Section 8 may soon be endangered
A large portion of federally-subsidized rental units will be in jeopardy in the next five years once Section 8 housing contracts expire. Sarah Gardner reports the average post-Section 8 rent hike is between 20% and 40%.
A group of apartments in New York City (Don Emmert/AFP/Getty Images)
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Scott Jagow: All the attention on housing has been about foreclosures. But today, Congress looks at another kind of housing crisis that might be brewing: older, low-income rental housing. Sarah Gardner has more.
Sarah Gardner: Lawmakers will hear some sobering statistics. Between now and 2013, three-quarters of federally-subsidized rental units will be in jeopardy. That's when contracts on a lot of "Section 8" housing developments expire.
Section 8 renters pay up to 30 percent of their income in rent. The government pays the balance, subject to a federal cap.
Michael Bodaken, president of the National Housing Trust, says once those contracts expire, owners can charge any rent the market will bear.
Michael Bodaken: We show that when an owner opts out of Section 8 housing, the average rent hike is anywhere from 20 to 40 percent.
Bodaken expects future home foreclosures will force many families into the rental market, and that will push rents even higher.
House Democrat Barney Frank is working on legislation aimed at preserving affordable housing. Bodaken's urging him to include tax and other incentives for owners.
I'm Sarah Gardner for Marketplace.
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