The Housing Choice Voucher (HCV) program, better known as Section 8, has been one of the federal government’s most important interventions in addressing housing affordability. Since its inception in 1974, Section 8 has provided millions of low-income households with the opportunity to access private rental housing through subsidies that close the gap between their income and the cost of housing. However, despite its potential, the program faces a series of systemic limitations that undermine its ability to address the housing affordability crisis effectively.

In the current context of rising housing costs, especially in urban areas like New York City, the need for reform and expansion of Section 8 is widely acknowledged. The question is no longer whether Section 8 is useful, but rather whether it is adequately designed and funded to meet the scope of the crisis. To this end, a growing number of policy experts, researchers, and housing advocates have pointed to the necessity of expanding the program both in terms of the resources it allocates and the structural reforms that could help it reach a wider audience and function more efficiently.

What is Section 8?

Section 8 provides rental assistance to low-income households by covering the portion of rent that exceeds 30% of the family’s income (calculated before taxes but after certain deductions, such as for dependents, medical expenses). The subsidy is paid directly to private landlords who participate in the program, and tenants are responsible for paying the remaining rental cost from their income. The program is designed to give families more flexibility in choosing where to live, theoretically allowing them access to higher-opportunity neighborhoods that they could not afford otherwise.

This flexibility is often illusory, however. Housing markets in metropolitan areas have rapidly outpaced Section 8’s capacity to provide meaningful choice or access. According to the Center on Budget and Policy Priorities, while 2.3 million low-income families currently benefit from Section 8 vouchers, many more—potentially millions—are on waiting lists, and in some cases, wait times can stretch over years. The chronic underfunding of the program has created a scarcity of vouchers, and even when families receive one, they often face further barriers in using it.

Underfunding: The Core of the Problem

The principal flaw of Section 8 is the underfunding relative to the scale of the need. Many critics argue that the U.S. has the right tools to tackle the housing crisis, but simply lacks the political will to allocate the resources necessary. Despite the clear benefits of the Section 8 program – lowering homelessness rates, improving residential mobility, and providing a critical lifeline for vulnerable populations – federal investment in the program has not kept pace with rising rents or the growing number of households burdened by housing costs.

This underfunding was most visibly in the news recently as NYCHA (New York City Housing Authority) just announced the reopening of its Section 8 Voucher Waitlist for the first time in 15 years, demonstrating the staggering demand for the program.

Expanding the funding for Section 8 could have a profound impact on housing stability. For every family that receives a voucher, there are often several others who remain unhoused or rent-burdened. Expanding voucher availability could help alleviate waitlists and allow more families to benefit from subsidies.

According to a study from the Urban Institute, extending vouchers to all qualifying households across the country would cost roughly $75.7 billion per year (2024 dollars) in addition to the $30 billion per year section spent on the program in 2023. This $106 billion expenditure would expand coverage from the current 2.3 million households participating in the program, to an additional estimated 8.2 million households. That would cover roughly 25 million people; 7.5% of the US population.

This expansion would help destigmatize participation in the program and put more pressure on private landlords to accept the vouchers, effectively expanding their acceptance. Most importantly, it would move the vouchers from a game of chance and enable everyone to have a fair shot at affording an apartment.

To put this in context, the total $106 billion yearly expense would equate to 1.7% of the federal government’s budget. This is right within the range of $100-150 billion which is the estimated value of subsidy from the federal government yearly by supporting and encouraging home ownership via the Mortgage Interest Deduction Property Tax Deduction, Capital Gains Exclusions, as well as via preferential rates from FHA and VA Loans. By providing a similar amount of assistance to renters as to homeowners, the federal government could guarantee every household could afford a place to live without being rent burdened.

Increasing the Maximum Voucher Amount

An additional major barrier for Section 8 recipients is that voucher amounts often do not align with market rents, especially in high-demand areas. The program is based on what the Department of Housing and Urban Development (HUD) calculates as the Fair Market Rent (FMR) for a region, which is meant to represent the 40th percentile of rent prices in the area. While this calculation may work in some markets, it fails in others, particularly in booming metropolitan areas where rents are increasing far more rapidly than HUD’s annual adjustments. This is tied into the lag between rents changing and the timing of HUD’s yearly surveys, as well as a weighting in the HUD calculation which includes rents as far back as 5 years. This can have a depressing effect on yearly increases in FMR, which lag behind the reality of a ‘hot’ market. You can explore how HUD calculates FMR for your area on the HUD website.

