Way too small a share of federal housing expenditures is directed to those who need it most: low-income families who struggle to make rent. The main program serving those people is the Section 8 Housing Choice Voucher.
When it works, it works very well. The GAO has found it to be more cost-effective than other federal housing programs, and a randomized study found that housing vouchers significantly improve the health and happiness of all recipients. If those recipients use the vouchers to move to lower poverty areas, the vouchers lead to better income, employment, and educational outcomes.
But it's not without its problems. For one thing, it's often not enough for families to afford to move to lower-poverty, better-educated neighborhoods, and when they stay in poor areas, or move from one poor area to another, the benefits are significantly reduced. Millions of eligible people are on waiting lists for Section 8 and other public housing programs; while no one knows the total number for sure, one 2004 report estimated that the number for Section 8 alone was 850,000, a number the recession surely increased. CBPP estimates that only about one in four low-income renters get assistance.
Even for those who do manage to get on it, there are a number of unnecessary obstacles to receiving assistance. As the Urban Institute's Margery Turner and Brookings' Bruce Katz note in a new report, the way the program is set up doesn't reflect how metropolitan areas actually work. The program is administered by local public housing agencies (PHAs), of which there can be several in a given metro area. D.C. has its own PHA, as do Alexandria, Montgomery and Prince George's counties in Maryland, and Fairfax and Arlington counties in Virginia.
So let's say I'm living in a chronically disadvantaged neighborhood in D.C., paying rent with the assistance of Section 8, and I find a cheap place in a much better neighborhood in Virginia. The process of moving while keeping my place in the program is extremely complicated. "The process of moving to a different PHA jurisdiction is administratively burdensome for both PHAs and families," Turner and Katz write. "The receiving PHA may apply different or more rigorous screening criteria or require the family to attend another orientation briefing, duplicating steps for both parties. At the same time, PHAs may use a different application form and calculate subsidy levels differently, all of which makes it more difficult for families to find a unit and negotiate a lease in the limited search time."
And there are also problems for landlords and property managers. "PHAs sometimes find themselves in competition for area landlords rather than working together to recruit the largest possible pool of participating landlords," Turner and Katz note. "Moreover, landlords are often confused by the multiplicity of local programs, and may hesitate to participate in the program at all because of uncertainties about who is administering it and how reliably it operates."
So Turner and Katz want to consolidate things. Instead of having Section 8 run at the local level, they proposed setting up metro area-level housing authorities to run it. So instead of Alexandra, Fairfax, Arlington, Montgomery, P.G., and D.C. all having their own housing authorities administering Section 8, there'd be a D.C. metro authority. Once you got your voucher there, you could move to wherever in the area is most affordable, safe, and has the best schools for you and your family, without regard to municipal or state boundaries.
The main effect would be to make the program better serve its main purpose. "The biggest effect of this is on program outcomes. Letting them make rational choices about how do you get closer to work, to quality schools," Katz tells me. "I think more families would use them to go to neighborhoods that are safe and where things work already," Turner says. "We've got a growing body of evidence that escaping from distressed neighborhoods pays off for families in ways that pay off for all of us."
And the idea is also likely to save money. There are a number of fixed costs of running housing agencies which would be lowered if a they were to be consolidated. They're the first to admit that the size of this savings is impossible to estimate accurately, but given how fragmented the agencies are at the moment, it could be considerable.
The plan would likely require Congressional authorization to be executed in full, but there's plenty that the Department of Housing and Urban Development (HUD) could do on its own. "In the near term, HUD can and should more vigorously encourage the formation of regional consortia, including its ongoing efforts to eliminate duplicate reporting requirements for consortium members," Katz and Turner write. HUD is also allowed to reorganize housing authorities that fail to meet certain standards, and could require regional consolidation for authorities in that situation. However, that might entail offering incentives to non-failing nearby agencies, which might not be too eager to take over for their failing counterparts. And Congress would need to allocate money for those incentives.
But HUD at least appears to be on board. "I think there's a lot of interest in HUD in making the voucher program more efficient and there's a real commitment to giving people real choice and promoting de-concentration of poverty," Turner says. "There would be particular interest there in pushing the incentives for housing agencies to consolidate voluntarily through performance incentives."
Turner and Katz's plan isn't a silver bullet. What would likely be needed to start adequately supporting the housing needs of low-income families would be what Katz calls "the big trade," a swapping of the mortgage interest deduction for expanded support to low-income renters. The Center for Budget and Policy Priorities, among others, has expressed support for this. But if it works, Turner and Katz's proposal would at least make our current system less of a tangled web, and help move families out of bad neighborhoods into ones where they can flourish.