By Kurt Keena | When the topic of affordable housing comes up we often hear the term “Section 8” as a type of affordable housing. It can be bandied about in a generic way, like Post-It notes, Band-Aids, or Vise-Grips are used to describe categories of common items. If you don’t work in the affordable housing area this Section 8 thing may seem cryptic and confusing. I’ll try to break it down, having developed over my years in the field a simple way to explain what I do to friends and family members.
The name Section 8 comes from the section of the federal housing statutes that created the program. It is a form of housing subsidy paid by the Department of Housing and Urban Development to help make rents affordable to low-income households.
Along with the mortgage interest deduction, public housing and low-income housing tax credits, the subsidy we call Section 8 is one of the major housing subsidy programs the federal government administers.
In essence, this is how Section 8 works: Eligible households pay 30 percent of their adjusted gross income towards the cost of the rent and utilities and the Section 8 voucher pays the remainder. There are limits on the amount of income a household can earn and still be eligible for the subsidy, as well as on the amount of rent that can be charged.
As the amount of household income increases, the amount of the Section 8 subsidy goes down and vice versa. There is an excruciating amount of rules, regulations, verifications and procedures to ensure that all of a household’s income is accounted for and that the correct amount of subsidy is paid out.
There are two main types of Section 8 assistance: project based vouchers and housing choice vouchers. Both do the same thing but in a slightly different way.
Project based vouchers are tied to a particular unit within a particular property and the subsidy stays with the unit and property. The subsidy is available to any qualifying household that occupies that unit. When the household moves out of that unit they no longer get the subsidy. Project based Section 8 vouchers are used a lot in housing for seniors and the disabled as well as supportive housing for special populations.
Housing choice vouchers (HCV) are issued to households and can be used at any property where the owner has agreed to accept them. The voucher is “portable” and remains with the household as long as the household remains eligible for the subsidy. It can be used throughout the country wherever there is an entity that administers the Section 8 program. This “portability” provides maximum choice in housing location and for that reason a HCV is a highly coveted form of assistance. Because the number of HCVs is limited, the wait to be issued one is often many years.
For example, last year the Metropolitan Council’s Housing and Redevelopment Authority opened up its housing choice voucher waiting list for the first time in eight years, and received 36,000 applications for 2,000 spots.