¶ … Bush Administration's Section 8 voucher program may be to limit the number of lower-income people who can enter the housing market for the first time. Bush's plan reduces the amount of money available to rehabilitate multi-housing buildings. That will reduce the number of multi-housing buildings available to be bought and sold in the real estate market (Castellanet, 2003).

In addition, the plan would limit the amount of money available to pay rent in improved housing (Castellanet, 2003). This could reduce the attractiveness of buying depressed housing for the purpose of renovating it and making it either more salable or more rentable, because the owners would have more difficulty renting the units.

The Bush administration maintains that too much fraud is present in the current program (Goldstein, 2003), and wants to turn control of Section 8 housing over to the individual states. It is not clear how this would reduce fraud, as the new managers would have less experience than those currently overseeing the program. This kind of government management uncertainty may also negatively affect sales.

Another concern involves the additional restrictions individual states might put on Section 8 housing once they take over management of the program. Some states have passed laws restricting how long welfare recipients can receive financial welfare aid (Goldstein, 2003). If states put similar restrictions on how long families can live in Section 8 housing, this would effectively reduce the demand for Section 8 housing. The federal government currently has no stated plans to enact such a plan, but they also want to turn management over to the states, so their statements provide no assurance to property owners or prospective property owners.

This kind of uncertainty may cause current owners of Section 8 approved housing to put their units on the market and get out of that market before laws clearly turn against their financial interests.

Bibliography

Castellanet, Craig. 2003. "NHLP Preservation e-News #3." National Housing Law Project, Oct. 27. Accessed via the Internet 10/27/03. http://www.nhlp.org/html/pres/email/pres_3.htm

Goldstein, David. 2003. "Bush plans scrapping HUD 'section 8' voucher program for state grants." Northern Illinois University (Knight-Kidder News Service). Accessed via the Internet 10/27/03. http://www.star.niu.edu/national/articles/050503-bush.asp