Three Principles for a Rental Assistance Guarantee

Housing is a basic human need, but millions of people in this country cannot afford a stable home. Rental assistance directly closes the gap between rents and the amount a household can afford to pay for housing and has been proven highly effective at reducing and preventing homelessness, overcrowding, and housing instability.^[2] Despite these successes, 3 in 4 households with low incomes who are in need of rental assistance do not receive it due to policymakers’ failure to provide sufficient funding.^[3] This failure contributes to deep inequities in housing insecurity for people of color, people with disabilities, LGBTQ+ people, and other communities and reflects a long history of racist and oppressive policies in housing, education, and employment.

Federal policymakers need to start funding rental assistance in a way that recognizes housing is a necessity, not a privilege. This means expanding and improving rental assistance so that all people with low incomes who need help receive it, by:

1. Providing long-term funding that adjusts automatically to meet changes in need. Policymakers should transition rental assistance from a “discretionary” program, where funding is set each year by Congress, to a “mandatory” program that adjusts to serve all eligible households who apply.
2. Prioritizing assistance for people with the lowest incomes. Guaranteeing rental assistance for all who need it will likely require incremental steps. Policymakers should start by phasing in guaranteed assistance for people with the lowest incomes, such as 15 or 30 percent of area median income and below.
3. Removing barriers to assistance and providing services and resources that support equitable access to housing. Policymakers should eliminate restrictions on rental assistance, including those based on a person’s criminal record or immigration status, and should make assistance more effective and responsive to the needs of the people it serves by steps such as providing supports (like additional financial assistance) and services to help households find housing.

Grounding a rental assistance guarantee — and more incremental steps on the path to guaranteed rental assistance — in these three principles will help ensure that ultimately, all low-income households who need it receive help.

Widening Gap Between Incomes, Rent Costs

The gap between incomes and rent costs for many households has widened considerably in recent decades, placing millions of people at risk of housing instability or homelessness.

High rents hit people with the lowest incomes the hardest. In 2022, 83 percent of renter households earning less than $30,000 per year paid more than 30 percent of their income on rent and utilities, an increase of 5 percentage points since 2001. And 65 percent of these households paid more than half of their income toward housing, 10 percentage points higher than in 2001.^[4]

This hardship has also shown up as an increase in homelessness, particularly as pandemic relief and eviction protections expired. Between 2022 and 2023, homelessness rose 12 percent, reaching its highest level on record in data going back to 2007. The number of people experiencing homelessness has been increasing since 2017 — after declining by 15 percent over the preceding decade — as improvements to homelessness response systems and modest, population-specific investments in rental assistance could not make up for the widespread scarcity of resources needed to prevent homelessness.^[5]

Rental Assistance: A Proven Tool to Address Urgent Unmet Need

Federal rental assistance currently helps over 5 million households afford modest homes by covering the difference between what a household can afford to pay — generally defined as about 30 percent of their income — and rent.^[6] For someone struggling to afford housing, rental assistance can have a profound impact on their life. It might help them leave a shelter, move out of a friend’s or relative’s overcrowded home, remove themselves from an abusive situation, maintain consistent school enrollment for their children, or stop sleeping in their car.

Rental assistance helps provide a stable home, which in turn promotes children’s well-being^[7] and reduces the intense stress that can result from not having a regular place to sleep or having to choose between rent and food.^[8] By reducing the amount spent on housing, rental assistance also allows people to use more of their limited resources for other necessities, such as food, clothing, transportation, and child care. And rental assistance strengthens communities by ensuring that households have a stable, affordable place to live, have the resources to meet their basic needs, and are able to more meaningfully engage with their communities.

