More Housing Vouchers: Most Important Step to Help More People Afford Stable Homes

More Housing Vouchers: Most Important Step to Help More People Afford Stable Homes

As the economy recovers from the COVID-19 crisis, high housing costs will continue to cause hardship for millions of renters with low incomes, raising their risks of housing instability and homelessness and undercutting their children’s chances of long-term success. The recovery legislation that policymakers will consider soon is a historic opportunity to address this problem. Providing Housing Choice Vouchers to more households — and ultimately to all who are eligible, as President Biden proposed during the presidential campaign — is by far the most important step they can take.

Housing vouchers are highly effective at reducing homelessness, housing instability, and overcrowding and at improving other outcomes for families and children, rigorous research shows. They are crucial to giving people with low incomes greater choice about where they live and to ensuring that initiatives to build or rehabilitate housing reach those who most need help. Vouchers can also make a major contribution to lifting people out of poverty and reducing racial inequity: the housing affordability challenges that vouchers address are heavily concentrated among people with the lowest incomes and, due to a long history of racial discrimination that has limited their economic and housing opportunities, people of color.

But due to inadequate funding, just 1 in 4 voucher-eligible families received any type of federal rental assistance even before the pandemic struck, and there are long waiting lists for vouchers in much of the country.The inadequacy of the housing safety net leaves families struggling to keep a roof over their heads even in good economic times. And it is a major reason why adequate housing assistance wasn’t available in a timely way as need grew in the COVID-19 crisis.

The inadequacy of the housing safety net leaves families struggling to keep a roof over their heads even in good economic times.

One of policymakers’ top priorities in recovery legislation should be to provide vouchers to a larger share of families in need. Making more vouchers available would mean that fewer people would live in shelters or motels, on the street, or in overcrowded homes; fewer families, seniors, and people with disabilities would have to choose each month between paying the rent and buying needed medicine or food; and more children would have access to stable housing in neighborhoods their parents choose. Taken together, these benefits could substantially reduce low-income households’ exposure to hardship and improve their children’s chances of long-term success, while also preparing the nation to respond more promptly and humanely to housing needs during the next health or economic crisis.

Many Households With Low Incomes Struggle to Afford Stable, Adequate Housing

Millions of U.S. households with low incomes must pay very high shares of those incomes in order to afford housing. The costs can force families to divert resources from other basic needs and leave them one setback — such as a reduction in work hours or an unexpected bill — away from losing their homes. Many others live in housing that is overcrowded or substandard, in shelters, or on the streets. These housing problems are linked to cascading harm in other aspects of families’ lives, including adverse effects on children’s health, development, and educational success.

Inadequate Housing Safety Net Left Many Vulnerable to Pandemic and Slowed Nation’s Response

This assistance will make a crucial difference for many struggling renters, enabling them to pay down rental debt, cover future rent and utility payments, and in many cases avoid eviction when moratoriums are lifted. But the price of the slow response was hardship and stress for many months and for many people. Many in crowded homes, shelters, and institutional care settings were unnecessarily exposed to the coronavirus, contributing to preventable loss of life.

Moreover, the rental assistance that policymakers ultimately enacted falls short of the full amount needed to help people with low incomes afford housing. Because it is temporary, it won’t address the underlying problem where many people struggled to afford rent before the pandemic and will continue to struggle in its wake. And we won’t be prepared for the next crisis unless policymakers build on these emergency measures with more durable action to strengthen the nation’s system to help low-income people afford housing. That action should include making vouchers available to many more — and ultimately all — people who need them.

Vouchers Reduce Homelessness and Housing Instability Substantially, Improve Children’s Outcomes

Federal rental assistance offers a proven, evidence-based tool that could be scaled up to help people struggling to afford housing and prepare the nation for future crises.

