HOUSING VOUCHERS VERSUS HOUSING PRODUCTION - ASSESSING LONG-TERM COSTS

Possibly the single largest debate in the field of affordable rental h ousing concerns the use of tenant-based assistance versus project-base d assistance. The accepted wisdom is that project-based assistance cos ts anywhere from 50 to 100 percent more than tenant-based assistance. This premium for project-based housing is based on a comparison of sub sidy costs at the start of a project's life rather than on a compariso n of the discounted present value of the costs over the long term. The subsidy costs of samples of Section 8 new construction projects have been compared to those of Section 8 certificates over a long period of time. The results indicate that the cost premium associated with proj ect-based assistance may be lower than conventionally believed, around 40 percent, and may get even lower if the cost comparison could exten d to longer time periods and could control for the quality of the hous ing units.