Credit: Housing Authority of the County of Los Angeles
In recent months, the Trump administration has proposed changes to housing voucher programs (also known as Section 8), which allows low income individuals and families to recieve government funds, paying part (sometimes nearly all) of their rent, in housing owned by private landlords.
Carson’s proposals have brought renewed attention to federal housing voucher programs. These programs have been focal points of both support and skepticism, for their entire existence.
Federal housing voucher programs have the potential to function as an effective tool in the fight against poverty, and to allow voucher recipients to become self sufficient, while also making effective use of taxpayer dollars. However, voucher programs, as currently structured, are not meeting these objectives. We need significant changes to how these programs are currently structured.
Support for & Critiques of Section 8 Voucher Programs
Those who support the existence of Section 8 point to the broader context of the American economy, where breaking out of one’s economic circumstances and escaping poverty, is, on average, quite difficult. Also, with rental costs at all-time highs, without housing vouchers, some advocates argue that many more Americans would go homeless.
At the same time, for decades, concerns have persisted, around the way Section 8 and similar programs impact voucher recipients, and the neighborhoods where they live. Not surprisingly, conservatives and libertarians have been amongst the most prominent skeptics of Section 8.
Howard Husock of the Manhattan Institute says that high concentrations of voucher residents destabilize communities which are already low income. Husock offers evidence that voucher recipients are more likely to perform poorly in school, and to either be involved in crime, or to associate with those who are. He argues for reforms to limit the amount of time voucher recipients spend on these programs, and to facilitate “personal and cultural change”, so that recipients become less dependent on public assistance.
John Stossel, the libertarian commentator and writer of 20/20 fame, believes that vouchers create a culture of dependency, whereby recipients stay on Section 8 for extended periods of time, rarely breaking free of the program’s crutches. Since there are no hard time limits placed on how long someone might remain on the program, Stossel argues, some treat housing vouchers as a permanent feature of their lives.
How Neighborhood Quality Impacts Section 8 Tenants
Recent research suggests that one supposed goal of Section 8 (helping poor families escape challenged neighborhoods), has largely failed. Many landlords of more desirable properties, in well-off areas, vigorously avoid renting to voucher tenants (landlords in most jurisdictions are not required to accept vouchers, and if they do, they are allowed to screen and reject voucher tenants, just like those who pay market rates).
What’s more, housing voucher amounts are calculated based on rental costs for a metropolitan area. However, because maximum voucher amounts are set towards the lower end of local rental costs, voucher recipients are often forced to live in distant outposts, or impoverished, higher crime areas.
Another study, from researchers at the University of Wisconsin - Madison, found mixed results in terms of whether moving poor individuals,to more affluent neighborhoods, improves their lives. While such a change is associated with tangible improvements in some measures of adult health, such as the risk of diabetes and obesity, the researchers found little demonstrable improvement in children’s educational outcomes, or adult economic “self-sufficiency.” Their research also concluded that housing voucher programs were a net benefit to society, as well as recipients (though obviously more of the costs were borne by society, and the benefits by recipients).
In contrast to the University of Wisconsin findings, Heather Schwartz of the Rand Corporation found that when low income, mostly minority students in Maryland (who lived in public housing), attended a school in a more affluent, majority white area (thanks to zoning regulations), they greatly outperformed their peers who still lived in public housing. What’s more, the longer these students attended strong public schools, the more their test scores improved.
It is clear that economic integration, can be beneficial to voucher recipients. Of course, such efforts are also likely to face resistance from landlords in affluent areas, and local residents as well. I’ve proposed some solutions to that problem below.
Some Effective Changes To Section 8 Employment & Income Requirements
How do we improve housing vouchers, both for those who benefit from these programs, as well as for American taxpayers, whose earnings fund housing assistance? The goal of helping economically challenged individuals and families is a worthy one, but the program itself must be overhauled.
The first issue is employment and income. Right now, Section 8 is designed to serve individuals who are defined as “extremely low income” and “very low income” (as well as those defined as merely low income, in some cases), with income thresholds being calculated by the median income for a geographic area, based on household size.
