About Subsidized Housing in the United States Federal housing policy in the United States has its roots in the Great Depression of the 1930s, when the country faced an urbanizing population and an economic crisis that produced mass unemployment and crippled the private housing sector. Policy makers in the New Deal period responded in several ways to address these problems: To help stabilize the housing sector and stimulate private construction, they created the Federal Housing Administration (FHA) and authorized it to insure private mortgages. FHA programs have continued to the present day, benefiting millions of American households by making homeownership simpler and more feasible.

To help meet the housing needs of the poor, who could not attain homeownership, they created a framework for public housing. Under the Housing Act of 1937, public housing is largely federally funded but is built and managed by local housing authorities, within certain federal guidelines. Legislation enacted after World War II expanded both of these programs and declared that the goal of federal housing policy was to create "a decent home and a suitable living environment for every American family".

The 1960s saw new approaches to solving housing problems-including housing for the elderly, rent supplements, subsidized private housing production, subsidized homeownership, and housing allowances.

A form of the housing allowance idea grew in popularity in the early 1970s. Congress created the Section 8 housing program in 1974-including elements that allowed local authorities to subsidize housing rehabilitation, initiate new construction, and subsidize rents in existing private-market housing. A housing voucher, issued to an eligible low-income family, allows the family to search for and lease housing in the private rental market. Under the Section 8 Program-now known as the housing choice voucher program - the family pays 30% of its income toward the privately set rent, while the housing agency pays the difference, up to a certain "fair market rent" level, set by HUD.

The voucher program has continued to win broad support from policy makers who see it as an efficient, effective alternative to public housing. In 2001 the bipartisan Millennial Housing Commission called it the "linchpin" of federal housing policy. Today it serves about 1.7 million households in communities around the country and is a vital means of addressing the housing needs of low-income people.