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Housing Vouchers: How Well Do They Work?

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Document date: May 02, 2000
Released online: May 02, 2000

MR. ROBERT REISCHAUER: Let me welcome you all to the Urban Institute. I'm Bob Reischauer, the president. And we're here, as we are on the first Tuesday of each month, to discuss an important area of policy concern.

Today we'll be looking at the Section 8 program, a major channel through which the federal government has attempted to support affordable, decent housing for low-income people. This is not an easy program. It is a complex program that has to deal with varying market conditions in thousands of different communities, and with landlords who face very different incentives for their behavior. It's a program that involves a good deal of deft oversight to work effectively.

And here to talk about some of the challenges and successes and failures in that program, we have a panel of three Urban Institute scholars, as well as somebody who does real work.

[Laughter]

I'm going to let Marge Turner introduce the panel. Marge Turner is the director of our Metropolitan Studies Center here at the Institute, and for several years during the 1990s was the deputy assistant secretary at the Department of Housing and Urban Development, dealing with research and analysis.

MS. MARGERY AUSTIN TURNER: Today we're going to talk about how well housing vouchers are working for families and communities. Drawing from recent research we've been doing here at the Urban Institute, including the pumpkin-colored report that's in your binder, our most recently released piece on this topic, and also drawing upon some local practitioner experience.

And I'm going to begin by giving a little bit of brief background on the Section 8 Housing Voucher Program, especially intended for those of you in the audience who aren't housers.

The key thing to know about the housing voucher program is that it offers families choices, options about what type of housing and in what location they want to live. That differentiates it from the more traditional approach to housing assistance for very low income renters, which subsidized the construction and the operation of projects like public housing projects, projects that were earmarked for occupancy by poor people.

In the housing voucher program, recipients are searching for housing on the private market—existing units, homes, apartments that exist in the private market—and they choose the unit in the neighborhood that best meets their needs. They contribute approximately 30 percent of their income toward the rent and the program makes up the difference up to a locally defined payment standard, which is intended to reflect the cost of decent but modest housing in the local market.

To date, the Section 8 program serves about 1.4 million households. Those are all very low income households, which means in their community they earned typically less than a third, 30 percent of the median income. So, like the payment standard, the income ceiling varies with the housing market. The program serves families with children, but also individuals who are elderly or disabled. It's a program that's administered at the local level by local public housing agencies, in most cases, but at least in theory the assistance is national. The assistance is portable so that a family has the right to take their voucher and move anywhere in the United States that they feel meets their needs.

Although there are still more federally subsidized families living in project-based subsidy than in the voucher program, we think the voucher program is extremely important to focus on because it's growing in its size and its importance as a component of federal housing policy. For the last couple of decades there has been virtually no new subsidized development that reaches down to very low income levels, and in addition, in this decade we have been demolishing some of the worst, the most distressed public housing developments. And some of those families have been shifting over into voucher assistance.

So we see this now as a growing program and the federal government's really primary mechanism for addressing the housing needs of very low income people.

Now, overall this is a program that works quite well. The national performance numbers are all very positive. The majority of people who get a voucher are able to find a unit and find a landlord where they can use that voucher. That's high rates of success. And the families who receive vouchers live in better-quality housing and definitely pay less of their income toward housing costs than their counterparts who receive no assistance. So it has important housing and income benefits for the recipients.

And finally, the recipients of vouchers are far less likely to be concentrated in high-poverty, profoundly distressed neighborhoods than are their counterparts in public housing. So it has important locational benefits relative to other forms of housing assistance.

But there are some concerns, some cracks in the picture that have been emerging over the last few years. And many of these issues are coming up from the field, from practitioners in local markets and from advocates for low-income people. But they really warrant more investigation and policy attention. And these issues link together in important ways.

The first is there's a lot of concern now that success rates may be declining. As rental markets in a lot of areas heat up, voucher recipients may be having more difficulty finding a unit where they can use their assistance. And we hear a lot of reports that turnback rates are increasing in many local areas. Second, the philosophy of free choice about where is the right place to live with your voucher may not be operating fully in reality. There may be geographic clustering with pockets of poverty forming in some communities. And related to that issue is the issue of neighborhood opposition. There have been a few highly publicized instances where communities either believed or convinced policymakers that an influx of Section 8 recipients was having a negative effect on the neighborhood. And finally, there are new issues emerging as the program tries to serve public housing relocatees. Many longtime residents of distressed public housing are profoundly poor and may never have lived in private market housing at all. They may only have had the public housing authority as a landlord. As these families attempt to use the program it may create new challenges for them, and for the program, and for landlords.

So today we've got four presentations that are going to explore and address what do we really know about these emerging issues. First, Susan Popkin, a senior research associate at the Metro Center at the Urban Institute, is going to talk about the challenges and barriers to housing search from the recipient's perspective. Then it's going to come back to me, and I'm going to talk about what we know about these issues of neighborhood clustering and neighborhood decline. Then we're going to turn to John Callaghan, who's the director of Housing Management in Fairfax County, Virginia, who will talk about some of the real day-to-day challenges of operating this program in a big, suburban jurisdiction. And finally, Mary Cunningham, another research associate in the Urban Institute's Metro Center, will talk about some of the innovative strategies housing authorities around the country are beginning to implement to address these problems and issues and make the program work better.

Sue?

MS. SUSAN J. POPKIN: Okay. As Marge said, I'm going to talk about the recipients' perspective on Section 8 and some of the barriers they face when they try to find good housing, and I'll be drawing on two recent studies we've done here in Washington, D.C. These studies allow us to understand more about what recipients' experiences are like as they search for housing with the Section 8 program. And one thing I want to point out before I go over some of the findings is the findings from these two studies are remarkably similar. Even though the rental markets in the cities are very different, the kinds of experiences and problems people are having are very, very similar.

