Contracts for more than 30% of the 1.34 million units in the Section 8 project-based rental assistance program are set to expire by the end of 2017.
The Section 8 program allows tenants who meet income requirements to pay only 30% of their income in rent. Meanwhile the Department of Housing and Urban Development covers the balance, paying the landlord a subsidy on top of the rent.
The majority of at-risk units were built between 1974 and 1983, Bloomberg reports. A typical contract is for 20 years, putting contracts that renewed in the mid-1990s up for likely expiration soon. HUD has also allowed renewal for a one- or five-year period since the 1990s, adding to the potential wave of expirations.
While most of the contracts will likely be renewed, there is the possibility that some owners could be looking to cash out or convert the units to market rate housing, which will only add to the country’s affordable housing crisis. [Bloomberg]
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