An Overview of the Section 8 Housing
Programs: Housing Choice Vouchers and
Project-Based Rental Assistance
-name redactedSpecialist in Housing Policy
February 7, 2014
Congressional Research Service
7-….
www.crs.gov
RL32284
An Overview of the Section 8 Housing Programs
Summary
The Section 8 low-income housing program is really two programs authorized under Section 8 of
the U.S. Housing Act of 1937, as amended: the Housing Choice Voucher program and the projectbased rental assistance program. Vouchers are portable subsidies that low-income families can use
to lower their rents in the private market. Vouchers are administered at the local level by quasigovernmental public housing authorities (PHAs). Project-based rental assistance is a form of
rental subsidy that is attached to a unit of privately owned housing. Low-income families who
move into the housing pay a reduced rent, on the basis of their incomes.
The Section 8 program began in 1974, primarily as a project-based rental assistance program.
However, by the mid-1980s, project-based assistance came under criticism for seeming too costly
and concentrating poor families in high-poverty areas. Congress stopped funding new projectbased Section 8 rental assistance contracts in 1983. In their place, Congress created vouchers as a
new form of assistance. Today, vouchers—numbering more than 2 million—are the primary form
of assistance provided under Section 8, although over 1 million units still receive project-based
assistance under their original contracts or renewals of those contracts.
Congressional interest in the Section 8 programs—both the voucher program and the projectbased rental assistance program—has increased in recent years, particularly as the program costs
have rapidly grown, led by cost increases in the voucher program. In order to understand why
costs are rising so quickly, it is important to first understand how the program works and its
history. This report presents a brief overview of that history and introduces the reader to the
program. For more information, see CRS Report RL34002, Section 8 Housing Choice Voucher
Program: Issues and Reform Proposals; and CRS Report R41182, Preservation of HUD-Assisted
Housing, by (name redacted) and (name redacted).
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An Overview of the Section 8 Housing Programs
Contents
Introduction…………………………………………………………………………………………………………………….. 1
Background Information …………………………………………………………………………………………….. 1
Early Section 8 ………………………………………………………………………………………………………………… 2
New Construction and Substantial Rehabilitation …………………………………………………………… 3
Moderate Rehabilitation ………………………………………………………………………………………… 4
Existing Housing Certificates ………………………………………………………………………………………. 4
The Voucher Program……………………………………………………………………………………………. 5
Today’s Section 8 Programs ……………………………………………………………………………………………… 5
Section 8 Project-Based Rental Assistance ……………………………………………………………………. 6
Section 8 Tenant-Based Housing Choice Vouchers …………………………………………………………. 7
Project-Based Vouchers …………………………………………………………………………………………. 9
Tenant Protection or Enhanced Vouchers …………………………………………………………………. 9
Special Purpose Vouchers ……………………………………………………………………………………… 9
Family Self-Sufficiency Coordinators……………………………………………………………………. 10
Demonstrations ………………………………………………………………………………………………….. 11
Conclusion ……………………………………………………………………………………………………………………. 12
Tables
Table 1. The Experimental Housing Allowance Program………………………………………………………. 2
Table 2. What Do Long Term Contracts Mean for Congress? ………………………………………………… 3
Table 3. What is Fair Market Rent (FMR)? …………………………………………………………………………. 4
Table 4. Income Thresholds for a Three-Person Family in Selected Areas in 2013 …………………… 7
Table 5. How is a Voucher Subsidy Calculated?…………………………………………………………………… 8
Contacts
Author Contact Information…………………………………………………………………………………………….. 12
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An Overview of the Section 8 Housing Programs
Introduction
The rental assistance programs authorized under Section 8 of the United States Housing Act of
1937 (42 U.S.C. §1437f)—Section 8 project-based rental assistance and Section 8 tenant-based
vouchers—have become the largest components of the Department of Housing and Urban
Development’s (HUD) budget, with combined appropriations of $27 billion in FY2013.1 The
rising cost of providing rental assistance is due, in varying degrees, to expansions in the program,
the cost of renewing expiring long-term contracts, and rising costs in housing markets across the
country. The most rapid cost increases have been seen in the voucher program.
Partly out of concern about cost increases, and partly in response to the administrative complexity
of the current program, there have been calls for reform of the voucher program and its funding
each year since 2002. In response, Congress has enacted changes to the way that it funds the
voucher program and the way that PHAs receive their funding. Congress has considered program
reforms, but has not enacted them.
In order to understand why the program has become so expensive and why reforms are being
considered, it is first important to understand the mechanics of the program and its history. This
paper will provide an overview of the Section 8 programs and their history. For more information,
see CRS Report RL33929, The Section 8 Voucher Renewal Funding Formula: Changes in
Appropriations Acts; CRS Report RL34002, Section 8 Housing Choice Voucher Program: Issues
and Reform Proposals; and CRS Report R41182, Preservation of HUD-Assisted Housing, by
(name redacted) and (name redacted).
Background Information
From 1937 until 1965, public housing and the subsidized mortgage insurance programs of the
Federal Housing Administration (FHA) were the country’s main forms of federal housing
assistance. As problems with the public housing and other bricks and mortar federal housing
construction programs (such as Section 235 and Section 236 of the National Housing Act)
arose—particularly their high cost—interest grew in alternative forms of housing assistance. In
1965, a new approach was adopted (P.L. 89-117). The Section 23 program assisted low-income
families residing in leased housing by permitting a public housing authority (PHA)2 to lease
existing housing units in the private market and sublease them to low-income and very lowincome families3 at below-market rents. However, the Section 23 program did not ameliorate the
growing problems with HUD’s housing construction programs and interest remained in
developing and testing new approaches. The Experimental Housing Allowance Program is one
example of such an alternative approach.
1
For more information about HUD budget trends, including the Section 8 programs, see CRS Report R42542,
Department of Housing and Urban Development (HUD): Funding Trends Since FY2002, by (name redacted).
2
PHAs are state-chartered, quasi-governmental bodies that administer public housing and Section 8 vouchers.
3
HUD uses a relative measure of income for determining benefits and eligibility for Section 8. “Low-income families”
have adjusted gross incomes at or below 80% of the local area median income; “very low-income” families have
adjusted gross incomes at or below 50% of the local area median income; and “extremely low-income” families have
adjusted gross incomes at or below 30% of the local area median income
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Table 1. The Experimental Housing Allowance Program
The Experimental Housing Allowance Program (EHAP) began with a mandate to HUD from Congress in 1970 to test
