Welcome back to our series of blog posts on the history and philosophy of the economy, bankruptcy, and debt – today we continue to discuss public benefits in the 21st century. Thus far, we have been picking and choosing public benefit programs to discuss based on whether they provide a true monetary benefit, but there are so many public benefit programs that offer funds or necessities. Now, we will discuss some public housing benefits.
Public housing is one of the more significant public benefits. Generally, you can qualify for public housing benefits based on “low-income” – defined by the Department of Housing and Urban Development as making 80% of median area income. Rent is then capped at 30% of one’s income. These housing complexes are publically owned and created under the Wagner-Steagall Housing Act of 1937 and 1947 amendments. History has shown that the high-rise towers fail compared to the low rise complexes due to operating expenses. However, there are also scattered sites which exist outside the complexes. Most importantly for our discussion: you will not lose your public housing benefits upon filing bankruptcy.
We dipped briefly in to the policy history above for one specific reason: true public housing is a great and necessary service, but not terribly effective or successful in operation. As of right now in September of 2022, 0 of the 20 municipal housing programs have openings; and only 5 of the 20 municipal housing services in Minnesota have waitlists that are not closed.
Cue the creation of the “Section 8” housing program. This program offers housing vouchers so low-income individuals can rent a private residence from a private landlord (who accepts section 8 vouchers), at a cost of 30% of the individual’s income – the relevant public housing program pays the remainder. Though, as of right now, only about half of the section 8 housing wait lists are open to new applicants. It is worth noting that, though your access to benefits for section 8 will not be affected by filing bankruptcy, you can still be evicted for arrears to your private landlord.
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Next time, we will finish off our round up of public benefits by discussing food assistance, benefits aimed at needy families and children, and possibly even Lifeline (aka Obama-phone) etc. If you are interested in the history and philosophy of the economy, bankruptcy, and debt, stay tuned for my blog posts. And, if you are thinking about filing, reach out to us at www.lifebacklaw.com.
