Three Principles for a Rental Assistance Guarantee

Housing is a basic human need, but millions of people in this country cannot afford a stable home. Rental assistance directly closes the gap between rents and the amount a household can afford to pay for housing and has been proven highly effective at reducing and preventing homelessness, overcrowding, and housing instability.^[2] Despite these successes, 3 in 4 households with low incomes who are in need of rental assistance do not receive it due to policymakers’ failure to provide sufficient funding.^[3] This failure contributes to deep inequities in housing insecurity for people of color, people with disabilities, LGBTQ+ people, and other communities and reflects a long history of racist and oppressive policies in housing, education, and employment.“3 in 4 households with low incomes who are in need of rental assistance do not receive it due to policymakers’ failure to provide sufficient funding.”

Federal policymakers need to start funding rental assistance in a way that recognizes housing is a necessity, not a privilege. This means expanding and improving rental assistance so that all people with low incomes who need help receive it, by:

1. Providing long-term funding that adjusts automatically to meet changes in need. Policymakers should transition rental assistance from a “discretionary” program, where funding is set each year by Congress, to a “mandatory” program that adjusts to serve all eligible households who apply.
2. Prioritizing assistance for people with the lowest incomes. Guaranteeing rental assistance for all who need it will likely require incremental steps. Policymakers should start by phasing in guaranteed assistance for people with the lowest incomes, such as 15 or 30 percent of area median income and below.
3. Removing barriers to assistance and providing services and resources that support equitable access to housing. Policymakers should eliminate restrictions on rental assistance, including those based on a person’s criminal record or immigration status, and should make assistance more effective and responsive to the needs of the people it serves by steps such as providing supports (like additional financial assistance) and services to help households find housing.

Grounding a rental assistance guarantee — and more incremental steps on the path to guaranteed rental assistance — in these three principles will help ensure that ultimately, all low-income households who need it receive help.

Widening Gap Between Incomes, Rent Costs

The gap between incomes and rent costs for many households has widened considerably in recent decades, placing millions of people at risk of housing instability or homelessness.

High rents hit people with the lowest incomes the hardest. In 2022, 83 percent of renter households earning less than $30,000 per year paid more than 30 percent of their income on rent and utilities, an increase of 5 percentage points since 2001. And 65 percent of these households paid more than half of their income toward housing, 10 percentage points higher than in 2001.^[4]

This hardship has also shown up as an increase in homelessness, particularly as pandemic relief and eviction protections expired. Between 2022 and 2023, homelessness rose 12 percent, reaching its highest level on record in data going back to 2007. The number of people experiencing homelessness has been increasing since 2017 — after declining by 15 percent over the preceding decade — as improvements to homelessness response systems and modest, population-specific investments in rental assistance could not make up for the widespread scarcity of resources needed to prevent homelessness.^[5]

Rental Assistance: A Proven Tool to Address Urgent Unmet Need

Federal rental assistance currently helps over 5 million households afford modest homes by covering the difference between what a household can afford to pay — generally defined as about 30 percent of their income — and rent.^[6] For someone struggling to afford housing, rental assistance can have a profound impact on their life. It might help them leave a shelter, move out of a friend’s or relative’s overcrowded home, remove themselves from an abusive situation, maintain consistent school enrollment for their children, or stop sleeping in their car.

Rental assistance helps provide a stable home, which in turn promotes children’s well-being^[7] and reduces the intense stress that can result from not having a regular place to sleep or having to choose between rent and food.^[8] By reducing the amount spent on housing, rental assistance also allows people to use more of their limited resources for other necessities, such as food, clothing, transportation, and child care. And rental assistance strengthens communities by ensuring that households have a stable, affordable place to live, have the resources to meet their basic needs, and are able to more meaningfully engage with their communities.

Studies show that Housing Choice Vouchers, the largest federal rental assistance program, sharply reduce housing instability and help families stay together. (See Figure 1.) Funding for vouchers and other rental assistance programs, however, falls far short of the need; 3 in 4 low-income households in need of rental assistance don’t receive it due to funding limitations. Expanding rental assistance to a universal guarantee could provide the benefits of a stable, affordable home to as many as 18 million households with low incomes who are currently paying more than 30 percent of their monthly income toward housing or living in an overcrowded or substandard home.^[9]

Expanding rental assistance would also have a profound impact in addressing the deep inequities among people experiencing housing insecurity or homelessness. Because of long-standing inequities that stem from structural racism in housing, employment, and education and other factors, median incomes are lower for Black, Latine, and American Indian and Alaska Native households than for the nation as a whole. As a result, the housing affordability crisis disproportionately affects renters of color. Over half (53 percent) of the households with low incomes who are in need of rental assistance but don’t receive it are headed by a person of color.^[10] (See Figure 2.)

Beyond addressing homelessness, overcrowding, and housing instability, expanding rental assistance would also help reduce poverty. One study found that universal rental assistance would lift over 7 million people above the poverty line^[11] and cut poverty rates by 29 percent for Latine people, by nearly one-fifth for Black, Asian, and Pacific Islander peoples, and by 11 percent for American Indians and Alaska Natives.^[12] (See Figure 3.)