Section 8 Voucher Reform

On July 12th the House passed the Section 8 Voucher Reform Act of 2007, H.R. 1851. The legislation will change Housing and Urban Development's (HUD) Section 8 public housing programs - expanding rental assistance opportunities, improving program efficiency, and encouraging family self-sufficiency. The bill expands the number of families receiving vouchers by 20,000 a year for each of the next five years and ensures the program works effectively for the nation’s low income working families with children, elderly and disabled.

This legislation will:

• Reform the voucher funding formula to increase eligibility and eliminate inefficiency. The bill reforms the formula used to allocate Section 8 voucher funds to housing agencies in order to increase the number of families receiving vouchers - through the elimination of inefficiencies that have resulted in $1.4 billion in unused funds and through incentives for agencies to use funds to assist more families.
  
  
• Authorize 20,000 incremental Section 8 vouchers in each of the next 5 years, for a total of 100,000 new vouchers.
  
  
• Encourage Economic Self-Sufficiency. The bill includes provisions to encourage economic self-sufficiency for low income voucher and public housing families, including:
  
  • Reducing rent disincentives related to increases in earned income
  • Making it easier for low income working families in rural areas to receive a voucher
  • An improved funding mechanism to help families find employment
  • Income exemptions for adult full time student dependents and for education savings accounts
  • Helping low income families improve their credit score by allowing reporting of voucher and public housing rent payments
  
  
• Promote Homeownership. The bill permits housing agencies to let families use a housing voucher as a down payment on a first-time home purchase.
  
  
• Simplify the voucher, public housing, and Section 8 programs. The bill changes rent calculation, recertification, and inspection rules for the voucher, public housing, and project-based Section 8 programs, to reduce costs and compliance burdens for public housing agencies, landlords, and families. These changes are made while maintaining rules that target scarce resources to those families most in need and while maintaining rent calculation rules that ensure that rents are affordable.
  
  
• Increase tenant protections. The bill makes a number of changes for the benefit of federally assisted families, including provisions to preserve voucher families’ ability to move to other areas, to address excessive voucher rent burdens, to provide for more accurate fair market rent calculations, and to protect voucher holders in units that are in need of repair.
  
  
• Expand the Housing Innovation Program. The bill expands and renames the Moving to Work Program, which gives a limited number of housing agencies flexibility to experiment with development and rent policies, and strengthens the program’s evaluation process.
  
  
• Attach vouchers to housing units. The bill includes changes to make it easier for housing agencies to attach vouchers to housing units – an important option in tight rental markets and in developing supportive housing for seniors, disabled persons and homeless persons.

Financial Services Committee Passes Section 8 Voucher Reform Act of 2007 on May 25, 2007

Washington, DC - The House Financial Services Committee today passed H.R. 1851, the Section 8 Voucher Reform Act of 2007. The bill passed by a wide bipartisan margin of 52 to 9. The legislation would reform the Section 8 funding formula to make it more efficient, revise the rent calculation process for Section 8 and public housing to expand work incentives and reduce administrative costs, increase flexibility to use vouchers for homeownership, amend voucher targeting rules to increase voucher opportunities for lower income working families in rural areas, and authorize an expansion in the number of families receiving vouchers by 20,000 a year for each of the next five years.

“It is important that we move forward on Section 8 Voucher reform, if for no other reason than to restore our responsibility for the program. Many important aspects of the program like the funding formula have had to be addressed by the appropriators because we did not reauthorize the Section 8 Voucher program. Several weeks ago the funding formula was put in the Continuing Resolution without any vetting of the issue within our Committee,” said Rep. Waters.

“A program of this importance to American communities needs to be more efficient to be effective. H.R. 1851 represents consensus around a federal housing program that can work for the nation’s low-income working families with children, and the elderly and disabled, as well the Public Housing Authorities (PHAs).”

The Financial Services Subcommittee on Housing and Community Opportunity held a hearing to examine Section 8 voucher issues on March 9, 2007. Rep. Waters introduced H.R. 1851 on March 29, 2007, with Committee Chairman Frank, Ranking Housing Subcommittee Member Biggert, and Rep. Shays as original cosponsors.

The full committee also voted today to adopt Rep. Waters’ Manager’s Amendment that would provide for the following provisions:

Using Vouchers for the Purchase of manufactured homes
Permits vouchers to be used for the full cost of purchasing manufactured homes on leased land.

Protecting Vouchers Reserved for Persons with Disabilities
Requires HUD to issue guidance to ensure that the 50,000+ vouchers created for persons with disabilities continue be reserved for such persons.

Breaking the Cap on the number of families a housing authority can serve
Permits housing agencies to exceed their limit on the number of voucher holders they can serve, thus encouraging more efficient use of voucher funds.

Voucher Reserves
Increases from 2% to 5% the percentage of reserves housing agencies can retain for the voucher program.

Portability
Provides for full funding for the cost of housing agencies accepting voucher holders from other communities, to strengthen the voucher program’s feature that lets families move from one community to another.

Family Self-Sufficiency Coordinators
Provides for a more reliable funding source for the cost of family self-sufficiency coordinators that assist public housing residents in finding employment.

More Accurate Market Rent and Funding Adjustments
Requires HUD to establish smaller areas for the purpose of calculating Fair Market Rent levels and providing annual voucher funding inflation adjustments, in order to improve the accuracy of such calculations.

Housing Innovation Program
Expands the number of public housing agencies that can participate in the Housing Innovation Program [renamed from “Moving to Work”], which lets agencies experiment with development, financing, and work incentive proposals, while also adding substantial tenant protections to the program.

Subsequently, the Committee passed a number of amendments, as follows:

• A Waters amendment to expand the permissible number of Housing Innovation Program agencies by 20, plus a second category of 20 additional agencies under expanded tenant protections, including expanded resident participation in any proposals to demolish public housing units.


• A Green amendment, modified by an amendment by Rep. Bachus, to authorize 20,000 new incremental vouchers in each of the next five years.


• A Waters amendment to strengthen protections for voucher families in units that fail to meet federal housing quality standards.


• A Lynch/Murphy amendment to strengthen voucher provisions to address areas when families face high rent burdens.


• A Watt amendment to ensure that families seeking public and assisted housing are only screened based on their ability to meet lease obligations.


• A Murphy amendment to exclude income from Coverdell and Section 529 educational accounts from rent calculations.


• A Moore [WI] amendment to increase voucher work incentives for severely disabled persons, in conjunction with State demonstration programs.


• A Capuano/Lynch amendment to protect families making less than 95% of median income from being evicted from “Demo Dispo” and Section 8 limited equity cooperative developments.


• A Green amendment to authorize 15 year contract terms for vouchers used in housing tax credit projects, to help facilitate financing for such projects.


• A Capuano amendment to protect “empty nesters” from eviction from certain buildings when their units are oversized.