of the Section 8 Existing
Housing Program in New York City
A CHPC Research
II: The Tenants
Determination of eligibility is
perhaps the most critical aspect of any housing assistance program. For many
years federal law promoted access to housing assistance for a mixed-income
population. During the 1980s, budget considerations encouraged a contraction
of eligibility almost exclusively to very low-income and other disadvantaged
households. In the 1990s, there has been a reaction against that trend, with
federal housing legislation gravitating back to a mixed-income approach.
Federal Targets and Preferences
Like the public housing and Section
8 new construction and substantial rehabilitation programs, federal law specifies,
to a large degree, the tenant profile of the Section 8 Existing Housing program.
Unlike the public housing and Section 8 project-based programs, however,
the tenant profile of the Section 8 Existing Housing program in New York
City is driven more by the housing needs of low-income families--and by the
budgetary constraints of the city--than by federal law. Whereas the managers
of public or privately owned assisted housing developments must be mindful
of maintaining a tenant mix that promotes the financial and social health
of their projects, the Section 8 Existing program faces no such consideration.
Since the recipients of tenant-based certificates and vouchers are by the
nature of the program dispersed within the existing housing stock, the "concentration
effects" of the program are at worst neutral. This allows the program
to serve a needier population than project-based housing programs, and without
When Congress established the Section
8 Existing Housing program, it targeted benefits to the same population as
was served by public and project-based Section 8 housing. The Housing and
Community Development Act of 1974 limited eligibility to those households
at or below 80 percent of the median income for each area, adjusted for family
size, and further required that HUD administer the program in such a way
that at least 30 percent of the assisted families be very low-income families.  HUD's
implementing regulations required that each PHA operating a Section 8 Existing
program observe the 30 percent very low-income target. HUD regulations also
required PHAs to establish waiting lists for Section 8 certificates, from
which eligible families would be drawn on a first-come, first-serve basis.
In 1981 Congress amended the law,
limiting low-income families other than very low-income families to 5 percent
of new admissions to the program (and to public housing and project-based
Section 8 as well). This income targeting requirement remained in place until
1990.  Moreover, in 1979 Congress established
two significant "federal preferences" for public and Section 8
housing: for families who are occupying substandard housing and for those
who are involuntary displaced. The first preference has been interpreted
to include homeless families. A third important preference, families whose
rent/income burden exceeds 50 percent, was added in 1983. Since the number
of families in New York City meeting those preference criteria far exceeded
the supply of certificates and vouchers, families in those categories became
the almost exclusive recipients of Section 8 rent subsidies.
of Section 8 Tenants
Even before Congress legislated
the tightened income targets and preference criteria, New York's Section
8 recipients were predominately those of very low-income. As early as 1983,
87 percent of families receiving NYCHA- distributed certificates had incomes
below 50 percent of the median, a percentage far exceeding that legally required
during the early years of the program.
Although the incomes of families
participating in the certificate program were lower than those in public
housing, the ethnic characteristics were more representative of those prevailing
in the city at large. Almost 45 percent of the recipients as of 1983 were
white families, a higher percentage than prevailing in public housing at
that time, and a much higher percentage than were applying for public housing
during the six preceding years. There may be two reasons for the higher percentage
of white families entering the Section 8 program, even though the eligibility
criteria were identical to those for public housing. First, white certificate
holders may have found it easier to find eligible apartments, because of
the absence of discrimination or because they were more likely to be living
in apartments that met the Housing Quality Standards and hence could qualify
in place. Another explanation may be that low-income white families were
more apt to apply for Section 8 than for public housing because it does not
involve living "in the projects" or necessitate relocating from
white enclave neighborhoods of the city, where there was often little public
Source: New York City
After federal law was changed to
give preference to homeless families and those with excessive rent burdens,
the proportion of families receiving Section 8 certificates and vouchers
who were non-Hispanic white decreased rapidly. By 1994 white households comprised
only 15 percent of the new families receiving NYCHA Section 8 rent subsidies.
The higher proportion of white
participants during the early years of the program was related to the correspondingly
higher proportion of elderly households served. In recent years that proportion
has declined as the focus of the program has shifted to housing the homeless.
