According to the National Alliance to End Homelessness, one of the greatest challenges faced by formerly incarcerated individuals is securing housing upon release. People who were previously incarcerated are 10 times more likely to face homelessness than the general public. The statistics are even higher for those who have been incarcerated more than once -- this population is 13 times more likely than the general public to experience homelessness. Additionally, being homeless in and of itself increases the likelihood of an individual being arrested. Given this data, it's no surprise that prison is a revolving door for many.
To help combat this systemic problem, the Biden administration issued 70,000 emergency housing vouchers for more than 600 public housing authorities administering the Housing Choice Voucher Program (also known as Section 8). The goal of the voucher program is to provide housing to formerly incarcerated individuals as part of the American Rescue Plan. In total the Department of Housing and Urban Development (HUD) awarded $1.1 billion to cover the cost of vouchers as well as related administrative costs for an 18-month period. With access to this voucher, many formerly incarcerated people will have access to one of life's most basic needs -- adequate housing.
What should investors know?
Now that HUD has awarded $1.1 billion to administer this program, landlords can tap into an even larger pool of tenants while also being the instrument that provides the formerly incarcerated with safe, adequate, and secure housing.
Landlords will not only have an opportunity to provide this most basic need to the formerly incarcerated but will also provide themselves access to a steady stream of income because the local housing authority traditionally pays a portion of the rent directly to the landlord. As a result of this direct method of payment, any landlord who accepts the voucher can be guaranteed that at least a portion of the rent will be paid consistently and on time each month. That's a lot of assurance for any landlord, especially given that many tenants are unable to pay rent as a result of the impact of COVID-19.
Additionally, one of the main goals of the program is for recipients of the voucher to secure long-term housing. Working within this population of tenants will in turn help landlords to ensure that their property is occupied on a long-term basis. While there are many pros and cons in working with long-term tenants, one of the biggest pros is that landlords will not have to deal with as many vacancies.
The Millionacres bottom line
As the saying goes, not all heroes wear capes, and with this housing voucher program, landlords have an opportunity to be heroes by providing rental property access to formerly incarcerated individuals, all the while helping the United States government combat one of its biggest crises: homelessness.