The Other Section 8

Last week, we discussed efforts to reform the Section 8 voucher program, also known as Housing Choice Vouchers. Section 8 vouchers make it possible for households with extremely low incomes to live in private market rental homes while paying rents they can afford.

But vouchers aren’t the only kind of Section 8. Project-based Section 8 is one type of project-based rental assistance that created affordable rental homes owned and operated by private owners.

Created in 1974, project-based Section 8 provided Housing Assistance Payment (HAP) contracts to private owners who agreed to help keep their apartments affordable to low income houses. Nearly 1.4 million households are assisted by this program. The original HAP contracts lasted as long as 40 years; contracts are shorter today, and are subject to annual appropriations. The original contracts required that private owners charge tenants 30% of their adjusted income for rent, heat and electricity. HUD then makes up the difference between what the tenants pay and an amount stipulated in the contract, called the contract rent.

The project-based Section 8 program no longer creates new housing units; authorization for new construction was repealed in 1983. But low income residents still live in these units as long as property owners continue to renew their contracts. When the initial project-based Section 8 contracts began to expire, many owners opted not to continue in the program, causing a loss of affordable units and motivating housing advocates across the country to engage in preservation initiatives. Today, the remaining project-based Section 8 housing is owned by a mixture of private, for-profit owners, public housing agencies, mission-driven nonprofit organizations, and others.

Budget cuts present a threat to the project-based Section 8 program, as HUD still subsidizes existing units. For every 1,000 units terminated, 530 seniors and 170 people with disabilities will face the loss of their home.

Want to get involved? Contact your Member of Congress and speak to the person who deals with housing policy with the message that preserving existing project-based contracts is critical.

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