NCPA - National Center for Policy Analysis

HUD's Section 8 Taxpayer Rip-Off?

October 16, 1996

The Secretary of Housing and Urban Development last week awarded $716 million in grants to public housing authorities to demolish their housing projects and hand over to residents enough money to find lodgings in suburbia and elsewhere.

  • This was done under HUD's so-called Section 8, a housing welfare program under which recipients pay 30 percent of their income -- which may be zero -- toward an apartment or house and the federal government picks up the rest of the rent.
  • Secretary Henry Cisneros believes that public housing has been a failure because it "concentrates the very poor" -- which could be rectified by moving them into middle-class neighborhoods.
  • Subsidy levels are set for each city and county in the country, with the amount determining where the recipient can live -- even on Nantucket Island, for which HUD would hand out $1,771 a month to selected welfare recipients, a higher rent than 95 percent of American renters pay.

According to HUD, paying such lavish subsidies is no more than "fair." Critics call the mixing of supposed "market" principles with government handouts a fraud perpetrated on taxpayers.

  • In 1994, HUD raised the subsidy for Plano, Texas, to $750 for a two-bedroom and $900 for a three-bedroom apartment -- even though the median rent there is only $586 per month.
  • In the Washington, D.C. area, HUD will pay up to $1,303 per month for welfare apartments -- even though there are almost no apartments that rent for such a high price anywhere near Washington.
  • Complaints are often heard from non-subsidized residents in Section 8 areas that some welfare residences are used for drug distribution, and that the houses have become either "crack houses" or garbage dumps.
  • Because the subsidies are so lavish, ordinary working-class renters find their own rents raised, or have trouble finding places to rent.

HUD's policies have led to charges the department is building ghettos in the suburbs. Not surprisingly, with benefits so generous, bribery is sometimes involved in their distribution.

Source: James Bovard (Competitive Enterprise Institute), "Demolition and Dispersion," Washington Times, October 16, 1996.


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