Housing vouchers in the United States – co-opting the private supply of housing

Better Finance, Subsidizing rents


In the United States most rented dwellings are provided by private landlords and this sector has a small affordable rental housing segment. Housing vouchers (HVs), funded by the central government and allocated locally, are the most common United States mechanism to ensure rents are affordable. HVs aim to increase purchasing power and improve housing choices for very low-income renters, and more recently have used to encourage poor households to move to areas of greater labour opportunity.

Actors involved

  • U.S. Department of Housing and Urban Development (HUD)



More information

The voucher is provided to eligible tenants according to a waiting list maintained by city or county housing agencies, who are searching for housing of a defined quality and cost.  When a suitable dwelling and willing landlord is found, the HV can be used to help pay the tenant’s rent[1].  This HV payment reflects the difference between a Fair Market Rent (FMR) which is calculated locally, and affordable rent defined as 30 per cent household income. If an HV recipient cannot find suitable housing within 60 days, the voucher must be returned to the issuing local housing authority.

The budget for HVs is capped and both demand and need outstrips availability.  HVs are targeted strictly based on income – 75 per cent of recipients have a very low income.[2] It is estimated that only 25 per cent of eligible households are actually assisted by HVs due to limited supply, leading to long waiting lists and occasional government crises measures.[3] Voucher recipients also face discrimination when searching for suitable homes. Only a few local governments have passed “source of income laws”[4] to combat this problem.


[1] For a review of this scheme, see Keith Jacobs and others, “Individualised and market-based housing assistance: evidence and policy options”, AHURI Final Report, No.253 (Melbourne, Australian Housing and Urban Research Institute Limited, 2015). Available at https://www.ahuri.edu.au/__data/assets/pdf_file/0021/5664/AHURI_Final_Report_No253_Individualised-and-market-based-housing-assistance-evidence-and-policy-options.pdf

[2] Barbara Sard, “Housing Vouchers Work: Helping Vulnerable People Afford Decent, Stable Housing”, Off the Charts (blog), Center on Budget and Policy Priorities, 28 March 2017. Available at https://www.cbpp.org/blog/housing-vouchers-work-helping-vulnerable-people-afford-decent-stable-housing

[3] At the time of writing, the incoming Biden administration proposed substantial expansion of many housing and urban development programmes, including the Housing Voucher programme, as part of the President’s discretionary funding request for fiscal year 2022 (https://www.whitehouse.gov/omb/fy-2022-discretionary-request/).

[4] For an overview of Source of Income Laws by Local Housing Solutions, see https://www.localhousingsolutions.org/act/housing-policy-library/source-of-income-laws-overview/source-of-income-laws