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Housing Allowances in the US under Section 8 and in Other Countries: A Canadian Perspective

Department of Economics, University of Guelph, Guelph, Canada, NIG 2W1, msteelel{at}uoguelph.ca

Housing allowances are provided in the US by the federal government under Section 8 of the 1974 Housing and Community Development Act. This paper compares the design of Section 8 certificates and vouchers with that of Canadian housing allowances and with aspects of design in many other developed nations. Distinguishing elements of Section 8 are discussed: its minimum standards condition, its use of a three-way contract in which both the government housing agency and the tenant pays a private landlord, its availability to only a limited number of eligibles, the absence of a percentage-of-rent element in its formulas and the low required contribution of its recipients. It is argued on the basis of an array of diverse evidence that these characteristics lead to perverse housing consumption effects, stigma, rent inflation and unnecessary restrictions on recipient choice. The paper also addresses the standard objections to dropping the minimum standards condition and to incorporating a percentage-of-rent element in the formula.

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