The Center's work on 'Vouchers' Issues

Ryan Budget Mischaracterizes Housing Vouchers, Then Sets the Stage to Cut Them

April 4, 2014 at 11:02 am

House Budget Committee Chairman Paul Ryan used a faulty number to argue that “Section 8” Housing Choice Voucher program costs have risen excessively.  His budget documents also float a proposed expansion of the Moving to Work (MTW) demonstration that could lay the groundwork for deep, harmful cuts in the voucher program in years to come.  That program, which helps 2.1 million low-income families rent modest units of their choice in the private market, is just beginning to recover from the loss of 70,000 vouchers due to sequestration budget cuts last year.

Rental vouchers sharply reduce homelessness (see chart) and other hardships, lift more than a million people out of poverty, and help families move to safer, less poor neighborhoods, research shows.  These effects, in turn, are closely linked to educational, developmental, and health benefits that can improve children’s long-term outcomes.

Ryan’s budget claims that voucher spending grew by an “explosive” 80 percent from 2005 to 2013.  That’s simply incorrect.  Voucher expenditures rose by 20 to 30 percent over this period, driven largely by rising market rents and congressional decisions to add vouchers to assist homeless veterans and to replace other rental assistance (such as public housing that was demolished, which was funded through a different budget account).  The average inflation-adjusted cost of a voucher is lower today than it was in 2005.

The Ryan budget calls for changes in housing assistance and says that such changes could include expanding MTW, a deregulation demonstration project that now includes 39 of the nearly 4,000 state and local agencies that administer vouchers or public housing.  MTW allows waivers of most laws and regulations governing the voucher and public housing programs and converts voucher funding — and sometimes public housing operating subsidies — to a block grant.

MTW expansion could weaken protections for vulnerable families and cause fewer needy households to receive assistance.  (These risks would be lower if Congress added new safeguards to MTW, but the Ryan budget documents make no mention of such safeguards.)  The Government Accountability Office and the Department of Housing and Urban Development’s (HUD) Inspector General have raised serious doubts about expansion, based on concerns that HUD has not adequately evaluated and monitored the existing demonstration.

Most significantly, a major expansion of MTW block grants would raise the odds of future voucher and public housing funding reductions.  Congress has cut funding deeply over time for housing block grant programs such as HOME, Community Development Block Grants, and the Public Housing Capital Fund, as well as many block grants in other areas.

Two features make block grant programs especially vulnerable to cuts.  First, unlike the current voucher and public housing operating fund formulas, block grants typically don’t account for factors such as the number of families assisted or the cost of assistance.  As a result, it’s more difficult to make a compelling case that policymakers should maintain current nominal funding levels, let alone ensure that funding at least keeps pace with inflation.  Second, because block grants provide broad flexibility in how state or local officials use the funds, federal policymakers can cut funding and claim no harm will ensue, while leaving the tough decisions about how to actually make the cuts to state and local agencies.

The Ryan budget cuts $791 billion over the next ten years from non-defense discretionary programs, the budget category that includes most low-income housing programs.  The budget does not specify which discretionary programs would lose funding, but if policymakers expand MTW to the point that block grants provide the bulk of voucher and public housing funds, it would increase the likelihood of sizable cuts to the voucher and public housing programs — an outcome that would likely lead to more homelessness and housing instability among the most vulnerable Americans.

Don’t Let Affordable Housing Programs Go Begging

March 24, 2014 at 4:16 pm

“[A]t a time when record numbers of families have been caught in the squeeze between rising rents and falling wages — and are at greater risk of homelessness . . . this is the worst possible time for Congress to let affordable housing programs go begging,” the New York Times editorialized yesterday.  The editorial called on Congress to restore all 70,000 housing vouchers lost last year due to sequestration.  We couldn’t agree more.

As we explained Friday, December’s Murray-Ryan budget agreement provided partial relief from sequestration for 2014 and 2015.  To finish the job, next year’s funding must cover all vouchers in use in 2014 plus another 40,000 vouchers.  Congress can do this in ways that also promote other important policy goals, like reducing homelessness.

This map shows the state-by-state impact of last year’s voucher cuts.

Why and How Congress Should Restore Lost Housing Vouchers

March 21, 2014 at 10:48 am

A big question facing the Housing Choice Voucher Program next year, I noted recently, is whether policymakers will provide enough funding to restore all 70,000 vouchers lost last year due to the sequestration budget cuts.  Given the large and growing need for affordable housing, policymakers need to make this a priority.  And, they should accomplish it in ways that also promote other important policy goals, like reducing homelessness, keeping vulnerable families together, and eliminating unnecessary institutionalization of people with disabilities.

More than 2 million low-income families use vouchers to rent modest units of their choice in the private market.  We’ve highlighted research showing that vouchers not only reduce housing instability and homelessness but also reduce poverty, help low-wage workers make ends meet, and give families access to neighborhoods with better opportunities.  They also can reduce the cost of other public services, like health care and emergency shelters.

Unfortunately, only 1 in 4 households eligible for any type of federal rental assistance receives it because of limited funding.  Low-income seniors, people with disabilities, and working families with children eligible for the voucher program often must wait years for assistance.  Sequestration worsened the funding squeeze, cutting the program by nearly $1 billion last year and causing the loss of 70,000 vouchers.

