Today, The Section 8 Voucher Program Is Missing Opportunities

Fifty years after it began and almost a decade after Congressman Paul Ryan reviewed the program, where is Section 8 today? Started as a program to help people struggling to pay rent but without building and managing housing, the Section 8 program, according to Ryan, was not successful. But that judgement was made largely on Ryan’s assessment that the program didn’t improve other the employment prospects, health, and education of participants. While his assessment that spending on vouchers increased and so did demand seems correct, it’s also true that many people were housed by the program. But why has the program continued to struggle to move people out of poverty and why is the program still so difficult for both housing providers and voucher holders to use. There are three reports that show the challenges the program still faces but also points to opportunities for improvement.

The Congress made their final decision on spending for 2023 late last year and it included 30.3 billion to renew existing Section 8 tenant-based vouchers and $14.9 billion for existing Section 8 project-based vouchers. Many were hoping for an expansion of the program proposed by the House of Representatives to include 140,000 more households, or $1.1 billion in additional funding. The Department of Housing and Urban Development (HUD) asked for $32.1 billion which included 200,000 new vouchers. So while the program was not significantly expanded, it remains funded consistent with previous years commitments to the program. But there are three areas to consider when evaluating today’s Section 8 program, tenant utilization, housing provider participation, and effectiveness judged based on whether the project helps with housing.

Are Tenants Able to Use Section 8 Vouchers?

The answer to this question is in the headline of a 2021 review of Section 8 by the Office of the Inspector General (OIG): HUD Remains Challenged To Serve the Maximum Number of Eligible Families Due to Decreasing Utilization in the Housing Choice Voucher Program. The review found that, “as of November 2020, there were more than 191,000 unused and unfunded vouchers,” a total of $1.8 billion that would need to be reallocated to the program. Essentially, vouchers have a life span from the time they are issued, and if they aren’t used in 60 days. According to HUD regulations, the Public Housing Agency (PHA) “must issue a voucher for an initial period of at least 60 days. The term must be clearly indicated on the voucher, and the family must submit its request for tenancy approval within the specified period, unless the PHA grants an extension.”

Why is there lack of utilization? The OIG pointed to explanations from local PHAs that “due to circumstances beyond a public housing agency’s control, such as insufficient landlord interest or participation, lack of availability of affordable housing, and housing costs increasing faster than a public housing agency’s budget.” It’s worth a quick look at each of those.

I’ll look at housing provider participation in more detail later, but this is certainly a real issue and is certainly within the influence of the local PHA to address. In fact, the OIG says that more outreach to providers has been recommended. The “lack of affordability” excuse is also real, at least in my estimation, but points to the need for reforms that I’ll save for later. Also true is that if housing costs rise, finding an apartment that meets the HUD Fair Market Rent (FMR) standard would be a challenge. But the response of PHAs and HUD seems rather weak here and the answer based on the budget requests for 2023 always seems to be for more money rather than finding ways to improve the use of the resources already allocated.

Are Housing Providers Participating?

One of the best answers to this question and one of the most ignored, is in a study done by HUD back in 2018, called, Urban Landlords and the Housing Choice Voucher Program: A Research Report. The study actually talked with housing providers and found that participation or lack thereof was largely a function of how difficult the process has become. The study team interviewed housing providers in Baltimore, Cleveland, and Dallas. They found that participation was based on three key factors,

  • Financial motivation,
  • Perception of tenants, and
  • Bureaucratic factors.

The study makes the case that “the costs and benefits to the program are weighed against a hypothetical tenant that a landlord might otherwise rent to in the open market.” This makes perfect sense, but misses a key word: risk. But the study does have a great paragraph which sums up how risk works in the rental market realistically. Using an example from an interview, of a housing provider and a resident, we can see a clear picture of the three elements.

“Moreover, even if a market tenant could be found, John does not want the hassle of rent collection. The voucher program solves that problem as well. He charges $900 a month for the four-bedroom unit, of which his current tenant is responsible for $100, with the remainder directly deposited into his account each month. John said he likes that his tenant keeps the unit clean, but she nearly never pays her portion. Although this nonpayment puts her at constant risk of eviction, John has so far held back, because the money from the housing authority is worth it to avoid the vacancy.”

John could evict the resident. He doesn’t because in this case the bureaucracy is working, delivering almost all the rent payment. It simply isn’t worth it for John to embark on a costly eviction when the resident is not creating any problems and a vacancy would also be costly to fill. The tradeoffs for him make the use of a voucher worth it. But often the unpredictability of bureaucratic requirements, like inspections, make taking vouchers a risky proposition.

“If landlords can predict what’s coming and fix things in anticipation, they can accept the inspection as a cost of doing business. When they feel that inspectors will identify minor issues while simultaneously missing larger ones, they lose faith in the process. This unpredictability is particularly frustrating to landlords at the time of initial inspection, which can mean the landlord might need to delay the move-in date, meaning a whole month’s rent can be lost.”

And there are issues of perception. The study found that housing providers worry that people with vouchers might be less reliable tenants than market rate tenants. There isn’t any indication that this is race based or even about money, but simply a worry that most providers have about any potential resident. One provider said that the Section 8 programs screening of tenants was a positive.

“You know that they have no felonies, you know there’s been no illegal activities, and you know that you’re going to get whatever rent or portion of the rent that you’re asking for. It’s just covered and secured. And with me, I need security.”

All of this points to the place where HUD and local PHAs could improve voucher uses and are not “beyond a public housing agency’s control.”

Does Easy Access to Vouchers Work?

Another important but also widely ignored study is the three years look at how various interventions, including vouchers, helps homeless families. The Family Options Study is extensively researched, tracking hundreds of families over time and comparing the impact of various interventions. The results are very obtusely presented, but very important asking a pretty straightforward question.

“The goal of the study is to determine what interventions work best to promote housing stability, family preservation, self-sufficiency, and adult and child well-being.”

Families that were in shelters and other improvised housing situations were randomly sorted into four different interventions:

  • Community-based rapid re-housing (CBRR) which was temporary rental assistance for 2– 6 months with possible renewal. This approach includes case management services,
  • Project-based transitional housing (PBTH) which was temporary housing in agency housing with services and case management,
  • Subsidy (SUB) which was a permanent subsidy usually with a voucher only, no services or case management, and
  • Usual care (UC) or emergency shelter.

The study found that, “compared with the CBRR and PBTH interventions and with usual care, assignment to the SUB intervention caused improvements in housing stability 3 years after random assignment.” Much of this was attributed to the simplicity of the intervention, just paying the rent. Even without case management or other services, vouchers

“Reduced the number of schools attended by children relative to assignment to all the other groups. Compared with assignment to the UC group, assignment to the SUB group led to improvements in other areas of child well-being, with reductions in behavior and sleep problems and with improvements in prosocial behavior.”

This not only kept people who were homeless and at risk of homelessness housed, but it met Ryan’s standard of helping in other ways as well and the study found that just paying the rent was more efficient than the other interventions.

Section 8 Today

It seems obvious that more money and more vouchers aren’t needed but that simplifying the ability to use existing vouchers would result in more participation by providers and residents and that easy use could improve outcomes not just in housing but broadly across other factors. Up next, we’ll look at possibilities for reform, but going forward HUD and local PHAs need to try new things, not make more excuses and ask for more money.

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