the impacts and feasibility of providing low-income families with allowances to assist them in obtaining existing, decent
rental housing of their choice (P.L. 91-152). Congress was interested specifically in finding the answers to several key
questions:
•
How many families would make use of allowance payments?
•
What kind of housing would they choose and in what neighborhoods?
•
How would housing markets respond to the increased demand for housing?
•
At what cost could a housing allowance program be administered?
In order to answer these questions, HUD contracted for the conduct of three experiments: the Demand Experiment
to test how families would respond to a housing allowance, the Supply Experiment, to test how markets would
respond to subsidies and the Administrative Agency Experiment, to test the administrative capacity and funds required to
administer a housing allowance program. The first reports came out in 1973, and a final report was issued in 1980.
The EHAP’s key findings are listed below:
•
In order to ensure housing quality, subsidies have to be tied to housing standards; however, stricter housing
standards limit participation. Participation is also linked to subsidy amount; as the subsidy increases, so does
participation.
•
Mobility and location of residence are mainly governed by ties to relatives, neighbors, and friends and are not
affected by housing allowance payments.
•
A housing allowance program has virtually no effect on the price of housing and does not stimulate new
construction or major rehabilitation. However, it does help preserve the existing housing stock by stimulating
repairs.
•
A housing allowance program can be effectively administered at the local level.
The early findings of EHAP helped to set the tone for the debate that created the Section 8 program.
Source: Raymond Struyk, “Policy Questions and Experimental Responses,” in Housing Vouchers for the Poor: Lessons
from a National Experiment, Raymond Struyk and Marc Bendick Jr. Eds (Washington: Urban Institute Press, 1981).
Due to criticisms about cost, profiteering, and slumlord practices in federal housing programs,
President Nixon declared a moratorium on all existing federal housing programs, including
Section 23, in 1973. During the moratorium, HUD revised the Section 23 program and sought to
make it the main assisted housing program of the federal government. However, at the same time,
Congress was considering several options for restructuring subsidized housing programs. After all
the debates and discussions that typically precede the passage of authorizing legislation were
completed, Congress voted in favor of a new leased housing approach, and the Section 8 program
was created.
Early Section 8
The Section 8 program is named for Section 8 of the United States Housing Act of 1937. The
original program, established by the Housing and Community Development Act of 1974 (P.L. 93383), consisted of three parts: new construction, substantial rehabilitation, and existing housing
certificates. The 1974 Act and the creation of Section 8 effectively ended the Nixon moratorium.
In 1978, the moderate rehabilitation component of the program was added, but it has not been
funded since 1989. In 1983, the new construction and substantial rehabilitation portions of the
program were repealed, and a new component—Section 8 vouchers—was added. In 1998,
existing housing certificates were merged with and converted to vouchers.
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New Construction and Substantial Rehabilitation
Under the new construction and substantial rehabilitation components of the early Section 8
program, HUD entered into long-term (20- or 40-year) contracts with private for-profit, nonprofit, or public organizations that were willing to construct new units or rehabilitate older ones to
house low- and very low-income tenants. Under those contracts, HUD agreed to make assistance
payments toward each unit for the duration of the contract. Those assistance payments were
subsidies that allowed tenants residing in the units to pay 25% (later raised to 30%) of their
adjusted income as rent. The program was responsible for the construction and rehabilitation of a
large number of units. Over 1.2 million units of housing with Section 8 contracts that originated
under the new construction and substantial rehabilitation program still receive payments today.
By the early 1980s, because of the rising costs of rent and construction, the amount of budget
authority needed for the Section 8 rental assistance program had been steadily increasing while
the number of units produced in a year had been decreasing. At the same time, studies emerged
showing that providing subsidies for use in newly constructed or substantially rehabilitated
housing was more expensive than the cost of providing subsidies in existing units of housing.
Also, because contracts were written for such long terms, appropriators had to provide large
amounts of budget authority each time they funded a new contract (see below for an illustration
of the implication of long-term contracts). As the budget deficit grew, Members of Congress
became concerned with the high costs associated with Section 8 new construction and substantial
rehabilitation, and these segments of the Section 8 program were repealed in the Housing and
Urban-Rural Recovery Act of 1983 (P.L. 98-181).
Table 2. What Do Long Term Contracts Mean for Congress?
The following example illustrates how Congress appropriates funds for long-term contracts, compared to one-year
contracts.
In 2012, a housing voucher cost an average of $7,400 per year, according to HUD’s FY2014 Congressional Budget
Justifications. If Congress wanted to fund 10 new Section 8 subsidies in 2012, the cost of doing so would depend on
the length of the contract Congress decided to fund:
If the contract was a 40-year contract, as was the case in the beginning of the Section 8 program, then Congress
must appropriate:
10 vouchers x $7,400 x 40 years = $2.96 million.*
If the contract was a one-year contract, as is the case with Section 8 contracts today, then Congress must
appropriate:
10 vouchers x $7,400 x 1 year = $74,000.
Thus, it would have cost Congress less in 2012 to provide one year contracts than it would have to provide multiyear
contracts. The trade-off is the cost in subsequent years. For example, assume that Congress intends to maintain those
10 subsidies in 2013. If Congress funded those subsidies under 40-year contracts in 2012, then the subsidies would
not require new funding again until 2052, meaning Congress would not have to provide appropriations in 2013;
however, if Congress funded those subsidies under one-year contracts in 2012, then the subsidies would require
another year’s worth of funds in 2013.
* Note, this example does not include an estimate for inflation. When funding multi-year contracts, Congress
generally includes an estimate of inflation and adds it to the total cost.
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Moderate Rehabilitation
The Housing and Community Development Amendments of 1978 (P.L. 95-557) added the
moderate rehabilitation component to the Section 8 program, which expanded Section 8 rental
assistance to projects that were in need of repairs costing at least $1,000 per unit to make the
housing decent, safe, and sanitary. Over the next 10 years, however, this component of the
program was fraught with allegations of abuse; the process of awarding contracts was considered
unfair and politicized. Calls for reform of the moderate rehabilitation program led to its
