Democrats hope to expand housing vouchers on infrastructure bill

Waters' draft bill would aid everyone eligible

Sen. Chris Van Hollen, right, has a bill that would fund 500,000 new vouchers. (Tom Williams/CQ Roll Call)
Sen. Chris Van Hollen, right, has a bill that would fund 500,000 new vouchers. (Tom Williams/CQ Roll Call)
Posted July 1, 2021 at 7:00am

As a strategy to get President Joe Biden’s $4.4 trillion infrastructure proposals through Congress takes shape, senior Democrats in both chambers see an opportunity to boost federal spending on rental assistance.

House Financial Services Chairwoman Maxine Waters, D-Calif., and Senate Banking Chairman Sherrod Brown, D-Ohio, said they want an expansion of Section 8 housing vouchers, in addition to the $213 billion Biden included to create 2 million affordable housing units in one of his infrastructure proposals.

“I’m saying housing is infrastructure,” Waters said in an interview, adding that she’s working on getting draft legislation that would guarantee rental vouchers for all who qualify into an infrastructure bill.

Brown said in an interview he wants to do “whatever it takes” to make more housing available. “We don’t do it nearly well enough in this country, so whatever it takes,” he said. 

The voucher program funds up to 70 percent of a household’s rent. But only about a fifth of households eligible for housing vouchers actually receive them, according to the Urban Institute, a think tank.

The program serves about 2.3 million households, with an additional 8.2 million qualifying for aid without getting any. The need so outstrips the funds available that local public housing authorities charged with distributing the vouchers can have yearslong or suspended waiting lists for subsidies. 

Waters’ draft bill would increase the number of vouchers incrementally for five years and then guarantee subsidies for all who qualify starting in 2026.

The Urban Institute last year estimated fully funding the program would cost an additional $62 billion a year.

Biden committed during his campaign to funding vouchers for everyone eligible, though so far the administration’s legislative proposals have fallen short of that.

Biden’s two infrastructure proposals, referred to as the American Jobs and American Families plans by the administration, include $2 billion in project-based rental assistance that would be attached to specific housing units but no additional vouchers for individuals.

The president’s fiscal 2022 budget request, however, included funding for 200,000 new vouchers, a historic investment in a program that’s seen little growth since the 1990s. Still, the request falls 8 million vouchers short of Biden’s campaign pledge.

Democrats in Congress say they hope to correct the omission in the infrastructure legislation they send to the president’s desk. Their best bet is to include vouchers in a second package passed through reconciliation, rather than in a bipartisan bill focused on traditional infrastructure.

Entitlement

Rep. Ritchie Torres, D-N.Y., a member of the House Financial Services Committee and co-sponsor of Waters’ bill, said spending on affordable units needs to be accompanied by rental assistance. The “best case scenario” would be to incorporate the substance of Waters’ draft bill into the infrastructure package, he said. 

“Even more important than the dollar amount is how those dollars are spent. I'm concerned that if we expand housing supply without expanding housing subsidy then we run the risk of creating housing unaffordable to the lowest-income Americans,” Torres said in an interview. 

The draft bill would make the housing voucher program an entitlement, placing it on par with Social Security, Medicare and unemployment benefits. The federal government has an obligation to fund entitlement programs to meet the needs of all those who qualify. Other benefit programs, including rental vouchers, depend on Congress each year to determine funding through the appropriations process.

“We fail to recognize housing as a fundamental public good, in the same sense that we recognize education as a fundamental public good,” Torres said. 

Douglas Rice, special policy adviser to the Department of Housing and Urban Development’s Office of Public and Indian Housing, said the voucher program has never met the needs of everyone who qualified, but the gap has widened. Rice spoke to CQ Roll Call in April before he joined HUD, when he was a senior fellow at the Center on Budget and Policy Priorities think tank.

The program grew from its launch in 1974 into the mid-1990s. Since then, aside from a push to house homeless veterans starting in 2008, the program stagnated, and funding has actually declined relative to gross domestic product, Rice said.

Rising housing costs also mean more households need help, he said. To be eligible for a voucher, a household can make no more than half of the local median income. Three-quarters of subsidies must go to households making no more than 30 percent of the median.

“Beginning in the early 2000s really into the Great Recession, rental housing costs climbed at a very sharp clip," Rice said. “As a result, there was a steep increase in the number of shares of renters who pay more than half their income for rental housing costs, even though the number of renter households receiving federal rental assistance has increased only marginally over that same period.”

Racial equity

Torres said expanding the voucher program is a matter of equity in a system that he said favors white, wealthy homeowners over renters. Fully funding rental assistance would “bring disproportionate benefit to communities of color,” he said. 

Making housing vouchers available to all who are eligible would lift 9.3 million people out of poverty. It would cut the poverty rate by a third for Latinos, by a quarter for Blacks and by a fifth for Asian Americans, Pacific Islanders, American Indians and Alaska Natives, according to a Center on Budget and Policy Priorities paper released last month.

“The single largest housing program in the federal budget is the mortgage interest deduction, which is skewed toward wealthier, whiter households,” Torres said, referring to the program that allows homeowners to deduct interest on mortgage loans from their taxes.

The deduction cost the government an estimated $30.2 billion in 2020, according to a report from the Congressional Research Service, citing the Joint Committee on Taxation. Costs were even higher before the changes to the tax code enacted in 2017. That year the credit cost an estimated $66.4 billion, the report said. 

HUD’s budget for rental-based assistance was $25.8 billion in fiscal 2021. Biden asked Congress to increase that funding to $30.4 billion in his fiscal 2022 budget request, saying it would add 200,000 people to those receiving the benefit.

“If we were to invest as much in rental housing as we do in homeownership for the wealthiest households, we could end homelessness,” Torres said. “Homelessness is a choice rather than an inevitability.”

In the Senate

Meanwhile, in the Senate a more modest plan is taking shape. 

Sen. Chris Van Hollen, D-Md., said he’s hopeful a bill he introduced June 9 with Sen. Todd Young, R-Ind., to fund 500,000 new vouchers will make it into an infrastructure bill passed through reconciliation. 

“I think we're moving in the right direction,” Van Hollen said in an interview. “I'm hopeful that we'll be able to include not just the provisions to improve the supply of housing, which is important, but also to expand the housing choice vouchers.”

Subsidies would go to families with young children and come with wraparound services to help them relocate to neighborhoods with more opportunities, including better jobs and schools.

“All the evidence shows that these mobility vouchers for families with young children are among the most effective ways of helping lift people out of poverty and provide opportunity, and to directly break what we see as the legacy of segregation in many neighborhoods,” Van Hollen said.

Brown said he supports including housing vouchers in an infrastructure bill. “I want to do more than that, not less,” Brown said of Van Hollen and Young’s proposal.