Trampoline or Hammock? What a $26 Billion Cut Means for America’s Housing Safety Net
A closer look at the White House’s 2025 proposal to reduce Section 8 funding — and what it could mean for millions of low-income renters. You can listen to the AI podcast of the article .
On May 2, 2025, the White House sent Senator Susan Collins a memo detailing its proposed changes to discretionary spending. Spoiler alert: it’s not exactly a beach read — unless your idea of fun involves wading through budget spreadsheets. Buried in one of the rows of a table in a 46 page proposal was a bombshell: a $26 billion cut, primarily targeting the Housing Choice Voucher (HCV) program, aka Section 8. For the uninitiated, this program is a lifeline for millions of low-income renters. So, yeah, it’s kind of a big deal.
What’s in the Proposal?
The White House’s plan shakes up the HCV program with three major changes:
- A $26 billion cut to housing voucher funding.
- States foot the bill: The feds want to shift more costs to state governments.
- Two-year cap for “able-bodied” adults: If you’re not elderly, disabled, or a parent, your voucher expires after two years.
Let’s break it down.
Who Relies on Housing Vouchers?
About 9 million households receive HUD housing assistance, with 5.2 million using HCVs to rent in the private market. Here’s the catch: landlords must opt in to accept these vouchers, and many are saying, “Thanks, but no thanks.” (For more on why landlords are opting out, check out my articles: “The Hidden Flaw in America’s Largest Rental Assistance Program” and “Opting Out of Choice: What Ten Years of Data Say About the Section 8 Stall.”)
Another 2 million households use Project-Based Vouchers (PBVs), which are tied to specific units instead of people. Think of them as “voucher-embedded apartments”: the assistance sticks with the apartment, not the renter. These buildings sign long-term contracts with HUD, so participation isn’t optional — it’s baked in. That means no landlord ghosting, no last-minute opt-outs, no chasing down signatures. If a tenant leaves, the unit stays in the program and a new qualified renter moves in. It’s more stable for tenants and more predictable for housing authorities. The tradeoff? Less flexibility. If your job moves you across town or you need to live closer to a hospital or school, that PBV doesn’t come with you.
Demand vs. Reality
Housing vouchers are like concert tickets to a sold-out show: everyone wants one, but good luck getting in. Waitlists are often years long, and in some cities, they’re closed entirely. Yet, the White House wants to shrink the program further. Experts aren’t exactly thrilled:
“You’d be looking at millions of people out on the street virtually overnight.”
—“Federal rental aid already only reaches about a quarter of those who qualify. Cutting that feels like cutting into bone.”
— of the National Alliance to End Homelessness
They’ve got a point.
There is an alternate way to look at this!
But let’s try a different lens. Instead of asking why the administration wants to cap vouchers or whether the system is bloated, what if we asked how the system actually works — and for whom?
In the next section, I’ll zoom in on the mechanics of the Housing Choice Voucher program — who runs it, how the money flows, and why it so often feels like a maze wrapped in red tape. By unpacking how HUD operates on the ground, we can start to see where the administration is coming from. The system isn’t just bloated — it’s tangled. And understanding that tangle helps explain why a time limit might look like a solution, at least on paper.
A Beginner’s Guide to HUD, PHAs, and the Rental Assistance Maze
For simplicity, I’m focusing on the Housing Choice Voucher (HCV) program — HUD Assistance’s star player. HCV or Section 8 vouchers is the biggest, most politically charged part of HUD’s rental assistance portfolio, and it’s a decent proxy for understanding the broader system.
If the HCV program had a dating profile, it’d read: “Looks simple, but it’s complicated.” On paper, it’s a straightforward deal: low-income households get help paying rent in the private market. In reality, it’s a bureaucratic marathon involving federal agencies, local housing authorities, state politics, and landlords who ghost faster than a bad first date.
Meet HUD: The Housing Puppet Master
The Department of Housing and Urban Development (HUD) has been tackling affordable housing since 1965. The HCV program is its flagship rental subsidy. Here’s the gist:
- HUD funds it: The feds provide the cash.
- Public Housing Agencies (PHAs) run it: About 2,150 PHAs across the U.S. manage waitlists, verify eligibility, and pay landlords. They’re the unsung middle managers of housing policy.
- Renters get vouchers: These cover the gap between 30% of a household’s income and market rent (up to a local cap).
