As the United States slipped deeper into the Great Depression in the 1930s, thousands of people lost their jobs as well as the roof over their heads. In an effort to stem the growing tide of homelessness, the United States Housing Act of 1937 was passed to provide federal housing assistance for the homeless. When studies in the 1970s revealed that the housing problem afflicting the low-income group of the population was no longer the availability of decent dwelling units but the affordability of decent housing, the Housing and Community Development Act of 1974 was enacted to repeal certain provisions of the Housing Act of 1937. Specifically, Section 8 of the amending law provided for a housing subsidy for qualified tenants.
Presently, the Section 8 Program involves the issuance of a voucher, which may either be “tenant-based” or “project-based.” A tenant-based voucher is specific to the qualifying tenant and is free to use it anywhere he wishes to reside in the United States where a Public Housing Agency operates a Section 8 housing program. On the other hand, a project-based voucher is limited only to a particular low income housing project or complex and is not valid for use elsewhere. Under this housing subsidy scheme, qualified tenants would only pay rent equivalent to 30 percent of their total income and the rest would be paid with federal funds in the form of government vouchers subject to a cap known as “fair market rent” which is determined by the United States Department of Housing and Urban Development.
Since participation to the Section 8 housing program is not generally obligatory on the part of landowners, some resist taking part in the program because of apprehension that low-income earners will not properly maintain the leased property. Others dislike the idea of the “fair market return” limiting the amount of rent they could charge or the possibility of government agencies having to interfere in the management and operation of their leaseholds. In some states, it is illegal for a landlord to refuse to accept a tenant under Section 8 unless the said tenant has a criminal history, bad credit standing or a record of past evictions.
By and large, many landlords accept Section 8 tenants because of the prompt payments of rent subsidy by the Public Housing Agency and the huge market of potential tenants borne out by the long waiting list for the housing subsidy. Moreover, there is a prevailing perception among landlords that Section 8 tenants are responsible renters because of the stipulation that they can be stripped of their housing subsidy if they fail to pay their share of the rent or damage the property being rented.