The Housing Choice Voucher Program is a type of Federal assistance provided by the United States Department of Housing and Urban Development (HUD) dedicated to sponsoring subsidized housing for low-income families and individuals. It is more commonly known as Section 8, in reference to the portion of the U.S. Housing Act of 1937 under which the original subsidy program was authorized. The United States Code (the compilation of current U.S. federal laws) covers this program in Title 42, Chapter 8. 
 

History 
 

Federal housing assistance programs began during the Great Depression to address the country’s housing crisis. 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 1961, the Section 23 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 23 tenants, and annually reviewed the tenant’s income for program eligibility and rent calculations. 
 

In the 1970s, when studies showed that the low income housing crisis 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. 
 

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, the Voucher Program in 1983, and the Project-based Certificate program in 1991. The numbers of units a local housing authority can subsidize under its Section 8 programs is determined by Congressional funding. Since its inception, some Section 8 programs have been phased out and new ones created, although Congress has always renewed existing subsidies. 
 

HR1851, the Section 8 Voucher Reform Act of 2007 (SEVRA), was introduced in the House of Representatives to reform Section 8 of the United States Housing Act of 1937. It was passed by the House in July, 2007, and went to the Senate for study and consideration as Senate version, S. 2684, filed on March 3, 2008 by Senator Christopher Dodd, chair of Senate Banking Committee. 
 

Summary of the program 
 

Currently, the main Section 8 program involves the voucher program. A voucher may be either "project-based" (where its use is limited to a specific apartment complex; public housing agencies (PHAs) may reserve up to 20% of its vouchers as such.) or "tenant-based" (where the tenant is free to choose a unit in the private sector, is not limited to specific complexes, and may reside anywhere in the United States or Puerto Rico where a PHA operates a Section 8 program, though in practice such portability is very difficult). 
 

Under the voucher program, individuals or families with a voucher find and lease a unit (either in a specified complex or in the private sector) and pay a portion of the rent (based on income, but generally no more than 30% of the family's income). 
 

There is an asset test in addition to earned income. Over a certain amount, HUD will add income even if the Section 8 tenant doesn't 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. This makes the tenant's contribution higher since his gross income is made higher. 
 

The PHA pays the landlord the remainder of the rent over the tenant's portion, subject to a cap referred to as "Fair Market Rent" (FMR) which is determined by HUD. FMR is determined by several factors, including: 
 

    * the geographic area (city or county) where the unit is located (generally, a unit in a metropolitan area will have a higher FMR),

    * the unit size (in terms of the number of bedrooms; generally, the more bedrooms the higher the FMR, while a studio apartment would be at the low end), and

    * whether the owner or tenant will pay utilities (generally, FMR is higher for units where the owner pays utilities). 
 

The landlord cannot charge a Section 8 tenant more than FMR and cannot accept payments outside the contract which would cause the total rent to exceed FMR. 
 

In addition, landlords, though required to meet fair housing laws, are not required to participate in the Section 8 program. 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 for HUD's Housing Quality Standards (HQS) and the possible remediations required,

    * fear that a Section 8 tenant will not properly maintain the premises,

    * a desire to charge a rent for the unit above FMR,

    * unwillingness to initiate judicial action for eviction of a tenant (HUD requires that Section 8 tenants can only be evicted by judicial action, even where state law allows other procedures). 
 

However, other landlords willingly accept Section 8 tenants, due to: 
 

    * a large available pool of potential renters (the waiting list for new Section 8 tenants is usually very long, see below),

    * generally prompt regular payments from the PHA for its share of the rent, and/or

    * a perceived higher quality of tenants, since a tenant can be permanently removed from the Section 8 program if s/he damages the rental unit and/or fails to pay his/her share of the rent. 
 

Whether voucher or project-based, all subsidized units must meet HQS, thus ensuring that the family has a healthy and safe place to live. This improvement in the housing stock is an important by-product of this program, both for the individual families and for the larger goal of community development. 
 

In many localities, the PHA waiting lists for Section 8 vouchers may be thousands of families long, waits of three to five years to access vouchers is common, and many lists are closed to new applicants. 
 

Families who participate in the program must abide by a series of rules and regulations, often referred to as "family obligations," in order to maintain their voucher, including accurately reporting to the PHA all changes in household income and/or family composition so the amount of their subsidy (and the applicable rental unit size limitation) can be updated accordingly. In recent years, the HUD Office of the Inspector General has spent more time and money on fraud detection and prevention. 
 

Currently, there are no time limits for family participation in the program, though occasionally reform bills are introduced in Congress that suggest time limiting the program.

June 2009

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