Technically speaking, there are no work requirements in place for Section 8. However, according to a study from the Center on Budget Policy & Priorities, of those Section 8 recipients who were not elderly or disabled, 55% reported income, although the median income suggested wages slightly above minimum wage. Another 11% of recipients were part of Temporary Assistance for Needy Families (TANF) programs, where they were typically subject to some sort of work requirements.
Clearly, there are some (not most) voucher recipients who choose not to work (in spite of not being disabled or elderly). For each such person, however, there are many more working in low wage jobs. In every single state in this country, it is impossible to afford a two bedroom apartment, while earning the federal minimum wage of $7.25 per hour. Even paying for a one bedroom apartment requires earnings of $17.90 per hour, which is well above the minimum wage in most locales.
Those who aren’t working (and are not disabled or of retirement age), should be required to work at least 20 hours per week. If an individual doesn’t have the education to obtain entry-level employment (i.e at least a GED or a high school diploma, which is required for many minimum wage jobs today), they should be required to complete such education, as a condition of remaining on Section 8 (and of course, classes should be offered for free). If an able-bodied individual does not enroll in such programs, for whatever reason, and wishes not to work, they should be removed from Section 8 at the end of their current lease, and restricted from further enrollment in the program.
For those recipients who were not working, and were enrolled in programs to help attain very basic employable skills, time limits should be placed on how long they can remain in this sort of basic skills program (ideally, just two years). It is important that voucher recipients enter the workforce as soon as possible. If childcare is an issue, vouchers can be provided for that purpose - the increased cost of paying so, is well worth the long-term benefit of voucher recipients gaining employment.
Helping voucher recipients help themselves
For those who already hold minimum wage or part time jobs, further vocational/educational training ought to be encouraged, and offered for free, along with more extensive career and personal coaching, as well as childcare. HUD should also explore ways to pair up with certain “preferred” employers, who will offer hiring preferences, or job training, to Section 8 participants who complete required programs. In exchange, these employers would recieve tax breaks. Since employers might be located in different parts of the country from where voucher recipients currently reside, where needed, relocation expenses ought to be provided.
Through this approach, over time, the wages and earning potential of many Section 8 recipients can increase, possibly allowing them to break the cycle of poverty. The goal of housing vouchers should be not just to provide more affordable housing, but to help recipients earn more, becoming self sufficient. In the long run, this can save taxpayer dollars, not only by reducing housing voucher expenses, but also by eliminating the many societal costs of poverty, such as crime and poor health.
In order to facilitate increased employment and earnings, while saving taxpayer dollars, HUD should make use of an algorithm which considers the economic prospects of voucher recipients, by geographic region, and balances that with rental costs. This can be used to help determine where Section 8 recipients might live.
For example, while housing costs in cities like Buffalo, New York, or Youngstown, Ohio are relatively low, a lack of job opportunities, makes these places less conducive to the long-term economic success of voucher recipients. By contrast, the Los Angeles or New York metropolitan regions offer stronger employment prospects, but due to astronomical housing costs, Section 8 vouchers will cost taxpayers more.
Perhaps somewhere in Florida or Tennessee offers the right tradeoff between strong employment prospects and reasonably affordable housing? If so, voucher tenants should be offered assistance to relocate, and hands-on assistance in finding work. Ideally, voucher rules might be altered, so that tenants are required to move to one of several locations that meet the jobs and housing criteria laid out above, in order to continue receiving vouchers.
Generally, excessive government involvement in people’s lives is not positive. However, when taxpayer dollars are involved, it is hardly unreasonable for the government to ensure money is being properly allocated. Helping people move to where opportunities can be found, allows
Transitioning Voucher Recipients Off Government Support
Of course, all of this raises another question: How do we transition individuals and families out of Section 8? Under the current structure, an individual is required to pay the larger amount of either 30% of monthly adjusted income, 10% of their monthly gross income, or the welfare rent. Income criteria are calculated based on the metropolitan area where one lives (since earnings vary widely by region), and family size.
