How to Increase Housing Flexibility for Low-Income Americans
The Situation: Demand for housing has led to skyrocketing real estate prices in many of the country’s most productive regions, and a housing affordability crisis for low-income Americans, nearly half of whom spend more than thirty percent of their income on rent. Because the problem is driven primarily by local land-use restrictions, it’s difficult for federal policymakers to address these causes – but they have some opportunities to help. In addition to encouraging zoning reform, federal policymakers can help rent-burdened households by expanding Section 8 benefits and experimenting with giving beneficiaries cash transfers in lieu of housing vouchers.
The Solution: Section 8 is one of the most important housing subsidies in the country, its benefits correlated with less food insecurity, less domestic violence, fewer child separations, and much less housing instability for the families who receive them than those who are eligible but do not. Though expanding access to all households whose income qualifies them for the program would help many who are currently struggling, the current system is in critical need of reform. For starters, landlords often do not like to accept vouchers, in part because of the requirement that landlords who accept vouchers complete a bureaucratic inspection process. Voucher rates are also generally determined by the median rent in a region, meaning that they are often insufficient to cover rent in the highest-opportunity areas of that region.
Cash transfers in lieu of housing vouchers would likely reduce landlord discrimination against Section 8 recipients, as well as give those households greater freedom in how they use their benefit. Some tenants may use a cash benefit to supplement rent in a location with amenities that are important to them, or to live with roommates or extended family members to save money on rent – arrangements that would not be permitted under current Section 8 housing voucher rules but that allow recipients to spend more money on other priorities.
Conclusion: The housing affordability crisis is a growing problem that cannot be ignored. While solving the housing scarcity problem among localities will be crucial to creating a lasting solution, expanding and reforming Section 8 benefits will be a significant first step to helping low-income households and increasing income mobility among Americans who need it most.