The prices of the home have skyrocketed in the past years caused by the most recent housing bubble. We are so consumed on the fact that a lot of people won’t be able to afford to own a home nowadays that we have forgotten that there are still a number of people who can’t even afford to rent one. Since most people can’t afford to purchase a house, the rental market has seen an increase in demand, thus, putting pressure on the housing rental market.
Homelessness is one of United States most severe social problems. There are more people that you might realize that needs affordable housing. Here are a few interesting facts and statistics from the US Department of Housing and Urban Development (HUD):
- An estimated 12 million renters and homeowners household now pay more than 50 percent of their annual incomes for housing.
- The generally accepted definition of affordability is for a household to pay no more than 30% of its annual income on housing. Families who pay at least 30 percent of their salaries for housing are considered cost burdened and may have the difficulty of affording necessities.
- A family with one full-time worker earning the minimum wage cannot afford the local fair-market rent for a two bed-room apartment anywhere in the United States.
- The lack of affordable housing is a significant hardship for low-income households preventing them from meeting their other basic needs, such as nutrition and medical care, transportation, or saving for their future and that of their families.
About The Section 8 Voucher Program
One subsidy that the HUD has implemented is the Section 8 rental program. This program provides rental payment assistance to qualifying low income households. To make rental affordable, Section 8 covers the rents that exceeds 30 percent of a tenant’s adjusted monthly income. For example, if your landlord charges $800 per month for rent and you make $1,500 per month, you would pay $450 (30% of your monthly income) and Section 8 would pay the $350 (the difference between what you can afford and what your landlord charges.) The landlord will get paid directly by the government or via a voucher.
The Section 8 Dilemma
The section 8 program is overburdened and it is now difficult to get the subsidy. Many people wait for years to receive the subsidy. In 2004, President Bush had proposed to cut the funding for section 8 voucher by $1.6 billion from current services in 2005 and by $4.9 billion in 2009, thus, affecting the more than 2 million low income tenants who rely on the vouchers.
As much as I want to whine that I wasn’t able to take advantage of purchasing a home before the housing boom, (I was busy paying my other gigantic debts during that time), I realize that I am still fortunate that I can afford to rent one.