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What Is the Housing Choice Voucher Program?

3 minute read

Federal housing assistance vouchers subsidize the cost of rental housing, but high demand and long waiting lists mean many low-income families wait for years to access affordable housing.

New York Apartments

Ryan DeBerardinis / Shutterstock

The federal Housing Choice Voucher (HCV) program, managed through the Department of Housing and Urban Development (HUD), assists low-income families by subsidizing housing costs in privately owned rental housing. The program is administered by over 2,000 local public housing agencies (PHAs) with subsidies distributed directly to participating landlords. In 2019, over 5 million Americans used housing vouchers to subsidize their housing costs.

The program generally applies to families whose income is below 50 percent of area median income (AMI) in their county or metropolitan area. PHAs must also distribute at least 75 percent of their vouchers to families earning below 30 percent of AMI. Under the program, PHAs can spend up to 30 percent of their funding on project-based vouchers to support the maintenance and rehabilitation of existing housing. Though rare, some PHAs also offer mortgage assistance to help low-income families purchase homes.

Housing subsidies began with the Housing Act of 1937, which authorized government-funded rental assistance for low-income households. The “tenant-based” voucher program stands in contrast with other housing assistance programs, which are “project-based” and tend to concentrate low-income residents into government-owned public housing complexes or, more recently, private housing subsidized by the program. In the late 20th century, public housing projects gained notoriety as poor maintenance and a lack of access to economic opportunities led to squalid conditions and a rise in crime. Housing advocates argued that public housing complexes trapped people in poverty and isolated low-income families in neighborhoods with poor access to transportation, jobs, and urban amenities.

 The 1965 Section 23 Leased Housing Program created rental subsidies for the first time. Assistance programs grew throughout the 1970s. The Housing and Community Development Act of 1974 replaced the LEased Housing Program with what became known as the Section 8 program, which established federal limits for how much households should spend on rent. The voucher component of the program was created in 1983.

The voucher program differs by—in theory—allowing households to choose housing in the buildings and neighborhoods of their choice. In practice, however, voucher recipients often face discrimination, known as source of income discrimination, and limited opportunities for safe, comfortable housing in amenity-rich neighborhoods. While some local jurisdictions have taken steps to outlaw discrimination in housing, U.S. landlords are not required by federal law to participate in voucher programs.

HUD uses ‘Fair Market Rent’ to calculate the ceiling for rent costs for voucher recipients, which critics of the program say skews to lower-quality housing. As Alana Semuels explains in a 2015 article in The Atlantic, “HUD draws the line at the 40th percentile of rents for ‘typical’ units occupied by ‘recent movers’ in an entire metropolitan area, which includes far-flung suburbs with long commutes and, as a result, makes the Fair Market Rent relatively low.” This means that households are frequently relegated to areas with poor infrastructure, low-quality housing, and other risks such as high pollution rates.

While the program uses household income to determine eligibility, eligible families can remain on waiting lists for years before being issued vouchers. Once a renter is in possession of vouchers, source of income discrimination and a strained housing supply mean it can be almost impossible to find affordable housing. A 2021 study found that providing vouchers to all households earning up to 50 percent of AMI could lift almost 5 million U.S. households out of poverty. Because many PHAs give voucher recipients a limited amount of time to find housing, some eligible families lose their vouchers if they can’t find housing in time. Housing advocates have called on the federal government to create more incentives or mandates for landlords and promote more widespread acceptance of vouchers to increase the geographic and economic mobility of low-income households.

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