How Housing Policy Is Failing America's Poor

When a woman in McKinney, Texas, told Tatiana Rhodes and her friends to “go back to your Section 8 homes” at a public pool earlier this month, she inadvertently spoke volumes about the failure of a program that was designed to help America’s poor.

Created by Congress in 1974, the “Section 8” Housing Choice Voucher Program was supposed to help families move out of broken urban neighborhoods to places where they could live without the constant threat of violence and their kids could attend good schools.

But somewhere along the way, “Section 8” became a colloquialism for housing that is, to many, indistinguishable from the public-housing properties the program was designed to help families escape.

How did this happen? To begin with, Section 8 is poorly designed. It works like this: Families lucky enough to get off lengthy waiting lists are allowed to look for apartments up to a certain rent, which varies for each metro region. This figure is called the “fair market rent,” and is calculated by HUD every year for each metro area. The tenant pays about 30 percent of his income,  and the voucher covers the rest of the rent (this is based on the idea that families should not spend more than one-third of their income on rent).  

But the fair market rent cut-off point often consigns voucher-holders to impoverished neighborhoods. This is in part because of how that number is calculated: HUD draws the line at the 40th percentile of rents for “typical” units occupied by “recent movers” in an entire metropolitan area, which includes far-flung suburbs with long commutes and, as a result, makes the Fair Market Rent relatively low. In New York City, for example, the Fair Market Rent for a one-bedroom is $1,249, a price that would relegate voucher-holders to the neighborhood of Brownsville in Brooklyn, one of the most dangerous places in the city, and where the most public housing is located.

Technically, voucher holders can live anywhere in a region that meets the price restrictions. But the tendency is for people to stay in neighborhoods that are familiar to them, though a few areas have created robust mobility-counseling programs to try and mitigate this. Additionally, as Eva Rosen has detailed, landlords in low-income areas aggressively recruit voucher-holders, as the vouchers are a much more reliable source of rent than other low-income tenants have available.

The failings of Section 8 go far beyond flaws in how the program was designed to how the the states have implemented it. People can argue all they want about the merits of subsidized housing, but given that Section 8 exists, it would seem advantageous for states and municipalities to take advantage of federal funds to help families find better housing. But many states seem especially determined to keep voucher-holders in areas of concentrated poverty.

“The whole idea of Section 8 in the beginning was that it was going to allow people to get out of the ghetto,” said Mike Daniel, a lawyer for the Inclusive Communities Project, told me. (Daniel has sued HUD over the way it is carrying out the program in Dallas.) “But there’s tremendous political pressure on housing authorities and HUD to not let it become an instrument of desegregation.”

For example, in much of the country, landlords can refuse to take Section 8 vouchers, even if the voucher covers the rent. And, unlike the landlords in poor neighborhoods in Eva Rosen’s study, many landlords of buildings in nicer neighborhoods will do anything to keep voucher-holders out. The result is that Section 8 traps families in the poorest neighborhoods.

One study in Austin found that there were plenty of apartments around the city that voucher-holders could afford. But only a small portion of those apartments would rent to voucher-holders.

The report, by the Austin Tenant’s Council, found that 78,217 units in the Austin metro area—about 56 percent of those surveyed—had rents within the Fair Market Rent limits. But only 8,590 of those units accepted vouchers and did not have minimum income requirements for tenants. Most were located on the east side of Austin, in high-poverty areas with underperforming schools and high crime rates. (The survey only looked at apartment complexes with at least 50 units.)

“Families don't have very many choices as to where they can actually use the voucher,” said Nekesha Phoenix, the Fair Housing Program Director at the Austin Tenants’ Council. “Although there are properties north and west that they could actually afford to live in, they can't do it because the properties won't take the voucher.”

Some cities have tried to prevent this. Last year Austin passed a “Source of Income” ordinance that prohibited landlords from refusing to rent to people solely because they have a voucher. And 12 states, as well as the cities of Los Angeles, San Francisco, Washington D.C., Chicago, and Philadelphia have all done the same.

But in Austin the landlords successfully pushed back. The Austin Apartment Association sued the city over the ordinance, asking for an injunction to block it. The apartment owners say that being forced to accept Section 8 meant more paperwork, onerous lease terms, and “burdensome inspections.” (Section 8 properties have to be inspected to ensure they are sanitary and safe.)

After a district judge left the law standing, the Texas legislature in May passed a bill banning any municipality from passing Source of Income ordinances. Source of Income discrimination will once again become legal in Austin when the state law goes into effect in September.

“A housing authority that on its own set out to use housing choice voucher as an instrument of desegregation would be brought to its knees by the elected officials of the cities that they’re in,” Daniel told me.

Why do some landlords try so hard to attract voucher-holders and others try so hard to avoid them? Section 8 tenants pay the rent reliably and stay in apartments for longer than market-rate tenants, according to Isabelle Headrick, the executive director of Accessible Housing Austin!, who is also a property owner. Though the apartment owners’ lobby had said that Section 8 requires landlords to sign a 400-page document and makes it more difficult to evict tenants, Headrick says that the contract is only 12 pages, and that the inspections required are “no more difficult than what a responsible landlord should be doing anyway.”

“Having Section 8 tenants makes my job easier, not harder,” she said.

