The federal government funds numerous housing assistance programs that provide direct assistance to low-income individuals through the Department of Housing and Urban Development and the Department of Agriculture — primarily by subsidizing rental units in the private housing market. The largest housing assistance programs are Section 8 rental assistance, direct Public Housing for beneficiaries, HOPE VI public housing stock rehabilitation, and Homeless Assistance.
Section 8 housing vouchers and other project-based rental assistance accounted for 43 percent of all federal housing and development spending in FY2009. The voucher component of Section 8 by itself is one of the 10 largest low-income programs.1
The Public Housing program — which pays the operating costs of publicly-owned housing and makes the units available to low-income individuals and families — accounted for 18 percent of spending on low-income housing assistance in FY2009.2
The HOPE VI program pays for the costs of demolishing, rehabilitating and replacing distressed public housing units. Other housing programs provide loans to state and local governments or private entities to build or finance low-income public housing or to otherwise support and expand the supply of housing for low-income elderly and disabled households.3
Homeless Assistance Grants target the needs of homeless individuals and families (including those with disabilities) for basic shelter, short-term and long-term housing, and related support services.4 Additional federal programs provide funding to rehabilitate, modify, repair and demolish low-income private residences owned by individuals; provide social services and other assistance to public housing tenants; or to provide emergency shelter.5
President Reagan was not a proponent of the top down approach to public housing and made efforts during his Presidency to reduce traditional subsidies and provide more flexible benefits.
Continuing President Reagan’s legacy, the Carleson Center for Welfare Reform supports the creation of a public housing block grant to provide both states and individuals more flexibility.
Modern public housing programs can trace their roots back to the United States Housing Act of 1937.6 However, it was the creation of Section 8 tenant-based certificates in 1974 — expanding federal low-income tenant assistance to include privately-owned housing — that drove the expansion of federal housing to become the dysfunctional system that we have today.7