Discretionary Spending

Function 600 - Income Security

Reduce the Number of Housing Choice Vouchers or Eliminate the Program

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

Billions of Dollars 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-2021 2017-2026
    Reduce the Number of Housing Choice Vouchers
Change in Spending                        
  Budget authority 0 -2 -2 -2 -2 -2 -2 -2 -2 -2 -7 -17
  Outlays 0 -1 -2 -2 -2 -2 -2 -2 -2 -2 -6 -16
    Eliminate the Housing Choice Voucher Program
Change in spending                        
  Budget authority 0 -2 -5 -7 -10 -12 -15 -18 -21 -24 -23 -113
  Outlays 0 -3 -4 -7 -9 -12 -15 -17 -20 -23 -23 -111

This option would take effect in October 2017.

The Housing Choice Voucher program (sometimes called Section 8) provides federally funded vouchers that recipients can use to help pay the rent on units that they find in the private housing market. (Property owners choose whether to participate in the program.) To receive assistance, a household must have income that is below a specified level, and it must wait for a voucher to become available. (Although roughly 20 million households qualify for federal rental assistance on the basis of their income, only about one-quarter of those households receive such assistance because funding for the three discretionary spending programs that provide it is limited.)

Recipients usually pay 30 percent of their household income, after certain deductions, toward their rent. The value of the voucher is the difference between the household’s rental payment and the limit on rent for the area that is determined annually by the Department of Housing and Urban Development. That limit is based on the benchmark rent charged for standard rental housing in the area. In some areas, the benchmark rent is set at the 40th percentile (meaning that it is less than 60 percent of rents in the area), and in others, at the 50th percentile. Recipients can continue to use their vouchers when they move; nonetheless, each year households leave the program for a variety of reasons—some because of the dissolution of their family, others because of a violation of program rules, and still others because changing circumstances make it so that they are better off without a voucher. The vouchers that had been used by those households are reissued, to the extent that funding is available, to eligible households on waiting lists for federal housing subsidies.

This option includes two approaches for reducing the number of vouchers. Lawmakers could retire 10 percent of all outstanding vouchers, principally by not reissuing them when households currently enrolled in the program leave it. Alternatively, lawmakers could gradually eliminate the program from 2018 to 2026. Retiring 10 percent of all outstanding vouchers in 2018 would reduce federal spending by $16 billion from 2018 through 2026, and eliminating the program altogether would reduce spending by an estimated $111 billion over that period, the Congressional Budget Office estimates.

An argument in support of retiring 10 percent of outstanding vouchers is that a onetime reduction of that magnitude—about 190,000 vouchers—is roughly equal to the number of households that would be expected to leave the program in a given year, so no one would lose assistance as a direct result of such a reduction. For example, in 2013 about 300,000 voucher-subsidized households (or about 13 percent) left the program.

One rationale in support of eliminating the voucher program entirely is that providing assistance to some households through the program is unfair to other households that are eligible for federally assisted rental housing (through the voucher program and other similar programs) but do not receive assistance. That population is three times as large as the population of households that receive assistance from those programs. Unassisted households must pay their own rent, and at least four-fifths of those households spend more than 30 percent of their income on rent.

An argument against reducing the number of vouchers available is that doing so would increase the amount of time that eligible but unassisted households would have to wait to receive assistance. The households that were added to the voucher program from the waiting lists in 2013 had been waiting for assistance for an average of 23 months. That number probably understates the amount of time that households have to wait for assistance because many waiting lists are periodically closed to new applicants.

An argument against eliminating the voucher program entirely is that doing so would probably increase overcrowding and homelessness because about 2 million households that would receive vouchers in 2026 under current law would no longer receive housing assistance.