As of 1996, 29 percent of all households receiving subsidy through NYCHA's
Section 8 program were classified as elderly, comparable to the percentage
of NYCHA's public housing tenant households who are elderly. For certificates
and vouchers exercised between 1993 and 1995, however, the proportion was
under 10 percent.  Nevertheless, elderly households are apparently
well represented on the waiting list. Although NYCHA does not tabulate the
elderly component of its waiting list specifically, the proportion of applicant
households whose primary source of income is social security or supplemental
security income (SSI) has been fairly constant at around 28 percent. Public
housing officials report that many elderly households are clustered in the
50 to 80 percent of median income range, and hence do not receive preference
for Section 8 certificates. 
While the proportion of applicants
who are elderly or disabled and consequently derive most of their income
from social security has remained virtually constant over the life of the
program, the proportion of whom are among working poor has declined steadily.
In the early years of the program slightly more than one-third of rental
assistance applicants were employed. The percentage began to slip during
the mid-1980s, and by 1994 only 22 percent of those on NYCHA's Section 8
waiting list were employed. Conversely, the percentage who were public assistance
recipients rose from about 38 percent during the early 1980s to 50 percent
during the 1990s. Since more than 98 percent of certificates and vouchers
issued in recent years have gone to families with federal preferences, there
is little chance that an employed applicant will actually be issued one.
In December 1996, after the waiting list had swelled to over 200,000 eligible
applicants, the Housing Authority stopped accepting applications from families
who were not homeless, victims of domestic violence or intimidated witnesses.
One of the original criticisms
of the rent subsidy program was that large families would not be able to
find housing through it, either because a sufficient number of large apartments
does not exist in the private market or because the Fair Market Rent level
(FMR) schedules are not favorable to large families. The record of the Section
8 program in New York City does not support this contention. The percentage
of applicants requiring four or more bedrooms has historically hovered below
2 percent, while the proportion of NYCHA Section 8 tenants with certificates
or vouchers for four or more bedrooms is 2.2 percent. As of 1983, however,
the average Section 8 tenant household contained 2.09 people, significantly
less than those in public housing. Tenant household sizes have risen since,
reaching 2.79 for families entering the program in 1995, but when adjusted
for the small proportion who are elderly, the figure is still below that
of public housing.
Section 8 and the Homeless
While federal law sets parameters
on the tenant profile of a public housing authority's Section 8 Existing
Housing program, these limitations have been largely superfluous in New York
City. The housing problems of the city's poor have generally forced NYCHA
and HPD to exceed even the strict federal income targets and preference criteria.
The preference criteria have, in effect, allowed the city to select from
the Section 8 waiting list those families it had the greatest budgetary and
political need to house.
Each year since the early 1980s
between 10,000 and 15,000 homeless families have sought emergency housing
from the city. In order to accommodate that influx, the city has established
a network of transitional homeless facilities run primarily by non-profit
groups. With about 5,200 apartment-style housing units in total, these "Tier
II" facilities attempt to stabilize the circumstances of the families,
provide or link them to a variety of social services, and ultimately to assist
them in procuring permanent housing. More than half of these families eventually
leave the transitional housing of their own accord, returning to their original
housing or finding new housing affordable to them on their earnings, welfare
grants or Section 8 assistance. As many as 7,000 annually, however, require
direct placement assistance provided by the staffs of the non-profits working
in conjunction with city agencies.
During the late 1980s and early
1990s homeless families were placed primarily into three types of housing:
public housing, private or non-profit housing newly renovated with city assistance,
or city-owned in rem housing. With these placement resources available, the
city's Human Resources Administration (HRA) was able to balance entries and
exits from the transitional housing network and stabilize the shelter population
at about 5,500 families.
This system has gradually begun
to erode. NYCHA, which for a time had been placing several thousand homeless
families referred to it by HRA into its public housing developments each
year, grew increasingly concerned that its carefully managed tenant mix was
being undermined. Existing residents in public housing also became increasingly
vocal about the influx of formerly homeless families, many of whom other
tenants felt were disruptive or insufficiently prepared for independent living.
In 1992 the Authority negotiated an agreement with the Dinkins administration
that substantially cut the number of HRA referrals it was asked to accept,
increased its authority to screen referrals, and provided follow-up social
services to those who were placed.
Another source of permanent housing
for homeless families was non-profit housing rehabilitated as part of the
city's massive Ten Year Housing Plan. Funded with a mix of low-income housing
tax credits and city capital dollars, some 15,000 new housing units were
created in formerly abandoned buildings utilizing the Local Initiatives Support
Corporation (LISC) and the Enterprise Foundation as intermediaries to neighborhood-based
Source: Mayor's Office
or large non-profits like Phipps
Houses and Settlement Housing Fund as direct developers/owners. Those programs
generally required the nonprofits to rent 30 percent of the apartments to
homeless families, who were usually provided with Section 8 certificates
or vouchers so that their rents would not have to be cross-subsidized by
other tenants. 