This first slide shows you some findings from Washington, D.C. about the types of neighborhoods people move to with their Section 8 voucher. And I think you can see this shows the poverty rate—the red lines show the poverty rates of the neighborhoods they lived in when they got their Section 8 vouchers, and the blue lines show the poverty rates of the neighborhoods they moved to. And you've got D.C., and then public housing relocatees within Washington, D.C., and then suburban, people in the inner suburbs and outer suburbs. And the big story for the slide is you can see that people moved to dramatically better neighborhoods with Section 8. The poverty rate of the neighborhoods that they've moving to in the D.C. area are much lower than the neighborhoods that they started in.

However, they're not moving very far. They're not using the vouchers to their full potential. While they are moving to much lower poverty neighborhoods, they are still staying pretty much within the same area that they lived in before. Most of them moved less than five miles; some of them only moved a couple of blocks. And, as you know, in D.C., the neighborhoods change dramatically, block to block. And so there were very few city-to-suburban moves. Despite what's been in the media lately about Prince George's County, the majority of the people in D.C. are staying within the city, and they're not taking advantage of the full potential of the voucher to move to areas that offer more opportunities, that offer opportunities for jobs, that might offer better schools for their children. They're basically moving around within the District of Columbia. And they're also moving to areas where there are a lot of other Section 8 recipients already. So they're not taking the full advantage of moving to a new area, not moving into other cluster areas.

So why is the program not working quite as well as it could? And why are people not moving? I'm going to go over some of the barriers that people told us about when they searched for housing.

The first is that they really don't understand how the Section 8 program works. Section 8 is a very complicated program and it's confusing to people who are well educated and understand housing programs. It's even more confusing to people whose literacy levels may be low, who may not speak English as a first language. And their first introduction to the program is generally coming to an orientation session at the housing authority that lasts about two hours, and the housing authority gives them a big packet of information—most of it is HUD required. It's written in very legalistic language. It's often Xeroxed materials that HUD has provided, and people don't understand it. They are overwhelmed. The staff has done this a million times. They go fast; they're not very nice a lot of the time; they don't pay attention to whether people are understanding. They have to get through what they have to get through in their two hours. And at the end of it people don't understand what it is they're supposed to do, what they can use their voucher [for]. They certainly don't understand they can take their voucher anywhere they want. And then they're sent off to search for housing.

As an example, one of the people in one of the focus groups we did said to us she didn't understand how she was supposed to search for housing. She thought she was coming to get her $900 voucher, and where was her $900. How was she supposed to rent a unit without the $900? What was she supposed to do with this piece of paper they'd given her? So the level of understanding is very low.

Another major problem, particularly for working families, is not having enough search time. Section 8 recipients initially—it depends on the housing authority. They usually initially get 60 days to search and they usually can renew their voucher for another 60 days to continue searching. Particularly for working families, that's not enough time, especially for a lot of people who have entered the labor market recently and may be working in shift jobs. And they just can't be there when the landlords are available. That's one of the biggest concerns people have.

Another problem is large families, particularly as more and more poor families, very poor families, move into the Section 8 program. We saw people who had eight children. Sometimes they had custody of their other children from other members of their family. There was one family that we met who had eight children in a one-bedroom apartment, and they were looking for housing. And there just aren't that many large units available.

Following on that, especially among public housing relocatees, people have very serious personal problems that they bring to the search that make them less attractive tenants. For example, one of the people who we talked to was a young woman who was 26 years old. She already had seven children. She was from the Robert Taylor homes in Chicago, all of which were strikes against her. And she was searching for housing. And she just cried as she told us she couldn't find anything. And finally when she found a unit, the landlord was a police officer. He recognized her boyfriend as someone he had arrested recently, and that was the only unit she'd been able to locate. And she thought this was her only opportunity to leave public housing and was terribly upset.

Another problem people talked about a lot is most people don't have cars. In a place like Chicago, it can take two to three hours to get from one end of the city to the other, or if they're trying to look in a low-poverty area.

And finally, there are a number of costs associated with searching for Section 8 that aren't obvious. There are credit check fees, there are apartment application fees, and people have to pay a full security deposit on Section 8. And that presents a real barrier for a lot of residents.

In addition to the kinds of challenges people encountered when they were searching, people had a lot of fears about using their vouchers in unfamiliar areas. Very few people we talked to said they had even tried to look in a low-poverty area or predominantly white area that might have more access to jobs or opportunity. Many of them were very suspicious of efforts to move them to those kinds of areas, efforts to encourage them to move. We had people say to us bluntly things like, "The whites want the city back." And one person said, "At 5:00, they're going to shut off the bus service and they'll be in there and we'll be out here, and we won't be able to get back in."

Another issue was real fears about unfamiliar neighborhoods, not just suspicion about what it might mean to move to an unfamiliar area, but particularly in Chicago people talked repeatedly about how they thought there were floods in the suburbs; they thought there were tornadoes in the suburbs; the suburbs were dangerous; people might be hostile to them. I mean, it sounds funny when I say that, but the number of people who said that was overwhelming. There are a lot of myths about what's going to happen if you try to move to an unfamiliar area.

We also heard a lot about encounters with discrimination. The number one complaint was refusals by landlords to accept Section 8. Section 8 is a voluntary program. Within Chicago, it is actually illegal to discriminate against people on the basis of Section 8 recipiency, but, on the other hand, landlords can choose anyone they want to be their tenant. And often landlords would just say flat out, "I don't take Section 8."

There was a lot of bias against families with children. One of the stories we heard was a woman who said, "Well, the landlady said to me if you've got boys, I don't want you because they're in gangs and they'll deal drugs; and if you've got girls I don't want you because they're going to attract the boys." There was no winning.

