Section 8 of the Housing Act of 1937 (), commonly known as Section 8, provides rental housing assistance to low-income households in the United States by paying private landlords on behalf of these tenants. Approximately 68% of this assistance benefits seniors, people in families with children, and individuals with disabilities. The Department of Housing and Urban Development (HUD) oversees Section 8 programs, which are administered locally by public housing agencies (PHAs).Programs of HUD , HUD.
In 2022, about 2.3 million out of the 5.2 million households receiving rental assistance used Section 8 vouchers. While landlord participation in the program is voluntary in most areas, some states and municipalities have enacted laws that prohibit source of income discrimination, including discrimination against individuals whose income is derived from Section 8 housing vouchers. Voucher amounts vary depending on city or county, size of unit, and other factors. Voucher recipients typically have two to four months to secure housing that meets HUD standards; otherwise, they lose their vouchers and must reapply. Wait lists for vouchers can be very long, averaging 28 months but ranging up to 10 years in large cities, with many local programs closed to new applicants.
Voucher amounts are based on Fair Market Rents (FMRs) set by HUD. The recently introduced Small Area Fair Market Rents (SAFMRs) program refines these calculations to the zip code level in major metropolitan areas.
History Federal housing assistance programs started during the Great Depression. In the 1960s and 1970s, the federal government created subsidy programs to increase the production of low-income housing and to help families pay their rent. In 1965, the Section 236 Leased Housing Program amended the U.S. Housing Act. This subsidy program, the predecessor to the modern program, was not a pure housing allowance program. Housing authorities selected eligible families from their waiting list, placed them in housing from a master list of available units, and determined the rent that tenants would have to pay. The housing authority would then sign a lease with the private landlord and pay the difference between the tenant's rent and the market rate for the same size unit. In the agreement with the private landlord, housing authorities agreed to perform regular building maintenance and leasing functions for Section 236 tenants, and annually reviewed the tenant's income for program eligibility and rent calculations.
The Housing and Urban Development Act of 1970 introduced the federal Experimental Housing Allowance Program (EHAP) and the Community Development Corporation and authorized larger outlays for housing subsidy programs and rent supplements for moderate-income households."HUD History" , HUD websiteWinnick, Louis, "The Triumph of Housing Allowance Programs: How a Fundamental Policy Conflict Was Resolved" , Cityscape: A Journal of Policy Development and Research, Volume 1, Number 3, September 1995, U.S. Department of Housing and Urban Development, Office of Policy Development and Research
In the 1970s, when studies showed that the worst housing problem afflicting low-income people was no longer substandard housing, but the high percentage of income spent on housing, Congress passed the Housing and Community Development Act of 1974, further amending the U.S. Housing Act of 1937 to create the Section 8 Program. In the Section 8 Program, tenants pay about 30 percent of their income for rent, while the rest of the rent is paid with federal money.
Since its inception, some Section 8 programs have been phased out and new ones created, although Congress has always renewed existing subsidies. The Section 8 program initially had three subprograms: New Construction, Substantial Rehabilitation, and Existing Housing Certificate programs. The Moderate Rehabilitation Program was added in 1978 and the Voucher Program in 1983. The number of units a local housing authority can subsidize under its Section 8 programs is determined by Congressional funding.
In 1998, the Quality Housing and Work Responsibility Act (QHWRA) combined the earlier Section 8 voucher program and the certificate programs into a single housing choice voucher (HCV) program, merging those tenant-based assistance streams into a single, voucher-style system. The updated HCV adopted the payment-standard approach (permitting tenants to lease units above the fair market rent if they cover the difference) and capped participant rent contributions at 30–40% of income. The law created the Project-Based Voucher (PBV) option. Starting in 2000, QHWRA also allowed HUD to allow certain PHAs to establish the Housing Choice Voucher Homeownership Program, which permits HCV holders to apply their subsidy toward homeownership costs, such as mortgage payments.
The 2008 Consolidated Appropriations Act (Public Law 110-161) enacted December 26, 2007, allocated $75 million in funding for the HUD-Veterans Affairs Supportive Housing (HUD-VASH) voucher program, authorized under section 8(o)(19) of the United States Housing Act of 1937. This new program combines HUD Housing Choice Voucher rental assistance for homeless veterans with case management and clinical service support which is provided by the Veterans Affairs administration at its own medical centers and also in the community.HUD, "Overview of HUD-VASH Vouchers" – U.S. Department of Housing and Urban Development
The Housing Opportunity Through Modernization Act of 2016 (HOTMA) was signed into law on July 29, 2016, and amended the United States Housing Act of 1937 and made changes to several federal housing programs, particularly Section 8. Key provisions include reforms to income calculation methods, adjustments to asset limits, and modifications to the income review processes.
