Thirty-eight million people in America were living in poverty in 2022. To reduce the risk of homelessness for millions, the federal government provides financial support for people whose incomes are below a certain threshold. Just over nine million people receive housing subsidies through the Department of Housing and Urban Development’s (HUD) Section 8 program.
Among participants in assisted housing programs, including those beyond Section 8, the average 2022 household income was $16,019, or 21.5% of the national median of $75,580.
What is Section 8 housing?
Government-supported housing initiatives have taken various forms over the last century. Today, the primary public housing assistance program is known as “Section 8 housing,” which accounts for about 80% of housing units and participants in HUD-assisted housing programs.
The name “Section 8 housing” comes from Section 8 of the United States Housing Act of 1937, the beginning of a new subsidized housing initiative in the US. The Section 8 housing model began in 1974 as financial subsidies offered to landlords that allowed them to offer rental units to low-income people at below-market rents. In 1983, a voucher program was added to provide financial assistance directly to renters.
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Types of Section 8 housing
These two sub-programs remain the core of the Section 8 housing initiative:
Project-Based Rental Assistance: Project-Based Rental Assistance provides subsidies to building owners.
Housing Choice Vouchers: The Housing Choice Voucher program program gives subsidies directly to tenants.
The biggest difference between the two programs is what the subsidy is attached to — the housing unit or the tenant.
What is Section 8 Project-Based Rental Assistance?
Project-Based Rental Assistance (PBRA) is attached to housing units: the government contracts with private building owners, who agree to rent to program-eligible tenants at below-market rates. The government and building owners agree on a rental rate based on HUD’s estimates of a fair rent price for the market, which is then adjusted for low-income tenants.
The lowered rent is based on the tenant’s resources. Tenants must contribute 30% of their monthly income toward rent or a minimum of $50, whichever is higher. The difference between that contribution and the unit's contract rent cost is then paid by HUD.
How many people receive Project-Based Rental Assistance?
The number of PBRA recipients has remained relatively steady since 2014. In 2022, over 2 million people received PBRA.
To qualify for housing units receiving project-based rental subsidies, households need to be “low-income,” meaning their income is below 80% of the local median, as determined by HUD.
Average income of PBRA recipients
The average annual income of PBRA recipient households in 2022 was $14,405, or about 19% of the national median. Since 2004, the average income of PBRA households has fallen by over $2,000 (after adjusting for inflation).
The Housing Choice Voucher (HCV) program is tenant-based, rather than unit-based, so renters are not limited to particular buildings. With HCV, HUD provides vouchers for a percentage of rental costs directly to renters. People and families with vouchers can choose to live anywhere and apply the vouchers to their rent. However, the housing must meet specific health and safety standards, and the building owner has to agree to receive a portion of the unit’s rent from a voucher.
Voucher recipients must also have incomes that qualify as low-income.
How many people receive Housing Choice Vouchers?
In 2022, 5.2 million people received Housing Choice Vouchers. This number has remained stable since 2011. Between 2005 and 2011, the number of people getting HCV rose from 4.5 to 5.4 million.
The maximum amount of the voucher is determined by the fair market rate for housing in the area and the family’s household income. Families are responsible for paying at least 30% of their monthly income toward rent, with the voucher making up the remainder.
Average income of Housing Choice Voucher recipients
HCV recipients had an average annual household income of $16,610 in 2022, or about 22% of the national median. Like the average income for PBRA recipients, the income for Housing Choice Voucher recipients has fallen in recent years, after adjusting for inflation; in 2007, HCV households earned an average of $18,208.