Center on Budget and Policy Priorities

Housing

Sequestration Could Deny Rental Assistance to 140,000 Low-Income Families

The budget cuts known as “sequestration,” initiated on March 1, will likely force state and local housing agencies to cut the number of low-income families using Housing Choice Vouchers to afford housing by roughly 140,000 by early 2014. This represents a sharp break from Congress’ bipartisan commitment — which it has met for most of the voucher program’s nearly 40-year history — to renew assistance for at least the same number of families from year to year. Thousands of other low-income families using vouchers could face sharp rent increases because of sequestration.

Related:

Mortgage Interest Deduction Is Ripe for Reform

Costing about $70 billion a year, the mortgage interest deduction is one of the largest federal tax expenditures, but it appears to do little to achieve the goal of expanding homeownership. The main reason is that the bulk of its benefits go to higher-income households who generally could afford a home without assistance: in 2012, 77 percent of the benefits went to homeowners with incomes above $100,000. Meanwhile, more than a third of homeowners with mortgages — most of them middle- and lower-income families — receive no benefit from the deduction.

Three major bipartisan panels have proposed to convert the deduction to a credit and lower the maximum amount of interest it covers. These reforms would be major improvements over current law and would generate significant additional revenue. Read more

Topics

Basics

Policy Basics: Federal Rental Assistance:
Federal rental assistance enables 5 million low-income households to afford modest homes. Three major programs — Housing Choice Vouchers, Section 8 Project-based Rental Assistance, and Public Housing — assist about 90 percent of these households.

Policy Basics: Section 8 Project-Based Rental Assistance:
The Section 8 Project-Based Rental Assistance (PBRA) programs enable more than 2 million people in 1.2 million low-income households to afford modest apartments by contracting with private owners to rent some or all of the units in their housing developments to low-income families.

Policy Basics: The Housing Voucher Choice Program:
Created in the 1970s, the “Section 8” Housing Choice Voucher Program has become the dominant form of federal housing assistance.

Policy Basics: Introduction to Public Housing:
Public housing is one of the nation’s three main rental assistance programs. Public housing developments provide affordable homes to 2.2 million low-income Americans.

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Will Fischer

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The Center works with state and local housing agencies and advocates to improve the effectiveness of federal low-income housing programs — particularly the Housing Choice Voucher Program. We also examine the role that well-designed housing assistance programs can play in advancing goals such as reducing the concentration of poverty.