Discretionary Spending
Function 600 - Income Security
Reduce the Number of Housing Choice Vouchers
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.
The Housing Choice Voucher (HCV) program provides federally funded, portable vouchers that low-income households may use to help pay for housing they choose in the private market.
To illustrate ways to decrease costs associated with the HCV program, which accounted for $18 billion in federal spending in 2014, CBO analyzed the budgetary effects of reducing appropriations for the program by:
- Retiring 10 percent of all outstanding HCVs, by not reissuing them to new participants when households leave the program;
- Gradually restricting assistance to households with income of no more than 30 percent of area median income (AMI); or
- Eliminating all outstanding vouchers over a period of 10 years.
Retiring 10 percent of HCVs in 2016 would reduce federal spending by $18 billion from 2016 through 2025. A onetime reduction of that magnitude in the number of vouchers—about 190,000—could most likely be achieved without affecting households now served by the program. However, for the many households that are eligible for assistance but do not receive it, such a reduction would increase the amount of time they would have to wait to obtain a voucher. Tenants leave the HCV program each year, in some cases because of the dissolution of their family or because of a violation of program rules; in other cases, tenants leave because changing circumstances make them better off without a voucher. In 2013, roughly 300,000 voucher-subsidized households left the program.
Alternatively, lawmakers could gradually reduce the number of vouchers over a period of 10 years by retiring the vouchers of households with income of more than 30 percent of AMI as the tenants leave the program or have their vouchers canceled. Newly assisted households would be eligible for HCVs only if their income was no more than 30 percent of AMI. CBO estimates that such a policy change would reduce federal spending by $20 billion from 2016 through 2025.
Another option would be for lawmakers to end the program by eliminating all outstanding vouchers over a period of 10 years. Federal spending would be reduced by $118 billion from 2016 through 2025.