Expanding Vouchers Would Help Struggling Renters and Better Prepare Nation for Future Crises

The voucher program could not be expanded to reach all (or even most) eligible households overnight, since it would take time for housing agencies to build administrative capacity and for rental markets to absorb the vouchers. But lawmakers could enact legislation expanding the program over time until it reaches everyone who is eligible. The Congressional Budget Office estimated in 2015 that phasing in a voucher entitlement over a ten-year period would help 8 million additional households and cost $410 billion, which would be $460 billion today after adjusting for inflation. It is possible that because of competing priorities policymakers will not be able to phase in a full entitlement through a recovery package, but even addressing a large share of the unmet need would do a great deal to reduce hardship for the nation’s lowest-income people.

To achieve a major expansion of the voucher program, policymakers would almost certainly need to change its funding mechanism. Today vouchers receive “discretionary” funding; lawmakers determine the funding level each year in appropriations bills. By contrast many federal programs — including most of the largest programs that help households with low incomes meet basic needs — receive “mandatory” funding set at levels determined by ongoing laws rather than by annual appropriations.

In the near term, policymakers should increase discretionary funding to provide vouchers to more families. The President’s 2022 budget request, commendably, includes funds for 200,000 new vouchers, and Congress should agree to this request. But it would be very hard to achieve a major, multiyear voucher expansion using discretionary funding. Congress and the President would have to go back and approve the increases each year in the phase-in period. It is quite difficult to plan for significant and sustained program increases of this magnitude through funding decisions made each year. Mandatory appropriations, on the other hand, would enable lawmakers to decide how much they wanted to invest in housing vouchers over a five- or ten-year period and enact a single law funding the program at those levels over the entire phase-in period. (They could still pass another law to make any needed adjustments later.)

Mandatory funding would also be essential to enabling the voucher program to expand automatically when people need more help. When workers using vouchers lose their jobs or see their hours cut, the voucher subsidy must grow to cover the wider gap between the market rent and the rent the worker can afford. When many workers lose earnings at once, as during a recession, mandatory funding could increase automatically to cover the added cost. And if ultimately everyone eligible for a voucher can receive one, then when the number of households eligible for help rises — as would also typically occur during a recession — the program can automatically adjust to the higher need. (This is how programs like SNAP and Medicaid generally work.)

Vouchers Essential for Housing Supply Investments to Reach Those in Need

But only funding “supply-side” investments without adequately expanding vouchers will almost certainly leave out a large share of the families who most need help to afford housing, and will also risk constraining the housing choices available to low-income people, people of color, and people with disabilities. Although the Administration has not yet put forward its full plan to achieve the President’s goal of making vouchers available to all who are eligible, the Administration acknowledged the importance of making significant investment in vouchers in its fiscal year 2022 discretionary funding request, which includes funding for 200,000 new vouchers.

Supply-side investments do have an important role to play. In tight housing markets where the number of housing units is inadequate to meet demand, policymakers should make more units available through added subsidies for affordable housing construction (and through measures to reduce regulatory barriers to development, which the Biden jobs plan would also encourage). Funding for rehabilitation can also improve energy efficiency and upgrade housing that is unsafe or unhealthy. In addition, supply-side investments can make units available to assist particular populations, for example by increasing the number of units accessible to people with disabilities. And in some cases they can provide access to neighborhoods where it would otherwise be difficult for people with low incomes to rent homes.

In addition, vouchers are essential to ensuring the federal housing investments allow low-income people to choose where they live. A housing investment package focused solely on development would limit the housing choices available to low-income renters (who are disproportionately people of color). Those families would receive help to rent a particular unit but would usually have to give up their subsidy if they need to move elsewhere (for example, to be close to a job opportunity, to a relative who can act as a caregiver, or to a school they would like their child to attend). Tying most rental subsidies to particular units would contrast sharply with subsidies like the mortgage interest deduction that help higher-income, disproportionately white households purchase homes where they choose.

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[29] Sophie Collyer et al., “Housing Vouchers and Tax Credits: Pairing the Proposals to Transform Section 8 with Expansions to the EITC and Child Tax Credit Could Cut the National Poverty Rate by Half,” Columbia University Center on Poverty and Social Policy, October 7, 2020, .