Do you know if you’re spending too much on housing expenses? It’s important to consider what costs fall under this category. When determining your budget for housing, you want to include both rent (or mortgage) and utility bills. According to the Department of Housing and Urban Development (HUD), there is a rule of thumb to follow for housing expenses. The combined cost and rent and utilities should not exceed 30% of the household’s gross income. Unfortunately, this may not be realistic for everyone, considering current high rent rates! Putting too much of your income towards housing means there is less you can spend on other necessities. In order to help get your costs down, you need to know what options you can consider.
Federal Housing Assistance Programs to Consider
Spending the majority of your income on housing expenses can lead to a difficult financial situation very quickly. These days, it can be even harder to spend less on housing due to the current rental market. If your income isn’t stretching as far as you need it to, you may be able to benefit from a federal opportunity. There are a couple of popular housing assistance programs that help qualifying individuals and families. The goal of these support programs is to increase access to safe and decent housing for people in need.
The first program we are going to highlight is the Housing Choice Voucher Program. You may also recognize this program as Section 8. Basically, recipients of this program receive monthly vouchers to use towards housing costs. Local public housing authorities (PHAs) administer the assistance and determine the eligibility of applicants. Vouchers are able to cover a good portion of rent for many recipients. The tenant is responsible for paying the remainder of rent each month. One of the main advantages to Section 8 is that voucher holders can choose any housing that meets program requirements. This gives households greater choice of where they want to live! If you’re interested in benefiting from Section 8, you need to meet certain requirements.
Despite the availability of federal housing assistance programs, many families face long waiting periods before they can access much-needed support. On average, applicants spend over two years waiting for a voucher due to high demand and limited resources.
The wait times can be discouraging to those in need of help with housing expenses. This challenge comes as a result of a combination of the following factors:
- Limited funding: Although Section 8 receives considerable funding, it is still not enough to help every household that is struggling with their living costs.
- Rising rents: An increase in rent rates over the last several years has made it more challenging for low-income families to afford housing.
- Economic hardships: Housing costs have been increasing faster than wages. Roughly 1 out of 5 households spent more than half of their income on housing expenses in 2018.
Public housing is another well-known program that offers affordable housing to people in need. While Section 8 and this program share a similar purpose, they are very different! Public housing offers qualifying individuals and families a safe place to live within a subsidized housing unit. The recipient is able to live in the unit at a rent rate that’s affordable to them. There are currently over one million households living in public housing units. Local PHAs manage this program as well! A common misconception about public housing is that it is limited to apartment buildings. Actually, there are many types of units! In addition to apartments, there are duplexes and even single-family homes available. There are challenges that applicants of public housing should also consider. Public housing is also in high demand. Therefore, long wait times and limited funding also affect this program.
What the Application Process Can Look Like
The exact application process varies depending on which program you’re applying to and what area you’re applying in. The first step to benefiting from either Section 8 or public housing is to contact your local PHA. From there, they can provide you with the information you need to apply. In some areas, applicants can apply online. In other areas, a paper application may be needed. When applying to either program, it’s important to provide accurate information on your application. You can also expect to provide documents that verify the details on your applications. For example, you may need to supply the following:
- State-issued I.D. or driver’s license.
- Recent pay stubs.
- Recent bank statements.
- Social security numbers for every household member.
- A copy of your current lease agreement.
Alternatives to Lowering Housing Costs
In light of the challenges that come with both Section 8 and public housing, you may want to consider alternatives. If you’re spending more than you can afford on housing costs, then you may need a faster solution. There are changes that you can make immediately that can help cut down your housing expenses! This includes:
- Finding a roommate
- Improving the energy efficiency of your place
There are numerous options that you have if you’re struggling with your housing costs. One option that you can consider in order to decrease your expenses is to seek government assistance. The Department of Housing and Urban Development (HUD) provides a few different housing assistance options. These programs are very effective for decreasing housing insecurity for those that can benefit. However, both programs aren’t without some faults. Some challenges that Section 8 applicants face are long waiting times due to limited funding. The average Section 8 recipient waits more than two years before receiving their voucher, for example.
If you’re in need of a solution now, you want to consider other options in order to improve your financial situation. For example, finding a roommate to share the housing expenses with can cut your costs down! If you are spending too much on housing, what is important is that you take action towards getting those expenses down!