NCPA - National Center for Policy Analysis

Reforming Section 8 Vouchers

March 3, 2004

President Bush's new budget proposes reforms to one of the last no-strings-attached federal welfare programs: the U.S. Department of Housing and Urban Development's Section-8 housing vouchers.

The voucher program subsidizes the rent of eligible families in regular apartments. Although that is better than sticking the poor in public housing projects, vouchers also have side effects. Unlike reformed federal welfare, no time limit applies to Section-8 vouchers, and just as welfare once did, they facilitate the creation of single-parent households.

  • Today, housing vouchers support more people than live in traditional public housing -- some 2 million today.
  • Out of the million or so non-elderly, non-disabled Section-8 households, single parents head 783,000.

Like unreformed welfare, Section-8s discourage work. Here's how:

  • Regulations require that three out of four vouchers go to households earning 30 percent or less of a region's median income.
  • The tenant portion of rent is capped at 30 percent of their income, which means that if voucher families want to keep receiving housing aid or avoid higher rent, they need to keep their income way below the regional median by avoiding work.
  • Getting married to a wage earner also makes little economic sense, since a recipient risks losing their entitlement.

Instead of giving housing authorities funds for a set number of assisted rentals, the administration's "Flexible Voucher Plan" would give them a yearly lump sum to serve as many families as they can.

The authorities that perform well would receive extra money. And if authorities do a poor job managing the program, HUD says it would give their responsibilities to private leasing firms.

The plan frees local housing authorities to set flat rents, to provide declining amounts of assistance over the life of a lease -- and even to impose overall time limits.

Source: Howard Husock (Manhattan Institute), "Working Poor: Housing Hope," New York Post, March 3, 2004.

 

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