Welfare Housing Programs of the Federal Government
The Department of Housing and Urban Development (HUD) administers various Welfare Housing Assistance Programs. The largest is the Housing Choice Voucher Program (sometimes called Section 8 or Tenant-Based Rental Assistance), run by local Public Housing Agencies (PHA) [i]. The PHA distributes vouchers to tenants who use the vouchers to pay rent on single-family homes, townhouses, or apartments. The voucher amount is calculated based on a standard rental for the locality [ii] (set by the PHA) lowered by a participation amount per family. The participation amount totals 30% of the family’s monthly income. The voucher program’s end result limits a family’s rental expense to 30% of their income. To qualify, a tenant must have income below 50% of the median income for the county or metropolitan area. Most participants are 30% or less of the median. The median annual income for the entire U.S. in 2022 was $74,580; 50% totals $37,290, and 30% totals $22,374 [iii].
Once the voucher is granted, families can choose their place to live, provided the dwelling meets general HUD standards for health and safety. Once a lease is signed, HUD pays the voucher amount directly to the landlord, and the family pays its share directly to the landlord. Rental assistance is not always available as described by HUD: “Since the demand for housing assistance often exceeds the limited resources available to HUD and the local housing agencies, long waiting periods are common. In fact, a PHA may close its waiting list when it has more families on the list than can be assisted in the near future [iv].”
In 2023, HUD spent $29.5 billion on Tenant-Based Housing Vouchers. An estimated 2.3 million households were served [vii], equating to $12,826 per household.
HUD and the PHA also administer a Project-Based Voucher Program [v], through which apartment owners can get subsidies to help them lower rents to low-income tenants. In 2023, HUD spent $14.6 billion on Project-Based Vouchers. An estimated 1.3 million households were served [vii], equating to $11,231 per household.
HUD also manages a Public Housing Program [vi], which builds housing that HUD then operates for low-income tenants. Each area has its own regulation, qualification, and benefit structures, which are adapted to local conditions and policies. In 2023, HUD spent $8.2 billion on Public Housing. About .9 million households were estimated to be served [vii], equating to $9,535 per household. This is a lower figure than either Project or Tenant-based vouchers because the capital costs to build the housing units were spent in prior years.
As described above, approximately 4.5 million households received housing assistance in 2023, compared with 7.0 million families in poverty in 2023 (See Poverty Statistics Page).
HUD also administers a broad set of programs called Community Planning and Development [viii]. These programs include block grants to communities to support various unique community development needs. The assistance can cover homeless shelters and programs, rent subsidies and support, community studies, information gathering, and other purposes. The grants generally are made to the communities to support low-income housing and living standards in some manner.
In 2021, HUD spent $33.0 billion in emergency rental assistance for Coronavirus Relief, which was authorized in Coronavirus legislation in 2020 and 2021. Emergency rental assistance dropped to $9.5 billion in 2022 and 3.5 billion in 2023.
Total expenditures for all HUD Welfare Housing Assistance Programs were $53.0 billion in Fiscal Year”(“FY”) 2020, $89.8 billion in FY 2021, $76.5 billion in FY 2022, and $67.1 billion in FY 2023 [ix]. See below for HUD expenditures per year going back to FY1966 and a related fluctuation analysis. The Pie Chart above shows the makeup of HUD expenditures in FY 2023.
Entire Welfare System
Housing Assistance is one of thirteen welfare programs. The Welfare Programs Page explains how it fits into the entire system.
History of Welfare Housing Assistance
The following history of Housing Assistance was adapted from Wikipedia, Section 8 Housing [x], and Wikipedia, Housing and Urban Development [xi].
Federal housing assistance programs started during the Great Depression to address the country’s housing crisis. The Housing Act of 1937 created the United States Housing Authority to enact slum-clearance projects and construction of low-rent housing. The Housing Act of 1949 was passed to help eradicate slums and promote community development and redevelopment programs. The Housing Act of 1954 amended the 1949 Act to provide funding for new construction and demolition and the rehabilitation and conservation of deteriorating areas. The Housing Act of 1959 allowed funds for elderly housing.
