- During the first two years of the pandemic, the typical rent
increased 18% nationwide while the value of housing vouchers rose
by only 7%.
- With more than 19 million voucher-eligible households in
2021 but fewer than 2 million vouchers available across the
country's metro areas, the program needs to be improved and better
funded to help more low-income households.
SEATTLE, April 18,
2023 /PRNewswire/ -- Housing Choice Vouchers are
failing to keep up with rising rents, exposing rent-burdened
households to economic uncertainty or homelessness. This is
according to Zillow's latest research, which found nearly 10 times
more qualified voucher recipients than vouchers in most large U.S.
metros. The analysis also found voucher values grew at less than
half the pace of typical rent during the pandemic.
"Renters across the country are struggling as costs have
skyrocketed and vouchers have failed to keep up," said Orphe
Divounguy, senior economist at Zillow. "Better calculating for
voucher values and more funding are good short-term solutions, but
building more homes is the long-term answer."
Zillow research found there was not a single large metro area
with enough vouchers to meet demand. Across the country, there were
nearly 10 times as many eligible voucher recipients as there were
vouchers. In addition, there were nearly four times more severely
cost-burdened households than voucher recipients.
Several metros in Florida stand
out for their extreme mismatches between vouchers and those who
need them. Orlando had the highest
mismatch in the nation, with 12 severely cost-burdened households
for every available voucher.
Between February 2020 and
February 2022, the typical U.S. rent
grew by an astonishing 18%, but voucher values grew by only 7%.
Counties with the biggest disparity between rent growth and voucher
values were scattered throughout the country, but Florida — a state that experienced among the
fastest rent increases in the country — stood out again with
several counties suffering the largest gaps. In Miami–Dade County,
rent growth outpaced voucher values by almost 50 percentage points
in those two years.
outpaced voucher values
Palm Beach County,
Ocean County, New
How vouchers work
The Housing Choice Voucher Program
is a critical rental assistance program provided by the U.S.
Department of Housing and Urban Development (HUD), and is sometimes
referred to as Section 8. The program pays landlords a portion of
the rent directly on behalf of the tenant, and the tenant pays the
Eligibility for a housing voucher is based on income and family
size. In general, a family's income may not exceed 50% of the
median income for the county or metropolitan area in which the
family chooses to live. Typically, a voucher holder pays about 30%
of their income as rent and the program pays the rest, up to a
ceiling determined by HUD as the fair market value.
Recent Zillow research found that it would take four full-time
minimum wage workers to reasonably afford a two-bedroom rental,
illustrating the daunting financial challenges many renters face
today. With voucher values eroding, voucher holders will have fewer
options for places to rent and will likely be forced farther away
from neighborhoods with amenities and job centers. The increase in
rents leaves many rent-burdened families exposed to eviction,
health crises and homelessness.
What can be done
As part of National Fair
Housing Month, Zillow is highlighting several
policy solutions that could improve this program.
Zillow is working with HUD to help improve the formula used
to calculate fair market rent values. By incorporating the Zillow
Observed Rent Index (ZORI), HUD's fair market rents should become
more responsive to rent increases. Most critically, without an
increase in funding, fewer vouchers could leave many rent-burdened
voucher-eligible families behind.
Increasing landlord participation can also help keep people
housed. Lawmakers could pass source-of-income protections to
ensure all housing providers participate in the program.
Additionally, policymakers should find ways to shore up housing
provider education and outreach, and to streamline and modernize
programs so that landlords feel more confident navigating this
These are short-run policy solutions. Creating more homes is the
longer-term solution to making housing more affordable. A recent
Zillow survey of housing experts and economists found broad
agreement that loosening zoning laws would be the most effective
path to achieving this outcome.
"I applaud Zillow for shining a 100-megawatt spotlight on the
immense rental affordability challenges facing millions of
low-income families across the United
States," said Dennis Shea,
executive director of the J. Ronald Terwilliger Center for Housing
Policy. "This critical research challenges policymakers to take
immediate action. Strengthening the Housing Choice Voucher
program, encouraging greater landlord participation in the program
by enacting the Choice in Affordable Housing Act, and
increasing the supply of affordable rental homes by passing
the Affordable Housing Credit Improvement Act should all be on
Congress's must-do list."
About Zillow Group
Zillow Group, Inc.
(NASDAQ: Z and ZG) is
reimagining real estate to make it easier to unlock life's
next chapter. As the most visited real estate website in
the United States,
Zillow® and its affiliates offer customers an on-demand
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