suspension. It has not been funded since 1989.
Existing Housing Certificates
The existing housing certificate component of the Section 8 program was created in the beginning
of the Section 8 program and continued until 1998. Under the existing housing certificate
program, PHAs and HUD would enter into an Annual Contributions Contract (ACC) for the
number of units that would be available to receive assistance. Contracts were originally written
for five years and were renewable, at HUD’s discretion, for up to 15 years. In the contract, HUD
agreed to pay the difference between the tenant’s rental payment and the contract rent of a unit.
The contract rent was generally limited to the HUD-set Fair Market Rent (FMR) for the area.
Table 3. What is Fair Market Rent (FMR)?
FMRs are gross rent estimates that include both shelter rent paid by the tenant to the landlord and the cost of
tenant-paid utilities, except telephones. Each year, HUD sets FMRs either at the 40th percentile rent or at the 50th
percentile rent for each metropolitan or non-metropolitan statistical area in the nation, as well as for each state. For
most areas, the FMR is set at the 40th percentile rent paid by recent movers, which means that 40% of all standard
quality rental housing units rented within the past 18 months have rents at or below the FMR. For some high cost
areas, the FMR is set at the 50th percentile rent or the median rent, so that 50% of standard units fall at or below the
FMR. In some low-cost communities, the FMR is raised to the statewide FMR, if it is higher.
After entering into a contract with HUD, PHAs would advertise the availability of certificates for
low-income tenants. The existing housing certificate program was primarily tenant-based,
meaning that the assistance was attached to the tenant. Families selected to receive assistance
were given certificates as proof of eligibility for the program; with their certificates, families
could look for suitable housing in the private market. Housing was considered suitable if it rented
for the FMR or less and met Housing Quality Standards (HQS).4 Once the household found a
unit, they signed a lease and agreed to pay 30% of their adjusted income for rent. The remainder
of the rent was paid by HUD to the landlord on behalf of the tenant. If a family vacated a unit in
violation of the lease, HUD had to make rental payments to the landlord for the remainder of the
month in which the family vacated, and pay 80% of the contract rent for an additional month. If
the family left the unit at the end of their lease, they could take their certificate with them and use
it for their next home. HUD also paid the PHA an administrative fee for managing the program.
The amount of this administrative fee was set by Congress in appropriations legislation each year.
PHAs were permitted to use up to 15% of their Section 8 certificates for project-based housing. In
project-based Section 8 existing housing, the subsidy was attached to the unit, which was selected
4
Housing Quality Standards (HQS) are minimum standards set by HUD that set acceptable conditions for interior
living space, building exterior, heating and plumbing systems, and general health and safety.
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by the PHA, and not to the tenant. This meant that when a tenant vacated a unit, another eligible
tenant would be able to occupy it, and HUD would subsidize the rent as long as a contract was in
effect between the PHA and the owner.
In 1998, the Quality Housing and Work Opportunity Reconciliation Act (QHWRA) (P.L. 105276) merged the Section 8 existing housing certificate program with the voucher program (see
below) and converted all certificates to vouchers, effectively ending the Section 8 existing
housing certificate program.
The Voucher Program
The largest component of today’s Section 8 program, the voucher program, was first authorized
by the Housing and Urban-Rural Recovery Act of 1983 (P.L. 98-181). It was originally a
demonstration program, but was made permanent in 1988. Like the Section 8 existing housing
certificate program, the voucher program is administered by PHAs and is tenant-based, with a
project-based component. However, under the voucher program, families can pay more of their
incomes toward rent and lease apartments with rents higher than FMR.
Today’s Section 8 Programs
Today’s Section 8 program is really two programs, which, combined, serve almost 3.5 million
households.
Note to Reader: Recent Legislative Changes
The FY2014 Consolidated Appropriations Act (P.L. 113-76) included several legislative provisions that affect the two
Section 8 programs. They are summarized below; however, the remainder of this report does not reflect these
changes. This report will be updated once the new policies are fully implemented by HUD.
From Division L, Title 2 of P.L. 113-76
•
Section 220: Modification of Section 8 Housing Choice Voucher inspection requirements
PHAs are required to inspect units that are to receive Section 8 Housing Choice Voucher subsidy payments prior to approval
of a family’s tenancy and annually thereafter. The inspections are to ensure that the property meets standards set out in
statute. Section 220 alters this requirement to require ongoing inspections happen no less frequently than biennially and it
also allows inspections undertaken pursuant to other state, local, or federal housing program standards to fulfill the Section
8 voucher inspection requirements, as long as the administering PHA attests that the alternate standards provide at least as
much protection as the Section 8 voucher program standards. It also adds a provision to allow for interim inspections, to
take place at the request of a tenant, within 24 hours in the case of a life-threatening condition, or within a reasonable time
period for all other conditions. The changes are to take effect upon a date set at the Secretary’s discretion through either
notice or rulemaking.
•
Section 238: Redefinition of “extremely low-income”
Currently, the term “extremely low-income” (ELI), which is used for eligibility and targeting provisions in various federal
housing assistance programs, is defined as income no greater than 30% of local area median income. This provision
expands the definition such that the term is defined as income that is no more than the greater of 30% of local area
median income or the federal poverty level. This effectively sets the federal poverty level as a national floor for the definition
of ELI, meaning anyone who has income at or below the federal poverty level will be considered extremely low-income. This
provision was included in earlier assisted housing reform legislation. HUD is to establish the requirements of this new policy
by notice, then commence rulemaking within six months of the issuance of the notice.
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•
Section 242: Modification of utility allowance for Section 8 voucher holders
Section 8 voucher holders whose utilities are not included in their rent are provided with a utility allowance to help offset
their utility costs. Currently, utility allowances are based on the size of the unit occupied by the family, not the size of the
family. Section 242 would base a family’s utility allowance on a family’s size, rather than a unit size. This policy will reduce
utility allowance payments for families that are renting dwelling units with more bedrooms than is necessitated by their
family size. PHAs must approve a higher utility allowance amount as a reasonable accommodation for a person with a
