How can we fund more housing vouchers?

The HUD Section 8 Housing Choice Voucher program is a major source of housing assistance for households with the lowest incomes in Snohomish County. It’s an excellent tool, as the vouchers can be used in any unit that accepts the vouchers and meets rent and safety standards, theoretically promoting mixed-income neighborhoods and providing deep assistance more affordably than through traditional public housing models. At the same time, this flexibility also limits the program’s use, as landlords will be less likely to accept vouchers in a tight market, and finding an acceptable unit that meets set rent standards can also be a challenge. In
addition, the program is limited by federal funding, so the supply of vouchers does not come close to the demand. In Snohomish County, there are currently 6,183 vouchers in use, compared to around 68,000 households earning less than 50% Area Median Income. (This is the line where it typically starts to become more possible to find an affordable rental unit in Snohomish County)

The program is essentially a lottery at present, with years-long wait lists, if a housing authority’s wait list is even open at all. Contrast this with the SNAP program (AKA food stamps), an entitlement-type program, where all who earn less than a certain income level can receive assistance. Could we do this with housing assistance as well? A post over at City Commentary makes an interesting case as to how it could be possible. For a summary, read on.

First, the total cost to make this happen – the Congressional Budget Office estimates that it would take $41 billion per year over the next 10 years to expand the program to cover all households currently eligible, meaning all earning less than 5o% AMI. To only expand to make those earning less than 30% AMI, it would take an estimated $29 billion per year.

Which gigantic sofa cushion do we have to look under to find this kind of money? The author of the article proposes reforming the home mortgage interest rate deduction, which cost $68 billion in 2014. While supporting home ownership is a worthy goal, the evidence suggests that the program currently most benefits higher income households, with 77% of the money spent on the program going to households earning more than $100,000 per year in 2012. The author argues that, were the deduction eliminated for households earning more than $100,000, we could both provide vouchers for all eligible households and have enough left over to expand the deduction for households earning less than $100,000. Another option could include reducing the maximum amount of home value that can be deducted, which is currently $1 million.

Leave a Reply

Your email address will not be published. Required fields are marked *