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Now the Section 8 program has two HUGE income caps. First is the 30% rule. The Tenant MUST pay 30% of the household TOTAL income for rent and Utilities (Heat, Eater and Electricity only). If the rent is LESS than 30 % of one's income, no subsidy.
Second, to get one Section 8 you MUST be on their list of applicants. Priority is given to people without housing and to "Low-low-low income" people. Congress came up with the Term "Low-Low Income" and "Low-low-Low Income" categories in 1974 when it was found most Housing Authorities gave Subsidies (and housing in Public Housing) to only the highest Income people who were still "low income". People on welfare could NOT get into Public Housing or Section 8 program for their income was to low. The 1974 changes in the Housing law changed that, forcing Public housing and Section 8 Housing to give preference to such "low-low-low Income" families.
This brings up the five types of "Section 8 Housing":
First is "Existing Homes" which is when your local housing Authority pays Landlords the rent in excess of 30% of the Income of the Tenant.
Second, is Section 8 "Substantial Rehabilitation" where a Landlord agrees to rent to low income tenants after accepting money from the local Housing authority to fix up his Rental properties (Rare in last 20 years, but popular before then).
Third, Section 8 New Constructions. This is run by the Department of Housing and Urban Development (HUD) directly. This is where a private company build a set of rental housing and agrees to rent to low income people (Subject to the same rules as Housing authorities, i.e. Low-low-low Income people get priority).
Fourth, Section 8 "Farmer's Home" (Old Name, now Rural something or another, but everyone stills call it Framer's Home). Same as Section 8, New Construction but in Rural areas only.
Fifth, Section 8 Indian Housing, Section 8 housing for Indians Reservations. I am NOT familiar with this type of Section 8 Program for they are no Indians Reservation in my area.
Notice all of them still use the 30% rule. All of them, the total rent must equal "Market Rent" which tends to be "Market Rent" for Existing homes, but a formula for Section 8 New Construction housing (Especially in areas where Market Rents have DROPPED over the last 40 years such as in my area), unless the Local Market Rent is Higher (I have seen some as high as $900 for a small apartment where similar apartments in my areas were going for $400 or less).
No Section 8 Housing has been built since Reagan (Public Housing building basically ended in the 1970s under Nixon in favor of Section 8 New COnstruction). Thus, while the demand for such housing has increased since 1982 (When Reagan said all new Housing will be stopped) none has been built. In the late 1990s several Section 8 housing projects started to exercise their right to end their participation in the Section 8 program and convert to market rent, but that was delayed by Clinton. The right to convert still exists, but a system of Notice to tenants were set up and a way this could be prevented if the tenants objected. This was successful in my area (which really did NOT participate in the boom of the 1990s) but was done elsewhere in the nation. Overall a drop in the Number of Housing units available for low income people.
My point is simple, the subsidies to low income people for rent has been on the Decline since the last positive changes in 1974. Nixon started it, Ford Continued it (The post Watergate Congress stepped in and improved the situation), but Reagan went back to freezing Public Housing Funding. IT exists, but no where near the level of need.
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