disability. HUD is to establish the requirements of this new policy by notice, then commence rulemaking within six months
of the issuance of the notice.
Section 8 Project-Based Rental Assistance
The first program under Section 8 can be characterized as Section 8 project-based rental
assistance. This program includes units created under the new construction, substantial
rehabilitation, and moderate rehabilitation components of the earlier Section 8 program that are
still under contract with HUD. Although no new construction, substantial rehabilitation, or
moderate rehabilitation contracts have been created for a number of years, about 1.3 million of
these units are still funded under multiyear contracts that have not yet expired and do not require
any new appropriations, or multiyear contracts that had expired and are renewed annually,
requiring new appropriations.
Families that live in Section 8 project-based units pay 30% of their incomes toward rent. In order
to be eligible, families must be low-income; however, at least 40% of all units that become
available each year must be rented to extremely low-income families. If a family leaves the unit,
the owner will continue to receive payments as long as he or she can move another eligible family
into the unit.
Owners of properties with project-based Section 8 rental assistance receive a subsidy from HUD,
called a Housing Assistance Payment (HAP). HAP payments are equal to the difference between
the tenant’s payments (30% of income) and a contract rent, which is agreed to between HUD and
the landlord. Contract rents are meant to be comparable to rents in the local market, and are
typically adjusted annually by an inflation factor established by HUD or on the basis of the
project’s operating costs. Project-based Section 8 contracts are managed by contract
administrators. While some HUD regional offices still serve as contract administrators, the
Department’s goal is to contract the function out entirely to outside entities, including state
housing finance agencies, PHAs, or private entities.
When project-based HAP contracts expire, the landlord can choose to either renew the contract
with HUD for up to five years at a time (subject to annual appropriations) or convert the units to
market rate. In some cases, landlords can choose to “opt-out” of Section 8 contracts early. When
an owners terminates an HAP contract with HUD, either through opt-out or expiration—the
tenants in the building are provided with enhanced vouchers designed to allow them to stay in
their unit (see discussion of “Tenant Protection or Enhanced Vouchers” below).5
In 2010, about 51% of the households that lived in project-based Section 8 units were headed by
persons who were elderly, about 17% were headed by persons who were non-elderly disabled,
5
For more about expiring Section 8 project-based rental assisted contracts, see CRS Report R41182, Preservation of
HUD-Assisted Housing, by (name redacted) and (name redacted).
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and about 33% were headed by persons who were not elderly and not disabled. The median
income of households living in project-based Section 8 units was a little more than $10,000 per
year.6
Section 8 Tenant-Based Housing Choice Vouchers
When QHWRA merged the voucher and certificate programs in 1998, it renamed the voucher
component of the Section 8 program the Housing Choice Voucher program. The voucher program
is funded in HUD’s budget through the tenant-based rental assistance account. The federal
government currently funds more than 2 million Section 8 Housing Choice Vouchers. PHAs
administer the program and receive an annual budget from HUD. Each has a fixed number of
vouchers that they are permitted to administer and they are paid administrative fees.
Vouchers are tenant-based in nature, meaning that the subsidy is tied to the family, rather than to a
unit of housing. In order to be eligible, a family must be very low-income (50% or below area
median income (AMI)),7 although 75% of all vouchers must be given to extremely low-income
families (30% or below AMI). To illustrate the regional variation in these definitions of lowincome and their relationship to federal definitions of poverty, Table 4 compares HUD’s income
definitions to the Department of Health and Human Services (HHS) poverty guidelines for
several geographic areas in 2013. Note that HHS poverty guidelines are uniform in all parts of the
country (except for Alaska and Hawaii, not shown in the following table).
Table 4. Income Thresholds for a Three-Person Family in Selected Areas in 2013
HUD Very
Low-Income Limits
HUD Extremely
Low-Income Limits
HHS Poverty
Guidelines
Jefferson County, MS
$18,900
$11,350
$19,530
New York, NY
$38,700
$23,200
$19,530
San Francisco, CA
$47,500
$28,500
$19,530
Source: Department of Housing and Urban Development 2013 Income Limits and Department of Health and
Human Services 2013 Poverty Guidelines.
Families who receive vouchers use them to subsidize their rents in private market apartments.
Once an eligible family receives an available voucher, the family must find an eligible unit. In
order to be eligible, a unit must meet minimum housing quality standards (HQS) and cost less
than 40% of the family’s income8 plus the HAP paid by the PHA. The HAP paid by the PHA for
tenant-based vouchers, like the HAP paid for Section 8 project-based rental assistance, is capped;
however, with tenant-based vouchers, PHAs have the flexibility to set their caps anywhere
between 90% and 110% of FMR (up to 120% FMR with prior HUD approval). The cap set by the
PHA is called the payment standard. Once a family finds an eligible unit, the family signs a
contract with HUD, and both HUD and the family sign contracts with the landlord. The PHA will
pay the HAP (the payment standard minus 30% of the family’s income), and the family will pay
6
CRS analysis of data provided by HUD. Please note that 2010 are the most recent data HUD has provided to CRS.
In some limited circumstances, families can earn up to 80% of AMI and still be eligible.
8
This 40% cap on a tenant’s contribution is in effect only for the first year. After the first year, if rent increases and the
family wishes to continue to live in the unit, then the family can choose to contribute more than 40% of its income
toward rent.
7
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the difference between the HAP and the rent (which must total between 30% and 40% of the
family’s income). After the first year, a family can choose to pay more than 40% of their income
towards rent. PHAs may also choose to adopt minimum rents, which cannot exceed $50. (See box
below for an example.)
Table 5. How is a Voucher Subsidy Calculated?
First, a PHA sets a payment standard. A payment standard is a maximum subsidy level that is equal to anywhere
between 90% and 110% of Fair Market Rent (FMR). Then, a PHA calculates a maximum Housing Assistance Payment
(HAP). A HAP is the amount that the PHA will pay the landlord and it is equal to the greater of the rent for an
apartment or the payment standard, minus 30% of a family’s income. The family can then go out to the rental market
and find an apartment. In order to be approved that apartment cannot rent for more than the maximum HAP plus
40% of a family’s income. If the rent for the unit is less than the HAP plus 30% of a household’s income, the
household must still pay 30% of their income toward rent, but the HAP will be reduced.
For example, consider a family who earns $900 per month and lives in a community with an FMR of $800 per month
