Rent subsidies, section 8 housing

There are several different rent subsidy programs, the most common of which is section 8 housing through the HUD. These programs are vouchers which low income households can qualify for and use to pay for part/most of their rent. It is interesting to note that these vouchers ultimately wind up as paid rent and in the landlord’s pockets. Another effect is that these vouchers raise the demand for lower income housing for a given locality. A voucher program drives up the rent on houses at and near the bottom of the market. It is also a contributor towards establishing a steady rent floor. A rent floor is the bottom of the local market where a bunch of close houses exist at a price. In an example area, it’s $900/month for a single family house. These are the houses that are pushed up by the voucher program. A much nicer house can be had for $1200/mo. It also works out, that based on income qualifications, it is hard to get into a house greater than $1100 on the voucher program. The rent ceiling in this area is at $1250 right now.

The lesson behind this: Research the local market if you plan on being either a tenant or landlord and find out how to best take advantage of economic trends dealing with rent floors and rent ceilings, and the spread between the two.

About Steve @ FPO
Hello FPO readers, I have been writing on financial topics for about 12 years now, but I have only recently reignited the fire of publishing online. I have to say, its good to be back. I am an electrical engineer by trade who enjoys all topics engineering and financial. I started Financial Place Online (FPO) to create a value added financial news and education website that would provide a refreshing daily financial read. Financial Place Online websites are built around the principles of consumer empowerment, leveling the playing field, zero spam tolerance, and none of those annoying sidebar or banner ads. For us, it's all about enjoying a good read.

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