The Section 8 Housing Choice Voucher program provides monthly rental assistance to around 2 million low-income households each year. It is administered at the local level by quasi-governmental public housing agencies (PHAs). While some form of Section 8 rental assistance has been in place since the mid-1970s, the modern program was shaped largely by the 1998 assisted housing reform act ( P.L. 105-276 ). More than a decade later, the Section 8 Housing Choice Voucher program has come under new scrutiny, with PHA industry leaders, low-income housing advocates, both the Bush and Obama Administrations, and some Members of Congress calling for reforms. Further, recent efforts to reduce domestic discretionary spending have resulted in constraints in funding for the program, which has intensified PHAs' calls for cost-saving administrative reforms. This report introduces the primary features of the Section 8 Housing Choice Voucher program, issues that have arisen, and recent reform proposals. The current Section 8 Housing Choice Voucher program and its approximately 2 million vouchers are administered by more than 2,500 local PHAs across the country. PHAs vary greatly in their size, jurisdiction, and capacity. Some administer as few as 10 vouchers, while one PHA, the New York City Housing Authority, administers almost 90,000. Roughly half of all PHAs administer 250 or fewer vouchers. Some PHAs have jurisdiction over all rural areas of a state or an entire county or city, while others have jurisdiction over only part of a city or county. Some PHAs have a full-time director and a large staff; others have one person serving part-time as both the director and sole staff. This heterogeneity has been criticized at times by some researchers and housing advocates. They have argued that housing markets are regional, and thus housing programs should be administered on a regional level. Most other social service programs serving low-income families—such as Temporary Assistance for Needy Families, child care assistance, and the Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps)—are administered at the state level. If the voucher program were administered at the state level, it is argued, it might be easier to coordinate it with other social services. A recent Government Accountability Office (GAO) report suggested that consolidated administration of the voucher program could increase efficiency; however, it could also result in reduced local control over the program. The organizations representing PHAs have generally argued in favor of the current locally driven and focused system. Local PHAs have important local connections with entities ranging from landlords to zoning boards, connections that states, they contend, would not have. Furthermore, PHAs have the most experience in administering federal housing assistance for the poor, both through the voucher program and the federal public housing program. HUD has taken some steps to encourage consolidation of PHAs. For example, the department has provided guidance to PHAs on how to voluntarily transfer their voucher programs to another PHA. Many of the features of the program (described throughout this report) are set by federal statutes and regulations, such as the general eligibility requirements, maximum subsidy levels, minimum tenant contributions towards rent, and basic housing quality standards. However, PHAs are given discretion in some areas, such as managing and prioritizing their waiting lists for assistance and screening tenants for suitability. PHAs must describe their programs and how they are using their local discretion in five-year and annual PHA plans, as well as in administrative plans. All of these plans must be developed with public input and made available for public review. (For more information about PHAs' discretionary authority, see CRS Report R42481, The Use of Discretionary Authority in the Housing Choice Voucher Program: A CRS Study , by [author name scrubbed].) Today's voucher program provides a federally defined subsidy, called a voucher, which a family can use to help pay its housing costs in the private market. That voucher pays roughly the difference between a unit's rent and the tenant's contribution towards the rent. The bulk of voucher funds provided by HUD to PHAs is used to renew existing, previously funded and authorized vouchers. New vouchers are called incremental vouchers. No funds had been provided for new, general purpose incremental vouchers since 2002; however, the appropriations acts since FY2008 have all provided funding for incremental vouchers for targeted populations, including homeless veterans and families in the child welfare system. In addition to receiving funding for the rent subsidies themselves, PHAs receive funding for the cost of administering the program. PHAs earn administrative fees on a per-voucher basis. They can use their administrative fee funding to cover the cost of administering the voucher program, and for other purposes, such as providing supportive services, downpayment or security deposit assistance, or housing search assistance. The voucher program is governed by hundreds of pages of regulations and guidance that make it, some argue, costly, overly prescriptive, and difficult to administer. Past reform initiatives have proposed to convert the current program into something more akin to a block grant, redefining the concept of a voucher by instead providing funds that PHAs could use for rental assistance, homeownership assistance, and/or supportive services, as defined by the grantee. A "voucher" would no longer have uniform meaning, and PHAs could provide more or less generous assistance to families at their discretion, outside of some, if not all, current federal rules. Such a reform would be consistent with the 1996 welfare reform law that abolished the Aid to Families with Dependent Children (AFDC) program and replaced it with the broader-purpose Temporary Assistance for Needy Families (TANF) block grant. The concept of block-granting the voucher program raises concerns among low-income housing advocates, who argue that block granting could lead to funding cuts, that block grants can lead to less federal oversight and less transparency about how funds are being spent, and that existing rules and regulations are necessary to protect tenants. To some degree, the Moving to Work (MTW) Demonstration (discussed later in this report) has allowed some PHAs to receive their federal housing assistance funding (Section 8 and public housing) in block grant form. MTW has been popular with participating PHAs, who feel that the added flexibility allows them to innovate and run more efficient programs. Low-income housing advocates have criticized MTW for lacking transparency and clear program objectives and for allowing PHAs to adopt proposals—such as time limits and work requirements for recipients—that they argue are detrimental for assisted families. (For more information about MTW, see CRS Report R42562, Moving to Work (MTW): Housing Assistance Demonstration Program , by [author name scrubbed].) In some cases, families can use their vouchers to help pay the monthly costs of a mortgage, but only if their local PHA chooses to run a homeownership voucher program. There has been debate about how much of the voucher program should, and can realistically, be focused on promoting homeownership. The George W. Bush Administration made a priority of increasing the number of first-time homebuyers making purchases with homeownership vouchers. Successful homeownership can help lower-income families build assets and wealth, which can help their long-term financial security. However, the voucher homeownership program has minimum requirements that many families currently served by the rental voucher program may be unable to meet (minimum income standards, employment requirements). Furthermore, some voucher families, particularly those in low-wage and/or volatile employment markets may not have the financial stability necessary to successfully maintain homeownership. Given the recent turmoil in the housing market, the immediate future growth of the voucher homeownership option is uncertain. After a peak of nearly 2,800 closings in FY2004, the number of closings has averaged around 1,700 per year through the end of FY2010, and around 1,100 closings in FY2011 and FY2012. Under the current rules of the voucher program, families pay an income-based rent. Specifically, families are required to pay 30% of their adjusted incomes toward rent, although they may choose to pay more. Given this income-based rent structure, as tenants' incomes increase, the amount they are required to pay in rent increases, and as their incomes decrease, the amount they are required to pay in rent decreases. The current income-based rent structure used in the voucher program—and most other HUD rent-assistance programs—is based on the concept of affordability. It is generally accepted that housing is affordable for low-income families if it costs no more than 30% of their adjusted gross income, on the assumption that low-income families need the full remaining 70% to meet other needs. However, this figure may be considered somewhat arbitrary. For some families with few costs for work, transportation, medical, child care, or other needs, 40% or even 50% of income might be a reasonable contribution toward housing costs. In fact, the current voucher program allows families to choose to pay up to 40% of their incomes toward housing costs initially, and even greater amounts upon renewal of a lease. For other families, with high expenses for work, transportation, medical, child care, or other outside costs, some percentage lower than 30% might be the most reasonable, or "affordable," contribution. In fact, in the early years of the rent assistance program, the standard was set lower, at 25% of family income. Critics of the current rent calculation, including the former George W. Bush Administration and some PHA industry groups, have argued that PHAs should have the flexibility to modify the existing income-based rent system or adopt new systems partially or fully decoupled from income, such as flat or tiered rents.