for the appropriate size apartment. If their PHA has a payment standard of 110% of FMR, then the maximum HAP a
family can receive is $610 per month [($800 * 110%) – ($900 * 30%)]. The family can therefore shop for an apartment
with a rent of up to $970 per month [$610 + ($900 * 40%)].
If the family finds an apartment for $970 per month, the PHA will pay the maximum HAP ($610) and the family will
pay 40% of their income per month ($360).
If the family finds an apartment for less than the payment standard, say $750 per month, the family will pay 30% of
their income toward rent, and the PHA will pay the difference between the rent and 30% of the family’s income. In
this case, the family will pay $270 [$900 * 30%] and the PHA will pay $480 [$750 – (900 * 30%)].
Once a family is using a voucher, the family can retain the voucher as long as the PHA has
adequate funding for it and the family complies with PHA and program requirements. If a family
wants to move, the tenant-based voucher can move with the family. Once the family moves to a
new area, the two PHAs (the PHA that originally issued the voucher and the PHA that administers
vouchers in the new area) negotiate regarding who will continue to administer the voucher.9
The voucher program does not contain any mandatory time limits. Families exit the program in
one of three ways: their own choice, non-compliance with program rules (including non-payment
of rent), or if they no longer qualify for a subsidy. Families no longer qualify for a subsidy when
their incomes, which must be recertified annually, have risen to the point that 30% of that income
is equal to rent. At that point the HAP payment will be zero and the family will no longer receive
any subsidy.
Unlike the project-based Section 8 program, the majority of households receiving vouchers are
headed by a person who is not elderly and not disabled. In 2010, about 19% of the households
with Section 8 vouchers were elderly households, about 28% were disabled households, and
about 53% were non-elderly, non-disabled households with children. The median income of
households with vouchers was just over $10,400 per year.10
9
The feature of a voucher that permits a family to move from one jurisdiction to another while retaining their
assistance is referred to as portability. The administration of portability has proven to be complicated for PHAs. In
some cases, the originating PHA is billed for the cost of the family’s voucher by the receiving PHA; in other cases, the
receiving PHA transitions the new family onto one if its vouchers and the original voucher reverts to the originating
PHA. PHA advocacy groups have called for HUD to make regulatory reforms to ease the administration of portability.
10
CRS analysis of data provided by HUD. Please note that 2010 are the most recent data HUD has provided to CRS.
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Project-Based Vouchers
Vouchers, like Section 8 existing housing certificates, can be project-based. In order to projectbase vouchers, a landlord must sign a contract with a PHA agreeing to set-aside up to 25% of the
units in a development for low-income families. Each of those set-aside units will receive
voucher assistance as long as a family that is eligible for a voucher lives there. Families that live
in a project-based voucher unit pay 30% of their adjusted household income toward rent, and
HUD pays the difference between 30% of household income and a reasonable rent agreed to by
both the landlord and HUD. PHAs can choose to project-base up to 20% of their vouchers.
Project-based vouchers are portable; after one year, a family with a project-based voucher can
convert to a tenant-based voucher and then move, as long as a tenant-based voucher is available.
Tenant Protection or Enhanced Vouchers
Another type of voucher, called a tenant protection voucher, is given to families that were already
receiving assistance through another HUD housing program, before being displaced. Examples of
instances when families receive tenant-protection vouchers include when public housing is
demolished or when a landlord has terminated a Section 8 project-based rental assistance
contract. Families that risk being displaced from project-based Section 8 units are eligible to
receive a special form of tenant-protection voucher, called an enhanced voucher. The “enhanced”
feature of the voucher allows the maximum value of the voucher to grow to be equal to the new
rent charged in the property, as long as it is reasonable in the market, even if it is higher than the
PHA’s payment standard. They are designed to allow families to stay in their homes. If the family
chooses to move, then the enhanced feature is lost and the voucher becomes subject to the PHA’s
normal payment standard.
Special Purpose Vouchers
The voucher program also has several special programs or uses. These include family unification
vouchers, vouchers for homeless veterans, and vouchers used for homeownership.
Family Unification Program
Family unification vouchers are given to families for whom the lack of adequate housing is a
primary factor in the separation, or threat of imminent separation, of children from their families
or in preventing the reunification of the children with their families. HUD has awarded over
38,600 family unification vouchers to PHAs since the inception of the program.11
11
HUD awarded 33,497 FUP vouchers from 1992 to 2001. Each award included five years of funding per voucher and
the voucher’s use was restricted to FUP-eligible families for those five years. At the end of those five years, PHAs were
eligible to convert those FUP vouchers to regular vouchers. While the five-year use restrictions have expired for all
FUP vouchers, according to surveys conducted by the Child Welfare League of America, the vast majority of PHAs
have continued to use their original FUP vouchers for FUP-eligible families and some have even chosen to use some
regular-purpose vouchers for FUP families. As a result of these two factors, it is unclear how many of those original
FUP vouchers are serving FUP-eligible families at this time. In FY2008, FY2009, and FY2010, Congress appropriated
funding for additional FUP vouchers and HUD had awarded 5,094 of those vouchers at the time this report was
updated.
Congressional Research Service
9
An Overview of the Section 8 Housing Programs
HUD-VASH
Beginning in 1992, through collaboration between HUD and the VA, Section 8 vouchers have
been made available for use by homeless veterans with severe psychiatric or substance abuse
disorders. Through the program, called HUD-VA Supported Housing (HUD-VASH), PHAs
administer the Section 8 vouchers while local VA medical centers provide case management and
clinical services to participating veterans.12
Homeownership Vouchers
While there are no specifically authorized “homeownership vouchers,” since 2000 certain
families have been eligible to use their vouchers to help pay for the monthly costs associated with
homeownership. Eligible families must work full-time or be elderly or disabled, be first-time
homebuyers, and agree to complete first-time homebuyer counseling. PHAs can decide whether
to run a homeownership program and an increasing number of PHAs are choosing to do so.
According to HUD’s website, nearly 13,000 families have closed on homes using vouchers.13
Family Self-Sufficiency Coordinators
The Family Self Sufficiency (FSS) program was established by Congress as a part of the National
Affordable Housing Act of 1990 (P.L. 101-625). The purpose of the program is to promote
