We have the makings of a rational system of housing assistance for low-income renters, but it is in danger of coming unraveled. Congress has the opportunity to stop that from happening by using the flexibility provided by the recently passed bipartisan budget deal to restore funding for the Housing Choice Voucher program, which is critical to protecting families and individuals with poverty-level or near-poverty incomes from paying most of their earnings in rent.
In response to budget cuts imposed by sequestration, the agencies that administer the voucher program (sometimes called Section 8) stopped issuing vouchers to any new households, and many are considering reducing subsidies for households currently being helped. That in itself is a reason for overturning the cuts. Another compelling reason? The evidence shows that vouchers are just good public policy.
The system for helping low-income renters afford decent housing is based on a combination of the Housing Choice Voucher program and a tax subsidy called the Low Income Housing Tax Credit that induces developers to build rental housing developments with restricted rents. While the current system is more complex than just those two programs, they are at the core of the system we have as the result of the evolution of rental housing policy over the past 40 years.
Vouchers provide choice and flexibility. Research conducted over the years by my organization and others demonstrates that voucher assistance is the kind of housing assistance people most want and that the neediest households can use the assistance effectively. A current study by Abt Associates shows that even families experiencing homelessness can find and rent private market housing using vouchers. The voucher program helps people without creating concentrations of poor families living in the same housing project.
At the same time, the Low Income Housing Tax Credit has been successful in creating mixed-income housing in which poor families and individuals, often using Housing Choice Vouchers to help pay the rent, live with neighbors who are somewhat better off. The program is managed effectively by state agencies, which allocate and oversee the tax subsidy with modest bureaucracy.
Is there room for improvement to make the mixed system of providing housing assistance to poor renters even more effective? Certainly. For example, a recent study of the tax credit conducted by Abt Associates suggests some changes to the way in which these tax credits are allocated would help ensure that the program produces the types of housing in the locations that are most needed — that is, housing that people with vouchers are least likely to find in the unsubsidized market.
But the overall evidence shows that an expansion of the current mixed system of affordable housing for renters is sound policy. The Bipartisan Housing Policy Commission, a part of the Bipartisan Policy Committee that is attempting to create consensus across party lines on good public policy, has recommended making Housing Choice Vouchers available to many more poverty-level renters and preserving and expanding the Low Income Housing Tax Credit.
The cuts caused by sequestration could unravel this rational system of providing affordable housing that is centered on a balance of flexible, tenant-based vouchers and well-designed development subsidies. If the Housing Choice Voucher program does not continue to serve at least as many households as it has in recent years, the Low Income Housing Tax Credit will have to bear the entire burden of housing renters with incomes below poverty, threatening the mixed-income character of LIHTC developments and removing the current incentives for good management of the housing.
The recent budget deal gives lawmakers the flexibility to restore funding for vouchers. It’s the right thing to do to help thousands of poor families. It is also backed by years of evidence about what works when it comes to helping low-income renters. Let’s not undo the foundation we’ve built. Restoring funding for the housing voucher program helps to ensure we don’t.
Jill Khadduri is a principal associate and senior fellow at Abt Associates. The opinions expressed in this commentary are solely those of the author and do not reflect those of Abt Associates.