HUD Improves Project-Based Voucher Program But More Remains to Be Done

Posted by Barbara Sard on August 21, 2014

HUD has recently made some important changes to the rules for its Project-Based Voucher (PBV) program, which helps families live in affordable rental housing.

The PBV program combines two standard forms of housing assistance: "Project-based," meaning that the assistance is linked to a particular property, and vouchers, which are usually tenant-based and move with the family.

Residents of PBV units can move with a voucher after one year, using the next voucher that becomes available when another family leaves the HCV program, and the housing development continues to receive a subsidy for another eligible family in that unit. Public housing agencies (PHAs) may “project-base” up to 20 percent of their Housing Choice Voucher (HCV) funding.  

PBVs are an important tool to provide supportive housing for individuals with disabilities or others who need services to live stably in their own homes.  They can help PHAs in tight housing markets use all of their vouchers and can support development of housing in low-poverty neighborhoods with strong educational or job opportunities.  More than 400,000 vouchers could be project-based nationwide, but HUD data indicate that PHAs subsidized fewer than 100,000 PBV units in 2012.  About 500 of the 2,300 PHAs that administer Housing Choice Vouchers currently operate PBV programs.

While the changes were an improvment, unfortunately, HUD’s final rule did not incorporate many suggestions made by CBPP and other groups that would further strengthen the program.

Here are the changes HUD did—and didn't—make:

HUD issued the new rules primarily to implement changes Congress enacted in the PBV program in 2008.  The new rules will, for example:

  • Promote the long-term preservation of affordable housing, by permitting 30-year PBV contracts (with a 15-year initial term and an agreement in advance to renew for 15 years) and an indefinite number of 15-year renewals (subject to funding availability), and preventing the long-term loss of affordable units when tenants’ incomes rise too high to qualify for a subsidy;
  • Increase incentives for owners to commit to take PBVs to make units affordable, by allowing rents not to be reduced below the initial rent even if market rents decline—the typical policy in other HUD programs. This change that should make it easier for owners to get loans for their properties by guaranteeing a minimum rental stream; and
  • Protect tenants, by preventing evictions except for “good cause.”

But HUD dropped a proposed change that would have enabled PBVs to be used more effectively for supportive housing, by allowing properties to house only individuals eligible to receive services offered in conjunction with the PBV units. And HUD did not act on many recommendations that would have provided additional protections for tenants and reduced administrative burdens for PHAs. 

We hope that HUD will make additional improvements—and provide training and technical assistance to assist more housing agencies to have effective PBV programs—before the end of the Obama administration.


(Photo by Alan Cleaver, CC BY.)

About the author more ยป

Barbara Sard is vice president for housing policy at the Center for Budget and Policy Priorities. She served 18 months as senior advisor on rental assistance to HUD Secretary Shaun Donovan. She previously held the director's position at CBPP between 1997 and 2009.

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