Choosing Where to Live

Section Eight Housing

Public housing dates back to the Great Depression of the 1930’s.

Those were desperate years.  Homelessness and poverty were everywhere.  Large segments of the American workforce were unemployed.  During the Great Depression, the U.S. Government developed public programs to create employment and decrease homelessness.  One of those government projects was the construction of multi-family housing units for the poor and the needy.  Over time, the housing program evolved.  In 1965, the Leased Housing Program came into being.  Under this now defunct program, housing authorities would select needy families, negotiate a price with a private landlord, move the family into the unit, and assign a monthly cost to the tenant as his responsibility.  The program proved to be inadequate and cumbersome.

In 1974, Congress passed the Housing and Community Development Act which created the Section 8 program.  The housing program continued to evolve.  In 1983, the voucher program was added, and in 1991, the project based certificate program began.

The purpose behind the Section 8 program is to help the disabled, the elderly and the poor escape crime ridden, slum neighborhoods and find a decent place to live.  The modern Section 8 program has 3 separate arms or programs:

•    The Housing Choice Voucher Program
•    The Project Based Housing Program
•    The Home Ownership Voucher Program

The Housing Choice Voucher Program

The Housing Choice Voucher Program is, by far, the largest of the 3 programs.  It is also called the Tenant Based Program.  To get detailed information on this program, contact your local Public Housing Authority (PHA).  (The website for the Arizona Public Housing Authority is listed as a source for this article). Eligibility for the program is based on both income and assets. If you earn less than 50% of the Area Median Income for your area, you can qualify.  However, by law, the program is required to direct 75% of its assistance money to families who earn 30% or less of the Area Median Income.  This is a bit confusing, so let’s go through an example.

Suppose the Area Median Income for the metropolitan area where you live is $40,000 per year.  Your family has an income of $20,000 (50% of the AMI).  That would make you eligible for the program.  But, your family would take a back seat to other families with annual incomes of $12,000 or less (30%).  The intent of 75% of the funding going to the 30% group is to give the poorest Arizona residents help first.  This means your family may have a long wait for assistance.

The percentage calculations are based on adjusted gross income rather than on gross income.  Adjusted Gross income is your gross income minus deductions for dependents under 18 years, full-time students, disabled family members, and elderly family members.  It also includes deductions for certain disability assistance expenses and some medical expenses.  Forms and worksheets to figure your eligibility are available at your local Public Housing Authority and on public housing websites.  You can find the Area Median Income figures for Arizona in this document:  The Public Housing Agency will also consider your assets in processing your application.  If you have savings’ accounts, certificates of deposit, stock or other financial assets, those items will be included in the agency’s evaluation of your family’s need for assistance. 

The Federal Government, through HUD, calculates the maximum allowable voucher amount for each metropolitan area.  The line is drawn at the 40th percentile of rents for typical apartments occupied by recent movers.  That means voucher amounts will vary widely, depending on where you live.  A New York City renter may qualify for $1,200 per month while someone who lives in Gary, Indiana may have a maximum of $500 per month. Why?  Rents in New York City are considerably higher than rents in Gary, Indiana.  New York vouchers are based on the cost of living in New York, and Gary vouchers are based on the cost of living in Indiana.  The 40th percentile figure is based on rents in the entire metropolitan area, including far flung suburbs where rents are cheaper.  That can make it difficult for a family to find suitable housing in the area where they want to live.

Once you receive a voucher, you typically have up to 60 days to use it.  That means you have up to 60 days to find a suitable apartment, and that may not be easy.  Many landlords refuse to accept Section 8 vouchers.  If you cannot find a suitable apartment, you can request an extension.  The size of the housing unit you can get with a voucher will depend on several factors:  the dollar amount of the voucher, the number of people in your family, and the ages, medical conditions and disabilities of household members. 

Most people use their vouchers to rent apartments or single-family homes, but people with disabilities can also use their voucher for a group home or assisted living facility.   Once you receive your voucher and find an apartment, how much rent will you pay?  You will be expected to pay between 30% and 40% of your monthly income.  If your income is $1200/month, you will be expected to pay between $360 and $480 of the monthly rent, with the voucher covering the rest.  The exact percentage you pay will be determined by your local Public Housing Authority.  As part of the voucher process, the PHA will meet with you and determine your portion of the rent and the amount of the voucher you will receive.  The biggest issue you will face is the waiting list.  Some people wait years to qualify for a voucher.

Project Based Housing Program

The Project Based Housing Program is far less common than the voucher program.  Here, the Public Housing Authority contracts directly with an apartment complex owner.  They agree to make units available for Section 8 housing.  When an apartment is available, the PHA moves a candidate into the unit.  Eligibility requirements for Project Based Housing are exactly the same as those for the Housing Choice Voucher Program.  The amount the renter pays each month is also calculated the same way.  There are two chief differences between the programs that are important to know:

•    With Project Based Housing, the PHA selects the apartment, and you do not get to choose where you live.
•    If you move out of the Project Based apartment, you will usually lose your Section 8 support and be required to start all over again with the program.

Section 8 Homeownership Voucher Program

Not all Public Housing Authorities participate in the Homeownership Voucher Program.  For those that offer the program, the PHA provides vouchers that are similar to rent vouchers, but these are used to pay a portion of a monthly house payment.  The eligibility requirements are a bit different for this program.  The applicant must be a first-time home or condo buyer. No one in the family has had any ownership interest in the subject property in the past 3 years. (In other words, you can’t use this program to rescue the family home your parents lost to foreclosure.)    There are also minimum income requirements.  At least one adult family member must be employed full time, and the minimum income is the Federal minimum wage times 2000 hours per year.  The income and employment requirements do not apply to disabled applicants, but disabled people have their own income requirements.  Welfare assistance is not considered in the income determination unless you are elderly or disabled.

The Positive and Negative Sides of Section 8

The Section 8 Program has helped countless elderly, poor and disabled people to find affordable housing. It has helped people find housing in more desirable neighborhoods.  Historically, public housing projects, especially those in urban areas, have become breeding grounds for gangs and crime.  Moving low income renters out of the projects and into private rental units in better neighborhoods opens new opportunities. 

Yet, the program has many flaws and many critics. There are members of Congress who want to cut funding for the program, calling it an undue burden on taxpayers. People complain about mismanagement and confusion, about lack of accountability.  Funding is inadequate for the volume of applicants.  This means some waiting lists are closed and others are years long. Landlords do not have to accept Section 8 renters and many will not.  They complain about excessive paperwork with Section 8 rentals.  Most critics see the paperwork issue as a convenient excuse to exclude Section 8 applicants.  They say many owners believe having Section 8 renters in their complex will make it less desirable to other renters, that it will lower property values..   

This negative attitude means many desirable, yet affordable properties are closed to Section 8 applicants, leaving them with a limited pool of rental prospects, some of which are in poor condition.    Some landlords who cater to Section 8 clients allow the properties to deteriorate, extending blighted neighborhoods and leaving the renter right back in the situation she is trying to escape.  Because the voucher amount is based on the 40th percentile mark for current rentals in the metropolitan areas, affordable units in decent neighborhoods may be hard to find.  Affordable units may be in suburbia, many miles from jobs and services.  

With all its warts and flaws, Section 8 is the Federal program we currently have in place.  As the disparity between rich and poor continues to grow, the need for affordable housing will also grow. The problem needs to be addressed.



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