Government Assisted Housing

Poverty was the main issue in the development of Section 202 and Section 8 programs. During the initial phase (1959–1974) Section 202 housed the moderate-income clientele who did not meet eligibility requirements for public housing. The program was criticized for not being sensitive to the housing needs of the poor, even though it was run by nonprofit organizations. The Housing Act of 1968 allowed the for-profit sector to enter into the building of elderly housing. The Nixon administration terminated funding for Section 202 in 1970, but with enactment of the 1974 Housing Act, funding was reinstated and a new low-income phase began.

"Low income" meant below 80 percent of median income. First-time Section 202 units were also available as Section 8 rentals for eligible low-income persons. For low-income older people, this meant the acceptance of publicly subsidized housing and the realization that they could improve their housing standards by moving to a Section 8 unit. This Section 202 phase also responded to the rural and minority poor and the frail elderly by setting aside up to 25 percent of available funds to improve the conditions of their current housing.

Significant changes occurred between 1984 and 1990. Income eligibility was lowered to 50 percent of the local median income, but the rent contribution for low-income tenants was increased from 25 to 30 percent. Due to significant cuts during the Reagan and Bush administrations, the construction of Section 202 units declined; by 1988 older persons applying for Section 202 housing had to wait eight to eleven years, depending on location. By 1992 there were eight low-income elderly waiting for each vacancy in Section 202 housing. By 1999 over one million families were on the waiting list.