What is Subsidized Housing

Also known as social housing, subsidized housing is a government initiated project to provide accommodation to people with low incomes. With the average homes costing an upwards of $400, 000, it has become increasingly difficult for low income earners to afford a house. The government has addressed this issue by providing housing for a much cheaper price for these people.

There are three major programs that have been introduced under subsidized housing programs. There is the public housing category, the privately owned category and the vouchers and certificates for use in privately owned housing. This program is the oldest subsidy program in the U.S. There are different forms of housing subsidies available today. These are:

Public Housing Subsidies

These are the housing units that have been built entirely with funds from the federal government.  These units are owned by the local government agencies known as public housing authorities (PHAs). Lately, the federal government has been involved in the rehabilitation of most of these units as well as their modernization owing to the fact that most of the units date back to the 1950s.

Private Owned Subsidized Housing

The government since the 1960s has been subsidizing construction of privately owned subsidized housing projects. Most of these projects were and are financed through mortgages obtained from banks and other private lenders. The government subsidizes these privately owned projects by paying part of the mortgage. On top f this, the government also insures the mortgages through the Federal Housing Administration.

Regardless of differences in ownership in the above mentioned programs, they have a core similarity. In both cases the federal government makes a commitment to subsidize or cover the erection of the units. The subsidies are extended to owners of the housing projects as well as residents who continue to receive the benefit of the subsidy provided that they are still living in the houses. Once they move out of the houses, the benefits are extended to the new occupant of the unit. This is true for all housing subsidy programs under the federal government.

Housing Certificates and Vouchers

This is the third category of the housing subsidy programs. The structure and mechanism of this category is very different from the two housing subsidies mentioned earlier. These subsidies are extended directly to families that have a low income source. This comes in the form of commitment by the federal government to pay part of the rent in the housing unit occupied by the family or an individual. But there is a maximum amount of rent that the federal government is willing to pay on these units based on the cost of modesty and fair market rent mechanisms.