Section 8 Housing Choice Vouchers have been the largest federal assistance program for low-income renters since the program was created in the 1970s. But because the program has been under-funded by Congress, only 1-in-5 eligible households gets a voucher to help with their rent.
Representative Maxine Waters (D-CA) has introduced legislation that would make Housing Choice Vouchers an entitlement. Her proposal would mean that every low-income renter needing assistance will be able to get a voucher.
Waters, Chair of the House Financial Services Committee, introduced the Ending Homelessness Act of 2021 in late July. It was also co-sponsored by Representatives Emanuel Cleaver (D-MO) and Ritchie Torres (D-NY).
Even though it faces long odds if it gets to the Senate, the bill is historic. It is the first time that a member of Congress has proposed universal rental assistance, so that any low-income person who needs help with rent can get assistance right away.
The legislation would not only create a truly universal housing voucher program. It would also ban discrimination against renters who use government assistance to pay the rent, and make it easier for formerly incarcerated people to find housing. In addition, the bill proposes millions of dollars to build new affordable supportive housing.
Important parts of the bill:
- Universal Rental Housing Vouchers
- Source of Income Discrimination Nationwide Ban
- Reducing Segregation, and Increasing Housing Choice
- Funding New Affordable and Supportive Housing
- Permanent Homeless Assistance Programs
- What’s Next
Universal Rental Housing Vouchers
The End Homelessness Act proposes phasing in 1.5 million new rental assistance vouchers over five years. It authorizes 500,000 new vouchers in the first year, with the remaining 1 million phased in over the next three years.
In the fifth year, the program would become an entitlement. This is similar to the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps). When families fall on hard times, they are entitled to receive food assistance immediately.
Once rental assistance is an entitlement, all eligible renters that need help with rent would receive it. No family would have to stay on a waitlist for years before assistance is available.
A recent study by the Housing Initiative at Penn found that a universal voucher program would lift millions of households out of poverty. Currently, about 1.8 million households receive a Section 8 Housing Choice Voucher.
With universal vouchers targeted to renters at 50% Area Median Income (AMI), 10 million households would be eligible. Among these renter households, 4.9 million (almost half) would be lifted out of poverty. If targeted to renters with the lowest incomes, less than 30% AMI, 8.9 million households would be eligible. Of these, 3.9 million (44%) would be lifted out of poverty.
Source of Income Discrimination Nationwide Ban
The bill would also ban housing discrimination on the basis of a person’s source of income (SOI). This is what happens when landlords say they will not take Section 8 Housing Choice Vouchers. If this bill becomes law, no landlord in the country would be able to turn away renters just because they use government assistance to help pay their rent.
Although several states and local governments have enacted their own SOI protections, millions of renters live in places around the country where landlords can deny an applicant just because they have a housing voucher. Affordable Housing Online has information on jurisdictions with SOI protections here.
The legislation puts some teeth behind a national ban on SOI discrimination. New vouchers will not help low-income renters if landlords refuse to accept them. It proposes $137 million a year for 10 years to cover enforcement of the Fair Housing Act, and SOI protections.
Reducing Segregation, and Increasing Housing Choice
Another problem that limits where renters can use their vouchers is how HUD sets Fair Market Rents (FMRs). HUD traditionally has updated FMRs each year for every metropolitan area and county in the country. The FMR represents the amount it takes to rent a modest apartment in the entire metro area.
Renters with Housing Choice Vouchers can only rent apartments listed at or below the metro area’s FMR. This means, though, that neighborhoods with higher rents are too expensive to use a voucher. They will have very few apartments that list below the metro area’s FMR.
Several years ago, HUD was prompted to establish different rent requirements in several cities, called Small Area FMRs. FMRs in these metropolitan areas are set at the neighborhood level. This allows voucher holders to receive more assistance when renting in more expensive neighborhoods. Early studies show that low-income renters in these cities have been able to move to neighborhoods with greater opportunities.
The End Homelessness Act would require the use of Small Area FMRs nationwide. This would open up neighborhoods across the country to low-income renters seeking better opportunities. It would also help reduce segregation as low-income renters are given more housing choice.
Funding New Affordable and Supportive Housing
The bill also recognizes that the lack of affordable housing is a big contributor to homelessness. More affordable units are needed overall. More supportive housing is also needed to help homeless households make a transition to stable housing.
The legislation proposes $10.5 billion in its first year to build new affordable and supportive housing for people with the greatest needs.
$5 billion would go to the national Housing Trust Fund (HTF). The HTF helps fund rental housing development nationwide that is affordable to people with the lowest incomes. This would also be renewed four more years, bringing a total of $25 billion to the HTF.
$5 billion would go to McKinney-Vento Homeless Assistance Grants (HAG). These grants support development and operation of homeless shelters and transitional housing around the country.
In addition, the bill would provide $500 million for outreach, case management, and social services.
Permanent Homeless Assistance Programs
The main programs that serve people experiencing homelessness are authorized under the McKinney-Vento Homeless Assistance Act. These programs are only authorized for several years at a time.
Congress must occasionally re-authorize the McKinney-Vento Act, so that these programs can continue helping homeless people. If Congress does not act to re-authorize, the major programs that help homeless people would disappear. The End Homelessness Act would make the McKinney-Vento Act programs permanent, and less vulnerable to sudden political swings.
The legislation would also make the U.S. Interagency Council on Homelessness (USICH) permanent. USICH is made up of experts who coordinate federal efforts to reduce homelessness and advise the president. Making the USICH a permanent body sends a strong message that ending homelessness is a priority for our government, no matter what administration is in office.
The bill has not yet come up in the full House for a vote. If it passes the House, it is likely to fail due opposition from Republicans in the evenly divided Senate.
Universal housing vouchers, and nationwide protection from source of income discrimination, would make a huge dent in reducing homelessness. Even though the bill faces long odds, it will set the bar for other proposals to fund more rental assistance.
This includes the Build Back Better Act now being negotiated by Congressional Democrats. The House passed the bill with $90 billion to fund thousands of new Section 8 Housing Choice Vouchers as the first step toward universal housing vouchers.
Democrats are looking to trim the overall cost of the Build Back Better Act to meet concerns from moderate senators. Housing advocates are now working to keep as much affordable housing funding in the bill as possible as Democratic moderates and progressives negotiate where to make the cuts.