- Landlords opt in: Or, increasingly, they don’t — due to red tape, financial concerns, or, let’s be honest, selective preferences.
HUD sets the rules, but PHAs adapt them to local markets, creating a tug-of-war between federal, state, and local priorities. The system only works when everyone’s rowing in sync. Spoiler: they’re not always in sync.
This decentralization creates a kind of housing policy tug-of-war: the federal government holds the money (unless it doesn’t), states negotiate their share, and local agencies try to stitch it all together in ways that fit their housing markets. It’s federalism in theory. As expected, the HCV program only works when all three levels — federal, state, and local — are rowing in the same direction.
How Does HUD’s Budget Break Down?
In 2024, HUD spent about $57 billion, though its allocated budget was $73 billion. The gap might stem from reporting lags or unspent funds — details are murky. Of that $57 billion:
- $32 billion went to the HCV program.
- $16 billion supported PBVs.
These two programs are HUD’s heavy hitters, serving the most households.
Spending More, Serving Fewer?
Here’s where it gets weird. In 2014, HUD spent $36 billion to serve 9.8 million people. By 2024, spending jumped 58% to $57 billion, but the number of people served dropped 7.8% to 9.03 million. This gap — more money, fewer people — is the administration’s Exhibit A for reform, including the two-year voucher cap and shifting costs to states. It smells like bureaucratic bloat, and it’s fueling calls for change.
Once a voucher holder receives assistance, how long do they stay?
Getting a housing voucher is notoriously difficult — waiting lists are often closed or years long. But for those who do receive assistance, tenure tends to be long.
Figure 4 shows the average time voucher holders have lived in their current homes, based on their admission date. Results vary wildly:
- Washington, D.C.: An eyebrow-raising 785 months (over 65 years). Likely a data quirk — possibly inherited admission dates or miscoding — but it’s an outlier.
- Connecticut, Nevada, Massachusetts: 165–170 months (~14 years).
- North Dakota: The shortest at 70 months (~6 years).
These long tenures are Exhibit B for the administration’s push for time-limited aid. The thinking goes: if some households are using vouchers for over a decade, maybe the program isn’t working as intended. Maybe it’s become a hammock, not a trampoline. But here’s the real question: are people clinging to vouchers — or is the housing market so broken they have nowhere else to land?
A long term average tenure isn’t necessarily evidence of failure. It might simply reflect who the program is actually serving: seniors living on Social Security, single parents juggling multiple jobs, or low-income renters in cities where even a one-bedroom costs more than their monthly income. These aren’t freeloaders — they’re people stuck in a market that has outpaced their paychecks.
Still, the administration seems to have drawn a philosophical line in the sand. If a senior or a person with a disability uses a voucher for 20 years, that’s acceptable — maybe even expected. They are, by this logic, the “deserving poor.” But if the recipient is able-bodied, the clock starts ticking. Two years, then you’re off. The implicit belief? That able-bodied people have choices. They can bootstrap their way into the private market. The voucher is meant to be a short-term leg up, not a long-term crutch.
The Administration’s Case
The $26 billion cut — nearly half of HUD’s 2024 spending — is no small potatoes. HCVs target the most vulnerable: households earning less than 30% of the Area Median Income (average income: $18,500). These families often can’t cover a lease deposit, let alone market rent.
The administration’s rationale hinges on two points:
- Spending inefficiency: A 58% budget increase with an 8% drop in people served screams “fix me.”
- Long-term reliance: Vouchers lasting a decade or more suggest the system isn’t the “trampoline” it was meant to be.
, the head of HUD said,
“Public housing is not supposed to be permanent,” Turner said. “Public housing is a trampoline, if you will, to help the most vulnerable of our society. It was never meant to be a hammock.”
What is my take?
After eight years studying affordable housing, I’ll say it: HUD needs a policy glow-up. Experts across the board agree the system has bloat — inefficiencies are real, and reform is overdue. The administration’s proposal feels like a “starve the beast” tactic, a la Milton Friedman: cut funds to force change. It’s a bold opening bid, but Congress will likely counter with a milder version, balancing reforms with funding.
What this article doesn’t yet cover is the human cost. How many people could lose their vouchers under this proposal? That’s coming next. In part two, I’ll run the numbers and estimate the upper bound of “able-bodied” adults who could be affected. It’ll involve some probability theory — but don’t worry, no p-values will be harmed in the making of that analysis.
