Housing Voucher Programs - Policy and Procedures Manual

Chapter I Sections

1. Background/Evolution of Program
   1. Beginning in the 1930s
   2. United States Housing Act of 1937
   3. Section 23 Leased Housing Program
   4. Housing Act of 1968
   5. Experimental Housing Allowance Program (EHAP)
   6. The Housing and Community Development Act of 1974
   7. The Section 8 Existing Housing Program
   8. Rental Voucher Program
   9. Combining the Certificate and Voucher Prgrams
   10. The Public Housing Reform Act of 1998 and Merger of the Certificate and Voucher Programs
2. Program Components
3. Key Program Documents
4. Roles and Responsibilities
5. Occupancy Cycle
6. Payment Standards (PS)
7. Privacy Rights
8. Multi-Family Tenant Characteristics System (MTCS)
9. Section Eight Management Assessment Program (SEMAP)
10. Portability
11. Applicable Forms List

Chapter I: General Information

Effective: November 2007

Introduction

The Housing Choice Voucher (HCV) Section 8 Rental Assistance Program has roots dating back to the 1930’s. Many changes have occurred over the years. Use this chapter for general information about the program and refer to the other chapters of the Policy/Procedure Manual (PPM) for specific information on each subject.

Section A: Background/Evolution of Program

1. Beginning in the 1930s

• The National Housing Act of 1934 created the Federal Housing Administration (FHA) and a system of mortgage insurance, which enabled many more families to become homeowners.
• At the same time, pressure increased for affordable rental housing. To provide affordable rental housing and stimulate employment, the National Industrial Recovery Act (1933) authorized the financing of low-rent public housing.
• In 1933 the Public Works Administration (PWA) offered loans to non-profit and limited dividend housing corporations for the construction of low-cost rental housing.
• Due to limited response, the PWA began direct federal construction of low-rent housing projects in 1934, primarily in slum areas.
• Although approximately 60 projects were eventually built, local opposition to direct federal intervention and legal obstacles required that another approach be taken.

2. United States Housing Act of 1937

• The Housing Act of 1937 authorized states to pass legislation enabling establishment of local Public Housing Agencies (PHAs) in order to receive federal assistance.
• The 1937 Act also initiated the public housing program.
• A production approach was selected because of the Depression era emphasis on job creation and elimination of slums. Public housing units were to be owned and operated by local PHAs.

3. Section 23 Leased Housing Program

• The Section 23 Program, implemented in 1965, allowed PHAs to lease units from private owners and sublease them to low-income tenants.
• The U.S. Department of Housing and Urban Development (HUD) provided annual contributions to enable PHAs to pay a portion of the family’s rent.
• PHAs retained tenant selection, rent collection, and in some cases management/maintenance responsibilities.
• Section 23 was eliminated in 1974 and replaced by the Section 8 Existing Housing Program.
• PHAs were to convert Section 23 assisted units to the Section 8 Existing Housing Program.
• Some developments are still in the process of converting.

4. Housing Act of 1968

• The Section 235 homeownership program and the Section 236 rental program created by the 1968 Act continued the strong movement toward use of subsidies in private dwellings.
• The 1968 Act established the goal of providing six million housing units for low- and moderate-income families over a ten year period.

5. Experimental Housing Allowance Program (EHAP)

• This was implemented as a demonstration program to test the feasibility of providing housing allowances to eligible families. The demonstration was conducted in 12 locations between 1971 and 1980.
• It was the most extensive social program demonstration ever conducted by the federal government.
• There were three separate components of the demonstration:
  1. The Supply Experiment tested the effect of the program on the housing market.
  2. The Demand Experiment tested the response of consumers to the program.
  3. The Administrative Agency Experiment tested various ways of administering the program using PHAs, welfare offices, and state and local governments.
• Cash assistance was provided to participants who leased units directly from private owners.
• Homeowners, as well as renters, were able to participate at two of the demonstration sites.
• Almost 50,000 households were assisted over a nine-year period.
• HUD’s evaluation of the demonstration found that:
  1. A housing allowance-type program could preserve existing housing stock by encouraging owner repairs and maintenance.
  2. Allowing families mobility resulted in the selection of better neighborhoods.
  3. Families did not select expensive units and were able to pay their share of the rent in the selected units.

6. The Housing and Community Development Act of 1974

• The Housing and Community Development Act of 1974 authorized the Section 8 program, which included three components:
  1. Section 8 New Construction Program
  2. Section 8 Substantial Rehabilitation Program
  3. Section 8 Existing Housing Program
• It signaled a shift in the federal housing program from locally owned public housing to the use of privately owned rental housing

7. The Section 8 Existing Housing Program

• The Existing Housing Program, also known as the Rental Certificate Program, was modeled on the Experimental Housing Allowance Program, with the following key differences:
  1. Subsidy payments under the Rental Certificate Program were made by the PHA to the owners on behalf of the family rather than directly to the family.
  2. The Rental Certificate Program imposed a ceiling on rents that could be paid (Fair Market Rents [FMRs]).
  3. The program grew rapidly and was popular with Congress, local governments, owners, and tenants because it:
  4. Provided assistance quickly;
  5. Allowed family anonymity;
  6. Did not create projects or site selection problems; and
  7. Was a relatively inexpensive program which did not require long-term funding commitments to maintain the units.
• Four hundred thousand (400,000) units were occupied within the program’s first five years.
• The Section 8 Moderate Rehabilitation Program was implemented in 1978 to promote moderate upgrading of existing housing stock.

8. Rental Voucher Program

• The Rental Voucher Program, authorized by Congress as a demonstration program in 1984, was adopted as a program in the Housing and Community Development Act of 1987.
• The program was similar to the Rental Certificate Program and was administered as a component of the Section 8 Existing Housing Program.
• The key differences between the Rental Certificate and Voucher Programs were:
  1. The Rental Voucher Program did not have a Fair Market Rent limitation; and
  2. The Rental Voucher Program allowed families to pay more than 30% of their adjusted gross income for rent and utilities.

9. Combining the Certificate and Voucher Programs

• Through the issuance of three “conforming” rules in 1994, 1995, and 1998, HUD combined the Rental Certificate and Rental Voucher Programs to the extent permitted by statute.
• In July 1994 and July 1995, HUD published the first two parts of a Section 8 “conforming” rule designed to combine all aspects of the two programs which did not have differing statutory requirements. The July 1994 rule created unified admissions rules. The 1995 rule combined a wide range of other administrative and leasing activities.
• For units currently assisted under old voucher contracts executed before these rule changes, the old program rules remain in effect.
• A third conforming rule became effective in June 1998. It addressed rent reasonableness, the calculation of rent and housing assistance payment, and special housing types. It also created a new type of tenancy, over-FMR certificate tenancy, which has since been eliminated.

10. The Public Housing Reform Act of 1998 and Merger of the Certificate and Voucher Programs

• In October 1998, Congress passed long-awaited housing reform legislation, which includes a full merger of the certificate and voucher programs.
• Some provisions of the law became effective with the President’s signature, and HUD provided guidance for implementation of those changes on February 18, 1999 through a notice published in the Federal Register.
• On May 14, 1999, HUD published an interim rule providing for the complete merger of the certificate and voucher programs into a new Housing Choice Voucher (HCV) program.
• HUD published the final merger rule on October 21, 1999 and amendments on November 3, 1999 and March 30, 2000. All certificates should have been converted to housing vouchers by October 1, 2001.
• The program is now known as the HCV Section 8 Rental Assistance Program.