The problem with Section 8 is not that so many families are able to use their vouchers to rent nice homes.

The Wall Street Journal published a story today that points out the sudden shift in bargaining power among voucher holders. In overbuilt housing markets, landlords are increasingly eager to rent to tenants that are guaranteed to pay rent. That preference would seem to be crystal clear: Who can blame landlords for wanting to get paid on-time, every month?

It would be one thing if this was merely a story about a program that is working to shore up demand for housing at a time when rental vacancy rates are high. Unfortunately, that (more…)

HUD established a long-term of goal of improving the energy efficiency of homes in its Housing Choice Voucher Program (Section 8) several years ago.

Right now, HUD spends $5 billion per year on energy bills. That figure increased by 13.5 percent between 2006 and 2008, alone. Energy costs for subsidies to Section 8 increased 18 percent.

HUD provides utility allowances to 84 percent of the residents in its Section 8 program.

In their own words, HUD states that the focus of its energy plan is Energy Star. EnergyStar is a (more…)

While the Department of Housing and Urban Development has intimitated that it will seek way to help America’s housing stock “go green,” it is yet to provide concrete results in that direction.

HUD Secretary Shaun Donovan established a new department, known as the Office of Sustainability,” to research how HUD could lower the combined costs of housing.  HUD’s new rubric incorporates both direct housing costs as well as transporation costs.  It notes that the two now consume as much as 60 percent of household income.

This is a good idea.  For years, people have chosen to “drive ’til you qualify.” They have moved out to the suburbs and commuted to their jobs in the city.  It led to sprawl, and it masks the real costs of housing. Those Beazer “homes from the 130s” were located at the end of long commutes. In this framework, low-income households don’t really lower their housing costs so much as they shift housing costs over to transportation costs.

Section 8 does not tap into drive to you qualify, but it does work on some of the same prinicples. In the last entry of BankTalk, I speculated on the current problem: there is no incentive in place to encourage landlords to pay the costs of lowering the utility bills of their Section 8 tenants. It costs a lot of money to put in insulation. It costs a lot of (more…)