Strengthening Rental Assistance Is an Essential Part of the Biden-Harris Housing Supply Action Plan

Victoria Brown, Deputy Chief of Staff, and Doug Rice, Special Policy Advisor, Office of Public and Indian Housing

September 6, 2022

Our Way Home is for all of us. As the Biden-Harris Administration launches a whole-of-government effort to increase housing supply, we are committed to ensuring that it expands quality affordable housing options for those with the lowest incomes. A key resource for ensuring affordability as we build new housing is rental assistance. Because rental assistance is an essential part of an inclusive housing market, expanding resources such as Housing Choice Vouchers and Project-Based Rental Assistance, as called for in the Housing Supply Action Plan, is a critical piece of this coordinated effort to equitably expand housing supply.

Families across the income spectrum are feeling the effects of today’s housing shortage, most directly in the form of rapidly rising rents and home prices. Those families with the lowest incomes, however, feel these effects most acutely. About three-quarters of the 11 million renter households that pay more than half their income on rent, have incomes below the poverty line or no greater than 30 percent of area median income. Much higher shares of extremely low-income households also experience homelessness or other housing instability, or live in housing that is overcrowded or has serious condition problems such as inadequate heating or plumbing. The families experiencing these hardships are disproportionately Black or other people of color. Thus, expanding rental assistance in coordination with increasing housing supply will promote inclusive communities, a central pillar to HUD’s mission.

Rental assistance is the most effective and immediate means of closing the gap between the incomes of poorer households and rental housing costs. In rental assistance programs, low-income tenants pay a portion of the rental costs that they can afford (typically, about 30 percent of the household’s income), and rental assistance fills the gap between that contribution and the actual market rent or operating costs, within reasonable limits. HUD’s rental assistance programs currently help 4.5 million low-income households pay the rent and make ends meet, but this is only a small fraction of the number who struggle with high housing costs.

Since taking office, Biden-Harris Administration has repeatedly acted to help vulnerable renter households attain quality and stable housing. The American Rescue Plan and FY22 budget collectively provided nearly 100,000 new housing choice vouchers, and the President’s FY23 budget proposes 200,000 additional housing vouchers. In the coming weeks, HUD expects to allocate about 20,000 new flexible incremental housing choice vouchers, which will be allocated via formula to most communities across the country. HUD’s recent action on FMRs will improve the utilization of both the baseline vouchers and the supplemental vouchers created under this Administration. The American Rescue Plan also included $5 billion to create housing and services for people experiencing or at risk of homelessness, and provided tens-of-billions of dollars for Emergency Rental Assistance, which improved housing stability for over 6 million unique households, including 700,000 HUD-assisted households. HUD’s action on FMRs will improve the utilization of both the baseline vouchers and the supplemental vouchers created under this Administration.

Expanding rental assistance also complements the Biden-Harris Administration’s strong initiative to increase capital subsidies for affordable housing development. In housing developed with the help of Low-Income Housing Tax Credits (LIHTC), for instance, rents are typically set at a level affordable to households with incomes equal to 50 or 60 percent of the area median, which ensures that they are more affordable but high enough to cover the building’s operating costs. For LIHTC units to be affordable to households at 30 percent of area median income, however, those households must have access to rental assistance.

Indeed, combining LIHTCs or National Housing Trust Fund dollars with rental assistance that is tied to the property — Project-Based Vouchers (PBVs) or Project-Based Rental Assistance (PBRA) — is a proven approach to meeting affordable housing needs that the private market alone cannot meet. This approach is central in creating affordable housing options in resource-rich neighborhoods with quality schools and other opportunities for low-income families, for example. Combining LIHTC and rental assistance is also widely used to create permanent supportive housing, a model that pairs health and other intensive support services with affordable housing for people with disabilities and is an essential resource for reducing homelessness.

These strategies are mutually reinforcing in other ways, too. Families are more likely to succeed in renting housing using a Housing Voucher, for example, in markets where rental supply is ample and competition between tenants for units is less intense. Lowering regulatory barriers and investing in the production and rehabilitation affordable rental housing will also help extend the reach of rental assistance.

We must build more housing, and HUD encourages communities to use rental assistance and capital subsidy resources together to support an array of affordable housing options to meet families’ needs throughout their lifetimes, whether they are striving to get back on their feet, access better educational opportunities for their children, or save to purchase their first home. Housing vouchers and other rental assistance enable poorer families with children, older adults, people with disabilities, and others to live in decent, affordable homes, thereby reducing their risks of food insecurity, overcrowding, and homelessness, and expanding their housing opportunities in ways that can improve adults’ health and children’s chances of succeeding in school and the economy.