Characteristics and Dynamics of Homeless Families with Children. Section 2: Housing Resources for Permanent Housing for Parents Who Have Become Homeless and Their Children: Mainstream Subsidized Rental Housing

10/01/2007

What housing resources are available to provide mainstream permanent housing for homeless families? This section discusses the Federal programs that provide subsidized rental housing to low-income families and individuals. To understand the potential of each of these programs for serving families leaving homelessness, it is important to distinguish between two general types of programs: assisted housing programs and affordable housing programs. The key distinction is the system for determining the rent paid by the resident family.

In assisted housing programs, the family pays for rent 30 percent of actual income, regardless of how low that income is.5 The major assisted housing programs are public housing, project-based Section 8, and Housing Choice Vouchers. The nominal income limits for assisted housing programs are quite high—80 percent of the local median income, which is about twice the Federal poverty level. However, for two reasons, the assisted housing programs heavily serve poor families—those with incomes below 30 percent of area median income, which on average is about at the poverty level. The first reason is that, because the subsidy varies with the actual income of the household, it is most valuable for the poorest households, who are the most likely to get on the waiting lists for the programs and to accept assistance when it is offered. The second reason is that Federal law requires that a certain percentage of the families and individuals chosen from the waiting list for each program have incomes below 30 percent of area median income (also known as “extremely low income.”)

In affordable housing programs, all families within an income range (e.g., up to 50 percent of area median income) who occupy a certain size unit pay the same rent for that unit. The rent has been set at an affordable level by the owner of the housing development. The rules of the Federal funding program establish the maximum rent the owner may charge at 30 percent of the income that is the upper limit of the income range for the size household expected to occupy the unit—for example, 30 percent of 50 percent of area median income (i.e., 15 percent of area median income) for a 3-person family. The major affordable housing programs are the Low Income Housing Tax Credit (LIHTC) program and the HOME Investment Partnerships (HOME) program.

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