The HCV program is primarily a form of tenant-based rental assistance, where renter families spend 30% of adjusted monthly income on rent, and the balance is covered through subsidy. The policy focus of the HCV program is on assisting very low-income households. The average household income for HCV renters in 2021 was just $15,577—increasing a slight 2.4% year-over-year, though failing to keep pace with inflation by a significant margin.
HUD’s policy guidelines dictate that 75% of new families admitted into the program must earn at most 30% of the local area median income (AMI). The balance of admitted families may earn up to 80% of AMI. HCVs are widely supported by private-market advocates. Unlike tools such as rent control that place the burden of the subsidy on the landlord, HCVs interact openly in a market setting. Moreover, a renter household retains their subsidy should they choose to move, encouraging positive housing mobility.
While the HCV program is the majority of the federally subsidized rental universe, it has expanded slowly in recent years, failing to keep pace with growing market needs. Between 2015 and 2020, the number of units covered under the program expanded annually between 0% and 2%. However, some meaningful progress is underway. While Congress failed to authorize the full $68.7 billion for HUD’s annual budget requested by the Biden Administration, it did greenlight a significant $5.34 billion increase (+8.9%) from the 2021 appropriations, bringing HUD’s 2022 budget up to $65.7 billion. The HCV program will receive an additional $1.6 billion (+6.2%) in funding this year compared to 2021, accounting for 30% of the total HUD budget increase.
On March 1, 2022, a group of bi-partisan congresspersons, introduced a bill titled the “Choice in Affordable Housing Act.” The resolution focuses on the HCV program, and seeks to address declining private-landlord participation. According to a press release from Representative John Katko (R-NY), who introduced the bill with Emanuel Cleaver (DMO), the Act would reform the HCV program “by providing grant funding that allows local Public Housing Agencies […] to offer landlords strategic incentives to accept vouchers and conduct recruitment efforts with local property owners. The bill would also remove burdensome property inspection regulations and allow more vouchers to be used in higher-opportunity neighborhoods.” Both the National Multifamily Housing Council and the National Apartment Association are firmly supportive of the house resolution, claiming it has the power to move the needle for the efficacy of the HCV program.