The Section 8 Voucher Utility Allowance Dilemma

Because of the unique structure of the Section 8 Housing Choice Voucher program, an increase in the utility allowance to offset tenant-paid utility costs when rates go up may not provide immediate financial benefit to all tenants in the voucher program. Voucher tenants receive no dollar benefit from increased allowances once the sum of the total rent paid to the owner plus the utility allowance exceeds the payment standard. Households will only benefit where the gross rent — including the utility allowance — is less than the payment standard. As a result, it is often necessary for advocates to seek simultaneous increases in the utility allowance and the payment standard. This document, prepared by Mike Hanley at the Empire Justice Center, explains and demonstrates why.