Housing Foundations is a series about the policies, systems and history behind the housing challenges facing Houston and other large metropolitan areas. This post focuses on the role of housing choice vouchers.
Under President Richard Nixon, a 1973 federal funding moratorium effectively capped spending on public housing, leading to decay and eventual demolition of publicly owned affordable housing. In 1974, Congress created the “Section 8” program. In 1998, that was replaced by the housing choice voucher (HCV) program, though the nickname “Section 8” still is commonly used.
Under President Joe Biden’s administration, funding for vouchers increased substantially. In 2024, about $30 billion was allocated, about 20% more than in 2022. Despite HCV being the single largest affordable federal rental housing subsidy (accounting for 45% of the Department of Housing and Urban Development’s budget), the need far outstrips the resources of this imperfect but important program. Since the change of administration, no HUD press releases have addressed the HCV program. Public statements have emphasized cost-cutting, which may affect the program.
Public assistance for the private market
The key difference between housing vouchers and public housing is that federal dollars go directly to low-income tenants in the form of a voucher, rather than subsidizing the construction and maintenance of publicly owned housing units.
At the private unit, the tenant pays 30% of their income on rent while the housing authority, through the voucher, pays the landlord the rest. There is a limit on how much rent HHA will subsidize, based upon ZIP code. These are known as payment standards, which the Kinder Institute recently mapped for HHA’s mobility program.
Nationwide, voucher-holding households report a median income of $16,610, well below the poverty threshold for a family of four. Households are disproportionately female-headed (77%), and 35% are female-headed households with children.
Voucher demand vastly outstrips supply. To get a voucher, residents have to submit to a lottery and are put on a waitlist. In 2018, there were over 150,000 households on HHA’s waitlist for the roughly 19,000 available vouchers. The application portal opened briefly again in 2023, though data from that period is not currently available.
In addition to the tenant-based voucher program, HUD also funds the creation of “project-based” voucher communities. These developments exclusively house voucher-holding tenants, having received the project-based subsidy to assure affordability for renters. They may resemble public housing in that they are largely or entirely occupied by low-income households, but they are privately managed and owned, and residents must have a voucher. You can browse a list of recent project-based voucher awarded communities here. HHA plans to convert much of its public housing stock to project-based voucher communities.
Landlord partnership
The HCV program relies on private sector landlords, who are held accountable in different ways than a public entity. To assure that the rentals are adequate, landlords must submit to HHA-managed unit inspections, which is not the case in the overall private rental market in Houston, where only larger multifamily units are inspected upon their construction.
Landlords may choose to not rent to tenants they know have a voucher. Beyond the impression that voucher-holding tenants cause more property damage, research argues that a bigger deterrent is landlords not wanting to work with a federal bureaucracy just to receive rent income. New HUD Secretary Scott Turner emphasized during his confirmation hearings that the program should be easier for landlords to use.
The practice of categorically refusing all HCV tenants, known as source-of-income discrimination and banned in many states, is legal in Texas. Perhaps because of this, tenants may have a hard time finding a rental to which they can apply their voucher. If a tenant is one of the 150,000 on the waitlist who are lucky enough to get picked in the lottery when a spot opens up, they have only 90 days to find an available unit. If those 90 days pass without being able to find a lease that will accept vouchers, the voucher and the tenant’s chance of a decent, subsidized affordable unit disappears with it. Understandably, many renters stay and apply the voucher to their current lease, a context where the landlord hypothetically already knows them.
The voucher also can be applied to mortgage payments on a house, provided payments are within that ZIP code’s payment standards and the tenant meets other income and savings requirements. This program, run through the Family Self-Sufficiency program, is relatively small (about 150 households of the 19,000 in Houston serviced by HCV).
Other challenges
One of the HCV program’s goals is to deconcentrate poverty. Yet a large share of HHA households who win the HCV lottery stay where they are, and neighborhoods remain spatially concentrated with low-income HCV tenants. Looking for an explanation, research from Baltimore shows how landlords who work with the HCV program are a self-selecting cohort because of a variety of factors, from the specialized knowledge required to participate in the program to the nature/quality of a landlord’s properties.
That’s the paradox of the HCV program: It aims to deconcentrate poverty and turn tenants to the broader private housing market, yet poverty remains concentrated and tenants must work with a narrow, self-selecting set of landlords operating a limited number of properties in close proximity. Turning to the broader rental market means a risk of that lottery-winning luck disappearing. It’s not a surprise people don’t move. Moving stinks. It requires making new social ties, enrolling your kids in a new school and even learning your way around a new grocery store.
The voucher program, which marked its 50th year in 2024, has other well-documented shortcomings and also advantages, as documented by a recent issue of HUD’s “Cityscape” peer-reviewed research journal.
A voucher provides guaranteed shelter, which conveys many well-documented health, education and economic outcomes. Research argues, convincingly, that the 2.3 million U.S. households with a voucher have a better chance at a better life. Without a voucher, these households would be on the private market, which both locally and nationally has failed to provide extremely affordable rental housing.
Benefits aside, vouchers are a drop in the bucket of local affordable housing needs. According to 2023 American Community Survey 1-year estimates, 193,000 Houston renter households earn less than $35,000 a year, close to the “very low income” threshold for a two-person household per HUD definitions ($37,850). Compare 193,000 very-low-income renter households to the 19,000 households serviced by HCV and the 2,500 served by public housing, and it becomes obvious that public subsidies fall short.
While funding for more vouchers is largely outside local control, efforts are underway to a find a broader cohort of landlords to participate in the HCV program in order to increase the number of options available to recipients. This is one way to make sure the HCV program works to deconcentrate poverty and avoid replicating one of the most criticized aspects of the public housing program.
