How Does the Federal Government Support Housing for Low-Income Households?
The federal government spent $51 billion on housing assistance in 2019, and more than 80 percent of that spending was for three programs in the Department of Housing and Urban Development that provide rental assistance to low-income households. At a total cost of $41 billion, those three programs represent a relatively small portion of total federal spending — slightly less than 1 percent — but provide assistance to 4.4 million households. Here are some details on those three programs and the individuals that are served by them.
The three largest rental assistance programs operated by the federal government are:
- Tenant-based rental assistance ($22 billion in 2019). Low-income households receive a voucher that allows them to choose housing in the private market while paying 30 percent of their income toward rent. The voucher, administered by local public housing authorities (PHAs), covers the remainder of the rent.
- Project-based rental assistance ($12 billion). The Department of Housing and Urban Development (HUD) enters into contracts with property owners who have agreed to rent their units to low-income households. The households pay 30 percent of their income toward the rent and HUD makes up the difference. HUD has allowed such contracts to expire gradually over time and has been switching households to tenant-based assistance.
- Public housing ($7 billion). In this arrangement, PHAs own and operate housing units and rent them directly to low-income households, who pay 30 percent of their income. HUD provides regulatory oversight and allocates funding to PHAs to support operating costs and capital improvements.
Aside from the three programs above, the federal government spent an additional $9 billion on smaller housing assistance programs in 2019. Those programs include Supportive Housing for the Elderly, Supportive Housing for Persons with Disabilities, and Rural Rental Assistance.