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Studies show that Housing Choice Vouchers, the largest federal rental assistance program, sharply reduce housing instability and help families stay together. (See Figure 1.) Funding for vouchers and other rental assistance programs, however, falls far short of the need; 3 in 4 low-income households in need of rental assistance don’t receive it due to funding limitations. Expanding rental assistance to a universal guarantee could provide the benefits of a stable, affordable home to as many as 18 million households with low incomes who are currently paying more than 30 percent of their monthly income toward housing or living in an overcrowded or substandard home.^[9]

Expanding rental assistance would also have a profound impact in addressing the deep inequities among people experiencing housing insecurity or homelessness. Because of long-standing inequities that stem from structural racism in housing, employment, and education and other factors, median incomes are lower for Black, Latine, and American Indian and Alaska Native households than for the nation as a whole. As a result, the housing affordability crisis disproportionately affects renters of color. Over half (53 percent) of the households with low incomes who are in need of rental assistance but don’t receive it are headed by a person of color.^[10] (See Figure 2.)

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Beyond addressing homelessness, overcrowding, and housing instability, expanding rental assistance would also help reduce poverty. One study found that universal rental assistance would lift over 7 million people above the poverty line^[11] and cut poverty rates by 29 percent for Latine people, by nearly one-fifth for Black, Asian, and Pacific Islander peoples, and by 11 percent for American Indians and Alaska Natives.^[12] (See Figure 3.)

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Other groups, including young children,^[13] people with disabilities,^[14] and LGBTQ+^[15] people, also disproportionately experience low incomes and housing instability and thus would disproportionately benefit from expanded rental assistance.

Given the scale of the unmet need and the proven effectiveness of rental assistance like Housing Choice Vouchers in reducing housing instability, ultimately ensuring that all households who need housing assistance receive it is an essential component of a strategy for both ending homelessness and improving economic security. A full expansion is also critical for ensuring that efforts to address housing shortages don’t leave out the people who most need help to afford a home. Stakeholders at all levels are rightly seeking to increase the supply of housing where needed, whether publicly, privately, or collectively owned. While expanding housing supply can reduce average rents, it isn’t enough by itself to help people with the lowest incomes afford housing. People with the lowest incomes cannot afford the rents needed to cover even basic housing operating costs, so supply-only strategies — even those designed to create affordable housing^[16] — won’t create housing options affordable enough for them. That’s why housing supply strategies, which are necessary, need to be coupled with rental assistance so households with low incomes can afford the housing available in their communities.^[17]

While some critics have expressed concern that expanding rental assistance would drive rents up sharply, the best research indicates that past voucher expansions have had little or no impact on market rents, partly because many who benefit are already renters and simply need help paying for their current home. Pairing rental assistance expansion with increases in housing supply and other measures to limit housing costs would further minimize any impact on rents.^[18]

Guaranteeing Assistance for All Who Need It

Shifting from our current under-funded rental assistance programs to a universal program will likely take time and a series of policy and funding steps toward that goal. The key is to articulate the long-term policy goal of establishing an effective, equitable rental assistance guarantee to serve all low-income families who need it and then take actions toward that goal.

We recommend policymakers follow these three principles:

1. Provide Long-Term Funding That Adjusts Automatically to Meet Changes in Need

Federal rental assistance is currently a discretionary program, meaning that each year policymakers decide its funding level through the appropriations process. Appropriations fund a wide array of defense and non-defense programs, and amounts available have been severely constrained since 2010, in large part due to limits imposed in most years by statutory caps.^[19] These constraints have put critical programs like rental assistance at risk of receiving insufficient funding to simply continue their current low levels of assistance, let alone address unmet need.^[20] Moreover, if the need for assistance rises unexpectedly (due to an economic downturn, for example), the program cannot nimbly address the demand increase. And if Congress does not act quickly to provide additional funding, the amount of help available will not adjust to reflect growing need.

Moving toward a program that ensures rental assistance is available to everyone who is eligible, and allowing the program to adjust automatically to meet changes in need, would require more permanent and responsive funding provided outside of the annual appropriations process. Programs funded this way, such as the Supplemental Nutrition Assistance Program (SNAP) and Supplemental Security Income (SSI), are known as mandatory programs.

