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Friday, June 8, 2012

Section 8 Housing Choice Voucher Program: Issues and Reform Proposals

Maggie McCarty
Specialist in Housing Policy

The Section 8 Housing Choice Voucher program provides monthly rental assistance to around 2 million low-income households each year. It is administered at the local level by nearly 2,500 quasi-governmental public housing agencies (PHAs). While some form of Section 8 rental assistance has been in place since the mid-1970s, the modern program was shaped largely by the 1998 public housing reform act (P.L. 105-276). More than a decade later, the Section 8 voucher program has come under new scrutiny, with PHA industry leaders, low-income housing advocates, and some Members of Congress calling for reforms. This report introduces the primary features of the Section 8 voucher program, issues that have arisen, and recent reform proposals.

Many of the key features of the program have been considered for reform, including its administration; eligible uses of program funds; the method by which tenant income is determined and rents are calculated; who is eligible and what conditions are placed on eligibility; and other features of the program such as portability and quality inspections. Some reform proposals have focused on changing aspects of the program seen as administratively cumbersome and prone to errors. Other proposals have focused on altering the incentives in the program in order to promote policy goals such as homeownership and family self-sufficiency.

Issues have also arisen regarding how the Section 8 voucher program is funded and how changes in formula allocations have affected PHAs. Partly in response to funding issues, and partly in response to programmatic issues, there have been calls for deregulation of PHAs through expansion of the Moving to Work (MTW) Demonstration.

Section 8 voucher reform legislation has been considered in every Congress since at least the 108th Congress. One version of this reform legislation, called the Section 8 Voucher Reform Act (SEVRA), was introduced and considered in both the 110th and 111th Congresses (H.R. 1851 and S. 2684, 110th Congress; H.R. 3045, 111th Congress). These bills—which were largely similar, but with some changes—would have made modifications to several features of the Section 8 voucher program, including how income is calculated, how inspections are conducted, and how portability is treated, and they would have adopted a new funding formula. They also would have renamed, expanded, and modified the MTW Demonstration and permitted PHAs to implement alternate rent structures, within limits. A version of SEVRA that is very similar to H.R. 3045 has been introduced in the 112th Congress (H.R. 1209) by Representative Waters.

The fate of SEVRA in the 112th Congress is uncertain, as the House Financial Services Committee has held hearings on new draft Section 8 voucher reform legislation, initially called the Section 8 Savings Act (SESA) and most recently titled the Affordable Housing and Self Sufficiency Improvement Act (AHSSIA). This draft legislation contains many of the same provisions that have been included in SEVRA. While earlier versions of the reform legislation did not contain an expansion of the controversial Moving to Work (MTW) Demonstration, the most recent version, AHSSIA, does contain an expansion of MTW.