A lot of stereotypes about public housing relocatees, that they're all drug addicts, that they're all drug dealers, that they're all in gangs, that they're all going to tear up units. And to some extent racial discrimination, although that wasn't as salient as you might think because most people didn't even try to look in white neighborhoods, so they really hadn't encountered — we heard a few stories, but not a lot.

So to sum up, when you have a lot — a number of very poor families moving into the Section 8 program, and particularly people coming from public housing, they're facing a lot of very serious challenges and they're increasing the challenges to the housing authorities as they try to serve this new population.

And Marge is going to talk about the landlord and the market perspective.

MS. TURNER: Thanks.

So our next focus is on the potential for neighborhood clustering and the possible effects that may have on receiving neighborhoods, an issue that has been receiving a lot more attention in recent years than it had in the past.

As I said at the outset, vouchers are dramatically less likely than public housing and other project-based approaches to concentrate recipients in very high poverty neighborhoods. But there is growing evidence, and growing evidence across cities, of significant clustering in some places. And that doesn't always mean that the recipients are being clustered in the highest-poverty or most distressed neighborhoods, but that they're overrepresented, they're clustered in often weaker neighborhoods, lower-income neighborhoods, possibly declining neighborhoods. And this is particularly true of minority recipients. Black and Hispanic recipients are much more likely to be clustered in this way than white recipients of a housing voucher.

Now, the issue of geographic clustering and the possibility of creating new pockets of poverty with this housing program is a major concern for policy. Our history with federal housing programs has taught us that putting all the poor people in the poorer neighborhoods through federal housing policy was really a destructive mistake, that it was destructive for the neighborhoods and it was destructive for individual opportunity.

So as we begin to see any evidence at all of geographic clustering it should be setting off alarm bells for us about what are the market forces that may be contributing to or allowing the program to operate in this way. And some of our research suggests that there are both demand-side factors at work and supply-side factors. And Sue has really talked about the demand-side factors: the hesitancy of families to move, their unfamiliarity with what we might call opportunity neighborhoods, and their fears about moving away from familiar territory. So I'm going to talk about really the supply side of the picture.

The first factor to recognize is that moderately priced affordable rental housing isn't evenly distributed across all types of neighborhoods. We do tend to see more modestly priced rental housing in inner cities, in lower-income areas, in the inner suburbs, but that does not explain the whole picture. There is, in many metropolitan areas, an underrepresentation of voucher recipients in the most affluent neighborhoods, even after you take account of where rental housing is located and where affordable rental housing is located. So in addition to where the stock is, there's an issue about which landlords are willing to accept voucher recipients. As Sue said, landlords aren't required to participate in this program. You can say no, thank you, I don't participate in the federal Section 8 program. And while the program has worked hard and made renewed efforts to make itself feel as much like a regular market tenant as possible, you are dealing with a local bureaucracy. You've got to have your housing unit inspected, you may have to make some repairs, you're entering into a contract not only with your tenant but with an agency of local government, and you're getting rent checks from two different places.

Now, for landlords who are in really attractive markets where there's tons of private demand, there may not be much, if any, incentive to accept those elements of red tape and bureaucracy, and we're hearing more and more about this now. As I said earlier, rental markets are heating up. There's often a line of potential tenants clamoring for an attractive unit in a good neighborhood.

In addition, though, if the local housing authority is incompetent, inefficient, inept, or even corrupt, there are more good reasons why a local landlord wouldn't want to participate in the program. If the inspections don't happen for ages, rent doesn't come on time, months go by with no rent payment, those are really legitimate reasons why a landlord with options wouldn't participate in this program.

I think of these as push factors, why some neighborhoods with affordable housing aren't going to accept Section 8 recipients because there are so many alternatives. But there's also some troubling evidence of some pull factors, really kind of sucking Section 8 recipients into more vulnerable neighborhoods where the market is weaker.

Again, there isn't evidence that this is a widespread phenomenon, but there is some good evidence that in at least some places, in part because the local housing authority is not paying attention, that a landlord can get more rent out of a Section 8 program than he could ever get out of a private market tenant.

So landlords attract Section 8 tenants to their properties. They look for more Section 8 tenants; they look for properties to buy up so that they can rent them to Section 8 tenants. And then they don't pay much attention to what kind of behavior those tenants might be engaging in, whether they're causing problems in the neighborhood where their neighbors are complaining. And in that situation landlords could be taking advantage of the program, disadvantaging both the recipients and the neighborhood.

What do we really know about impacts on neighborhood health? There have been a lot of anecdotes, a lot of hot newspaper articles bubbling up from different cities around the country where neighbors and communities feel that Section 8 has brought crime, drugs, gangs to their communities, and where they argue that middle-class flight has been the result. There is, in fact, no evidence to suggest that that's widespread, and some of those anecdotes may really reflect change that was going on in the neighborhood anyway that's easy to blame on the Section 8 program.

There's been little systematic research on this issue. Two studies that have focused on property effects in Philadelphia and Baltimore found that if recipients are not clustered, if they're widely scattered, there's probably little or no property value effect. But if recipients are clustered it's possible that there may be a negative effect on property values.

We clearly need to know more about this issue, but in the meantime it's an issue that we can't afford to ignore. I think the problems are real in some places and the problems are symptomatic of deeper issues about the way the program is being administered. And if they aren't addressed as the program grows in size and importance, it could undermine really crucial public support for a program that essentially brings poor families to housing throughout the metropolitan area.

So I'd like now to turn the mike over to John Callaghan who will talk about experience here in the Washington metropolitan area, in Fairfax County.

MR. JOHN CALLAGHAN: Thank you.