Currently, most households experience hardship for years while waiting to receive a voucher.^[21] (See Figure 4.) Keeping rental assistance as a discretionary program would almost certainly continue to limit funding and therefore the number of people who can receive assistance, likely meaning that many people would continue to face long waits. A guarantee of rental assistance supported with mandatory funding would allow them to receive help when they first need it, providing the stability necessary to weather financial shocks. Transitioning rental assistance from a discretionary to a mandatory program would likely happen in stages, as discussed below, but when fully in effect, it would cost roughly $168 billion per year according to one estimate, or about five times the program’s funding in 2024.^[22]

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2. Prioritize Assistance for People With the Lowest Incomes

As noted, achieving a rental assistance guarantee for all people with low incomes who need it would likely require incremental steps because the unmet need is so large, approximately 18 million households. Policymakers should start by phasing in guaranteed assistance for people with the lowest incomes — such as 15 or 30 percent of area median income and below — and steadily moving up the income scale over subsequent years. This would ensure that the people who need assistance most urgently — and those most likely to experience eviction and homelessness — receive it first.

Expanding assistance based on income would be more inclusive and equitable, as well as simpler administratively, than prioritizing according to other criteria. For example, the Biden-Harris Administration’s last two budgets proposed to phase in assistance to all veterans with extremely low incomes and youth exiting foster care.^[23] Two recently introduced bills would build on those proposals by extending assistance to all young adults^[24] and all veterans with low incomes.^[25] These proposals are important for advancing the concept of guaranteed rental assistance and would help many people who would otherwise struggle to afford stable housing, but they would prioritize assistance for people in these groups over others who also have urgent needs. The veteran and foster youth guarantees would also be more complicated to administer; determining eligibility would require verifying additional information from other government agencies and creating data systems and reporting structures to track these resources separately.

Moreover, the demographics of specific groups do not always match the broader population of those with the most urgent housing needs, so targeting assistance in that way could fail to address — and potentially worsen — housing inequities. For example, the most recent data show that on a single night in January 2023, people identifying as Latine made up 13 percent of veterans experiencing homelessness but nearly 28 percent of all people experiencing homelessness.^[26]

Given the racial demographics of households in need of assistance (see Figure 2 above), the design of a rental assistance expansion cannot ignore existing housing inequities. Ultimately, an income-based approach would still reach veterans, youth exiting foster care, and other subpopulations often targeted for assistance while fairly prioritizing those with the greatest needs and demonstrating a firm commitment to ensuring that everyone has a home.

3. Remove Barriers to Assistance and Provide Affirmative, Person-Centered Supports

Funding alone won’t ensure that everyone who needs rental assistance actually receives and can use it. Creating an income-based rental assistance guarantee would provide an opportunity to implement lessons learned from existing rental assistance programs to better meet the needs of people they are supposed to serve. This would include removing restrictions to assistance based on a person’s conviction or arrest record^[27] or immigration status^[28] and making assistance more flexible for a variety of living arrangements, such as sharing housing with non-relatives. Policymakers should also pass a national ban on discrimination against people using assistance to rent housing in the private market, paired with resources for enforcement, to make sure families are able to use their assistance to rent a home of their choice.

Other ways to make rental assistance more effective and responsive to the needs of the people it serves include improving the inspections process, testing out providing assistance directly to tenants (rather than landlords), simplifying the eligibility verification process, helping renters pay for security deposits, and providing the resources agencies need to soundly administer the program.^[29]

In addition to removing administrative and statutory barriers, policymakers should sustainably fund services and resources to help people obtain and maintain stable housing — such as legal aid, team-oriented case management, and housing search assistance — that households can choose to use if they find them valuable.^[30] The barriers to having a stable home will vary from person to person, so the services available should reflect diverse needs. Services should be accessible and culturally responsive and help households navigate the administrative processes, including finding a home that best meets their needs. Ultimately, the people receiving assistance are the experts in what they need to find and keep housing; they should drive decisions on processes and on the supports that the program provides and that they choose to access.