coordination between the voucher program and other private and public resources to enable
families on public assistance to achieve economic self-sufficiency. Families who participate in the
program sign five-year contracts in which they agree to work toward leaving public assistance.
While in the program, families can increase their incomes without increasing the amount they
contribute toward rent. The difference between what the family paid in rent before joining the
program and what they would owe as their income increases is deposited into an escrow account
that the family can access upon completion of the contract. For example:
If a family with a welfare benefit of $450 per month begins working, earning $800 per
month, the family’s contribution towards rent increases from $135 per month to $240 per
month. Of that $240 the family is now paying towards rent, $105 is deposited into an escrow
account. After five years, the family will have $6,300 plus interest in an escrow account to
use for whatever purpose the family sees fit.
PHAs receive funding for FSS coordinators, who help families with vouchers connect with
services, including job training, child care, transportation and education.
In 2012, HUD funded the salaries of over 1,100 FSS coordinators in the voucher program,
serving nearly 48,000 enrolled families.14
12
The program was codified in 2001 and reauthorized in 2006; however, VASH vouchers were not funded again until
FY2008. Since then, VASH vouchers have been funded each year. For more information, see CRS Report RL34024,
Veterans and Homelessness, by (name redacted).
13
http://www.hud.gov/offices/pih/programs/hcv/homeownership/publiclist_vhosites.xls, accessed December 26, 2013.
Data current as of March 2011.
14
HUD FY2014 Congressional Budget Justifications.
Congressional Research Service
10
An Overview of the Section 8 Housing Programs
Demonstrations
Moving to Work
The Moving to Work Demonstration, authorized in 1996 (P.L. 104-134), was created to give
HUD and PHAs the flexibility to design and test various approaches for providing and
administering housing assistance. The demonstration directed HUD to select up to 30 PHAs to
participate. The goals were to reduce federal costs, provide work incentives to families, and
expand housing choice. MTW allows participating PHAs greater flexibility in determining how to
use federal Section 8 voucher and Public Housing funds by allowing them to blend funding
sources and experiment with rent rules, with the constraint that they had to continue to serve
approximately the same number of households. It also permits them to seek exemption from most
Public Housing and Housing Choice Voucher program rules. (For more information, see CRS
Report R42562, Moving to Work (MTW): Housing Assistance Demonstration Program, by
(name redacted).)
The existing MTW program, while called a demonstration, was not implemented in a way that
would allow it to be effectively evaluated. Therefore, there is not sufficient information about
different reforms adopted by MTW agencies to evaluate their effectiveness. However, there is
some information available about how PHAs are using the flexibility provided under MTW.
Agencies participating in MTW have used the flexibility it provides differently. Some have made
minor changes to their existing Section 8 voucher and public housing programs, such as limiting
reporting requirements; others have implemented full funding fungibility between their public
housing and voucher programs and significantly altered their eligibility and rent policies. Some
have adopted time limit and work requirement policies similar to those enacted in the 1996
welfare reform law.
An evaluation for MTW published in January 2004 reported:
The local flexibility and independence permitted under MTW appears to allow strong,
creative [P]HAs to experiment with innovative solutions to local challenges, and to be more
responsive to local conditions and priorities than is often possible where federal program
requirements limit the opportunity for variation. But allowing local variation poses risks as
well as provides potential benefits. Under MTW, some [P]HAs, for instance, made mistakes
that reduced the resources available to address low-income housing needs, and some
implemented changes that disadvantaged particular groups of needy households currently
served under federal program rules. Moreover, some may object to the likelihood that
allowing significant variation across [P]HAs inevitably results in some loss of consistency
across communities.15
Moving to Opportunity
The Moving to Opportunity Fair Housing Demonstration (MTO) was authorized in 1992 (P.L.
102-550, P.L. 102-139). MTO combined housing counseling and services with tenant-based
vouchers to help very low-income families with children move to areas with low concentrations
15
Housing Agency Responses to Federal Deregulation: An Assessment of HUD’s “Moving to Work” Demonstration,
U.S. Department of Housing and Urban Development, Prepared by Martin D. Abravanel et al., Urban Institute, January
2004.
Congressional Research Service
11
An Overview of the Section 8 Housing Programs
of poverty. The experimental demonstration was designed to test the premise that changes in an
individual’s neighborhood environment can change his or her life chances. Participating families
were selected between 1994 and 1998 and followed for at least 10 years. Interim results have
found that families who moved to lower-poverty areas had some improvements in housing
quality, neighborhood conditions, safety, and adult health. Mixed effects were found on youth
health, delinquency, and engagement in risky behavior: girls demonstrated positive effects from
the move to a lower-poverty neighborhood; boys showed negative effects. No impacts were found
on child achievement or schooling or adult employment, earnings, or receipt of public
assistance.16 (For more information, see CRS Report R42832, Choice and Mobility in the
Housing Choice Voucher Program: Review of Research Findings and Considerations for
Policymakers.)
Conclusion
The combined Section 8 programs are the largest direct housing assistance program for lowincome families. With a combined FY2013 budget of $27 billion, they reflect a major
commitment of federal resources. That commitment has led to some successes. More than three
million families are able to obtain safe and decent housing through the program, at a cost to the
family that is considered affordable. However, these successes come at a high cost to the federal
government. Given current budget deficit levels, Congress has begun to reevaluate whether the
cost of the Section 8 programs, particularly the voucher program, are worth their benefits.
Proposals to reform the program abound, and whether the current Section 8 programs are
maintained largely in their current form, changed substantially, or eliminated altogether are
questions currently facing Congress.
Author Contact Information
(name redacted)
Specialist in Housing Policy
[redacted]@crs.loc.gov, 7-….
16
Moving to Opportunity Fair Housing Demonstration Program Interim Impacts Evaluation, US Department of
Housing and Urban Development, Prepared by Larry Orr et al., Abt Associates; and Lisa Sanbonmatsu et al., National
Bureau of Economic Research, September 2003, http://www.nber.org/mtopublic/
MTO%20Overview%20Presentation.pdf.
Congressional Research Service
12
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“Housing Policies and Race Relations: A Context for Life-Course Analysis”
(Karasik & Kishimoto, 2016)
Housing for Older Adults in the U.S.