The Fairfax County Department of Housing and Community Development is the administrative body that administers housing programs on behalf of the Fairfax County Redevelopment Housing Authority. [As] we're going over this presentation, I found that I agreed with so much of the research. It was rather startling, except for the comment about housing authorities being inefficient, inept, and corrupt —

[Laughter]

CALLAGHAN: — which certainly doesn't apply to the Fairfax County Redevelopment Housing Authority, which has a sterling group of people, including one of our commissioners here this afternoon. And I say that with sincerity, not because he's here. I think we do a very good job. But having said that and administering the 2,700 certificates and vouchers that we have in Fairfax County, it's become an increasing challenge, as much of the research has pointed out. Unfortunately we don't have the luxury of doing research, and I appreciated the comment that we did "real work." But I think researchers do real work too because we need that work. We need it desperately because there is a convergence of policy research and practice. We need to understand if some of the things we're experiencing are just our jurisdiction or whether there're certain trends and problems that develop nationally that we need to grasp and to do something about it.

We have noticed that Section 8 is under siege in many respects. Our utilization rate has been maintained at about 96 percent, which is good, and it'll probably improve in the next few months. However, our participants are taking longer to find housing. Our return rate about a year ago was about 12 percent, and return rate means simply that people who are unable to find housing, return their assistance to be used for another family. It's lately increased almost 30 percent, which is extremely high, in our opinion. That means we have to issue more assistance than we actually have authority for, it means more people are out looking but they're competing with each other in a tight market.

The four points up there are really interrelated, that political disconnects and myths and realities really are kind of co-joined.

What we're finding that there are lot of misperceptions of Section 8 participants, and that leads to unfortunate policy decisions on the part of governmental officials. There's a misunderstanding that some of the research that was just discussed about the impressions of Section 8 participants bringing crime and other problems, social problems, into a community are rather rampant.

There's a number of incidents that we point to where we see the Section 8 program being what we call a lightening rod for community problems. If there are declining property values, people are trying to look for a reason and they connect with that. They see the presence of minorities and immigrants as connected to the presence of Section 8 assistance. Folks don't believe that people can be in their community who look different than they do, and they believe that subsidized assistance is the reason for it. They also start to connect the presence of those people with the decline of property value and other difficulties.

I think our major challenge is to be responsive to changing market conditions, to changing realities. And one of those changing realities is the fact that we're serving more immigrants than we did in the past from many different cultural backgrounds, which speaks to the issue of the orientation sessions, which we believe we need to improve locally. But it is a serious handicap for us in trying to administer the program and get people functioning out in the community and using Section 8 assistance effectively.

We're looking at a number of remedies, including providing some kind of legal protection under our human rights ordinance for persons who use Section 8 assistance. We'd like to raise the payment standards. We'd like to start giving priority to Section 8 participants in some of our programs, our locally administered and subsidized programs, to use our Resident Advisory Council more effectively to promote a positive image of Section 8 recipients. And I think one important thing that we're looking at is to use some of our Section 8 assistance and convert it to project-based assistance, which is something that can be done with Section 8. That's pretty much to make up for the loss of project-based Section 8 assistance in the private market. And we're finding we're going to have to seriously look at converting some of our tenant-based assistance to project-based assistance.

Thank you.

MS. TURNER: Thanks, John.

Mary?

MS. MARY CUNNINGHAM: Today I'm going to talking about four areas that housing agencies can focus on to strengthen the Section 8 program for families. And I'm going to start by talking about information and outreach. And probably the most important, and probably a great place to start, is to improve the orientation briefings for Section 8 participants. This is really the first exposure that participants have to the program. It's where they learn the regulations, it's where they learn how to search for an apartment. And if they can't understand the program at this point it's going to be very difficult for them to find an apartment. So steps really need to be taken to make sure that these briefings are effective.

One housing agency, for example, is working with a communication consultant to make the briefings more interactive, make sure that the materials are easy to read, are at the reading levels of the participants, and that overall the presentation is professional.

Another common element that's typically missing from briefings is incorporating mobility and the portablity option into the whole entire briefing instead of having it as an add-on at the end, to make sure that mobility is a common threat that exists throughout the whole entire briefing.

The next is to provide information about communities. If people or the participants don't know about these communities, or low-poverty communities, they won't know to search in them. And a few housing authorities have started resource rooms that are located within the housing agency that provide information on low-poverty communities and also allow participants to search online for an apartment or to have access to lots of local newspapers in those communities.

And finally, for information and outreach, is to explain portability. It often surprises me that Section 8 participants don't understand that they have a portability option, and for them to take advantage of it they need to know about it. So housing authorities really need to talk steps to constantly educate the participants about their options and about their housing opportunities, and to make sure that the procedures to move from jurisdiction to jurisdiction are simple and efficient and that they don't cause extra barriers for housing for Section 8 participants.

The next area is housing search assistance. And HUD has funded the Regional Housing Opportunities Program and the MTO program, and these are what are known as mobility programs. And they offer more intensive search assistance to Section 8 participants and also refer them to social service agencies if they need them. And I think that steps really need to be taken to incorporate these mobility programs into the Section 8 mainstream program, and that they're not thought of as separate, the mobility program and the Section 8 mainstream program. That everyone on the mainstream program has a portability option, and everyone should get services so that they can take advantage of it — to take advantage of that option.

And to do so we found that participants, we need to allow them more time while they're searching, especially if they're searching in low-poverty areas. Housing agencies really need to make sure that participants are given extensions if they need extra time while searching for housing.

Next, we need to help them and provide them with transportation. Section 8 participants have reported that searching for housing is not easy, especially on a fixed income. And some housing agencies have offered van tours to new communities so Section 8 participants can go with a group of other families and look at low-poverty communities, and also reimburse them for bus transportation.

The next is to help pay for moving costs. And a few housing agencies have started or developed security deposit loan programs. And these loan programs offer no- or low-interest loans to participants that they pay back over time. And they're often used as a carrot to encourage people to move to low-poverty areas.

