Housing Vouchers Are Hard to Use. Would Cash be Easier?

For the last four decades, housing choice vouchers (HCVs) have been America’s primary tool for helping people with very low incomes afford safe and decent housing. But vouchers remain hard to use. In fact, more than a third of people offered a voucher aren’t able to use one. Many landlords avoid renting to tenants with vouchers, despite a growing number of laws that make this kind of discrimination illegal. And it’s especially difficult to use a voucher in low-poverty or opportunity neighborhoods, even when vouchers can cover the higher rents in those neighborhoods.

Given these difficulties, policymakers, advocates, and researchers have recently considered whether households that currently receive vouchers would be better off if they received cash instead. While the HCV program pays landlords, direct rental assistance would make the payment to the renter and would minimize or eliminate the need for landlords to interact with the housing agency. This alternative model presents both benefits and challenges.

Direct rental assistance can help streamline the HCV program

In the HCV program, the local housing authority must approve a unit for both quality and rent reasonableness and then enter into a contract to pay the landlord a portion of the rent. In contrast, direct rental assistance would pay the renters. The renters then would have to provide the local housing authority documentation to prove they are paying rent, and they may need to certify that the home meets minimum quality standards.

Direct rental assistance could minimize the administrative and bureaucratic burden that landlords cite as a rationale for avoiding the HCV program. Removing or creating an alternative to the housing quality standards inspection could reduce the time units are vacant between tenants. Landlords may also benefit from receiving a single payment from the tenant rather than payments from both the housing agency and the tenant. As a result, direct rental assistance might allow tenants to rent from landlords that don’t currently accept vouchers, reduce the risk that their first choice falls through because of rent reasonableness or the housing quality standards inspection, and increase the feasibility of leasing in place.

Challenges direct rental assistance may pose to HCV households

Direct rental assistance will also create new hurdles for voucher recipients and prospective landlords. There is no guarantee that more units will be available, as some landlords may be less likely to rent to someone receiving direct assistance than someone with a voucher. For landlords who currently accept vouchers, the reliability of payment directly from the public housing agency is a significant incentive. Recipients of direct rental assistance will need guidance on how the assistance payments can affect tax liability or benefits payments. And they may face an increased burden to get receipts from their landlord or otherwise document that they are regularly paying rent.

Shifting from vouchers to direct assistance will also do little to ease the other hurdles to finding decent housing with a very low income. Many landlords will continue to require proof of income before renting. Background and credit checks will continue to disqualify many people from renting housing they could otherwise afford. And many renters will continue to face discrimination during their housing search because of their race, ethnicity, gender, or sexual orientation.

Direct rental assistance can offer more immediate support

Despite these hurdles, a well-designed direct rental assistance program offers one major advantage over housing choice vouchers: the possibility of immediate support.

Vouchers require a recipient to find a qualifying unit and wait for approval from the housing authority before signing a lease. But direct rental assistance could start making payments to recipients based on their residence at the time of enrollment. One nonprofit organization, Fund for Guaranteed Income, is even exploring whether direct rental assistance can be used as an on-ramp to the voucher program by offering direct rental assistance first and transitioning to vouchers after a family finds stable housing.

Research is still needed to determine whether direct rental assistance will make it easier for people to find better housing, whether it shifts landlord acceptance rates, and whether it affects housing stability. But direct rental assistance would almost certainly make it easier to get resources to households sooner. For people and families struggling with housing cost burdens, increasing the speed of assistance will be its own benefit.