The past few years of non-stop economic growth has brought prosperity to many, and has led to skyrocketing housing costs that prevent some two-income families from finding a home. Many stories have been written about dotcom millionaires with unlimited resources who cannot find a house to buy in Silicon Valley, and Wall Street warriors who are out-bid on Park Avenue apartments.

But less attention has been paid to a far more serious side effect of the booming economy: the dwindling availability of housing for low-income families. Families who have relied on government assistance to pay their rents are being forced out of their homes as landlords realize that they can charge much higher rents to non-subsidized tenants. Approximately 3 million households across the country rely on Section 8 housing vouchers to pay for most of their housing costs. The program originated in 1974, as part of the Housing and Community Development Act, and allowed low-income families an alternative to living in public housing blocs. If a family's income is below a certain level (based on regional median income), they are eligible to receive a voucher for any apartment they can find that will accept the government subsidy as payment. Once the family secures an apartment, they pay 30 percent of their income for rent, and the government covers the rest.

In recent years, however, fewer building owners are accepting these Section 8 vouchers. While government subsidized tenants were useful to landlords in the past to fill up vacant units, the current tight rental market has resulted in very few available apartment. Landlords can rent units for amounts far higher than the maximum allowed by the government, and are evicting Section 8 families to make room for higher paying tenants. Some local governments, who are charged with administering Section 8 programs, have responded to rising rents by slightly increasing the maximum allowed rent, but government cannot do anything about the shrinking number of building owners who will accept Section 8 vouchers. As the number of available apartments decreases, waiting lists grow, and more and more low-income families are left without housing. The U.S. Department of Housing and Urban Development (HUD) has asked Congress to fund 160,000 new vouchers, at a cost of $690 million, but the additional vouchers will be useless if the recipients cannot find an apartment that will accept the voucher.

On One Hand...

Section 8 voucher not only provide invaluable financial assistance to low-income families, but they also provide these families with the flexibility to decide where they want to live. Instead of settling for an apartment in a public housing facility, which are often located in high-crime, high-poverty neighborhoods, Section 8 allows families to live in safer, more economically diverse areas.

Many former welfare recipients are now working, as is required by the welfare reform enacted in 1996, but their jobs do not always pay a wage sufficient to cover housing costs. Low-income families who are working hard to rise out of poverty deserve help with their housing costs, and Section 8 is an invaluable program to help these families. Building owners should be encouraged to accept Section 8 vouchers for some of their units as a service to their communities.

On the Other Hand...

Housing subsidy programs such as Section 8 are ineffective because they do not distinguish between families working hard to better their lives and people who are poor because they choose not to hold a job and work for a living. These programs reward the terminally unemployed by paying for the bulk of their rent. This not only perpetuated the cycle of poverty, but it prevents apartments from being rented for their full market value. Interfering with housing prices with vouchers stifles economic growth. Low-income individuals should take advantage of the booming economy to find well-paying jobs, and use their salaries to pay a rent they can afford.

• The 1937 Housing Act was the nation's public-housing program.

• HUD has found that 5.4 million low-income families pay more than half their income for housing.

• The National Low Income Housing Coalition maintains that housing should cost no more than 30 percent of household income.

• A study by the Urban Institute found that only 14.8 percent of Section 8 participants live in high-poverty neighborhoods, compared with 53 percent of public-housing residents.

• In 1998, the Center on Budget and Public Priorities estimated that there were 6.1 million low-rent living units available nationally for the 10.5 million poor American households.

• Nearly 260,000 new low-rent units were created annually during the late 1970s.

• Nationally, rents increased 3.25 percent throughout 1997 and 1998 percent while the consumer price index increased just 1.65 percent

• In 1999, a survey found that in order to keep rental costs under 30 percent of his earnings, a low-income worker would have to earn nearly twice the federal minimum wage of $5.15 an hour for a 40-hour week to pay the national median fair-market rate for a two-bedroom unit.

U.S. News & World Report, Urban Institute, HUD