By Douglas Rice, Center for Budget and Policy Priorities, April 6, 2010
In a budget that would freeze overall funding for non-security discretionary (i.e., non-entitlement) programs, the Administration has made the renewal of "Section 8" Housing Choice vouchers a priority. The President’s budget requests $17.1 billion to renew vouchers in 2011, an increase of $875 million above the 2010 funding level. This amount is likely to be just enough to renew all vouchers in use this year, according to the Center’s preliminary estimates. In contrast, freezing voucher renewal funding at its 2010 level would cause approximately 100,000 low-income families to lose housing assistance.
The added funds are needed primarily for two reasons. First, approximately 50,000 new vouchers that Congress has funded in recent years for homeless veterans and other groups will be renewed for the first time in 2011. Second, because of continued high rates of unemployment and weak wage growth, the gap between tenant incomes and housing costs is likely to widen this year and next in spite of the general weakness in the housing market. This pushes up voucher costs, which cover the difference between 30 percent of tenant incomes and the rental costs of modest apartments.
Even with the proposed increase, actual spending (i.e., outlays) for Section 8 rental assistance would remain stable as a share of the HUD budget. In 2011, they would make up about 50 percent of HUD discretionary spending, slightly less than in 2010 and below the 1998-2010 average.
The Administration’s budget would also set aside $85 million for 10,000 new vouchers for individuals and families who are homeless or at risk of homelessness. In addition, the budget proposes improvements in voucher funding policy — modeled on those in the pending Section 8 Voucher Reform Act (SEVRA) — that would encourage the state and local housing agencies that administer the voucher program to use available funds more efficiently to serve more families.
While the Administration’s budget would strengthen the voucher program and modestly increase the number of families receiving assistance, housing affordability problems are likely to continue to grow among low-income renters. From 2000 to 2008, the number of low-income renters paying more than half of their income for housing increased by 2.3 million, or 38 percent, according to Census data. Over the same period, the number of families served by the three largest federal rental assistance programs increased by 300,000, or 7.5 percent.
Read the full report at: http://www.cbpp.org/cms/index.cfm?fa=view&id=3145&emailView=1.