In cities like New York, San Francisco, and Los Angeles, rents can easily exceed the maximum voucher payment. In effect, voucher holders are pushed out of some neighborhoods, forcing them to search for housing in lower-cost, often lower-opportunity, areas. This means that those utilizing Section 8 are often denied access to neighborhoods with better schools, lower crime rates, and greater economic opportunities. Access to which can significantly improve outcomes for families, especially children.

One common criticism of Section 8 is that it may create disincentives for recipients to increase their earnings, as doing so could reduce their subsidy or result in disqualification from the program. However, gradual rent increases and periodic income reviews are intended to mitigate this problem by providing recipients with time to adjust. Some advocates propose reforms to avoid abrupt cutoffs, such as income tiering, so that recipients don’t face a steep loss of benefits

One promising proposed reform is to adjust the voucher amounts to more closely reflect actual market conditions. This could be done by calculating FMR at a more localized level – which HUD already tracks and allows local Housing Authorities to utilize. Some jurisdictions have begun to experiment with utilizing this methodology, but making this a standard practice could help to ensure that all Section 8 recipients have a real choice in where they live.

Carrot or Stick: Landlord Participation

Another critical issue with Section 8 is that even when families receive vouchers, landlord participation in the program is voluntary, permitting widespread discrimination against voucher holders. Landlords in high-demand markets often have no financial incentive to rent to Section 8 tenants when they can easily find tenants willing to pay market rent without the administrative hassle that comes with government oversight.

In fact, many landlords actively avoid renting to Section 8 tenants, either due to biases against low-income renters or because of the bureaucratic red tape involved. This contributes to spatial segregation and concentrates voucher holders in economically disadvantaged areas.

There are two general categories of proposed reforms to address this issue; one is a carrot, the other, a stick. One approach is to incentivize landlord participation through tax credits, grants, or other financial rewards that offset the perceived burden of renting to voucher holders. The other option is to pass more stringent anti-discrimination laws that require landlords to accept vouchers. Some cities and states, including New York, have already implemented such laws, but enforcement is uneven, and landlords still find ways to skirt the rules. Strengthening and expanding these laws could help ensure that voucher holders are not systematically excluded from entire neighborhoods.

Administrative Streamlining

Section 8 also faces a number of administrative hurdles that prevent the program from reaching its full potential. The process of applying for and receiving a voucher can be cumbersome, and even after a voucher is granted, recipients must navigate complex inspections and paperwork before they can use it. This often results in delays that can cause families to lose housing opportunities.

Simplifying the administrative process could go a long way in making the program more effective. This could include reducing the paperwork burden on both tenants and landlords, allowing for more flexibility in inspections, and speeding up the approval process for rentals. Some jurisdictions have begun experimenting with these kinds of reforms, but more widespread and standardized changes are needed to ensure that Section 8 functions efficiently and equitably.

One Part of the Solution

The expansion of Section 8 is not a panacea for the housing crisis, but it represents a vital piece of the solution. By addressing its funding shortfalls, increasing voucher amounts, incentivizing or mandating landlord participation, and streamlining the administration of the program, we could make significant strides toward alleviating the burdens faced by low-income renters. Yet, these changes alone will not solve the housing affordability crisis.

There is ongoing debate about the effectiveness of voucher programs like Section 8 compared to directly building affordable housing. Vouchers give recipients more flexibility and allow them to choose from a variety of housing options on the private market. However, in markets with rapidly rising rents, vouchers often do not keep pace, making it hard for recipients to find landlords willing to participate. Building affordable units that are permanently dedicated to low-income households can provide more stability but takes longer to implement. Experts often argue that both strategies are necessary.

A holistic approach to housing affordability must also include efforts to expand the housing supply, particularly affordable units, through zoning reform and inclusionary or otherwise affordable housing policies. Section 8 can only function as intended if there are sufficient units available for voucher holders to rent. Without increasing the supply of housing, any expansion of Section 8 is likely to be only a partial fix. By combining voucher expansion with efforts to increase housing supply and address the root causes of housing scarcity, we can make meaningful progress toward ensuring that all Americans have access to safe, stable, and affordable housing.

December, 2025

RESEARCH TEAM

Galia Solomonoff, Director

Eddie Palka, Adjunct Associate Research Scholar, ‘18 M.Arch

Benjamin Vassar, Graduate Research Assistant, ‘25 M.Arch

Julian Krusic O'Donnell, Graduate Research Assistant, '26 M.Arch