The Housing and Urban Development Act of 1965 was passed as part of the “Great Society” program of President Lyndon Johnson. The Act established HUD as a cabinet-level agency and created the Section 23 Leased Housing Program by amending the U.S. Housing Act. This subsidy program, the predecessor to the modern Program, was not a pure housing allowance program. Housing authorities selected eligible families from their waiting list, placed them in housing from a master list of available units, and determined the rent tenants would have to pay. The housing authority would then sign a lease with the private landlord and pay the difference between the tenant’s rent and the market rate for the same-size unit. In the agreement with the private landlord, housing authorities agreed to perform regular building maintenance and leasing functions for Section 23 tenants and annually reviewed tenants’ income for program eligibility and rent calculations.
In the 1970s, when studies showed that the worst housing problem afflicting low-income people was no longer substandard housing but the high percentage of income spent on housing, Congress passed the Housing and Community Development Act of 1974. The Act further amended the U.S. Housing Act of 1937 to create the Section 8 Program. In the Section 8 Program, tenants pay 30 percent of their income for rent, while the rest is paid with federal money.
The Section 8 program has changed over the years. The number of units a local housing authority can subsidize under its Section 8 programs is determined by Congressional funding. Since its inception, some Section 8 programs have been phased out and new ones created, although Congress has constantly renewed existing subsidies.
The Housing and Community Act of 1977 established Urban Development Grants and continued elderly and handicapped assistance. The Stewart B. McKinney Homeless Assistance Act of 1987 helped communities to deal with homelessness.
See the Coronavirus Relief Bill Page for changes to the Program from legislation passed in 2021.
Housing Assistance Expenditures Over The Years
The graph below shows expenditures for Welfare Housing Assistance per year adjusted for inflation (stated in 2022 dollars) [xii]. Housing Assistance expenditures have risen as programs have expanded and extended their reach. The increase in 2021 of $37.1 billion is generally due to Coronavirus Relief efforts, including the expenditure of $33.3 billion for Emergency Rental Assistance. The spike in expenses in 1985 was due to low-rent public housing loans and other costs of almost $14 billion. The increase in expenditures in 2009 through 2011 and the decrease in 2012 and 2013 are generally due to fluctuations in Public Housing Program expenses, including capital costs.
[i] For a description of the Voucher Program and relevant data, see the U.S. Department of Housing and Urban Development [HUD]. Housing Choice Vouchers Fact Sheet [Internet]. Retrieved May 6, 2024. Available here.
[ii] Regional rental amounts are set based on local market conditions for rental units depending on their size as measured by the number of bedrooms in the unit. Monthly rental rates fluctuate widely across the nation from a low of $492 for a two-bedroom unit in Yauco County, Puerto Rico, to a high of $4.222 in Santa Cruz-Watsonville, California. The average monthly rent for a two-bedroom unit in all counties in America was $1,281, calculated from the HUD table. Data is from the U.S. Department of Housing and Urban Development [HUD], Dataset/50%percentile Rent Estimates, 2024. [Internet]. Retrieved May 6, 2024. Available here.
[iii] U.S. Census Bureau. Income in the United States: 2022, Table A-1. September 2022. Available here.
[iv] U.S. Department of Housing and Urban Development [HUD], Housing Choice Vouchers Fact Sheet [Internet]. Retrieved May 6, 2024.
Available here.
[v] U.S. Department of Housing and Urban Development [HUD], Project-Based Vouchers [Internet]. Retrieved May 6, 2024. Available here.
[vi] U.S. Department of Housing and Urban Development [HUD], Public Housing Program. [Internet]. Retrieved May 6, 2024. Available here.
[vii] U.S. Department of Housing and Urban Development [HUD], Budget in Brief Fiscal Year 2023. Pages 13 and 16. Retrieved May 6, 2024. [Internet]. Available here.
[viii] For a description of the various programs, see HUD, Community Planning and Development. [Internet]. Retrieved May 6, 2024. Available here.
[ix] USGovernmentSpending.com [Internet]. Total for Housing Assistance. Retrieved March 15, 2024. Available here.
[x] Wikipedia, Section 8 (Housing) [Internet]. Retrieved May 7, 2024. Available here.
[xi] Wikipedia, Housing and Urban Development [Internet]. Retrieved May 7, 2024. Available here.
[xii] Data from USGovernmentSpending.com [Internet]. See footnote ix above. Total for Housing Assistance less (in applicable years) Payment Where Tax Credit to Aid First-Time Homebuyers Exceeds Liability for Tax and TARP funding. The methodology of inflation adjustment is shown on the web page Poverty and Spending Over the Years.