Housing and Community Development Act of 1974

Introduction of a new rental assistance program referred to as Section 8, shifting federal policy away from the construction of public housing.

The federal began experimenting with private-market based voucher-like programs as early as 1965 with programs such as the Section 236 Leased Housing Program and the 1970 Experimental Housing Allowance Program (EHAP) which seeked to determine if was feasible to low-income families allowances instead of direct subsidized units.1

In January 1973 President Nixon enacted a moratorium on new public housing construction who criticized the program for being too expensive to construct, not affordable for those it is attended to serve and being in poor quality.

The Housing and Community Development Act was the first omnibus housing legislation since 1968 and the first such legislation following the Nixon moratorium.

It provided:2

  1. created a new low-income rental assistance program, called Section 8
  2. expanded upon the pilot rental assistance programs to build a comprehensive program
  3. the federal government provided private property owners monthly assistance payments for new or substantially rehabilitated rental units
  4. property owners agreed to rent to eligible low-income families (defined as families with incomes at or below 80% of local area median income), who would pay an income-based rent.
  5. it also provided PHAs with the authority to enter into rental
    assistance contracts for existing, private market units that met certain quality standards.

In 1983, the Housing and Urban-Rural Recovery Act of 1983 revoked United States Department of Housing and Urban Development’s (HUD) ability to enter into new section 8 contracts that provide new construction.  However, HUD was still allowed to renew contracts on existing properties.  It also created a new demonstration program that tested a modified use of Section 8, which were called vouchers.  This change was made permanent in 1985. Although very similar to Section 8 as originally enacted, vouchers provided local housing authorities more flexibility to have families using the program pay more than 30% of their income on rent.2

For more on housing vouchers, click here.

For the full text of the bill, see here.

Endnotes

1. https://fas.org/sgp/crs/misc/R41654.pdf

2. https://crsreports.congress.gov/product/pdf/RL/RL34591