Let’s take a step back and focus on the big picture of housing assistance using this chart I have prepared based on data in a recent HUD research report.
Since it is 107 degrees outside today I decided to stay in and read the latest HUD report and chart some of the data to get the housing assistance overview.
HUD has released the fourth in a series of reports providing information on the size, composition, and quality of the U.S. Department of Housing and Urban Development (HUD)-assisted housing stock and the characteristics of its occupants.
In the chart above, income-eligible renters are those households that would qualify for admission to assisted housing because their income is within the HUD-determined income limit of 50 percent or less of median family income for their area, adjusted for family size In HUD terminology, these households are “very-low-income renters” and are eligible for assisted housing based on income alone. The chart shows how the groups relate to one another. “Worst case needs” means renters who do not receive federal assistance, who have incomes below 50 percent of median family income in their area, as adjusted by HUD, and who pay more than half their income for rent and utilities or live in severely substandard housing.
Referring to the chart, let’s start at the top.
There are 33,604,000 renter households in the US. About 49 percent of those renter huseholds are within the HUD-determined income limit of 50 percent or less of median family income for their area, adjusted for family size. That is 16,577,000 households.
HUD subsidized housing is home for about one-quarter of all the income eligible households (4,280,000). Three quarters of the income eligible households do not live in HUD subsidized housing. Of the 12,297,000 households eligible but not receiving HUD housing, about 42 percent (5,116,000) have “Worst case housing needs.” Worst case needs” means renters who do not receive federal assistance, who have incomes below 50 percent of median family income in their area, as adjusted by HUD, and who pay more than half their income for rent and utilities or live in severely substandard housing.
Turning back to the 4,280,000 who do live in HUD subsidized housing, 1,094,000 (26 percent) live in public housing. HUD describes public housing…
Public housing consists of housing developments owned by local Public Housing Authorities or Indian Housing Authorities; HUD makes payments to the authorities to cover the development, rehabilitation, and operating costs of the housing units. Housing units in these developments are then rented to selected low-income families and individuals at below-market rents. Because the HUD payments cover the development and maintenance of the project, public housing is referred to as project based. The amount of rent low-income families pay is generally a fraction (30 percent) of their income. New tenants can select from vacant and available units owned and operated by the local authorities Tenants must live in units owned by the local housing authority.
1,800,000 (42 percent) have Section 8 rent vouchers.
The Section 8 Housing Choice Voucher Program involves selected low-income households searching for housing units of their choice in the private rental market. After the housing unit is located and approved by the local housing authority, a subsidy payment is made to the private-sector landlord on behalf of the tenant household. The program is designed so that the out-of-pocket amount that tenants pay is 30 percent of the household’s income, if the housing unit rents for less than the Fair Market Rent (FMR) established by HUD for the area and household size. Families are given the choice of renting units that are more expensive, but tenants then pay 30 percent of their income plus the difference between the higher rent and the payment standard. Because the payment is made on behalf of the tenant and the payment follows the tenant household if the household decides to move, Section 8 housing is referred to as tenant based.
1,385,000 (32 percent) live in privately owned, project-based, HUD subsidized housing.
The third program category consists of privately owned projects containing housing units that are rented to low-income households at subsidized rents. HUD provided assistance to encourage the development of affordable housing. Because the HUD payments are made for the development and maintenance of the project, assistance is referred to as project based. The following HUD programs are included in this third category: rent supplements, Section 221(d)(3) Below Market Interest Rate, Section 202 Supportive Housing for the Elderly, Section 236 Mortgage Assistance, Section 8 New Construction, Substantial Rehabilitation, Moderate Rehabilitation, and some other smaller programs. Data on tenants in privately owned housing may not be altogether comparable with data on public housing tenants or voucher recipients. The public housing and voucher programs are deeply subsidized, with nearly all tenants paying income-based tenant rents. Only about three-fourths of the households in privately owned housing pay income-based tenant rents. The other tenants pay rents that do not vary by income; the project is subsidized through initial financing and the rents are uniformly reduced for all tenants. As a consequence, about one-fourth of tenants in privately owned housing may pay differing proportions of their income for rent and also may differ in other characteristics from the other assisted tenants.
These assisted households represent 13 percent of total US renters.
That is the big picture of housing assistance.