Finally, I think we need to recognize that sometimes the first move is too new, that coming on to the program as a new participant is really overwhelming, and this may be the first time a participant is searching on the private market. A few housing agencies have recognized that and have started to target their mobility programs to second movers, to people who have already been on the program for a year and understand the program a little better, and concentrating on that second move to a low-poverty community.

The next area that I want to focus on is the supportive services, and I think that we really need to start to think beyond housing, that housing agencies that are successful at doing this are making sure that participants who are taking advantage of mobility programs are also being hooked up with family self-sufficiency programs that they offer so that they're getting case management and referrals to social service agencies.

For everyone, after you move to a new community there's a period of adjustment to sort of start to know your community, know it's out there, know your neighbors. A lot of housing agencies have found that successful participants get post-move supports, and usually what happens is that counselors, after they move, will go out to visit the family at month three or month six and hook them up with social networks such as churches or local community groups, make sure that they know their schools and their social services in the area.

The next area, the fourth area, is to attract more landlords onto the program. Participants can't take advantage of expanded housing opportunities if landlords are not willing to participate in a program. The first suggestion on this side is the most important, and it's often overlooked by housing agencies. If a housing agency can't administer their basic program components correctly, then understandably landlords won't want to participate. If they can't send the checks on time, if they can't inspect the units efficiently and quickly, landlords are not going to want to participate, and have really no incentive to participate at that point. So first housing authorities need to make sure that their program is operating correctly before they move on to anything else.

Next is to adjust the payment standards and make sure the payment standards are competitive with the local fair market rents, and that they ask for exception rents from HUD. After they take those two steps, housing agencies can start focusing on landlord outreach. Housing authorities that do this well do it by telephone, they do it by writing, they meet with landlord associations, and they develop special brochures that are targeted specifically for attracting landlords onto the program. Many use landlords who are already participating in the program to speak positively about the program to other landlords and sort of serve as testimony about positive aspects of the program.

Finally, housing agencies need to make sure that they respond to problem tenants and take responsibility for making sure the tenants adhere to their family obligations, and being willing to step in and mediate between the landlords and participants when there is a problem.

So overall our collective finding is that the Section 8 program works really well, but there are some areas where housing agencies can take steps to improve the program and to really expand housing opportunities for Section 8 participants.

MS. TURNER: We're going to open it up for questions and comments, and I've been asked to remind you to say who you are and get close to a microphone.

Q: Chester Hartman from the Poverty and Race Research Action Council. About 30 years ago we had one of the largest social experiments ever in this country on housing allowances, the EHAP program, the experimental housing allowance program. My reading, there was a supply-demand and administrative experiment. When I wrote about those findings, I was very negative, particularly about the notion of expanding it. One of the sub-experiments had allowances available for everyone who needed one, wanted one. The problem then, and I think it's even a more serious problem now, is that this kind of program does nothing to increase the housing supply, obviously. It relies totally on a market approach, when the market has been like a failure to meet the needs of these groups. It increases costs, it seems, with the competition. It increases government costs and rent levels for everyone, not only for competitors to Section 8 housing with certificates but for everyone.

I was wondering, since all four of you seem so enthusiastic about Section 8, how do you respond to that kind of criticism?

MS. TURNER: John, do you want to start?

MR. CALLAGHAN: Did you want me to be an apologist for the Nixon administration, which started the voucher certificate program? I wouldn't do that.

I think there are a combination of strategies. In a different world we might reconstruct it differently. It's a given at this point, it is expensive. I agree. It does minimize the number of fights about location and other issues. If we can't overcome injustice through the laws that we have now, I'm not sure what we do about finding locations for affordable housing because we spend years battling for the smallest sites within our jurisdiction.

I think it does fulfill a need. Whether it's the right thing now or not, I'm not sure. In the past in Fairfax County we've called it a stealth program. We really didn't pay attention to many of the things that these folks are discussing as remedies or improvements because it just seemed to work. We just have people take the assistance and they're on their own. Take care of it. Many of our staff, particularly those who have been around for a long time, had that attitude. It was a finders-keepers program, and so on.

I guess the short answer is, there are a lot of limitations to it, but I think obviously no one is willing to scrap it at this point because the alternative isn't — you know, what's the alternative at this point?

MS. TURNER: Yeah. Right here.

Q: Rudolph Penner, Urban Institute. I was at HUD when the program was invented way back when, and one of the things that we argued in PD&R was that it should be designed in a way that the landlord didn't know the tenant was subsidized. It seems to me that would have an important effect on a lot of the problems you mention, and I wonder what you would think about that kind of reform.

MS. TURNER: I guess my reaction would be a question about how quality standards would be achieved, if at all, under such a program. Would you not worry about whether the housing was—met a sort of standard of decent quality?

MR. PENNER: In a sense we worried less about that because we found in the housing allowance experiments in places like Green Bay that the standards inadvertently excluded a lot of very good housing. That was a big disadvantage. But we thought still some sort of toned down standards, if you like, could be administered through certification and through occasional inspection.

MS. TURNER: So the landlord would know that he was dealing with a subsidized tenant, but he wouldn't be getting the rent from two places?

MR. PENNER: Yeah. Well, he wouldn't even have to know he was dealing with a subsidized tenant. The inspections could occur sporadically through the tenant.

MS. TURNER: But unless that meant that you were beefing up the implementation of housing code enforcement citywide, then it would be a dead giveaway.

I think that if landlords didn't have to deal with the housing authority at all, it would address some of these issues. But I don't think it would necessarily address them all. I mean, I think there is an element of poor and often minority families trying to get the best outcomes out of the private market. At one level I agree with Chester, that the private market hasn't always served poor and minority households well, and so some of the issues we've raised about where people end up living and whether they get full access to the whole market I think would still persist even if you weren't dealing with a housing authority at all.