If a household’s income passes the limits allowed by Section 8, they’ll typically be removed from the program. There are some exceptions for individuals with disabilities, whose earnings increase. Also, if a voucher recipient who was unemployed (which is treated as working 10 hours per week or less, for the previous year), obtains employment which increases his or her income, this won’t be counted in determining the portion of rent that the tenant has to pay, or his or her eligibility for the Section 8 program. Then, for the following 12 month period of employment, only 50% of any increase in income will count towards the amount of income, permitted by Section 8.
What I propose, is allowing the full exclusion of any increased income from employment, for Section 8 income purposes, for a period of four years. This allows recipients to complete educational or vocational training programs, and to obtain some sort of higher-paying employment. At that point, it makes sense to transition them out of the voucher system, and also increases the chances that they’ll be able to live succesfully afterwards.
At first glance, this might seem like an overly generous proposal. After all, across the country, Section 8 programs face long waiting lists - so shouldn’t we be working to transition individuals (and families) out of the program as quickly as possible?
However, this viewpoint overlooks something. If Section 8 is designed to help the poorest Americans, doesn’t it make sense to break the cycle of poverty, and help people become self sufficient? Helping a voucher recipient improve his or her skills, and thus earnings, can have a series of ripple effects, such as improved health and educational outcomes for their children, not to mention lower chances of incarceration. Ultimately, voucher recipients who are gainfully employed, and have acquired new skills, can support themselves in the long run, making for stronger communities.
Time Limits on Voucher Assistance
Ultimately, for anyone who is not disabled, or too old to work, Section 8 should be a temporary stopping point, not a lifestyle, made possible by taxpayer largesse. Every working age individual without a demonstrated disability or illness, should be limited to receiving no more than five years of Section 8 assistance, for their lifetime. For those who were on the program prior to this change, they will be given another five years of Section 8 assistance.
Five years is plenty of time. When a voucher recipient is offered free education job training, career counseling, and even preferred employment opportunities, their chances of success are greatly increased. If, for some reason, a voucher recipient is unable to do so after five years, that’s very unfortunate. However, with limited space on voucher programs, and very long waiting lists, it is only fair that someone else be given a chance.
Economic Integration of Voucher Recipients Into More Affluent Areas
As noted earlier, many voucher recipients are able to rent in only in poor neighborhoods, due to both housing costs, as well as an unwillingness on the part of landlords in non-poor areas to accept housing vouchers. Some localities have explored laws to bar landlords from refusing to accept Section 8 vouchers (although they would still be allowed to screen and reject individual applicants). Offering some Section 8 recipients a chance to move to a more affluent area, as noted earlier, can have positive health and educational outcomes, for recipients and their children.
I propose a slightly different approach - creating incentives for landlords in more affluent areas, to rent to voucher tenants. In many places, property taxes are a substantial expense, which cut into a landlord’s profits. What if the federal government were to pay property taxes for landlords in certain well-off areas (as defined by median incomes), who agree to accept voucher tenants? For those who own apartment complexes, property taxes could be proportionally offset, for each unit rented to a voucher tenant.
In many parts of the country, property taxes are a significant expense, and offsetting them would increase a landlord’s profits, even if the rent pays for a Section 8 tenant is somewhat below the market rate. This makes renting to a Section 8 tenant more profitable, even if a property owner has some initial hesitation. Since work and educational requirements for voucher recipients have been strengthened, this might reduce some of the fears landlords have about Section 8 renters.
Many residents of more affluent communities fear that voucher recipients will bring down the quality of schools in their local areas, or cause crime, and other accompanying challenges. To stem these perceptions, it is important to organize community outreach, and facilitate better communication between residents from different backgrounds.
It could also make sense to limit the number of units in any given zip code which is more well-off, which is eligible for property tax benefits. This way, a local community won’t feel as if voucher recipients have become an overwhelming force, which can cause tensions.
The Final Word
Federal housing voucher programs were created almost 45 years ago. In that time, these vouchers have helped many avoid homelessness, and reduce some of the negative effects of poverty. Yet, they haven’t done nearly enough to empower voucher recipients to improve their lives, and as a result, haven’t made the best use of taxpayer dollars. The good news is, we can change that.
