How It Works
The U.S. Department of Housing and Urban Development (HUD) administers Federal aid to local housing agencies (HAs) to provide low-income housing for eligible low-income families, the elderly and persons with disabilities. Public housing ranges from single family houses to highrise apartments.
Public housing eligibility is determined based on annual gross income, whether you qualify as elderly, a person with a disability, or as a family, and U.S. citizenship or eligible immigration status. Income limits are developed by HUD. Low income limits are set at 80% of the median income level for the county or area and very low income limits are set at 50%.
Rent, or Total Tenant Payment (TTP), is based on the family’s anticipated gross annual income less deductions, such as dependent, elderly family members or persons with a disability. The formula used to determine the TTP is the highest of the following:
- 30% of the monthly adjusted income. (Monthly Adjusted Income is annual income less deductions allowed by regulations)
- 10% of monthly income
- welfare rent, if applicable, or
- a $25 minimum rent or higher amount (up to $50) set by a local HA
In general, there is no time limit for remaining in public housing. However, if family income changes, an HA may determine whether the family should stay in public housing.
The federal public housing program was created by the U.S. Housing Act of 1937 under the Roosevelt Administration. Public housing was originally intended as a work program and as a way to house people who were temporarily unemployed or employed at low wages during the Great Depression.
In 1998, President Clinton signed the Quality Housing and Work Responsibility Act (QHWRA) into law. The Act moved authority over many areas of public housing from federal to state and local governments. The Act requires local PHAs to submit a PHA Plan to HUD. The QHWRA increased local PHAs’ discretion to set admission preferences within broad federal rules and expanded their options for calculating tenants’ rent in public housing.
As the nation faces serious budget challenges, funding for low-income housing is also facing significant cuts. Beginning in fiscal year 2005, the President proposed, and Congress enacted, significant cuts in’ low-income housing assistance. For fiscal year 2006, the amount of funding approved by Congress for affordable housing and community development programs in HUD was nearly $3.3 billion below the 2004 level, adjusted for inflation. These funding cuts are already affecting low-income families. Over the past decade, there has been a net loss of approximately 170,000 public housing units to deterioration and decay, and much of the remaining units require substantial repair and rehabilitation.
In addition, these cuts are being made at the worst possible time. In the past 6 years, Congress has recycled $13 billion of previously appropriated but unspent HUD funds back into HUD programs. This has significantly reduced the amount of new appropriations needed. However, there is reason to believe that unspent funds available for recycling are drying up and Congress will soon have to start providing additional new funding each year just to keep total funding at its current level.
- US Department of Housing and Urban Development
- Center on Budget and Policy Priorities
- Council of Large Public Housing Authorities
- U.S. Department of Housing and Urban Development. HUD’s Public Housing Program. April 25, 2006. Available at: http://www.hud.gov/renting/phprog.cfm . Accessed on February 6, 2007.
- Center on Budget and Policy Priorities. The Effects of the Federal Budget Squeeze on Low-Income Housing Assistance. February 1, 2007. Available at: http://www.cbpp.org/2-1-07hous2.htm. Accessed on February 8, 2007.
- Center on Budget and Policy Priorities. How the Statutory Changes Made by the Quality Housing and Work Responsibility Act of 1998 May Affect Welfare Reform Efforts. January 19, 2000. Available at: http://www.cbpp.org/12-17-98hous.htm. Accessed on February 8, 2007.
- Council of Large Public Housing Authorities. Quick Facts on Public and Assisted Housing. Available at: http://www.clpha.org/page.cfm?pageID=3. Accessed on February 8, 2006.