MS. POPKIN: I agree. I think particularly as people come out of places like public housing and have not been in the private market, some of them, for 30 or 40 years, I think the problems they bring with them are going to make them unappealing to landlords, whether or not they've got a voucher in their hand.

Q: Bob Lerman, Urban Institute. I'm thinking that you're not discussing some of the other issues that these housing programs create, namely the horizontal equity issue where—and especially when you're saying, you know, you want to even actually raise the standard in already high-rent places so that you're providing subsidies of 800, 900 a month to some low-income people and zero to the other two-thirds, that that's a very awkward thing to do, it seems to me.

The second thing that I think gets very little attention in housing discussions that I've heard, anyway, you mentioned a little bit, is not housing mobility but mobility out of the vouchers altogether, and the fact that we have a fixed number of vouchers must mean that people are very reluctant to get themselves, you know, with incomes that just push them out of the benefit level because if a month later or six months later they get unemployed, they might be at the bottom of the list and it might be years before they can get anything.

And the third thing has to do—and this is related to the issue of mobility—with the issue of involving, especially at the high end, people toward more ownership or even possibly quasi-ownership or equity development situations because people -- even in fact there's a belief that even in the old welfare system a lot of the people who came onto welfare left rather quickly. My understanding is that in housing you don't get that.

MS. TURNER: But the fact that only about a third of eligibles get federal housing assistance in this country is indeed a huge fact that distorts a lot of issues about the program. It's a lottery where the households who are lucky enough to win get a huge benefit for a long time. The issues that you raised are being addressed tentatively in little experiments around the country. There are housing authorities that are experimenting under various demonstration programs, with time limits. There are a lot of housing authorities making more or less aggressive efforts to get families into what are called family self-sufficiency programs with the goal of moving up and out. And there is an effort to make the program apply to home ownership.

All those issues about is there a way we can get people moving through these programs on an upward trajectory so that the benefits spread a little bit further, those are all under discussion. But fundamentally, the country has never decided to make this an entitlement, or anything close.

Yeah.

Q: Tim Harrison with the American Public Human Services Association. I wondered, where you had clients who were dually served by housing assistance and other social services, is there any evidence or discussion about the use of other funding streams to support Section 8, either security deposits or some sort of assistance?

MS. POPKIN: There are some linkages to other kinds of assistance. In Chicago they've created a security deposit loan fund, and I believe they're having it administered by some local nonprofit organizations. There is also the welfare-to-work demonstration, which is intended to link Section 8 to the TANF agencies and help people to move off welfare and Section 8. It began, as Marge said, in some housing authorities, some small demonstration programs. It's not particularly widespread yet, but it's perking around.

Q: Cushing Dolbeare, freelance housing policy consultant. A couple of points. First of all, having spent most of the last 50 years in housing advocacy in one manner or another, it seems to me that one of the big reasons we don't have a more comprehensive and adequate housing assistance program is because so many housing advocates spend a lot of their time and energy arguing with each other, when it really doesn't matter what we do, as long as we do something. There is a great need for additional tenant-based assistance. There's a great need for additional expansion of the housing supply. I think there's a great need for the expansion of the nonprofit sector in community and individually owned housing.

I don't think we'd get anywhere by sort of criticizing the other programs and saying, well, you know, project-based assistance concentrates people in certain areas, or tenant-based assistance doesn't add to the housing supply. I share Bob Lerman's concern about the horizontal equity issue, and it seems to me that one of the things maybe we should look at, in addition to the focus today on housing vouchers and how to make them work better, and I hope how to expand them as a result of that, is the possibility of using other mechanisms to deal with the income part of the housing problem because with something like 90 percent of the worst-case-needs households living in housing that meets minimum standards of adequacy, and having only the problem that they're paying more than half their incomes for that housing, you don't really necessarily need a housing program to serve those 4 million households.

We certainly need —I see very little prospect that HUD will, in the next generation or so, move from 1.5 million households to 5 million or 10 million households, which will meet the need adequately. It seems to me we should look at other approaches.

At one point the food stamp program's excess shelter deduction was one of those, where you got extra food stamps to offset whatever you paid over 50 percent of your income for housing. It probably at that time was as large a program as the Section 8 program. I don't know if anybody's ever researched that to see how it worked. It seems to me you could put a housing add-on to the earned income tax credit, which would take account of the difference in housing costs from one market to another.

I think that we need to expand our horizons beyond just the housing programs themselves and look at how we can make other programs assist people in meeting their housing needs.

MS. TURNER: John, did that address some of the Fairfax issues?

MR. CALLAGHAN: I think it would. I think there is a lot of merit to the concepts— going back to the issue of horizontal equity. We're disturbed by the fact that there are probably 29,000 households in Fairfax County that would qualify by virtue of their income that we're not serving. 2,700 families out of 29,000 is pathetic. If we combine all of our housing programs together, it probably doesn't even account for a percent of the population.

We've talked internally —we don't have quite the stimulating policy discussions that we have here today, but we've talked about the issues of time limits and almost the housing allowance approach, where folks are really getting some kind of offsets to make housing more affordable. Because as you've well pointed out, many people are already housed. It's just the rent burden is excessive and it hurts them tremendously trying to keep up with their housing payments or their rent burdens.

This is why it's so puzzling locally, why people are getting disturbed that people are getting Section 8 in particular areas of the county. We saw this as a good thing. We couldn't figure out why people thought that was bad. It was giving them more disposable income by getting this benefit. It gave them more freedom to move other places. So we could not understand why there was a political upheaval because folks were getting Section 8 assistance. They saw it differently. They saw it as a magnet.

But I guess in sum, I think that helping more families is definitely called for, and there are other mechanisms, perhaps, other than just what we're talking about, along the lines that you were mentioning in some of the discussion earlier about some kind of —not housing subsidy exactly, but some kind of allowance of some sort.

MS. TURNER: Now a question all the way in the back falling out the door.

