Federal officials spend more tax dollars on Section 8 housing vouchers than they do on cash welfare, and the program often perpetuates poverty rather than alleviating it, according to an urban housing expert.
“Its incentives are completely skewed,” Howard Husock, vice president for policy research and director of the Social Entrepreneurship Initiative at the Manhattan Institute, told The Daily Caller News Foundation.
“You’ve ‘hit the lottery’ and you’re set for life,” said Husock, referring to those who receive housing assistance for decades, a lifetime or even generations, while others wait for years on a waiting list. “Not only do you hit the lottery and you can sit back and have a housing unit for life, but remember, your deal is you pay 30 percent of your income in rent, but what it means is for every additional dollar you earn, you pay an addition 30 cents in rent,” he said.
Voucher recipients pay 30 percent of their income in rent no matter how much they earn, which stifles motivation to earn more, Husock said. Federal housing assistance, unlike the five-year cap imposed on welfare benefits in 1995, has no time limit. Husock, author of, “America’s Trillion-Dollar Housing Mistake: The Failure of America’s Housing Policy,” calls it “welfare unreformed.”
The Department of Housing and Urban Development paid $18 billion in vouchers, not including associated costs, in fiscal year 2014, versus the $16.5 billion the Department of Health and Human Services spent on cash welfare the same year.
Housing vouchers began in the 1970s, hailed by liberals as an additional way to help the poorest, and by Republicans as a semi-free market alternative to public housing. But that attempt at reform backfired, Husock said, ultimately creating a system in which landlords and housing authorities have no incentive to cut costs or make sure tenants meet income requirements, and residents have an incentive to keep their financial situation stagnant.
Many of the wait lists in America’s more than 3,000 local housing authorities are so long that they’re closed to new applicants. Voucher tenants receive assistance for nine years on average, according to HUD.
“The reality is if you’re going to lose a lot of your benefits by working, you’re less likely to work,” Mark Calabria, director of financial regulation studies at the Cato Institute and former deputy assistant secretary for regulatory affairs at HUD, told TheDCNF. “We shouldn’t punish people for working.”
Voucher housing also discourages residents from increasing their earning power through marriage, Husock said.
“It’s also an invitation to hide your income, or not to get married, right?” Husock said. “So if you’re a single mother, and you would like to get married, well first of all, if your husband or your spouse is earning anything, your rent goes through the roof.”
Calabria said vouchers are also very immobile, discouraging people from moving elsewhere for better jobs. Landlords and local housing authorities also lack incentives to cut program costs, Calabria said.
“The program is almost guaranteed to be more costly than it should be, because the incentives aren’t there,” Calabria said.
Housing authorities also have an incentive to keep higher-earning tenants, rather than appealing to the neediest, Husock said.
“Housing authorities are desperately short of what?” Husock said. “Revenue. The more income you have, the more income you pay in rent. They love high-income tenants.”
HUD’s Office of Inspector General reported last summer that HUD allowed 25,000 families earning more than the income limit — including at least one millionaire — live in public housing, spawning critical news articles and editorials across the country. HUD finally caved to public pressure and agreed to begin kicking out those too-rich families.
The answer to America’s housing problems isn’t more money, Calabria said.
“We’ve spent a lot of money, it’s just not very well spent and the incentives are not very well done,” Calabria said. “I don’t think it’s a matter of money because we spend a lot of money.”
Unfortunately this article only tells half the story, its actually worse than this. It also adds a huge incentive to never marry, and is one of the main drivers of out of wedlocks births. Here’s how it (one of the scams) works. I knock up my girlfriend, she has the baby, she gets section 8 housing. She works very little, if at all. Section 8 ends up paying for most/all of her housing. She can also qualify for free or really cheap daycare, che is a single mom, after all. She can also get assistance with her utilities, TANF cash, as well as the all important EBT card. I work full time, and live with her full time, and just have my “official” residence be at my parents house, which is where my bills, etc, get sent to. I work full time, but since i don’t officially live there, it doesn’t count towards that 30% of income towards rent. This also keeps our “household income” very low because we don’t officially live together, and since we aren’t married, we can’t file jointly even if we wanted to, which we don’t. When she files, she gets everything she paid in back, plus a bunch of EITC type credits back, and will get thousands more than she paid in taxes in her return. Girlfriend and kids are enrolled in medicaid, I keep my cheap single male employer provided health insurance. Never have to pay for a thing for her or the kids, just myself, and my needs are few.
Now, picture this same couple, married. Both parents would have to work, and the more they work, the less in benefits they would recieve. In many cases, they would have to more than double their real income from employment in order even get to the breakeven point from losing the freebies, which means work a whole lot harder. How many people are ever going to bother? Very few. Which is how we find ourselves in this situation.
