Rental assistance
Federal funding for tenant-based rental assistance
Tenant-based rental assistance is a form of subsidy linked to a household rather than a specific housing unit or development. This approach allows households to use their subsidy in any home that meets program requirements, which can make it easier for them to move to neighborhoods close to jobs, high-quality schools, and other services. The largest tenant-based rental assistance program is the federal Housing Choice Voucher (HCV) Program, administered by Public Housing Agencies (PHAs). Families with HCVs spend approximately 30 percent of their income on rent and utilities, and the PHA pays the rest, up to a locally determined maximum.
Using HOME Investment Partnerships Program (HOME) funds for Tenant-Based Rental Assistance (HOME TBRA). In addition to the HCV program, the HOME program can provide tenant-based rental assistance. Unlike HCVs, which have an indefinite duration, HOME TBRA provides families with assistance for up to two years, which jurisdictions have the option to renew. HOME TBRA gives local jurisdictions a chance to expand the availability of tenant-based rental assistance, but it can be costly and needs to be funded each year to be effective.
Housing expenses not covered by tenant-based rental assistance. In most cases, housing choice vouchers can only be used for ongoing rent and utility payments; they cannot be used for expenses such as utility or rent arrears, security deposits, or moving costs. To meet these needs, localities can consider drawing on resources from more flexible programs such as the Emergency Rental Assistance Program (ERAP) or Community Development Block Grants (CDBG). For example, localities could use funds from ERAP to offer security deposit assistance for low-income households who have received a housing choice voucher. HOME funds may be used to provide security deposit assistance to families receiving HOME TBRA.
Balancing tenant-based and project-based subsidies. Tenant-based assistance allows renters to choose where they live. Still, sometimes it is difficult for families to find units in tight rental markets. Low-income households may struggle to find a unit in resource-rich neighborhoods without a special mobility program to help them access them. Project-based subsidies offer a long-term way to preserve affordability, but they can be more costly to maintain and are often located in higher-poverty neighborhoods. It is important for localities to carefully consider how to effectively balance both types of resources. The optimal approach will vary based on the neighborhood, target population, and the types of rental assistance funding available within the locality.
Using ERAP funds before they expire. The ERAP program is a temporary funding stream established in response to COVID-19. States and qualifying localities received funds in two tranches. The first tranche of funds expired in September 2022, and the second tranche must be expended by September 2025. Jurisdictions should prioritize using these funds before the expenditure deadline.
For more information on this topic, see these briefs on Housing Choice Vouchers and HOME Tenant-Based Rental Assistance.