Over the past few weeks, an outbreak of cyclospora (a parasite that causes severe, sometimes “explosive” diarrhea) has sickened over 3,000 people across the United States. It has been front-page news, cable-news fodder, and the subject of urgent statements from the CDC and FDA.
Don’t get me wrong. A stomach bug that causes severe gastrointestinal distress is not anyone’s idea of a good time. But there have been no deaths; it is not contagious, and it can be effectively treated with antibiotics.
I find it hard to imagine that we live in a world where this is front page news. Especially when millions of people today are experiencing a more significant health crisis that is causing serious illness and reducing their life expectancy in communities across the United States.
Unfortunately, there is no scary-looking parasite or explosive diarrhea to make this story sensational enough to hit our news feeds. And so it remains a sadly casual fact that there are 10 million very low-income households in the United States who are more likely to get sick and less likely to live a long and healthy life because they are paying more than half of their income on rent.
This is What A Health Crisis Looks Like
When people are poor and spend more than half of their monthly paycheck on rent, they can’t just tighten their belts. They have to stop doing healthy things that most of us take for granted. Prescriptions don’t always get filled. Doctor’s visits get postponed. Grocery bags get lighter. Air conditioners don’t get used in the summer. The heat gets turned off in the winter.
New research from the National Institute of Health (NIH) has made this connection even more clear. A recent study found that people living in communities with the highest severe housing cost burdens experienced significantly elevated rates of premature cancer and heart related deaths. Additional NIH research discovered that when the percentage of severely cost burdened renters in a community goes up, there is a corresponding increase in hospitalization for cardiac arrest and heart failure. The same study also found that severely cost-burdened renters and their families were 22% more likely to suffer from hypertension and 15% more likely to suffer from depression. These findings were reinforced by researchers from Princeton University and the United States Center for Economic Studies who determined that households who were severely cost burdened had a 12% higher mortality rate than those who were not.1
Simply put. If you don’t make a lot of money and you pay more than 50% of your income on rent, you are more likely to get sick and less likely to live a long and healthy life. And this is super important because when we talk about the issue of affordable rental housing, it is important to understand that this is about more than rebalancing supply and demand dynamics and figuring out who should be building what and where. This is also about fixing a a slow-burning epidemic that is sucking the life out of the hospital workers, janitors, and service professionals who make this great country go.
And it just so happens, that there is something that can be done about it today.
Have You Met the Housing Choice Voucher?
The Section 8 Housing Choice Voucher program is a rental subsidy funded by the federal government and administered by local public housing agencies. Last year, it eliminated housing cost burdens for more than 2.3 million very low-income households. It is the largest and most effective rental assistance program in the country. How it works is really quite simple.
The Housing Choice Vouchers are only available for people who make a very low income2.
If you are lucky enough to get a voucher, you can fill out a lease application to live wherever you want – so long as the property meets basic quality standards and the property owner accepts housing choice vouchers.
If your lease application is approved, the amount you pay in rent will be capped at 30% of your income and the voucher will be used to pay the difference directly to the property owner.3
What makes a housing choice voucher great for low-income households is that it eliminates their housing cost burden and frees up the cash they need to live a regular life. They can fill more prescriptions, buy more groceries, and give their hearts and minds a break from the relentless stress of being poor in America.
The benefit for taxpayers and communities is also significant because healthy people consume fewer Medicare and Medicaid resources. They alleviate the strain on local social service programs, and they have more residual income to spend in local stores and restaurants.
Housing choice vouchers are also a pretty good deal for property owners and investors because they provide a guaranteed stream of revenue that also makes it easier for more folks to pay rent on time. That means fewer bad debt costs, higher economic occupancy, and lower vacancy-related expenses. And if something happens and the renter falls behind, the voucher guarantees that the federal portion still gets paid.
Three Excuses For Doing Nothing
The housing choice voucher program is not perfect, but it is pretty darn good. And it works because it does one thing well. It enables millions of hardworking people who don’t make a lot of money to afford a place to live in an apartment building that already exists.
If you are new to the world of affordable rental housing, you might wonder why we aren’t just funding more housing choice vouchers. Here are some common excuses as to why we don’t.
Excuse #1 “We Don’t Have the Money”
I grew up on the prairie in Western South Dakota, and this is a textbook example of what my rancher friends would call a “bullshit” argument.
In the last twelve months, the federal government spent $1.1 billion to purchase warehouses for the Department of Homeland Security. Then we spent an additional $1.4 billion retrofit those buildings. According to CoStar, we paid an above market premium of 13% for these properties and then turned around and sold seven of them at a 15% loss. All told, we spent nearly $3 billion for warehouses we did not even need.
Had we spent that same $3 billion (a 10% increase in current spending) to increase the housing choice voucher program, we could have eliminated housing cost burdens for roughly 250,000 renter households. That’s more people than the population of Las Vegas.
We may not have enough money to fund housing choice vouchers for everyone, but we have enough to fund 10% more.
Excuse #2. “The Program is Too Complicated”
It is fair to say that the housing choice voucher program is too complicated, but is that really a reason to do nothing? The Low-Income Housing Tax Credit program is one of the most complex financing structures in the history of American public policy and yet policymakers from both parties continue to boost funding for the program because, while it is far from perfect, it works more often than it doesn’t.
The same argument should also be applied to the housing choice voucher program. We cannot afford to wait for perfection when “better than yesterday” will do.
Excuse #3 “It’s not Mandatory.”
This is also true. Property owners are not always required to accept a housing choice voucher, but most property owners do so anyway. And an increasing number of states and local governments are making sure they do. Today, nearly 57% of all housing choice voucher holders live in a jurisdiction where property owners are required to accept them as a form of payment.
Yes, it would be great if every property owner accepted vouchers, but we don’t have to wait for universal participation before we expand the program. Property owners who understand the value of a guaranteed payment stream will reap the benefits of the federal subsidy and create long-term value in the communities in which they invest. The property owners who don’t see the value are free to take their chances and hope for the best.
New is Not Always Better.
Over the past several years, policymakers and housing advocates have spun up program after program aimed at the affordable-housing shortage: new set-asides, new tax incentives, and new pilot funds. Each has its own set of bells and whistles. Each also comes with its own design phase, its own rulemaking process, its own unique set of implementation rules, and its own unique learning curve.
Some of these programs might eventually work, but they will be too late for the family that is struggling to make ends meet today and more likely to have health issues tomorrow.
So maybe it’s time to stop innovating and simply put more housing choice vouchers in the hands of the people who so desperately need them. Because we have enough money to get started. We have a pretty good program that is ready for action, and we are smart enough to figure everything else out as we go.
All that remains is the will to do it.
If you are interested in reading the research, they can be found here, here, and here. ↩
The federal government defines a “very low-income” household as one whose annual income does not exceed 50% of the average area median income of their community. ↩
A very simple example would go something like this:
A very low-income household that makes 2,000 a month gets a housing choice voucher.
They sign a lease for the most affordable apartment on the market at $1,100 a month.
Because they have a housing choice voucher, their monthly rent payment is capped at $600 (30% of their monthly income).
Every month, the federal government sends the property owner a check for the remaining $500 to cover the difference. ↩
