The Section 8 Housing Assistance Program, currently the largest source of subsidized low-income housing in the country, was authorized in 1974 following the FHA default crisis. It provides housing assistance payments by the federal government on behalf of eligible low- and moderate-income families through four different subprograms: New Construction, Substantial Rehabilitation, Moderate Rehabilitation, and Existing. New Construction is largely used by private developers who obtain financing and build low-income housing projects. The subsidy is in the form of payments on behalf of the eligible tenants which effectively lower the rent to 30 percent of the eligible family's adjusted annual income. Substantial Rehabilitation, Moderate Rehabilitation, and Existing operate similarly, covering already constructed, privately owned buildings needing various degrees of rehabilitation or none. This is also a "finder-keeper" provision. 57
Unfortunately, Section 8 assistance has also fallen short of demand as the National Association of Housing and Redevelopment Officials indicated in 1986. A survey of waiting lists in 223 local housing authorities by the Association revealed that 782,000 families were on waiting lists for public housing, with an overall average wait of more than one year. Average waits were much higher in some places: five years in the Winston-Salem MSA and seven years in Atlantic City. 58 Some were not even allowed to wait. The survey revealed that waiting lists had been closed in some PHAS, including eight of the fourteen largest, because the number of applicants far exceeded the projected supply of units.
The history of low-income housing in the United States indicates that federal housing programs, which grew out of the Depression of 1929, soon became an instrument of central-city reorganization and renewal. Until the 1960s, the primary role of low-income housing in most cities was to facilitate the removal of the poor from areas inside or adjacent to business districts, thus advancing the transition of older industrial cities to corporate cities. The formal adoption of public housing did not necessarily mean that housing conditions of the poor and displaced were significantly improved. Between 1934 and 1938 over one million individuals were displaced from central-city areas as a result of clearance activities nationwide. 59 Only a small fraction of these displaced people could have received federal housing assistance, since as of 1938 fewer than 22,000 units were completed and available for occupancy and only about 65,000 additional units had been authorized (on some of which construction had not even began). 60
In terms of its impact on the housing conditions of the poor, the 22,000 units of low-income housing could have little effect on the nearly one-third of