Subsidized Housing

Subsidized housing is when housing is made affordable from money funded by the government, banks, and foundations. This subsidy can be direct payments to a landlord to offset the rental costs or it can be construction money used to produce units of affordable housing with the landlord's contractual obligation to offer homes at an affordable rate or below fair market rental rates.

Some of the most common types of subsides include subsidized apartments, section 8, leasing assistance for homeless, housing opportunities for people with aids, HUD section 811, and local community mental health agency housing assistance programs.

Housing subsidies are defined as being "tenant based" or "project based". Tenant based subsidies are attached to the tenant. When the tenant moves the subsidy goes with the person. Project based subsidies are attached to the building or apartment that the individual or family is renting. In these cases, if the person moves, the subsidy stays with the apartment and does not follow the person. The individual or family must reapply through another program to obtain a different subsidy if eligible.

Below are the major housing subsides available:

Project Based: Subsidized Apartments

These are the most common housing subsidy and easiest housing subsidy to get. They are project based housing with reduced rent to the tenant, typically adjusted to 30% of the household's gross income. To find a listing of some of subsidized apartments go to www.communityhousingnetwork.org and type subsidized apartments in the search engine in the upper right hand corner. Subsidized apartments are funded through a variety of different means as explained below.

Section 236: This specific HUD program gives non profit organizations the ability to create housing for persons that are elderly and physically handicapped. These subsidies are matched to the building and are not portable.

Section 202: This specific HUD program gives non profit organizations the ability to create housing for the elderly. The section 202 program is similar to 811 program in that there is a built in rent subsidy that assist the individual in paying his/her rent. It is based upon the person's income. This housing is designated ‘elderly only'.

Section 8: Housing Commissions are permitted to use a portion of the money they receive from HUD for project based subsidized apartments. The apartments that are funded by Housing Commissions are for low and very low income individuals and families. Project based Section 8 is NOT portable and stays with the apartment when the person moves on.

Taxable Bonds 80/20: The apartments were created with funds raised through the sale of bonds. This subsidized apartments cost may cost more the 30% of one's adjusted gross income.

Low Income Housing Tax Credits: These apartments were created with funds from businesses that gave the money in return for their own reduced tax burden. Generally these apartments will be for lease at less then the fair market value but are not based on one's income.

Section 811 is a specific HUD program that gives non-profit organizations, especially CHDO's (community housing development organizations), the ability to create housing for people with disabilities. This housing includes a subsidy with each rental unit and the amount that the tenant pays is based upon his/her ability to pay. Non profits are eligible to apply for Section 811 dollars each year. According to HUD, each project must have a supportive service plan.

Tenant Based: Housing Choice Voucher (Section 8)

Section 8 is the second most common subsidized housing program. Section 8 assists low and very low income people to afford safe housing in the private market. Participants are able to find their own housing, including single family homes, townhouses and apartments. The participant is free to choose any housing that meets the requirements of the program as long as the landlord accepts the Section 8 voucher and the residence meets the minimum standard requirements. See also Housing Choice vouchers (section 8) explained for more information. The section 8 voucher is portable which means it can move at as the person moves. Section 8 is by far the most difficult to apply for and has one to 5 year waiting lists for the people that are lucky enough to get on the waiting list.

Other Subsidy Options

There are other subsidy programs such as Shelter Plus Care and Leasing Assistance Programs that are designed to link rental assistance to supportive services for hard to reach homeless persons with disabilities. Some populations served, depending on each particular grant; focus on persons diagnosed with severe and persistent mental illness and/or developmental disabilities, as well as a diagnosis of AIDs and related disease. Some programs have additional requirements such as a history of substance abuse or chronic homeless status. All programs require that the person be homeless as defined by HUD in order to enter these programs. The project provides grants to be used for permanent housing, which must be matched by supportive services that are equal in value to the amount of rental assistance and appropriate to the needs of the population served. Call Community Housing Network for more information.

Community Mental Health Agencies also provide housing assistance to persons with mental illness who are members of the mental health system and can not obtain housing with their current income. These people must be actively searching for work, social security benefits, subsidized apartments, and Section 8 vouchers. This housing subsidy is very temporary and can only be used to bridge the gap while waiting for other subsidies.