A Guide To Affordable Housing And Rental Assistance

U.S. renters have seen their rents rise an average of 18% over the last five years according to Pew Research. For many renters, wages aren’t increasing enough to compensate for the inflation of goods, services, and rent combined. In fact, the pressure of maintaining a household in 2020 saw almost half of American renters spending more than the recommended 30% on housing, with 23% spending more than half of their total income on rent. 

Inevitably, many Americans need assistance with their rental payments to maintain decent standards of living. The government does offer several affordable housing programs for low-income families, but navigating these programs can sometimes be difficult. Confusion can often deter landlords from participating or renting to families with rent subsidies. 

In this article, we aim to clear up some of that confusion. Let’s break down the primary rental assistance and affordable housing options that are available to U.S. families in 2023, as well as the role landlords can play in them. 

Section 8: Tenant-Based Voucher Program 

Section 8 is the largest federal program for subsidized housing, assisting nearly 5 million families across the country. It was first established by the Housing and Community Development Act of 1974 and is supervised by the Department of Housing and Urban Development (HUD). The HUD provides funds to local public housing agencies (PHAs) across the country, which administer the program locally and distribute those funds to families as housing vouchers. 

There are two components of Section 8: The Tenant-Based Voucher Program and the Project-Based Voucher Program. This section focuses on the Tenant-Based Program. 

How It Works 

To receive a tenant-based HUD voucher, a low-income family, elderly person, or person with a disability needs to apply to the program with their local PHA. They must meet certain income and screening criteria to qualify for the program. Typically, the family’s income must fall below 50% of the median income for their area. 

After being approved, the family is put on a wait list, if one is open. It could take anywhere from a month to several years for the family to finally receive a housing voucher, a government subsidy for around 70% of their monthly housing expenses (rent and utilities).  

Once the family has an affordable housing Section 8 voucher, it’s their responsibility to find a landlord willing to accept it in the private sector. Landlords are free to decline the voucher, and many do. However, if the family does find one willing to participate, the landlord typically screens the tenant as usual, and if the tenant is approved, they submit an application to be a Section 8 landlord with the HUD. Then, the local PHA schedules a property inspection to ensure that the unit meets standards of decency, safety, and sanitation. The inspector will examine the HVAC system, door/window locks, electricity, plumbing, infrastructure, and other factors to verify that everything is in working order.  

After passing the inspection, the landlord then enters negotiations with the PHA on the rent price. Generally, the PHA uses the Fair Market Rent (FMR) as an initial baseline for the rent, but it also considers the landlord’s typical asking rate. Finally, the landlord and the PHA sign a Housing Assistance Payments (HAP) contract to finalize the rent and specify everyone’s responsibilities and contributions. After the voucher family moves in, they’ll be responsible for paying approximately 30% of the monthly rent, while the PHA sends the landlord monthly checks for the remaining 70%.  

Section 8: Project-Based Voucher Program 

There is a second type of Section 8 housing, called the Project-Based Voucher (PBV) Program. Families on the Section 8 waitlist can also choose to participate in this program, but it differs in that the voucher is assigned to a specific property rather than to a family.  

How It Works 

The HUD gives each PHA a set amount of funds for housing vouchers (to use for both the Tenant- and Project-Based Programs). PHAs can use up to 20% of those vouchers for project-based units. These privately-owned properties are selected for enrollment in the program by the PHA through a competitive process. PHAs then work with owners who agree to rehabilitate their units, construct new ones, or set aside a portion of existing units for Section 8 housing. Once selected, the PHA connects a voucher to that unit and then refers an eligible family to it.  

This means that families in the Project-Based Voucher Program cannot carry their vouchers with them from property to property, as they would with the Tenant-Based Voucher Program. Rather, they must stay at a property already designated as part of the program.  

Section 8 project housing is an important pillar of affordable housing because it reserves units specifically for low-income families rather than assuming that a low-income family can convince a landlord to participate. See the HUD’s website for more information about this program. 

Public Housing 

Public housing is a third type of subsidized rental housing for tenants. It has the same goal as Section 8 housing (provide decent housing for low-income families, the elderly, and people with disabilities). However, public housing units are government owned and operated instead of privately owned.  