Of course I don’t think of this until after I hit submit, but if it needs to be said, no, “I” don’t do any of this, I just wrote this in the first person because its easier.
as an advertising landlord, just got a call from a section 8 tenant desperate to get out of his complex. he lives with his girlfriend and 8 year old son, and, at 38 years old, lives on disability (“but I do work some” he said). i have a non-smoking building, so he said he only “vapes” (liar). fuck these people – i would rather have a vacant apartment than have to evict a non-paying slug who gets free legal representation, food stamps and donated gifts at Christmas time than put up with this parasitic asswipe. he is an insult to humanity/
Section 8 is nothing but a welfare program for landlords, that inflates rents and prices moderate income buyers and first time buyers out of condos and houses.
Someone I know here in Chicago decided that he could clean up being a Section 8 whore, and collecting grossly-inflated rents on slum properties. He bought several such, and spent an additional $25,000 each at minimum, fixing them up to pass the mandatory HUD inspection, which is more difficult than you thin… at least for small landlords with no political connections- if you are huge and own, say, 50 fetid buildings with dozens of major code violations but have friends in city and county government, you will have no trouble passing inspection, or collecting voucher rent on vacant units.
Well, my friend found out who he wasn’t, pretty quickly. He ended up having to spend $25K or more to replace broken windows, broken or stolen fixtures and appliances, repair gaping holes in the walls, and have tons of filth and junk hauled away everytime someone moved out. His repeated rehab costs soon exceeded any profits he stood to make for renting a place that was worth $450 on the open market, for $1400 based on area rents for that size place. He found himself deeper in the hole every month, until he was booted off the program because of some small flaw in a property that had been perfectly up to code when he turned it over to the tenant, who complained to HUD about repairs not being done immediately to the damage caused by her sons and their hoodrat friends. He had to drop the rent to what the market would bear, which was a third as much, and hope he could find tenants that could come up with even that much.
Meanwhile, some lucky folks are living in places like the Presidential Towers, where a one-bed market rent is about $2200 a month, and one fortunate family was recently discovered living in a 3 story $4,000/month South Loop townhouse that I could come nowhere near affording. I just can’t tell you how warm and fuzzy it makes me feel to know that my taxes are enabling this while I settled on a less than perfect building in a subprime neighborhood, to have a place I could pay for outright and be able to afford the HOA and taxes. The South Loop owners are collecting a rent at least somewhat inflated by the allowance for vouchers while families making as much as $140K a year are priced out of similarly desirable dwellings, at least if they are financially prudent.
Most poor are no better housed than they were before Section 8, and the program has wrecked countless formerly beautiful urban neighborhoods since its inception in the Nixon years. Now it is wrecking suburban neighborhoods. A property owner is no longer permitted to refuse voucher tenants- the only way to escape is keep your building a little below HUD standards so it will flunk the HUD inspection. Meanwhile, the inflated rents drive up the purchase price of houses and apartment buildings, and the working poor who are one notch above the income levels to qualify for vouchers are priced out of even garbage housing, and increasingly, so are moderate income people, while those above them are paying more for less.
Government housing programs, whether Section 8 vouchers, down payment assistance, 3% down FHA, Fannie or Freddie mortgages, principal write downs for distressed borrowers, or any of the other programs designed to make housing “affordable” have wrecked affordability and perverted our housing market, and have destroyed our cities. They have also skewed buyer preferences by encouraging buyers to buy in new suburbs in preference to older, more established urban and suburban neighborhoods, and encourage over-borrowing by young or limited income borrowers. They have been pure ruination since the first housing projects were built in the 30s, and the first FHA and VA loans were made after WW2 to encourage young buyers to leave their towns and cities for new developments far from services, and established neighborhoods.
A friend bought an urban condo in a nice place 20 years ago but one by one his White neighbors turned into Blacks getting Sec 8 and other welfare. He says the Blacks are supposed to pay his old neighbors (the owners) some part of the rent each month but Blacks don’t and collection is nearly impossible so the owners just accept the HUD check as full rent payment. I told him to sell a long time ago and get out before the value collapsed but his wife kept making excuses and now he is stuck there; we are both afraid that he will be murdered when the riots start and Martial Law will prevent him and his wife from escaping to our house in the country. We should consider this a slow motion Black Death caused by the government.
I was also doing some reading about how ghettos were created by the FHA and redlining.
Brought about by democrats.
Why the black race continues to vote dem is beyond me.
The meek shall inherit the earth?