Senate Bill Would Update And Streamline Housing Voucher Program
Improves on House Bill Passed With Strong Bipartisan Support

PDF of this report (13pp.)

By Will Fischer and Barbara Sard

March 10, 2008

Key Findings

  • Senators Dodd and Schumer recently introduced the Section 8 Voucher Reform Act (SEVRA), which would make significant improvements in the housing voucher program. The House approved a similar bill last year by a vote of 333-83.
  • SEVRA would build on the housing voucher program’s success by establishing a stable, efficient policy for funding vouchers. In recent years, 150,000 vouchers have been lost due to funding instability.
  • SEVRA also includes reforms in areas such as tenant rent payments and housing quality inspections to make the voucher program more efficient and effective, while retaining key tenant protections.
  • The House SEVRA bill contains an expansion of the Moving-to-Work (MTW) demonstration that is far larger than needed to test alternative policies, has inadequate evaluation mechanisms, and poses some risks to tenants. If an MTW expansion is added to the Senate bill, it should be more limited in order to facilitate oversight and evaluation and minimize unintended harm from untested policies.

Related Areas of Research

On March 3, 2008, Senate Banking Committee Chair Chris Dodd, Senate Housing Subcommittee Chair Charles Schumer, and several other Senators introduced S. 2684, the Section 8 Voucher Reform Act (SEVRA). SEVRA would make significant changes to the “Section 8” Housing Choice Voucher program and related changes in other housing assistance programs. The Senate bill closely resembles H.R. 1851, a version of SEVRA that the House passed by a bipartisan vote of 333-83 on July 12, 2007.

Ten years have passed since the 1998 Quality Housing and Work Responsibility Act, the last major authorizing legislation affecting the voucher program. SEVRA represents a carefully crafted effort to update and improve certain aspects of the program while retaining features that have proven effective.

Some of the most important SEVRA provisions would:

  • Stabilize the voucher funding system, which has faced substantial volatility in recent years.
  • Simplify rules for setting tenant rent payments, while continuing to cap rents at 30 percent of tenants’ income.
  • Streamline housing quality inspections to encourage private owners to participate in the program.
  • Protect tenants of owners who face financial difficulties by giving housing agencies new tools to ensure that buildings are kept in livable condition.
  • Help develop and preserve affordable housing by facilitating use of “project-based” vouchers.
  • Expand housing choice by linking the maximum value of a voucher more closely to local market rents and by making it easier for a family to use its voucher to move beyond the local housing agency’s jurisdiction.
  • Promote homeownership by allowing vouchers to be used for downpayments or to help cover the cost of purchasing a manufactured (mobile) home.
  • Support work througha new earnings disregard and by stabilizing funding for employment counseling and financial incentives provided through the Family Self-Sufficiency program.

In each of these areas, the Senate SEVRA bill is similar to the House bill. Because nearly all of the changes that the Senate bill’s sponsors made to the House bill represent improvements, the Senate bill would strengthen housing assistance programs to a still-greater degree than the House bill.

One major difference between the two bills is that the Senate bill omits a House provision to expand HUD’s Moving-to-Work (MTW) demonstration to include up to 80 state and local housing agencies, from up to 29 agencies today. MTW (which the House bill would rename the Housing Innovation Program, or HIP) seeks to promote innovative housing policies by allowing agencies to operate their voucher and public housing programs without regard to many federal statutes and regulations. A number of the policies that MTW allows agencies to test, however, could have adverse effects on vulnerable families, such as alternative rent schemes that require sharply higher payments from some tenants and time limits that cut off subsidies even for working-poor families who cannot remain in their homes without assistance.

 

Housing Vouchers One of the Most Effective Federal Programs, According to Administration

The Housing Choice Voucher program, the centerpiece of the nation’s low-income housing policy, assists about 2 million families. Families generally use vouchers to rent modest housing of their choice in the private market.

Studies have shown that vouchers reduce homelessness, overcrowding, and frequent moves from apartment to apartment. Vouchers have also been found to help families move to lower-poverty neighborhoods with better schools, more jobs, and less crime.

As the Administration’s fiscal year 2009 budget documents note, an Office of Management and Budget assessment found the program to be “one of the Department’s and the Federal Government’s most effective programs” and stated that that it “is widely recognized as a cost-effective means for delivering decent, safe, and sanitary housing to low-income families.”

The House HIP provision, which could affect as many as one third of all voucher holders and public housing residents in the nation, would place far more tenants at risk of harmful consequences than is necessary to test innovative policies. Moreover, the evaluation requirements of the House provision are not sufficiently rigorous to ensure that the program will fulfill its purpose as a testing ground for future housing policies.[1] A HIP provision will likely be added to the Senate bill later in the legislative process; to build upon, rather than undermine, the improvements made by SEVRA’s other components, it will be important that such a provision limit HIP to a size that is appropriate for a demonstration.[2]

End Notes:

[1] Jeffrey Lubell and Jon Baron, “The Importance of Integrating Rigorous Research Objectives into any Reauthorization of the ‘Moving to Work’ Demonstration,” Center for Housing Policy and Coalition for Evidence-based Policy, March 2007.

[2] For additional discussion of the House HIP provision, see Barbara Sard and Will Fischer, “Bipartisan Legislation Would Build on Voucher Program’s Success,” Center on Budget and Policy Priorities, revised July 26, 2007.

 

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