabled, working (or had recently worked), or likely to be subject to a work requirement under the Temporary Assistance for Needy Families (TANF) program. Moreover, vouchers enable more than 1 million elderly or disabled individuals to afford to live independently.