Summary The primary component of the Section 8 program is the Housing Choice Voucher (HCV) program. A voucher can be either project-based or tenant-based. Project-based vouchers are tied to a specific housing unit or complex, and their use is restricted to that location. PHAs can allocate up to 20% of their vouchers for this purpose.HUD, "Project Based Vouchers" "Project-based vouchers are a component of a public housing agency's (PHAs) housing choice voucher program. A PHA can attach up to 20 percent of its voucher assistance to specific housing units if the owner agrees to either rehabilitate or construct the units, or the owner agrees to set aside a portion of the units in an existing development." In contrast, tenant-based vouchers are assigned to the individual recipient, allowing them to choose a rental unit in the private market. This type of voucher provides greater mobility, as tenants are not limited to specific complexes and may "port" (transfer) their voucher to another PHA's jurisdiction, enabling them to reside anywhere in the United States or its territories where a Section 8 program is in operation.
Under the voucher program, individuals or families with a voucher find and lease a unit (either in a specified complex or in the private sector) and pay a portion of the rent. Most households pay 30% of their adjusted income for Section 8 housing. Adjusted income is a household's gross (total) income minus deductions for dependents under 18 years of age, full-time students, disabled persons, or an elderly household, and certain disability assistance and medical expenses."Section 8 Rent", massresources.org
There is an asset test in addition to earned income. Over a certain amount, HUD will add income even if the Section 8 tenant does not receive any interest income from, for example, a bank account.Steinberg, Jessica, Esq., "The Income and Assets Test for Section 8 Housing" , Legal Network News, California Advocates for Nursing Home Reform (CANHR), Winter 2004. "If a family's net assets are worth more than $5000, the family must count toward annual income the greater of either (1) all income derived from the assets, or (2) a percentage of the total value of the assets based on the passbook savings rate, as determined by the U.S. Department of Housing & Urban Development (HUD) each year. The PHA will never count the full cash value of the asset toward annual income."HUD, "Housing Choice Voucher Program Guidebook" , Chapter 5: Eligibility and Denial of Assistance, pp. 5–24. January 10, 2008, version. "Calculation When Assets Exceed $5,000: When net family assets are $5,000 or less, use the actual income from assets. When family assets are more than $5,000, use the greater of: Actual income from assets; or A percentage of the value of such assets based upon the current passbook savings rate as established by HUD. This is called imputed income from assets." HUD calls this "imputed income from assets" and, in the case of a bank account, HUD establishes a standard "Passbook Savings Rate" to calculate the imputed income from the asset.HUD, "Public Housing Occupancy Guidebook" . "Public Housing Passbook Savings Rate" Another conforming change is related to the passbook savings rate. The Public Housing Occupancy Guidebook suggests that PHAs use a new rate of 2% to be consistent with Multi-Family Housing's passbook savings rate policy. However, as the Office of Housing is updating the passbook savings rate, therefore, PHAs should continue to implement PIH's current policy regarding the passbook savings rate until further notice." By increasing the amount of a tenant's total income, the amount of imputed income from assets may affect a tenant's assigned portion of rent.
The PHA pays the landlord the remainder of the rent. Each year, the federal government looks at the rents being charged for privately owned apartments in different communities, as well as the costs of utilities (heat, electricity, etc.) in those communities. The Fair Market Rents (FMRs) are amounts (rents plus utilities) for medium-quality apartments of different sizes in a particular community. As an example, the 2012 FMR for 1 bedroom housing in San Francisco is $1,522 and in New York is $1,280, while in many other places it is less than $500."SCHEDULE B – FY 2012 Final FAIR MARKET RENTS FOR EXISTING HOUSING" , HUD
The landlord cannot charge a Section 8 tenant more than a reasonable rent and cannot accept payments outside the contract.See Part B, 6(a), of Housing Assistance Payments Contract (HAP) Contract Section 8 Tenant-Based Assistance Housing Choice Voucher Program
Landlords, although required to meet fair housing laws, are not required to participate in the Section 8 program in most areas. As a result, some landlords will not accept a Section 8 tenant. This can be attributed to such factors as: not wanting the government involved in their business, such as having a full inspection of their premises by government workers for HUD's Housing Quality Standards (HQS) and the possible remediations required"Landlord Key To DCHA Section 8 Voucher Program" , Dane County Housing Authority, Monona, Wisconsin. a desire to charge rent for the unit above FMR
Depending on state and local laws, refusing to rent to a tenant solely for the reason that they have Section 8 may be illegal."DC Human Rights Act of 1977" Subchapter 2 Part C: Housing and Commercial Spaces the document states: 'It shall be an unlawful discriminatory practice to do any of the following acts, wholly or partially for a discriminatory reason based on the actual or perceived...source of income.' Government assistance such as vouchers are considered a source of income. Landlords can use only general means of disqualifying a tenant (credit, criminal history, past evictions, etc.). It also may be illegal to post "No Section 8" advertisements.
However, other landlords willingly accept Section 8 tenants, due to: a large available pool of potential renters (the waiting list for new Section 8 tenants is usually very long, see below) Regular and generally prompt payments from the PHA for its share of the rent