Section 8 project-based rental assistance: the potential loss of affordable federally subsidized housing stock.

Background Using Section 8 project-based rental assistance contracts, HUD contracts with for-profit owners of private multifamily housing, who in turn make specific rental properties available to qualified low-income households. Typically, the subsidy will pay the difference between 30 percent of the household’s income and the contract rent; this subsidy is paid by HUD to the landlord. Approximately 1.2 million renter households of all ages benefit from this type of rental subsidy, including 500,000 older households. Most Section 8 contracts have expired or will expire soon, and the property owners must now decide whether to renew their contract or leave the program (“opt out”). The problem is concentrated among those projects for which the rent levels set by the Section 8 contract are below the prevailing market rents for comparable units. Owners thus have an incentive to leave the program and convert their property to private market rentals.