But in Dallas, the Inclusive Communities Project found that some landlords who owned many units throughout the city would rent to voucher-holders in low-income neighborhoods, but not in high-income neighborhoods, even if the tenants could afford both apartments. Though the landlords would say they refused the vouchers because they didn’t want to deal with the paperwork, housing advocates say that property owners don’t want Section 8 tenants (read: minorities) in buildings because they might drive away market-rate tenants.

The Inclusive Communities Project sued HUD over the way it calculated Fair Market Rents in Dallas. It is now trying to make an arrangement with Dallas-area landlords so that it can rent apartments from them and then sublease them to Section 8 tenants, taking away landlords’ excuses for not wanting to deal with Section 8 paperwork. (Daniel also sued the Texas Department of Housing and Community Affairs over how it distributed tax credits for low-income housing, a case the Supreme Court will rule on in the next few days.)

“The idea that Section 8 people should be required to stay in areas of slum and blight—at some point they’re going to realize that’s just racial segregation,” Daniel told me.

Often, voucher-holders in Austin have such a hard time finding housing that they need to ask for multiple extensions to find housing. Tenants lose the voucher if they don’t use it in 60 to 90 days.

David Wittie, a voucher-holder in Austin, ran into this problem when he was looking for a new place last year. Wittie called around and found a few places that said they took vouchers. But by the time he got on a bus and arrived at the apartment building to sign a lease, the units would be rented. Wittie, who has been in a wheelchair since he contracted from polio in 1956, said that he had to ask for three extensions before he found a place.

“All I wanted was to find a nice place to live,” he told me.

In cities such as Austin, where rents are rapidly rising because of an influx of new, affluent residents, voucher holders may be having even tougher times finding a place to rent because the cost of housing has gotten so expensive. There are no rent-control laws in the state of Texas, and rents in Austin have gone up 7 percent over the past year, making it nearly impossible to find a place that is affordable with a voucher.

The result is that voucher-holders are pushed farther out from a city’s core, and into buildings that are dilapidated and have multiple code violations: In 2012, city enforcement officers ordered an apartment complex in Austin evacuated after a second-floor walkway sagged and then collapsed. Officials blamed termite damage, and said the low-income and Section 8 voucher-holders were hesitant to report unsafe conditions because they knew how hard it was to find an affordable place to live and didn’t want to be evicted.

Rufus Jones, a 51-year-old visually-impaired voucher-holder, had to look for a new apartment two years ago when the building where he’d lived for 13 years was sold to a new owner who quickly raised the rent. After months of searching, Jones moved into a place that soon became nightmarish when he discovered it was infested with cockroaches. The apartment was located in a noisy building where the hot water often didn’t work and where the sewage pipes leaked, but the final straw came when a roach crawled into Jones’s ear when he was sleeping and he had to go to the ER to get it out.

It took Jones a long time to find the place he now lives, since fewer and fewer apartments would accept vouchers. But when I visited him at the apartment, a low-slung building on the far north side of Austin, he told me it wasn’t much better.

His new place is infested with rodents, which crawl into his bedroom and bathroom through holes in the wall, waking Jones’s service dog and Jones himself. Jones’s current place is only on one bus line, and he’s now once again going through the process of finding his way around a new neighborhood.

“It’s just so horrible right now—I can’t sleep, and I’m stressed out the whole time,” he told me.

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The Housing Choice Voucher program is the nation’s largest housing subsidy, serving 2.2 million families, which is still only about 25 percent of eligible households. It makes up a big part of the government’s efforts to improve housing conditions for America’s poorest families.  Advocates have called time and again for HUD to alter the Housing Choice Voucher program to make it a better tool for families to improve their lots in life, and some changes are afoot.

“There’s a growing recognition that there’s a shortage of affordable housing, and that families with vouchers have a hard time using them in neighborhoods and communities that haven’t traditionally had voucher families in them,” said Phil Tegeler, the executive director of the Poverty & Race Research Action Council.

As the result of a settlement, HUD tested a new program in Dallas and a few other metro areas that calculates fair market rent based on zip codes, rather than for a metro area as a whole. Called the Small Area Fair Market Rent Program, the idea is to make the voucher more valuable to landlords in nicer neighborhoods. Under the program, if a voucher holder wants to rent a place in the 75231 zip code, the Vickery Park area of Dallas, the voucher would support a rent up to $580 for a one-bedroom. Vickery Park is a lower-income area that gained notoriety as the home of America’s first Ebola victim. But if a voucher holder wants to rent an apartment in Forney, Texas, zip code 75126, the voucher would cover rent of a one-bedroom up to $1,090. Forney has some of the lowest crime rates in the state, and has also been designated the “Antique Capital of Texas.”

A study out of Harvard’s Joint Center for Housing Studies found that the Dallas small-area fair market rent program was successful in helping voucher families move to neighborhoods with lower violent-crime rates and lower poverty rates. Kathy O’Regan, HUD’s Assistant Secretary for Policy Development and Research, told me that the results of that study motivated HUD to use small-area Fair Market Rents in more areas. Earlier this month, HUD sought comments the idea of potentially changing the way Fair Market Rents are calculated.

“We agree with critics—we believe that we should be able to do better,” she told me. “It doesn’t look from geographic patterns as though households are getting enough choice.”