Rent Assistance / Vouchers

Program Summary and Purpose:

Housing Choice Vouchers, commonly referred to as Section-8 vouchers, are vouchers given to low income persons participating in the program in order to subsidize the cost of housing.  The program allows low income residents to live in private housing at affordable rates by capping the amount of money an individual or family must pay for housing at 30-40% of their monthly income, with the remaining portion of monthly rent paid by the federal government.  The program targets households with incomes at or below 80% of the area median income (AMI), though more than 3/4ths of all voucher aid goes to households with incomes at or below 30% of an area’s median income.  Not everyone who qualifies for a voucher receives one.

The federal government, specifically the US Department of Housing and Urban Development (HUD), contracts with local agencies, known as Public Housing Authorities (PHAs), to distribute Housing Choice Vouchers.  Through a complex mathematical formula, HUD determines what a “fair” housing cost is for individuals and families in certain geographic regions.  The fair market rent is updated each year to reflect cost of living changes and is distributed to each PHA and is made available on HUD’s website.

Tenants who have a Housing Choice Voucher may find and apply to live in units available for rent that fall within the FMR and accept Housing Choice Vouchers.  Landlords are not required to accept or participate in the Housing Choice Voucher program, but the consistent, secure flow of rent provided by a voucher-holding tenant provide some incentive for landlord participation.

In the metropolitan area, several cities (Minneapolis, St. Paul, St. Louis Park, Richfield, Bloomington, South St. Paul, and Plymouth) have their own Public Housing Authorities.  Cities that do not have their own Public Housing Authority are covered by one of several larger regional Public Housing Authorities in the metropolitan area.

Current Status:

During the mid 2000’s, poor policy making and mismanagement of HUD funding by the federal government created several problems for the Housing Choice Voucher program.

While funding for each local PHA had traditionally been based on each PHAs budget from the prior 12-month period, changes under the Bush Administration fixed PHA funding at levels from an arbitrary 3-month period from the year 2004.  This change meant that PHAs that had significant expenditures during that 3-month period received inordinately high funding whereas PHAs that had lower-than-normal expenditures during the same 3-month period receive much lower funding than previously anticipated. As a result of the changes, several PHAs in Minnesota received significantly less funding and were forced to withdraw or retire vouchers and come up with other methods of plugging the budgetary gaps.

Under the current federal administration, PHA funding has temporarily switched back to a 12-month rolling period, and current federal legislation, known as the Section-8 Voucher Reform Act (SEVRA), would ensure that HRAs continue to receive appropriate funding based on the prior year’s expenses.

The decrease of available vouchers in Minnesota in the past few years, occurring as a result of mismanagement on the federal level, has led to voucher waiting lists filling to capacity.  In its latest study of the Housing Choice Voucher program in Anoka, Dakota, and suburban Hennepin Counties,  HOME Line found that the average time spent by a tenant to simply get onto a waiting list for a Housing Choice Voucher is between 2 and 5 years.  When combining the average time spent attempting to get onto a waiting list and time spent on the list waiting for a voucher, HOME Line found that it takes on average 7 years to receive a Housing Choice Voucher from the PHAs surveyed.

HOME Line also found that 72.1% of all rental units in the surveyed area fell into the fair market rent rate costs as dictated by HUD.  Less than half of those units, however, actually accept Housing Choice vouchers.  And, of the portion that accept such vouchers, a small portion of those rental units impose income requirements that make it impossible for low income tenants to actually use their voucher.  Excluding rental units that exceed FMR and those rental units that impose income requirements that shut out Housing Choice Voucher holding tenants, only 33% of of rental units surveyed by HOME Line were found to feasibly accept a Housing Choice Voucher.

In addition to a limited scope of rental units that accept Housing Choice vouchers, other problems facing the Housing Choice voucher program are the administrative costs born by landlords who accept Housing Choice vouchers and the negative perception that landlords have about tenants who hold Housing Choice Vouchers.  Landlords who own and rent a small number of rental units (such as a single house or duplex) are often faced with some administrative burden when choosing to accept tenants who have a Housing Choice Voucher as extra paperwork is required on the part of the landlord and the landlord may not fully understand his/her responsibility in renting to a tenant with a voucher, leading some landlords to decide not to accept Housing Choice Vouchers at all.  The Housing Choice Voucher program also faces issues of classist stigma against tenants who hold vouchers as voucher holders may be perceived as unsavory tenants.

What Advocates Need to Know:

The Housing Choice Voucher program is one of the largest affordable housing programs in the country, serving over 2 million households.  Since 1998, 75% of all new vouchers have been targeted toward tenants who are extremely low income.  Although HUD places few restrictions on who fits the criteria for acceptance to the Housing Choice Voucher program, local PHAs are allowed to place their own restrictions on applicants (within reason).  In Minnesota, preference is usually shown to applicants who are part of a family and have lower incomes.  Preferred applicants may move up the waiting list faster than other applicants who have been on the waiting list for a longer period of time.

The recent passage of SEVRA legislation will help reform the entire voucher program by streamlining its requirements for potential voucher holders and securing stable sources of funding.  SEVRA legislation has made it out of the House Committee on Financial Services and could be attached to the F.Y. 2011 appropriations but has not made it out of the House or Senate floors yet.

More Information:

HOME Line Section-8 Report

Out of Reach National Low Income Housing Coalition Guide comparing wages and rents across the country

Housing Choice Voucher Fact Sheet from the Department of Housing and Urban Development

Policy Basics: Housing Choice Voucher Program from the Center on Budget and Policy Priorities

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