1776-1800: Children, wealth or poorhouses
Mid 1800s:
 Reforms for “deserving poor” but
poorhouse still main option if poor.


Emergence of Mental Facilities
/Institutions; non profit “old age” homes;
and proprietary boarding houses & private
“homes” for non-indigent elders
Race Relations in the U.S.







1661-1865: De jure slavery
1790: Naturalization Law
1830: Indian Removal Act
1846-1848: Mexican American War
1850: Compromise of 1850
1857: Dred Scott Case
1861-1865: Civil War







1865-1877: Reconstruction
13th, 14th, 15th amendments
Literacy tests, poll taxes, lynching
1882: Chinese Exclusion Act
1887: Dawes Act (allotment and assimilation)
1896: Plessy vs. Ferguson
1898: Spanish-American War
Early planned “retirement communities”
1833: Sailor’s Snug Harbor “Old worn out
seaman”;
Late 1800s:

Early planned “retirement communities”
1889: William Enston Home

Emergence of professional home care
 1890s – 1950s, 60s: Jim Crow laws (restrictive ordinances
or covenants that denied housing to racial and ethnic
minorities)
 Influx of immigrants – Slums, Eugenics movement
US Presidents















George Washington (1789–1797)
John Adams (1797–1801)
Thomas Jefferson (1801–1809)
James Madison (1809–1817)
James Monroe (1817–1825)
John Quincy Adams (1825–1829)
Andrew Jackson (1829–1837)
Martin Van Buren (1837–1841)
William Henry Harrison (1841)
John Tyler (1841–1845)
James K. Polk (1845–1849)
Zachary Taylor (1849–1850)
Millard Fillmore (1850–1853)
Franklin Pierce (1853–1857)
James Buchanan (1857–1861)







Abraham Lincoln (1861–1865)
Andrew Johnson (1865–1869)
Ulysses S. Grant (1869–1877)
Rutherford B. Hayes (1877–1881)
James A. Garfield (1881)
Chester A. Arthur (1881–1885)
Grover Cleveland (1885–1889,
1893–1897)
Benjamin Harrison (1889–1893)
William McKinley (1897–1901)


1900-1929
 1900: 4.1% US Population 65+ (3.1
million)
 More voluntary & non-profit old-age
homes built (often on farms)
 Urbanization: Less room for elders to live
with family in cities (tenements)
 Spread of tuberculosis “consumption”
leads to development of public institutions
for chronic care.



1908: Presidential housing commission
(under Roosevelt)appointed to look into
problem of slums in U.S.
 1902: Extension of the Chinese Exclusion Act
 1908: “Gentleman’s Agreement” (restriction of Japanese
immigration to U.S.)
1914: Arizona outlaws almshouses provides
pensions for old and disabled (declared
unconstitutional in 1916)
 1914-1918: WWI
1918: (Post WW I) congress authorized loan
program for housing construction for
shipyard and defense workers
 1924: Immigration Act (limits immigration through a
national origin quota and prohibits immigration from
Asian nations to U.S.)
The Depression: 1930-1941
 1932: Emergency Relief & Construction Act
 1934: Fed move to eliminate care for old
people in “public institutions” (poor houses)
for cheaper alternatives (stay at home)

1934: National Housing Act creating the
Federal Housing Administration (FHA)

