Inside the confusing world of housing choice vouchers
People using housing vouchers in D.C. spent this past summer in limbo. In the spring, the D.C. Housing Authority (DCHA) deliberated changing the maximum value of all 20,000 vouchers the agency administers. If implemented, the change could have had major consequences, advocates and landlords warned, by inadvertently forcing thousands of people to move from their homes. Not until last month did the agency make clear that no changes are imminent.
The city’s embattled housing authority recently came under fire in an unsparing assessment by the U.S. Department of Housing and Urban Development (HUD). While media attention focused largely on the low occupancy rates and subpar condition of DCHA-run public housing, the agency’s oversight of its voucher program is also lacking, according to the report. DCHA is out of compliance with several HUD voucher regulations, and has been widely criticized for failing to hold landlords accountable for high rental costs. This summer, DCHA Executive Director Brenda Donald publicly stated that officials don’t know exactly how some of the Housing Authority’s current voucher rents were calculated (they were implemented long before she joined the agency last year). What’s clear, however, is that the existing rates DCHA uses are premised on years-old market conditions.
The agency is set to spend at least the next year determining how to revise the value of the 20,000 vouchers it administers. In doing so, the agency will have to grapple with concerns that landlords are exploiting the program, and that people with vouchers are unable to find suitable homes to rent. The end result could have lasting consequences not just for D.C.’s voucher holders, but for all those in the city who rely on affordable housing.
Housing vouchers 101
Reginald Black lives in an apartment in Northwest D.C. Like many residents across the city, he relies on a housing voucher. He pays 30% of his income toward his rent in an apartment of his choice while the District covers the rest.
This subsidy is a lifeline for thousands of D.C. residents exiting homelessness or making too little to afford to live in the city. But many people with vouchers still experience housing instability, enduring discrimination from landlords, poor housing conditions and mounds of paperwork to receive their monthly subsidy. In May, DCHA — the agency that administers the vouchers — almost added another complication.
That month, Black came home to find a letter from his landlord stuck in his door. It warned Black that DCHA was considering paying less for his voucher. But his overall rent wasn’t going down. If he received a smaller subsidy, Black knew he would no longer be able to afford to stay in the apartment.
Landlords and tenants across the city watched similarly alarming alerts fill their inboxes. The missives outlined DCHA’s plans to decrease the maximum value of all its housing vouchers. Charts made by landlords and homeless service providers proliferated across the community, suggesting that up to 30% of voucher holders would be evicted if the Housing Authority followed through.
In September, DCHA quashed its proposal after months of outcry. Officials have instead embarked on what’s shaking out to be a years-long process to reevaluate how much the agency will pay landlords to house people with vouchers. That amount — called a “voucher rent” — is supposed to be based on the literal cost of housing in D.C., but it also determines the city’s answer to a hotly debated question: Where should people who use vouchers be able to live?
How does DCHA determine the maximum value of a voucher?
The agency uses a complicated process for establishing the value of a housing voucher — so complicated, in fact, that DCHA Director Donald and her staff spent hours explaining it to the agency’s Board of Commissioners during this summer’s meetings. Officials say the complexity is unavoidable due to federal regulations and the nature of DC’s rental market.
The value of a housing voucher — i.e., the “voucher rent” — isn’t just a technical decision. It’s a key piece of the city’s housing policy. Set it too low, and people who use vouchers won’t be able to afford to live in middle- and upper-class neighborhoods, reinforcing D.C.’s intense racial and economic segregation. Set it too high, and landlords can take advantage of the high voucher rents, which can mean displacing other tenants to make more off renting to voucher holders.
There are three ways DCHA decides the value of a housing voucher.
First, the Housing Authority establishes the maximum value it will pay for any voucher in the city. In other words, no matter how much Black earns, his share of the rent (30% of his income) combined with DCHA’s share can’t exceed this cap.
Per federal requirements, the agency bases its calculations on a HUD assessment that establishes what it calls “fair market rent” for the region. Since the region includes lower-cost areas like Northern Virginia and suburban Maryland, fair market rent understates the actual cost of housing in D.C.
So, DCHA multiplies fair market rent to get the maximum value of a voucher. Right now, it’s at 187% of fair market rent, almost twice the region’s. In practice, this means the agency can pay landlords up to $2,930 for a one-bedroom unit anywhere in the city. The maximum value fluctuates based on the type of unit, reaching $5,073 for a four-bedroom.
In May, DCHA proposed to decrease the maximum value from the current 187% to 110% of small area fair market rent (a second number released by HUD that measures the price of housing based on ZIP codes). The agency worried it was paying landlords too much to rent to voucher holders, and saw lowering the maximum value as the most feasible way to stop that overpayment. DCHA nixed the proposal in response to objections from landlords as well as advocates for low-income Washingtonians, who argued that a lower maximum value would make it impossible for people with vouchers to find housing in neighborhoods with high rents. For Fiscal Year 2023, the maximum value will stay at 187% of fair market rent.
