Section 8 (housing)
Section 8 of the Housing Act of 1937, commonly known as Section 8, provides rental housing assistance to low-income households in the United States by paying private landlords on behalf of these tenants. Approximately 68% of this assistance benefits seniors, people in families with children, and individuals with disabilities. The Department of Housing and Urban Development oversees Section 8 programs, which are administered locally by public housing agencies.
In 2022, about 2.3 million out of the 5.2 million households receiving rental assistance used Section 8 vouchers. While landlord participation in the program is voluntary in most areas, some states and municipalities have enacted laws that prohibit source of income discrimination, including discrimination against individuals whose income is derived from Section 8 housing vouchers. Voucher amounts vary depending on city or county, size of unit, and other factors. Voucher recipients typically have two to four months to secure housing that meets HUD standards; otherwise, they lose their vouchers and must reapply. Wait lists for vouchers can be very long, ranging from 10 to 20 years, with many local programs closed to new applicants.
Voucher amounts are based on Fair Market Rents set by HUD. The recently introduced Small Area Fair Market Rents program refines these calculations to the zip code level in major metropolitan areas.
History
started during the Great Depression. In the 1960s and 1970s, the federal government created subsidy programs to increase the production of low-income housing and to help families pay their rent. In 1965, the Section 236 Leased Housing Program amended the U.S. Housing Act. This subsidy program, the predecessor to the modern program, was not a pure housing allowance program. Housing authorities selected eligible families from their waiting list, placed them in housing from a master list of available units, and determined the rent that tenants would have to pay. The housing authority would then sign a lease with the private landlord and pay the difference between the tenant's rent and the market rate for the same size unit. In the agreement with the private landlord, housing authorities agreed to perform regular building maintenance and leasing functions for Section 236 tenants, and annually reviewed the tenant's income for program eligibility and rent calculations.The Housing and Urban Development Act of 1970 introduced the federal Experimental Housing Allowance Program and the Community Development Corporation and authorized larger outlays for housing subsidy programs and rent supplements for moderate-income households.
In the 1970s, when studies showed that the worst housing problem afflicting low-income people was no longer substandard housing, but the high percentage of income spent on housing, Congress passed the Housing and Community Development Act of 1974, further amending the U.S. Housing Act of 1937 to create the Section 8 Program. In the Section 8 Program, tenants pay about 30 percent of their income for rent, while the rest of the rent is paid with federal money.
Since its inception, some Section 8 programs have been phased out and new ones created, although Congress has always renewed existing subsidies. The Section 8 program initially had three subprograms: New Construction, Substantial Rehabilitation, and Existing Housing Certificate programs. The Moderate Rehabilitation Program was added in 1978 and the Voucher Program in 1983. The number of units a local housing authority can subsidize under its Section 8 programs is determined by Congressional funding.
In 1998, the Quality Housing and Work Responsibility Act combined the earlier Section 8 voucher program and the certificate programs into a single housing choice voucher program, merging those tenant-based assistance streams into a single, voucher-style system. The updated HCV adopted the payment-standard approach and capped participant rent contributions at 30–40% of income. The law created the Project-Based Voucher option. Starting in 2000, QHWRA also allowed HUD to allow certain PHAs to establish the Housing Choice Voucher Homeownership Program, which permits HCV holders to apply their subsidy toward homeownership costs, such as mortgage payments.
The 2008 Consolidated Appropriations Act enacted December 26, 2007, allocated $75 million in funding for the HUD-Veterans Affairs Supportive Housing voucher program, authorized under section 8 of the United States Housing Act of 1937. This new program combines HUD Housing Choice Voucher rental assistance for homeless veterans with case management and clinical service support which is provided by the Veterans Affairs administration at its own medical centers and also in the community.
The Housing Opportunity Through Modernization Act of 2016 was signed into law on July 29, 2016, and amended the United States Housing Act of 1937 and made changes to several federal housing programs, particularly Section 8. Key provisions include reforms to income calculation methods, adjustments to asset limits, and modifications to the income review processes.
Summary
The primary component of the Section 8 program is the Housing Choice Voucher program. A voucher can be either project-based or tenant-based. Project-based vouchers are tied to a specific housing unit or complex, and their use is restricted to that location. PHAs can allocate up to 20% of their vouchers for this purpose. In contrast, tenant-based vouchers are assigned to the individual recipient, allowing them to choose a rental unit in the private market. This type of voucher provides greater mobility, as tenants are not limited to specific complexes and may "port" their voucher to another PHA's jurisdiction, enabling them to reside anywhere in the United States or its territories where a Section 8 program is in operation.Under the voucher program, individuals or families with a voucher find and lease a unit and pay a portion of the rent. Most households pay 30% of their adjusted income for Section 8 housing. Adjusted income is a household's gross income minus deductions for dependents under 18 years of age, full-time students, disabled persons, or an elderly household, and certain disability assistance and medical expenses.
There is an asset test in addition to earned income. Over a certain amount, HUD will add income even if the Section 8 tenant does not receive any interest income from, for example, a bank account. HUD calls this "imputed income from assets" and, in the case of a bank account, HUD establishes a standard "Passbook Savings Rate" to calculate the imputed income from the asset. By increasing the amount of a tenant's total income, the amount of imputed income from assets may affect a tenant's assigned portion of rent.
The PHA pays the landlord the remainder of the rent. Each year, the federal government looks at the rents being charged for privately owned apartments in different communities, as well as the costs of utilities in those communities. The Fair Market Rents are amounts for medium-quality apartments of different sizes in a particular community. As an example, the 2012 FMR for 1 bedroom housing in San Francisco is $1,522 and in New York is $1,280, while in many other places it is less than $500.
The landlord cannot charge a Section 8 tenant more than a reasonable rent and cannot accept payments outside the contract.
Landlords, although required to meet fair housing laws, are not required to participate in the Section 8 program in most areas. As a result, some landlords will not accept a Section 8 tenant. This can be attributed to such factors as:
- not wanting the government involved in their business, such as having a full inspection of their premises by government workers for HUD's Housing Quality Standards and the possible remediations required
- a desire to charge rent for the unit above FMR
However, other landlords willingly accept Section 8 tenants, due to:
- a large available pool of potential renters
- Regular and generally prompt payments from the PHA for its share of the rent
- tenants' incentive to take good care of the property.
Applicants
Applicants may apply for a Section 8 housing voucher at any county or city housing authority office. Although rules vary across housing authorities, residents of a particular area who receive a voucher from the jurisdiction in which they live may use the voucher anywhere in the country, but nonresidents of the jurisdiction must live in the jurisdiction that issues the voucher to them for 12 months before they can move to a different area.In many localities, the PHA waiting lists for Section 8 vouchers may be thousands of households long, waits of three to six years to obtain vouchers are common, and many lists are closed to new applicants. Wait lists are often briefly opened, which may occur as little as once every seven years. To manage excess demand, PHAs often create preference policies that place specific categories of applicants at the top of wait lists. Some PHAs also use a "lottery" approach, where there can be as many as 100,000 applicants for 10,000 spots on the waitlist, with spots being awarded on the basis of weighted or non-weighted lotteries. Priority is often extended to local residents, disabled people, veterans, and the elderly. There is no guarantee that anyone will ever be selected from a wait list.