As the city's budget crisis deepened,
however, and the supply of vacant buildings that could be efficiently rehabilitated
dwindled, those programs wound down and are now effectively over.
The largest source of homeless
housing was city-owned in rem buildings, into which the city placed over
13,000 homeless families between 1987 and 1995. That placement resource,
too, is gradually evaporating. As the city became more aggressive in disposing
of in rem properties and eventually stopped vesting new buildings, the in
rem inventory declined from a peak of 53,000 units in 1986 to about 25,000
today. Moreover, the city recognized that, in order to facilitate disposition,
it had to limit the number of homeless families placed in them and ceased
such placements in 1996.
With the loss of public and publicly
assisted placement opportunities, the need to find permanent housing for
homeless families within the private, unassisted housing stock gained urgency.
For years the city had been notably unsuccessful in doing so, primarily because
the shelter grant for public assistance recipients has remained far below
the market rate for apartment rentals, even in the poorest areas of the city.
It wasn't until the city linked its Emergency Assistance Rehousing Program
to the Section 8 certificate and voucher program that permanent apartments
for homeless families in the private housing sector opened up in substantial
The city established EARP in 1983
as an inducement to private landlords to rent apartments to homeless families.
The principal incentive was a bonus payment of $2,300 per family member that,
when coupled with the maximum shelter grant of $286 for a family of three,
would raise the effective rent payments to $500 per month during the 32-month
term of the agreement.  The incentive proved
insufficient to attract private landlord interest in renting to families
many perceived to be troubled and potentially disruptive: during the first
six years of the program less than 300 private placements per year were made.
In fact, HPD became the major beneficiary of the bonuses as most placements
were made into in rem housing. In fiscal 1988, for example, 2,111 EARP placements
were made, but only 265 were in private rental buildings.
In 1989 the program was restructured;
in addition to bonuses the families were provided Section 8 certificates
to permit a more attractive, ongoing rental price.  The
combination of EARP bonuses and Section 8 certificates proved much more effective
in placing homeless families than either had separately. In 1994 a peak of
3,072 homeless families were placed in private housing. In March of that
year the city, in an economy move, cut the EARP bonus payments to $1,000
for a family of two (increasing to a maximum of $5,000 for a family of eight
or more), effective with leases signed on July 1. Landlords seeking to get
into the program before the new schedules took effect facilitated the record
number of EARP rentals. In 1995 the number of EARP/Section 8 rentals fell
back to 2,330.
Despite the drop in 1995, homeless
placements into private housing through the EARP/Section 8 program have become
an increasingly critical part of the city's homeless housing efforts, growing
from less than 5 percent of all placements in 1989 to over 40 percent. Indeed,
with the demise of the city's vacant building rehabilitation effort and the
dwindling of in rem and public housing placement options, accessing private
sector housing through EARP/Section 8 has become the city's principal option
for moving families out of the Tier II shelters. This virtually ensures that
the dramatically reduced number of certificates and vouchers now available
will go only to the homeless, regardless of any loosening of federal income
targeting and preference criteria.
To Next Chapter
1: The Program | Chapter 2: The Tenants | Chapter 3: The
Housing | Epilogue
The New York City Rent Guidelines Board has converted this CHPC report to
an electronic format and posted it on its web site. We do so to inform the
public and the housing community, and further the debate on rent-subsidized
housing. The Rent Guidelines Board did not participate in this study and
does not necessarily agree with the findings of this report. The report is
solely a production of the Citizen's Housing and Planning Council.
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low-income families were defined as those having incomes not exceeding 50
percent of the area median.
increased the percentage to 10 percent in 1990 and suspended all federal
preferences in 1996.
about 23 percent of Section 8 Existing Housing tenants are 65 years of age
or older, compared to 38 percent of public housing tenants.
testimony before the House Subcommittee on Housing and Community Development,
November 3, 1993.
certificates and vouchers typically came from HPD's allocation. Consistent
with federal preferences, homeless families were given certificates or vouchers
and referred to this newly renovated housing. Since this was among the most
desirable housing available, the 30 percent quotas have been easily met.
are entitled to renew the leases at the end of the term, but the landlord
is not entitled to any additional bonus.
to the Fair Market Rent.