Looking beyond the maximum value
Black and DCHA don’t pay the maximum value of almost $3,000 for his apartment, however. Instead, he and most voucher holders are charged based on a second calculation, called the “neighborhood approved rent.”
Once DCHA sets a maximum value for the whole city, the agency turns to voucher rent caps
for each of D.C.’s 59 neighborhoods. These neighborhood rents act like the maximum value but on a localized level, setting varying caps to reflect housing costs across the city. In wealthier areas, the neighborhood rent ($2,648 for a one-bedroom where Black lives) approaches the maximum value. In lower-priced neighborhoods, DCHA sets a lower approved rent, such as $1,400 for a one-bedroom.
DCHA plans to overhaul the current neighborhood rents by 2024. A very early draft, prepared by an outside consultant, suggests increasing rents for many three-, four- and five-bedroom units, which can be especially hard to find in D.C. Landlords in neighborhoods that are paid the least — such as Anacostia, Barry Farm, Petworth and Shepherd Park — would see across-the-board increases. Meanwhile, areas where DCHA is currently paying the most — for instance, Capitol Hill, Cleveland Park and Mount Pleasant — would see significant decreases.
DCHA hasn’t updated the neighborhood rents since 2016, and an outside review conducted this summer suggested the currently used figures are outdated. The agency is overpaying for studios and one-bedrooms in 33 neighborhoods and underpaying for all units in 12 other neighborhoods, according to the study. (DCHA has questioned the study’s accuracy, and is following up to confirm data.)
What’s fair rent? The idea of ‘rent reasonableness’
When Black was searching for an apartment, he could look anywhere that charged up to the neighborhood rent. But once he found one, the Housing Authority had to figure out a third number: the fair rent for that specific apartment, which is how much Black and DCHA would actually pay the landlord each month.
The Housing Authority calls determining the actual rent a voucher holder and the authority pay to a landlord the “rent reasonableness process.” Under this policy, landlords cannot charge voucher holders more than they charge people without vouchers for comparable units in the same building or neighborhood. DCHA’s rent reasonableness review is a built-in control for overpayment by unit. That’s important because neighborhood rents technically allow DCHA to pay the same rent for voucher holders living in a new, luxury building as it does for those in an older building in the same neighborhood — even if the actual value of those units varies widely.
On paper, DCHA can evaluate the rent landlords propose to make sure it accounts for the building age, amenities and condition. But in practice, “it’s unclear what DCHA’s actual ‘process’ is to verify that unit rents are reasonable,” according to the HUD report. That echoes long-standing criticism from housing advocates.
DCHA did not provide HUD with any rent reasonableness records, but HUD found that DCHA is not following federal rent reasonableness guidelines. DCHA may accept all rents below the neighborhood maximum, the report said, which is against HUD regulations and allows landlords to exploit voucher rents. Prior to the HUD report’s release, a DCHA spokesperson indicated that the agency did not have any immediate plans to change its rent reasonableness process. HUD gave the agency 60 days to come up with a plan to address issues raised in its assessment.
Finding a suitable place to live
Queenie Featherstone, a Street Sense Media vendor, knows how hard it can be to find an apartment with a voucher. Some of the units she toured were infested with roaches and rats. And the rents seemed so high. Even if her voucher would cover $1,500 a month for a one-bedroom, Featherstone didn’t want to reward inflated prices.
“I refused to use the government’s money senselessly,” she insisted.
But Featherstone also needed certain things from her apartment, which she’s now found. “I wanted to pick a neighborhood that looked clean, safe, on a Metro or bus line, near grocery stores, that would work for me,” she said.
The tension Featherstone felt reverberates across the voucher rent-setting process: How can voucher holders live where they want without paying too much?
DCHA’s official policy is that people with housing vouchers should be able to live in any neighborhood across the city. But just like for Washingtonians who rent without assistance, housing costs in D.C. can be prohibitive.
“You cannot find any decent place to live with the current market rate,” Denise Blackson, a DCHA board member, said at a Sept. 14 meeting.
It used to be even harder. Ten years ago, a much lower maximum value in effect restricted people with vouchers to the city’s poorest neighborhoods. Between 2014 and 2019, DCHA incrementally raised the maximum value of vouchers from 110% to the current 187% of fair market rent. The agency can now pay for people with vouchers to live in at least 57 of D.C.’s 59 neighborhoods (officials didn’t have data for the other two neighborhoods). While most voucher holders still live in the city’s poorest neighborhoods, 11% now reside in wards 1, 2 and 3. Even so, many people report it’s hard throughout the city to find a unit their voucher will cover.
Having access to a range of neighborhoods is especially important for people who were formerly homeless, according to Black, who’s also a Street Sense Media vendor and the advocacy director at the People for Fairness Coalition. For some people, living by good schools, hospitals and grocery stores — resources that are more readily available in wealthier areas — can make it easier to adjust, Black said.