December’s Murray-Ryan budget agreement provided partial relief from sequestration for 2014 and 2015, but in 2014 that relief will enable housing agencies to restore fewer than half of the lost vouchers.  To finish the job, next year’s funding must cover all vouchers in use in 2014 plus another 40,000 vouchers.

The President’s 2015 budget would achieve the first goal but not the second.  Congress should go further, providing funding for the 40,000 additional vouchers targeted to three areas:

  • Reducing homelessness and keeping at-risk families together (30,000 vouchers).  Public housing agencies in every state could compete for these vouchers by showing, among other things, how the vouchers would reduce costs in health, criminal justice, or child welfare systems.  Agencies that had to distribute fewer vouchers last year because of sequestration would receive priority in the competition if they met other requirements.
  • Reducing unnecessary institutionalization of people with disabilities (5,000 vouchers).  The Supreme Court ruled in the 1999 Olmstead case that the unjustified segregation of people with disabilities in settings such as nursing homes and public mental health institutions violates the Americans with Disabilities Act.  At least 13 states are required by Olmstead-related legal action to rely less on segregated institutions for adults with disabilities, and litigation is pending in other states.  These vouchers, distributed through a national competition, would help states to meet these obligations to people with disabilities.
  • Protecting victims of domestic violence seeking emergency transfers (up to 5,000 vouchers).  The Violence Against Women Reauthorization Act of 2013 requires the Department of Housing and Urban Development (HUD) to devise procedures under which victims of domestic violence and related crimes who live in assisted housing can obtain vouchers in order to relocate quickly and safely.  These vouchers would enable HUD to fulfill that directive.

5 Proven Benefits of Housing Vouchers — and How Vouchers Help Your State

March 11, 2014 at 11:53 am

A key question for next fiscal year is whether policymakers will adequately fund the Housing Choice Voucher Program, which helps more than 2 million low-income families rent modest units of their choice in the private market but has been hit hard by the sequestration budget cuts.  Some 70,000 fewer families have vouchers than a year ago.  To show what’s at stake, we’ve prepared state-by-state fact sheets on the impact of vouchers and the sequestration cuts.

We’ve also issued a report reviewing research findings on vouchers’ impact on poor and vulnerable households.  In brief, studies show that vouchers:

  1. Reduce crowding, housing instability, and homelessness.  Low-income families with children that received vouchers are much less likely than families without vouchers to be homeless or doubled up with friends and family, to live in crowded conditions, or to move frequently.
  2. Reduce poverty.  Vouchers and other rental assistance lifted 2.8 million people — including 1 million children — above the poverty line in 2012 under the federal government’s Supplemental Poverty Measure, which counts non-cash benefits.  Vouchers alone likely produced at least half of that effect.
  3. Help low-wage workers make ends meet.  About two-thirds of voucher holders who aren’t elderly or disabled either work or worked recently.  Vouchers are critical to enabling low-income working families to make ends meet.  For a mother of two renting an apartment for $700 and working 30 hours a week at the minimum wage, a voucher is worth about $440 a month.
  4. Give families access to neighborhoods with better opportunities.  By allowing families to rent a unit of their choice in the private market, vouchers enable them to move to safer neighborhoods.  A growing body of evidence indicates that growing up in neighborhoods of concentrated poverty can adversely affect children’s health, education, and long-term economic prospects.
  5. Reduce costs in health care and other public services.  In addition to improving the lives of vulnerable low-income people, vouchers and other rental assistance can produce savings in other program areas that offset part (in some circumstances all) of the cost of the rental assistance.  For example, rental assistance combined with supportive services for homeless people with serious health problems can achieve savings in the health care, corrections, and emergency shelter systems that are close to or above the cost of the rental assistance and services.

Sequestration’s Toll: 70,000 Fewer Low-Income Families Have Housing Vouchers

February 26, 2014 at 12:26 pm

Some 70,000 fewer low-income families used housing vouchers to rent private housing in December than a year earlier, according to new CBPP projections.  The projections, based on new Department of Housing and Urban Development (HUD) data, show that low-income seniors, people with disabilities, and families with children continue to feel the effects of the across-the-board sequestration cuts, which started last March.  The big question now is whether the President and Congress will reverse these cuts next year.

We estimate that roughly three-fourths of state and local housing agencies have had to shrink the number of families they help due to sequestration, which cut funding for the Housing Choice Voucher Program by nearly $1 billion last year.  The map below provides state-by-state figures on the lost vouchers; see this table (in .pdf or .xls format) for more details.

These cuts come at a particularly bad time.  The number of renter households paying unaffordable housing costs is at historic highs, according to a new report by Harvard’s Joint Center for Housing Studies, which warns that the “spread of severe cost burdens [where renters pay more than half their income for housing] during the Great Recession and its aftermath is particularly alarming.”

Also, homelessness remains widespread.  More than 600,000 Americans, including some 58,000 veterans and 138,000 children, are living either in emergency shelters or on the street on any given day, according to HUD’s latest count.  Housing instability and homelessness can have a debilitating impact on children over the long term, and rigorous research shows that housing vouchers are highly effective at reducing these conditions among low-income families.

December’s Murray-Ryan budget agreement provided partial relief from sequestration for 2014 and 2015.  But in 2014, that relief will enable housing agencies to restore fewer than half of the vouchers cut in 2013 due to sequestration.  It is therefore essential that policymakers provide sufficient funds in 2015 to fully reverse sequestration’s harmful effects on the voucher program.

Douglas Rice