1935: Social Security Act

1937: Federal Public Housing Program
established
 1930s: Deportation of Mexicans and Mexican Americans
 1932-1972: Tuskegee Syphilis Experiments
 New deal (original social security program) excluded farm
workers and domestics (most of whom were people of
color).
 1934: National Housing Act (endorsed the practice of
redlining)
 1934 – 1962: Federal government underwrote 120 billion
dollars in new housing. Less than 2% went to people of
color.
 Theodore Roosevelt (1901–1909)
 William Howard Taft (1909–
1913)
 Woodrow Wilson (1913–1921)
 Warren G. Harding (1921–1923)
 Calvin Coolidge (1923–1929)
 Herbert Hoover (1929–1933)
 Franklin D. Roosevelt (1933–
1945)


Fewer old women co-residing with their
children
Decline in home care popularity
World War II: 1941-1946

1946: Hospital Survey and Construction
(Hill-Burton) Act (financing for new
hospital construction) (led to conversion of
older hospitals to nursing homes)
 1937: Housing Act (public housing, created greater racial
segregation because majority of poor population at the
time were minorities)
 1941: Tuskegee Airmen (Army Air Corps) forms
 1941: Executive Order 8802 (Fair Employment Practices
Committee)
 1942: Executive Order 9066 (authorized military Areas in
U.S.)
 1942 – 1946: Internment of Japanese Americans
 1942 – 1964: Bracero Program
 1944: GI Bill (left out African Americans, furthered
segregation practices)
 Harry S. Truman (1945–1953)
Baby Boom: 1946-1964

1949: Housing Act of 1949: beginning of
modern era in Federal Housing Programs

1949-1962: Section 515 of Fed Housing Act
(new construction mod/low income family
housing)

1950-1956: Amendments to Soc Sec Act led
to increase in Feds paying for nursing home
care

1953: State regulation of nursing homes/state
surveys of nursing homes emerged

1952: NH Fire Hillsboro, MO

1954: 1st national survey of nursing homes
 1949: Housing Act of 1949 – Public housing
(concentration of people of color in one place, Blacks
exposed to largely public housing in central city); Urban
renewal (90% of all housing destroyed by urban renewal
not replaced. 2/3 of those displaced were Black or Latino.)
 For most families of color who stayed in urban
neighborhoods, the housing market open to them in the
50s and 60s was a rental market. (Rentals didn’t gain
equity.)
 1950s: “Operation Wetback” (deportation of Mexicans
and Mexican Americans)
 1950-1953: Korean war
 1952: Voluntary Relocation Program (later became 1962
Employment Assistance Program)
 1952: McCarren-Walter Act
 1953: Termination Act
 1954: Brown vs. Board of Education
 Dwight D. Eisenhower (1953–
1961)

1954: Hill-Burton Act amended to include
development of skilled nursing facilities.
Increased in for-profit SNF construction

1957: NH Fire Warrenton, MO

1959: Housing Act of 1959: provided public
housing specifically for older persons:
Creation of: Section 202 (Loan program to build senior
housing); Section 231 (FHA Mortgage Insurance to for
Rental Senior Housing projects); Section 232 (Loans to
Build SNF, ALF, B&C); Section 502 (Rural Housing
Loans).

1959: Problems of the Aged and Aging
Senate subcommittee established over
concerns re: quality of NH care

1959 – 1974: Section 202: ModerateIncome Eligibility Phase: Provided belowmarket rate loans (typically larger than 153
units)

1960: Kerr-Mills bill Old Age Assistance
(OAA) amended and Medical Assistance
for Aged (MAA) established

1962: Section 515 of Federal Housing Act

1962: minimum age for Soc. Sec. lowered
to 62 for reduced benefits
 Civil Rights Movement, social movements by various
groups of color
 1959-1975: Vietnam War
 John F. Kennedy (1961–1963)
Post “Boom” 1964 – Present
 1964: Section 202 expanded to include
funding buildings for non-elderly
“handicapped”


1965: Medicare and Older American’s Act
1967: Age Discrimination in Employment
Act


1974: Section 8 of Federal Housing Act
1974: Housing and Community
Development Act enacted (provided for
low-income housing for the elderly and
handicapped)

1975: OAA Amendments (Grants to Indian
tribal orgs. for transportation, home care,
home renovation/repair)

1975-1980: Section 202: Low-Income
Phase 1974 Housing Act established new
mission for 202: Serve persons with low
incomes (at/below 80% of local median).
Project based Section 8 rental made
available to cover up to 11% of units for 20
yrs, Most smaller (82 units)

1980: First Assisted Living (ALF) opened
in Portland, OR
 1963: Equal Pay for Equal Work Act
 Lyndon B. Johnson (1963–1969)
 1964: Civil Rights Act
 1965: Immigration and Nationality Act
 1968: Fair Housing Act (racial language was removed
from federal housing policy)
 “Block-busting”: Real estate agents preyed on the fears of
white homeowners to sell their homes quickly. (It wasn’t
Blacks moving in, it was white flight that caused housing
values to go down.)
 1971: Nixon’s Fair Housing Policy of 1971 – Undermined
the Fair Housing Act (further exacerbated housing
inequality by not supporting subsidized housing programs
to help desegregation)
 1974: Equal Credit Opportunity Act of 1974 – To
supplement Fair Housing Act, protection against
discrimination in lending practices.
 Richard Nixon (1969–1974)
 1975: The Home Mortgage Disclosure Act of 1975 – To
supplement Fair Housing Act, to prevent lending
discrimination in certain localities.
 1975: Indian Self-Determination Act
 1977: The Community Reinvestment Act of 1977 –
Required banks to apply the same anti-discriminatory
guidelines to their lending criteria in all circumstances.
Did not completely stop discriminatory practices.
 Jimmy Carter (1977–1981)
 1980: Refugee Act
 Gerald Ford (1974–1977)

1981—1990: Section 202 CostContainment Phase: Program declined
(fewer/smaller units). Cuts in Most Fedearl
housing & social welfare programs. HUD
cost containment included req. at least 25%
efficiency units, eliminated community
space, no elevators for 2-story bdgs. 1990:
from low
Purchase answer to see full
attachment