Q: Anthony Benjamin from the National Association of Housing Redevelopment Officers. Addressing the gentleman from Fairfax, you said that your utilization rate is at 96 percent. I guess you're talking for Fairfax.

MR. CALLAGHAN: Yes, that's correct.

MR. BENJAMIN: And my question is this. Is there a direct correlation between that high utilization rate and a landlord outreach program, or do you have one?

MR. CALLAGHAN: We have a landlord outreach program but I think it's rather fledgling at this time. In fact, Mary's summary of the steps that housing authorities need to take is almost identical to the process that we went through. The issue of issuing checks on time and doing inspections quickly and then moving on to landlord outreach and other types of techniques is kind of a stage we're at now. We reversed some of it. We got embroiled in this what I call the three-year war to improve our compliance and enforcement activities. So we spent a lot of time and effort and resources on that step to prove to folks that we had a credible program and to rebuild trust.

So our outreach piece to landlords really needs improvement now. I think we just always had a strong program. The utilization rate often hit 100 percent, and as I mentioned earlier, the way we're achieving that is really over-issuing assistance. Getting more people out there. If everybody leased up, we'd be in trouble.

MR. BENJAMIN: There's not a high correlation between the landlord outreach and your utilization rate?

MR. CALLAGHAN: Well, not in our jurisdiction, as far as I can tell at this point. It may be true elsewhere. But it is a program that, as everyone acknowledges, is very sensitive to market conditions.

MR. BENJAMIN: And I think you mentioned that your turnback rate was about 30 percent.

MR CALLAGHAN: It's gone up to about 30 percent.

Q: MR. BENJAMIN What accounts for that, in your estimation?

MR. CALLAGHAN: Well, many of the landlords that we deal with in Fairfax County own just one unit. In fact, that's the majority of our landlords in Fairfax County just own a single unit. Many of the landlords were in a situation where they could not sell their properties because of depressed property values, and so two things are taking hold. I think people who want to sell their properties are in a position to do so so they're not taking renters, or they're not taking Section 8 renters at this point.

Secondly, the rental market is very high, so landlords really don't have to deal with us. As others have pointed out, it involves the usual red tape. As much as we try to streamline it, it still involves a certain amount of governmental involvement, and certainly the inspections process puts a lot of landlords off. They have to do things that they wouldn't do with any other tenant, and that's a deterrent. So in good times it tends to be less of an attractive program. In addition to that, some of the changes that were made in the regulations regarding damage claims and rental loss and things like that have gone away contribute to it being less attractive.

MS. TURNER: Yes? Here.

Q: Bert Seidman, National Council of Senior Citizens. I'd like to follow up on what John Callaghan just said, and that is in looking now to communities around the country rather than just Fairfax County where he and I both live, and that is this whole question of preservation and refusal of landlords, particularly where there's a tight supply to renew Section 8 contracts. In that connection, is the so-called enhanced voucher a way of dealing with the problem or is it not?

MS. TURNER: I'm not sure whether I know enough to answer that question definitively. The enhanced voucher, if I understand it correctly, is a sort of special-purpose voucher that goes to a family or an individual that is living in a project that was project-based subsidized and is going to lose its project-based subsidies, allowing the owner to rent to private market tenants at private market rents. To protect the current residents of those developments, they get this enhanced voucher that pays enough that they could stay in that unit if they wanted to, even though its rent might end up being too high. But they could also take it away with them if they wanted to.

The demolition of public housing and the expiration of subsidies in privately owned subsidized raised really big, complicated, and differing issues. When there are developments in really good neighborhoods where the private market rent is high, it may be difficult for families to stay where they've been living, and that's a real concern.

I think I would come back to a point that Cushing made, which is that people who care about housing outcomes for poor people should be looking for ways to combine project-based assistance strategies with tenant-based assistance strategies rather than kind of bickering over the right way to use the inadequate level of resources that is out there right now.

MS. CUNNINGHAM: And I think it's true, if I could just add on something to that, that there are some populations that project-based assistance better suits their housing needs. I think we need to recognize that.

Q: I'm Steve Bell of the Urban Institute. I'm thinking about Section 8 in the context of the larger array of income assistance programs and have questions or really points of information. One, is there an offset of benefit amount in any other assistance programs when a family receives its Section 8 benefit? This is to react to Bob's point about horizontal equity. That's certainly the case. This is the wrong direction, of course. It's taking away income, but just in terms of what the balance might be.

And the other point of information is simply, if it's known, what is the exit rate on Section 8 assistance, and particularly exit due to happy endings? Does anybody know?

MS. TURNER: On the exit rate I don't think we have good data. I sure don't k know it. There's a rule-of-thumb estimate that 10 percent of existing vouchers become available every year. Do you operate with that? I've heard it in a lot of contexts.

MR. CALLAGHAN: That's about right. We looked at the average length of stay in both public housing and Section 8 of Fairfax County and it differed between the programs, but from 6 to 8 years was the average.

MR. BELL: — at a point in time. So they made—the ones that you're interviewing, many of them are still there.

MR. CALLAGHAN: Well, I'm not sure how the number was arrived at. It could be longer. We're not accounting for people who get kicked off the program, asked to leave or encouraged to leave. Or in some cases people end up with a subsidy that's so small that they decide it's not worth it any more to go through all the intrusiveness that the program demands to continue to receive a small amount of money. For those people who are successful in running their incomes for some reason, they may decide to leave before the subsidy reaches zero.

We have a fundamental challenge in trying to get people to get to a point where they don't need the subsidy. As I think you were probably leading up to, in a sense people get very addicted to the assistance. It's very attractive. When folks have an option from housing authorities to Section 8 or public housing, they're going to wait for Section 8 all the time. They'll wait longer if they have to for Section 8. They think it's just a much more attractive program. It allows them to do more things and get better housing and not stand out.

