Senior Policy Analyst
House Budget Committee Chairman Paul Ryan used a faulty number to argue that “Section 8” Housing Choice Voucher program costs have risen excessively. His budget documents also float a proposed expansion of the Moving to Work (MTW) demonstration that could lay the groundwork for deep, harmful cuts in the voucher program in years to come. That program, which helps 2.1 million low-income families rent modest units of their choice in the private market, is just beginning to recover from the loss of 70,000 vouchers due to sequestration budget cuts last year.
Rental vouchers sharply reduce homelessness (see chart) and other hardships, lift more than a million people out of poverty, and help families move to safer, less poor neighborhoods, research shows. These effects, in turn, are closely linked to educational, developmental, and health benefits that can improve children’s long-term outcomes.
Ryan’s budget claims that voucher spending grew by an “explosive” 80 percent from 2005 to 2013. That’s simply incorrect. Voucher expenditures rose by 20 to 30 percent over this period, driven largely by rising market rents and congressional decisions to add vouchers to assist homeless veterans and to replace other rental assistance (such as public housing that was demolished, which was funded through a different budget account). The average inflation-adjusted cost of a voucher is lower today than it was in 2005.
The Ryan budget calls for changes in housing assistance and says that such changes could include expanding MTW, a deregulation demonstration project that now includes 39 of the nearly 4,000 state and local agencies that administer vouchers or public housing. MTW allows waivers of most laws and regulations governing the voucher and public housing programs and converts voucher funding — and sometimes public housing operating subsidies — to a block grant.
MTW expansion could weaken protections for vulnerable families and cause fewer needy households to receive assistance. (These risks would be lower if Congress added new safeguards to MTW, but the Ryan budget documents make no mention of such safeguards.) The Government Accountability Office and the Department of Housing and Urban Development’s (HUD) Inspector General have raised serious doubts about expansion, based on concerns that HUD has not adequately evaluated and monitored the existing demonstration.
Most significantly, a major expansion of MTW block grants would raise the odds of future voucher and public housing funding reductions. Congress has cut funding deeply over time for housing block grant programs such as HOME, Community Development Block Grants, and the Public Housing Capital Fund, as well as many block grants in other areas.
Two features make block grant programs especially vulnerable to cuts. First, unlike the current voucher and public housing operating fund formulas, block grants typically don’t account for factors such as the number of families assisted or the cost of assistance. As a result, it’s more difficult to make a compelling case that policymakers should maintain current nominal funding levels, let alone ensure that funding at least keeps pace with inflation. Second, because block grants provide broad flexibility in how state or local officials use the funds, federal policymakers can cut funding and claim no harm will ensue, while leaving the tough decisions about how to actually make the cuts to state and local agencies.
The Ryan budget cuts $791 billion over the next ten years from non-defense discretionary programs, the budget category that includes most low-income housing programs. The budget does not specify which discretionary programs would lose funding, but if policymakers expand MTW to the point that block grants provide the bulk of voucher and public housing funds, it would increase the likelihood of sizable cuts to the voucher and public housing programs — an outcome that would likely lead to more homelessness and housing instability among the most vulnerable Americans.