“The places that provide opportunities are where people who are in recovery need to go,” he added. Sufficient voucher rents, both at a city and neighborhood level, are key to that access.
How do vouchers affect the rental market?
“People with vouchers are being exploited in multiple ways,” said Lauren Taylor, the manager of the Latino Economic Development Center’s affordable housing preservation program.
Taylor is referring in part to the discrimination voucher holders often face when searching for an apartment, when landlords reject applications because of negative stereotypes around people who have experienced homelessness or deep poverty. But what Taylor has seen recently is a different story — landlords exploiting high voucher rents to turn a profit. Though there’s no hard proof landlords are systematically overcharging voucher holders, there are warning signs, as DCist/WAMU recently reported.
According to DCHA policy and D.C. law, landlords can’t charge voucher holders more than the standard rent in their building. For instance, if a landlord is charging market-rate tenants $1,500 for a one-bedroom, it’s illegal to ask a voucher holder to pay $2,300 for the same apartment, even if the neighborhood approved rent is $2,300. But some, including DCHA board member Bill Slover, worry landlords are doing exactly that.
Real estate listings on LoopNet, an online property marketplace, support this theory. Multiple listings advertise the “value-add” available if a developer were to fill the building with voucher holders instead of other tenants, including one that estimates an extra $500 per one-bedroom for a building near St. Elizabeths. In another instance, a building that charges $783 for a studio and $1,037 for a one-bedroom could get $2,397 and $2,467, respectively, by renting to voucher holders, according to the offering summary.
If DCHA is willing to accept these high rents, the process is no different than when one non-voucher tenant outbids another, said Dean Hunter, the CEO of the Small Multifamily Owners Association of D.C.
“Any landlord is going to rent their property for the highest rent possible, be it in the voucher program or be it in the market,” Hunter said. “What’s the problem? The market dictates where people live and what people will pay.”
But some worry DCHA’s high voucher rents drive up rents for tenants who rent without vouchers. If a landlord knows DCHA will pay more to rent a unit to a voucher holder, they might raise rents on non-voucher tenants, Taylor said. Or, the landlord might push out the non-voucher tenants and fill units with voucher holders. This potential displacement is one reason some D.C. residents, including Ward 3 Council candidate David Krucoff, have called on the city to suspend issuing housing vouchers.
It’s not clear how many landlords are taking advantage of high voucher rents. Donald pushed back against such claims in an interview with DCist/WAMU, saying “the narrative that we are overpaying and therefore creating some huge incentive for landlords to rent to voucher holders is wrong.” And a DCHA analysis presented by the agency in August shows that on average, the agency pays below its neighborhood rents.
Can DCHA hold landlords accountable?
When DCHA proposed lowering the maximum value of a housing voucher this past spring, it said it was doing so to prevent the overpayment that Slover, Taylor and others worry about. But Lynn Amano, advocacy organizer at Friendship Place, never thought the maximum value of a voucher was actually the problem. Instead, Amano and several other advocates for people experiencing homelessness and housing instability in D.C. place the blame on failing rent reasonableness controls.
To most outside observers, DCHA’s rent reasonableness process is opaque, to say the least. A DCHA spokesperson confirmed the agency compares the landlord’s requested rent to the neighborhood rent, and added that landlords must certify that the amount they charge voucher holders is not more than what they charge other tenants. Though the agency has the authority to account for specifics like building age and condition, DCHA officials stated multiple times in recent public meetings that the agency only checks proposed rents against the neighborhood rent. This could theoretically allow landlords to overcharge voucher holders without being held accountable — the same practice Slover and Taylor have raised concerns about.
If the agency regularly refused to accept inflated voucher rents, “that would address the crux of the issue,” said Amano.
Since the HUD report also found DCHA is out of compliance with federal rules, the agency will have to establish new policies to ensure it is assessing the rent reasonableness of any new voucher rent contracts. DCHA will also have to provide HUD with an analysis of unit rents from the past three years. If the agency paid any landlords more than a reasonable rent, DCHA will have to reimburse the federal government. DCHA did not respond to requests for comment on any new rent reasonableness policies by time of publication.
By October 2024, the agency is also planning to revise neighborhood rents. And the debate over the maximum value of a voucher is likely to return again when DCHA calculates those figures for 2024.
While the housing authority considers these changes, Black hopes voucher holders are at the center of the process.
“If you are gonna make changes that are going to impact me, then you need to be asking me what did I want to see,” Black said. “Like really base what you’re doing on what the impacted folks would like to see.”
This article was co-published with The DC Line.
Annemarie Cuccia covers D.C. government and public affairs through a partnership between Street Sense Media and The DC Line. This joint position was made possible by The Nash Foundation and individual contributors.