The fact remains, unless the family can get that income up into the high 30s in most markets, or in our market in particular, from where they are in the low to mid-20s, they're just not going to be able to make it without the subsidy. They just can't manage it. So if they really don't have good job prospects, if they have just marginal kinds of job skills and so on, there's just a big expectation to get them up and out.

MS. CUNNINGHAM: I think that's where the family self-sufficiency program component comes in, and maybe even targeting participants that have small subsidies in helping them make that climb up the ladder from the low 20s to getting off the program at the high 30s.

MS. POPKIN: I was going to address your first point, which is actually the reverse of what you implied, there is no offset for Section 8. If you're on AFDC, you usually pay no—usually on Section 8 you contribute 30 percent of your income. If you're on AFDC, that's usually considered zero income for TANF.

MS. CUNNINGHAM: So you pay 30 percent of your TANF benefit.

MS. POPKIN: In some cases they'll count that as a zero income. Depends on the housing authority. Nothing declines because you're getting the housing.

MS. TURNER: Jeff.

Q: Jeff Lubell, Center on Budget and Policy Priorities.

I think Fairfax is probably unusual in terms of your -- what your fair market rent or your payment centers?

MR. CALLAGHAN: Oh, I was afraid you were going to ask me that.

[Laughter.]

MR. LUBELL: You don't have to tell me. It's over — is it over $1,000?

MR. CALLAGHAN: Well, it depends on the bedroom size, of course, but it's getting up there pretty high. I don't have my notes with me, unfortunately. But nationally, if you looked at the weighted average of fair market rents, your income exceeds the amount at which you get any subsidy, and therefore you get kicked off the program at around $24,000 a year annual income. So it's not the high $30s nationally, that may be true, per year.

MR. LUBELL: So this gets back to the point about time limits. Sometimes it gets said that while we've got welfare time limits, so we should have one on the housing side, too. But there's an important distinction, which is, it may be possible for someone with relatively low skills to make up for the loss of welfare income, it's not that much, and to make up for it in employment is not all that difficult, provided you're not disabled. But to make enough money to afford housing costs, as you said, requires quite a large income, and I think it's unrealistic to expect that people are going to be able to do it in a very short three- to five-year time frame.

So, I think we should focus on helping people to increase their skills and increase their earnings so they can actually afford housing. Anything else I think would be giving up, and if you're concerned about horizontal equity, let's expand the pie, not reduce the amount of assistance that people need to help them afford housing.

MR. CALLAGHAN: Well, there's no question about that. It's just I feel that most housing authorities are pretty ill-equipped to do a lot of the things that are talked about. They're just too busy trying to crank the paperwork out and get people leased up, because if they don't get them leased out, they don't make money. They don't get administrator fees. And so, their focus, as Mary pointed out, their focus is on the essentials, and sometimes they're not even keeping up with the essentials. And getting them into the employment business, you know, I think if you look to, I believe, the Gateway project in Charlotte was an enormous amount of effort, a lot of resources brought to bear, and I think they had a 30 percent success rate. It was a self-sufficiency type program. Not that there's anything wrong with it, but most families are pretty overwhelmed just to begin with.

And I'm going to contradict myself somewhat, because I think what you're talking about is important, and we want that for our families, it's just — it seems like a very tall order, and we're not sure how to accomplish that. And the reason I kind of go back to these concepts that Cushing was talking about related to allowances and things like that, we had a local assistance program very similar to the one in D.C., it was called the Tenant Assistance Program, we did it purely by lottery, and we gave a flat upset number as a housing allowance. It was the most popular program we ever administered in Fairfax County. We ran out of money when the budget crisis hit back in the '90s, but people loved it. They loved the fact there was a lottery, like they were gambling and they won this thing. And landlords loved it, too. It was a very simple program. It was so simple, it was scary. Now, we didn't have a lot of checks and balances, so who knows what the implication might have been long-term, but that kind of thing seemed to work, and we just found out about that accidentally.

MS. TURNER: We can take one more question.

Q: Larry Pearl, actually, Marge, if you'll give me one-and-a-half. The first question, which is really several people have flirted with the issue of welfare reform, and I wanted to ask it specifically, what people think has been or will be the impact of welfare reform on Section 8. The program is up for renewal in a year or two. Are there things that can be done in the program other than repealing it perhaps to help Section 8. The other question is whether all the steps that were outlined, the positive steps, can be taken without an increase in administrative fees from HUD.

MS. TURNER: You want to take a stab at that?

MR. CALLAGHAN: No, go ahead. I'll take the other half.

MS. TURNER: I think the most aggressive housing search assistance that we've seen in some of the demonstration programs probably requires some additional money. But I think many housing authorities can do more to help people succeed in the program, more to help people realize a wide range of choices with the administrative fee that they've got, I think in most cases. But I think we need to do more work on that issue. And I think, I mean, we have been flirting in this conversation with the relationship between welfare reform and the Section 8 program, and there are housing authorities who are trying to make that linkage stronger, either by time limiting their Section 8 assistance, and making Section 8 really more restrictive than it has been in the past, or by entering into partnerships with social service agencies and employment agencies and welfare-to-work agencies to try to help Section 8 recipients make the income gains necessary to be able to afford rental housing in the market.

And I think the one issue to remember, or the one policy issue to remember in comparing housing assistance to welfare reform is that there are many working people, people working full-time, who can't afford what it costs to rent housing in their market. And the program has always recognized that, it's been a program that's been focused on helping people afford decent housing, it didn't originate with an up-and-out kind of focus. So, if we're going to think about it in a more time limited way, I think we do need to think about what does it take to reach a point in income where you can afford rental housing in the market.

With that, I think we're going to close, thanks a lot for coming. We really appreciate it. And thanks very much to you, John.

Return to May 2000



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