How It Works 

The public housing program is also managed by local PHAs, who receive federal funding from the HUD to manage housing for low-income tenants at reasonable rents. These units can be apartments, townhomes, single-family homes, or another property type, but they are all government owned.  

An eligible family who meets the appropriate income limits and qualifications can apply for public housing with their local PHA, which reviews the documentation and places the family on a wait list (unless there is immediate availability). Families with the greatest housing needs are prioritized on the waitlist, and due to the high volume of applicants to the program, families can often wait years for assistance. Once a public housing unit becomes available, the PHA contacts the family and signs a lease with them. The rent price for the family, or the Total Tenant Payment (TTP), is calculated based on the highest of the following: 

• 30% of the family’s monthly adjusted income (income minus any allowed deductions) 
• 10% of the family’s monthly income (unadjusted) 
• Welfare rent (if applicable) 
• The minimum rent set by the PHA (between $25 and $50) 

Once a lease is signed, the PHA continues to manage the unit. The family is allowed to stay in public housing as long as they meet the requirements—but if the family’s income increases such that they can afford housing on the private market, the PHA may require the family to do so. 

Types of Public Housing 

There are many different types of public housing and programs administered by the HUD. Below are a few of them: 

• Hope VI – Established in 1993, this program aims to revitalize distressed public housing by integrating public housing units into nonpoverty neighborhoods, increasing mixed-income communities, and using architecture inspired by New Urbanism. 
• Demolition/Disposition – This program works to get rid of older, run-down public housing units. The proceeds are then recycled to benefit public housing families and improve other low-income housing. 
• Moderate Rehabilitation – This program was designed in 1978 to upgrade rental units with deficiencies. It provides project-based rental assistance to low-income families. Families pay 30% of their adjusted income towards the rent. 
• Moving to Work Demonstration (MTW) – This program allows PHAs to trial various incentives to become economically self-sufficient.  

Emergency Rental Assistance 

The federal Emergency Rental Assistance (ERA) program provided over 46 billion dollars to families in crises during the COVID-19 pandemic. Housed in the U.S. Department of the Treasury, this program provides funds to families in immediate need of emergency assistance. It sends funding to local agencies who distribute them to millions of families in danger of eviction.  

How It Works 

Families who are behind on their rent or utility payments can find a local Treasury Emergency Rental Assistance program and submit an application for emergency rental assistance. In some cases, landlords can also apply for ERA on behalf of their defaulting tenants. To receive the assistance, the tenant needs to meet certain income and eligibility requirements. 

If approved, the local program sends the tenant’s landlord and/or utility providers emergency funding to cover late or overdue payments for rent, utilities, and home energy costs (gas, electricity, fuel oil, trash, water, and sewer). Rental assistance may also potentially cover reasonable late fees, internet, moving expenses, or other rental-related fees (e.g., security deposits, rental application fees, etc.). Some programs even provide counseling, case management, and legal representation in an effort to further reduce families’ risk of eviction in the future. 

Unfortunately, many ERA programs are temporarily or permanently closed due to too many applications.  

Rental Assistance for Specific Groups 

Some populations can receive special rental assistance. Below are two populations commonly served by federal rental assistance programs. 

Veterans 

Veterans may be eligible for Supportive Services for Veteran Families (SSVF), a federal program for veterans and dependents/spouses of veterans who have very low income and are at risk of eviction and/or homelessness. SSVF is operated by the U.S. Department of Veterans Affairs (VA) and provides rental assistance, case management, and other supportive services to veterans at risk of homelessness and their families. 

Persons with Disabilities 

Individuals under 62 years old who have a disability may apply for a Non-Elderly Disabled (NED) voucher to receive assistance for private rental housing from their local PHA. These are Housing Choice Vouchers reserved and assigned specifically to individuals with disabilities. Families who qualify do not need to currently be on their local PHA’s Section 8 waitlist to receive a voucher—they are admitted to the program via special admission.  

Conclusion 

Finding affordable housing can be a real challenge for many families at risk of eviction and homelessness. Landlords can play their part in reducing housing crises in their local area by participating in these programs when they can.