What is the federal Public Housing Assistance Program(FPHA)? The federal government provided about $50 billion in housing assistance to low-income households in 2014. The real (inflation-adjusted) level of assistance increased by about 15 percent between 2000 and 2003 through spending programs and preferential tax treatment. There have been occasional temporary increases, mostly in 2010 and 2011, associated with the American Recovery and Reinvestment Act of 2009 (ARRA).
It has not been possible for all application-eligible applicants to receive means-tested housing assistance, unlike some means-tested programs (such as Supplemental Nutrition Assistance Program or SNAP).
Currently, only a quarter of eligible low-income people receive housing assistance through federal spending programs. Housing expenses are generally required for households receiving assistance to pay 30 percent of their income, a threshold considered affordable by most experts.
What is Public Housing Assistance Program(FPHA)?
The public housing assistance program is federally funded and helps low-income households subsidize rent. Public housing authorities administer them in various cities and states. These cities and states are responsible for implementing federal PHA programs through the Department of Housing and Urban Development (HUD). As a result of government efforts during the Great Depression, today’s programs can trace their roots to the government’s early interventions.
How does public housing work in the U.S.?
It is only available to low-income families and individuals who qualify for public housing. As part of the H.A.’s eligibility determination, you need to provide the following information:
- Earnings per year.
- Regardless of your age, disability, or family status.
- A U.S. citizen or an eligible immigrant.
History of the Public Housing Assistance Program
The first federal housing assistance programs began during the Depression-era 1930s as a result of federal efforts to assist the needy. It was a time when many people did not have work or the means to buy a home.
Public housing funding increased in the 1960s as a result of federal initiatives. The government also initiated subsidies for rent for those living outside of projects. It was established by a 1974 law still in use today, the Section 8 voucher program.
Section 8
Section 8 voucher programs were established as a result of the Housing and Community Development Act of 1974. A 1974 federal law that amended the 1937 housing law provided vouchers to tenants that covered 70 percent of their rent. The federal government provides public housing assistance primarily in the form of section 8 vouchers. HUD administers Section 8 programs under the Housing Choice Voucher Program.
Public Housing
Public housing is another major form of PHA besides Section 8 vouchers. The apartment block first gained popularity in the 1960s, when large tracts of apartments were constructed throughout the country. Low-income families and individuals were targeted for these apartment blocks. A local housing authority, or H.A., oversaw most of these projects. It is still possible to find such communities throughout the country today. Housing vouchers have grown in popularity, however, and their popularity has decreased.
Considerations
The HUD issues public housing assistance based on eligibility determined by local housing authorities. The gross annual income of an applicant is considered in determining eligibility. Furthermore, H.A.s will consider whether the applicant is elderly, disabled, or heads a family. H.A.s also determine an applicant’s citizenship status. It is only possible to receive PHA if you are a U.S. citizen or an eligible immigrant. The housing authorities also check applicants’ backgrounds to ensure that they will be able to live on their own.
Income Determination
HUD field offices or local H.A.s frequently scrutinize income regarding PHA applications. A tenant’s income is determined using HUD’s Total Tenant Payment formula. The Housing Authority can, however, deduct certain amounts from an applicant’s gross annual income. The minimum rent payment can range from $25 to 30 percent of monthly adjusted income once deductions are taken into account.
What Housing Assistance Does the Federal Government Provide?
The majority of low-income household assistance is provided through three programs:
- Housing Choice Voucher (HCV) recipients use a federally-funded, portable voucher to help pay for housing on the private market, which totaled $18 billion in 2014.
- The project-based rental assistance program (PBRA) provides federally contracted and subsidized rent in private buildings under government contracting.
- Public housing provides federally subsidized housing in publicly owned and operated buildings at the cost of $7 billion in 2014.
The federal government also provided $8 billion for other housing programs in 2014. Most of that funding went to state and local governments in the form of grants.
There is one tax credit that accounts for the majority of the indirect assistance provided to low-income households, the Low-Income Housing Tax Credit (LIHTC). The Joint Committee on Taxation (JCT) estimated in 2014 that it accounted for $7 billion in tax expenditures for low-income housing developers. A tax expenditure is similar to a government spending program in that it provides financial assistance to a specific entity or group of people or for a particular purpose.
The federal government used tax deductions for mortgage interest payments and property taxes to support housing not targeted at low-income households in 2014, to the tune of $130 billion. A list of other types of assistance not focused on low-income households is provided in the appendix of this report, although it is beyond the scope of this report.
How much does public housing cost in the U.S.?
Public housing units in the United States are distributed across all 50 states and several territories, with 1 out of 5 units located in rural settings. It is estimated that only 47 percent of public housing homes are located in low- and moderate-poverty areas, or where less than 30 percent of the residents are low-income.
FAQs
What is the public housing system?
Housing for low-income families, seniors, and the disabled was established as public housing to provide decent and safe rental housing. There are all kinds of public housing, from single-family houses scattered throughout to high-rise apartments for the elderly.
What is the most Section 8 will pay?
This standard payment will range between 90 and 110 percent of Fair Market Rent. Thus, Section 8 payments are determined by three factors:
- The area’s Fair Market Rent
- The low rent in the neighborhood
- The high rent in the neighborhood within the metropolis
A list of Fair Market Rents is published each year by the Department of Housing and Urban Development.
Do I qualify for Section 8?
If you wish to qualify, your gross annual income can be at most 50% of the median income for the area. Families earning less than 30% of the median income must receive 30% of the vouchers. A Section 8 resident must pay 30% of their adjusted gross income towards rent and utilities each month.
Conclusion
Three main federal housing programs assist 4.8 million low-income households. A household can only qualify for a federal housing program if it earns less than 50 percent of the area median income (AMI). About three-quarters of households receive incomes below 30 percent of the AMI. The population of the United States is approximately 3 percent of the 9.8 million households that receive assistance.
