HUD's FY 99 Budget
Key Programs and Initiatives: 100,000 Housing Vouchers in 1999 Budget

50,000 To be Used for Welfare-to-Work

President Clinton is calling for the funding of 100,000 Housing Vouchers -- up from zero in FY 98 -- in the proposed 1999 budget. Congress has not provided any new housing vouchers since 1994. This aid will help ensure that people leaving shelters and HUD's Continuum of Care homeless aid programs have stable housing to ease their transition into the mainstream. The new vouchers will divided into four areas.

• Welfare-to-Work -50,000 of the new vouchers will assist residents of public housing to move from welfare to work. The $283 million initiative recognizes the direct link between affordable housing and self sufficiency.

• Homeless - The budget requests $192 million for 34,000 additional Section 8 vouchers for homeless persons moving from shelters and transitional housing into permanent homes.

• Other - The 1999 budget also asks for $60 million to provide an additional 10,600 Section 8 vouchers and $50 million for 8,800 new vouchers targeted to elderly and disabled Americans.

Public Housing Authorities, working in conjunction with local welfare agencies, state and local governments and the private sector, will have wide latitude in structuring the program to meet the needs of individual communities. The vouchers will be available on a competitive basis to local housing agencies.

The new Welfare-to-Work housing vouchers will focus on families whose need for housing assistance is considered essential to getting or keeping employment. Families who receive the vouchers must be eligible for or currently receiving temporary assistance for needy families (TANF) or have received TANF within the past year.

Families can use the voucher to move to areas where more job opportunities exist or to reduce excessively long commutes to get or keep a job. The vouchers will be portable and can be used to rent private housing.

While this proposal focuses on those leaving welfare to work, the President's FY99 budget proposal also will help spur private sector development of more affordable rental housing for all low income Americans through a 40% increase in the value of the Low-Income Housing Tax Credit.

Background Information/Rationale

• Families do not need to be in public housing and can not currently be receiving Section 8 assistance to be eligible. In addition, they must currently or with in the last year have received Temporary Assistance for Needy Families (TANF).

• Under existing programs, a family is eligible for Section 8 if their income is below 50 percent of the area median income. Currently, there are about 1.4 million units each of portable tenant-based Section 8, project-based Section 8, and public housing.

• The President's proposal includes $283 million in budget authority for FY 1999, with estimated outlays of $100-$200 million for FY 1999 and $1.3 billion over five years.

• In 1995, 5.3 million families spent more than half their income on rent and/or were living in severely substandard housing. More than 2 million of these households were families with children.

• Currently about two-thirds of new jobs are being created in the suburbs, but three of four welfare recipients live in rural areas or central cities.

• Demand for affordable housing exceeded supply by 1.7 million units in 1993 for the lowest income households. However, the number of vouchers has remained nearly stagnant.

• Currently funding provides for 1.6 million tenant-based (portable) Section 8 certificates and vouchers.

• About three-quarters of the households with the most serious housing needs have income below 30 percent of the area median income (roughly the poverty line).

• Based on 1993 estimates, about one-quarter of households receiving AFDC, or 1.1 million households, were also receiving housing assistance. Of these, 38.1% were in public housing, 54.4% received HUD rent subsidies (including Section 8 tenant-based and project-based certificates and vouchers), and 7.5% received other forms of rent subsidies.

• Many families leaving welfare for work do not have access to stable, affordable housing, let alone housing convenient to jobs. This further exacerbates transportation and child care challenges.

• 10.2 million individuals or 3.7 million households received AFDC/TANF in July (most recent available data).