Should policymakers curtail Section 8 housing benefits?
Government subsidy programs promote dependency, and they are expensive, but they provide a service needed by millions of people to alleviate poverty.
In a frontier society, there are no bailouts. Life on the frontier is harsh, and each family unit is self-reliant. In a frontier society, if people didn’t work, and if they didn’t produce their own food and shelter, then they died. Fear of death from starvation or exposure was very real, and anyone who wasn’t motivated to produce something of value to themselves or others faced the near certainty of painful death. We are no longer a frontier society in America, but our collective past still influences our attitudes and politics today.
We have made much progress over the last four centuries, and the fear of death from lack of food has been largely eliminated. Private and public shelters have lessened the fear of death from exposure, but America still has a problem with homelessness largely because as a society, we have been unwilling to provide individually-controlled private shelter as an entitlement. The reason we do this is simple: The fear of homelessness is the essential motivation to get people to work to produce goods and services in our society. Take away this fear, and you create an underclass of dependency: the welfare state.
Where is the line between compassion and enabling?
As a society we can and should debate whether or not the fear of homelessness is a desirable motivator. Perhaps we may decide to devote the resources to provide more shelters or private living accommodations for those unable or unwilling to work and produce goods and services. Until then, homelessness is a very real possibility for anyone unwilling or unable to find work. During times of full employment, the system works well and seems just. During times of persistent unemployment when motivated people are unable to find a job, the system works poorly and seems unjust.
The last eight years have been very stressful for many people, certainly anyone in the real estate industry. As a renter and a sole breadwinner, I faced the very real possibility of losing my source of income and being forced to move back to my parents house or move in with friends. I am fortunate to have family and friends who would give my family shelter. If I didn’t have that support — and many people do not have those resources — if I had not been one of the fortunate ones, I could easily have ended up homeless. Any renter faced that fear during the recession, and many still do.
There are places on earth where there is no housing entitlement. Even the US has a problem with homelessness and people living in unsafe and unsanitary conditions. However, the homeless here have access to shelters and other forms of assistance. In some countries, there is little or no assistance either public or private to help out those in need.
The most callous free-market advocates would suggest that people should fear homelessness and destitution so they will be motivated to work and produce goods and services for the benefit of society. It may make for principled debate, but when faced with the reality of grinding poverty, most people conclude something should be done to provide a minimal level of safe and sanitary housing. Unfortunately for those caught in poverty, the public and private institutions that define this minimum standard vary considerably across the world, and if you’re poor in an area where the minimum standard is very low, your quality of life is near zero.
Do we want to be the society that provides the lowest baseline level of entitlement in the world?
Proposals would expand a HUD program aimed at making tenants and rental-voucher recipients self-sufficient
By Jennifer Levitz, July 21, 2015 7:44 p.m. ET
Momentum is building to let more housing authorities impose time limits or work requirements on tenants who move into public housing or receive the federal rental subsidy known as Section 8.
Competing plans in the Senate, House and Obama administration would broaden a 1996 project called Moving to Work, which allows a small group of housing authorities to set requirements aimed at promoting self-sufficiency among tenants. …
Unlike welfare, which has a five-year limit for recipients, federal public-housing benefits generally are open-ended.
Back in 2010 I asked Did We Replace Welfare with Home Ownership and HELOC Abuse?
Ending welfare but keeping section 8 only accomplishes half of what’s required to prevent the safety net from becoming a lifelong snare.
But housing authorities in the Moving to Work program have waivers from regulations to try a range of strategies, such as requiring recipients to work, get job training or open savings accounts when their income rises. The elderly and disabled are exempt from the program.
Other agencies in the program stop aid after a certain number of years, with extensions granted for limited hardship cases.
“I think Moving to Work is particularly important because we’re not only supporting those in need, but we’re also providing them with the tools to one day rent or buy a home on their own,” said U.S. Rep. John Carney (D., Del.), who filed a bill this month to add as many as 60 housing authorities to the program.
These eduction programs are fine, but what about those who fail to acquire the necessary skills? What do we do with those who need this assistance? Is removing this assistance going to change their behavior in any way that benefits society?
“Let’s figure out if this is working and what the impact [of time limits and other changes] is on residents,” said Linda Couch, senior vice president for policy at the National Low Income Housing Coalition. “One of our key concerns is the instability that the program brings to the families the program serves.”
The movement comes as lawmakers face an increasingly contentious dynamic in federal public housing: Thousands of families linger on waiting lists for a place to live while current recipients often get benefits indefinitely. …
Meanwhile, those who get vouchers for rentals in privately owned buildings or spots in public housing often hang on to them. The average length of stay for all households is 9.3 years for public housing and 8.3 years for vouchers, …
People often email me with questions about owning and managing rental properties. One common question is whether or not they should consider section 8 tenants. I have several tenants on section 8, and as a landlord, I love it. I get paid every month without fail, and the tenant takes good care of the property because if they don’t, they risk losing the benefit. From a landlord’s and tenant’s perspective, it’s a win-win. However, neither the landlord or the tenant are paying the bills. That duty falls on the US taxpayer.
Mr. Ben Addi said 70% of the 800 families who have been in the program have gone on to pay fair-market rents, while many others bought homes. A handful returned to the waiting list for a new round of housing after they exceeded their time limit in the program, he added.
During the housing bubble, we had HELOC abusers who used to serial refiance their home to generate spending money. During the housing bust, we had loanowners who serially applied for loan modifications. Now, we have those dependent upon section 8 who serially apply to sustain that benefit.
It’s human nature to become dependent upon free money. Any subsidy or benefit will promote dependency among those who receive the benefit. This fact will never change, but does that mean all these programs should be eliminated or curtailed?
Many people who read my daily posts assume I must be an extreme right-winger because I believe in free markets and decry the loanowner bailouts proposed by the extreme left. I do not identify with the political Right. In fact, I consider myself a left-leaning Libertarian. I am not opposed to all forms of government assistance.
I believe there are problems and issues the government can rectify or remediate or even totally solve. I understand most government programs are wasteful, but I am willing to pay the price if there is real good that comes from the assistance that isn’t wasted. Alleviating the symptoms of poverty, including providing a minimum standard of housing, is a cause I can support.
If I am going to see my tax dollars wasted, I would far rather see it go toward helping those in poverty than I would to see my tax dollars go toward principal reduction or other bailouts for loanowners who are “suffering” the loss of their entitlements.