Subsidized Housing

Get to know the basics of subsidized housing, including Section 8 vouchers and cooperative housing


Federally subsidized housing provides affordable housing to "low income" people.  Low-income is defined as a household with income at or below 80% of the median income. However, there are far more people eligible for these subsidies than there is money to be allocated.

Wait List Priorities

The Department of Housing and Urban Development (HUD) requires many subsidized housing units to be set aside for people considered ""very low-income"". Following are examples of the 2003 income limits for ""low-income"" and ""very low-income"" households in Michigan:

    • Two-person: low-income is $45,200, very low-income is $31,100.
    • Three-person: low-income is $50,850, very-low-income is $34,950.
There are very few subsidized units available for single people.  Available units are reserved for single people with disabilities or people at least 62 years old.

    Income Certification

    After tenants move into subsidized housing, they are required to re-certify their income once a year with the management or subsidizing agency.  Their employer and/or the Family Independence Agency will have to verify their income.  If a tenant receives Section 8 and their income goes down, they can request an income re-certification in order to get a reduction in rent.


    You may be on a wait-list for more than one subsidized housing program at a time.  Tenants should call the program offices regularly to check on their status on the wait list.  If you are sitting on a wait list much longer than originally estimated and you suspect discrimination, contact the Fair Housing Center of Southeastern Michigan at (734-994-3426 or 517-263-1777) or simply visit the Fair Housing Center website.  Also, contact government agencies that oversee the administrating office.  You can send complaints to local politicians and ask them to investigate the situation.  Tenants can file Freedom of Information Act requests if they suspect that information about the administration of federally subsidized housing is being withheld.

    As with all housing problems, it is important to document your interaction with different administrators and politicians. Consider using the media to put public pressure on the owner or agency. The Fair Housing Center will investigate discrimination claims with testers, or refer you to an agency that does so in your area. 

    Section 8 Voucher for Private Market Housing

    A Section 8 rental subsidy is a federal payment to a landlord on behalf of an individual tenant.  With a Section 8 voucher, the government pays the difference between 30 percent of the tenant's household income and the set "fair market" rent of the unit.

    The tenant obtains a voucher for a fixed amount of money based on the geographic area.  If they decide to pay more than 30% of their income for rent, they may rent from a landlord that charges more than the "fair market rent" for the area.  

    Unfortunately, the money available for Section 8 vouchers does not come close to meeting the demand for subsidies.  Applications are taken only sporadically and, when the wait list is open, tenants can expect to wait a fair amount of time before actually getting a voucher in their hands.

    Once you are approved for a voucher, you will have 60 days to find a house in the area that meets Section 8 program requirements, and for which the landlord is willing to accept Section 8.  Sometimes it is possible to get an extension on the 60 days, but tenants sometimes have to return the voucher unused because they cannot find a unit that meets the requirements.

    Section 8 Government Subsidy of Developments 

    In subsidized housing, the federal government insures and usually pays a percentage of the mortgage.  The owner is required to pass on the debt-servicing savings to the tenants through reduced rents, sometimes in all the units of the building, sometimes in only a portion of the units.  The household pays 30% of its income for rent.  HUD subsidizes the owner to what they determine to be "fair market" rent.

    Because of their affordability, Section 8 subsidized units are almost always rented.  Because of the subsidy, the landlord is guaranteed his or her profit.

    Below Market Rate Cooperative Housing

    Co-ops are owned and managed by the people who live in them.  Income-eligibility, carrying charges (monthly "rent"), family composition requirements, and buy-in costs vary between cooperatives.  "Below market rate" co-ops are different than "market rate" co-ops, which function more like condominiums.

    Cooperatives are owned and managed by the people who live in them.  After being accepted into a cooperative, members buy a membership share that entitles them to lease a unit.  Shares are generally refundable at the end of the tenancy, less any damage and resale fees. In many of the co-ops, the initial buy-in costs have increased at a rate that prohibits many people from becoming tenants.  For example, the buy-in cost at Colonial Square in 1989 was $3200.  Area residents most in need of the low rent may not be able to afford the initial share.  However, if you can afford the buy-in cost, a cooperative can be an affordable alternative to the long wait-lists and large bureaucracy of other subsidized housing.  Also, check with management to see if they offer any assistance in paying the membership cost.

    Landlord-tenant laws generally apply to the cooperatives. When repairs are not done, you often have the same right to withhold your carrying charges.  However, your membership share is not protected under the Security Deposit law.  It is important to check your membership agreement for costs (such as repainting) that may be deducted from your buy-in share, as well as other rules that may apply to your housing.

    Getting Repairs in Subsidized Housing

    In Section 8 subsidized units, you can withhold your rent the same way that tenants in the private market do. Some city pressure can be applied by calling the city for an inspection to cite housing code violations.  Also, tenants can apply pressure through complaints to the Michigan State Housing Development Authority (MiSHDA), or the federal Department of Housing and Urban Development (HUD).

    In Section 8 voucher tenancies, the withholding procedure varies depending on what agency issued your voucher.  Generally, you are expected to alert your Section 8 worker to the problem.  The unit will be inspected and the worker will give your landlord a certain amount of time to repair before stopping payments.  If your landlord refuses to make repairs, or if the unit has been condemned, Section 8 should stop payments. You will be given time to look for another unit without returning to the bottom of the waiting list.  You should be able to withhold your portion of the rent, although some caseworkers discourage or even prohibit it.  Also, some offices allow you to make repairs yourself and deduct the cost from your portion of the rent.

    Family Independence Agency (FIA) Rent Payments

    In any type of housing, if rent is paid by the FIA, you still have the right to withhold rent when the landlord does not keep the house up to code.  It is important to document a history of notifying the landlord for repairs.  If the rent is vendored from FIA directly to the landlord, contact your FIA worker and tell her or him that you want payments sent to you instead.  FIA has rules that allow you to place rent money in the bank if you are taking positive steps to solve the problem. You can also cash the check and buy a money order with your and your landlord's names on it. Tenants should get the money orders at a bank versus a convenience gas/food store because you may not be able to obtain proof of the purchase from the gas/food store if a money order is lost or a landlord denies ever receiving it.

    "Just Cause" Protection from Eviction

    The federal government allows public housing providers to evict tenants, or refuse to renew a lease, only when they have ""just cause"" (a good reason) to do so. In the private market, landlords do not have to give a reason if they decide not to renew your lease. 

    Some examples of ""just cause"" are:

    • The tenant repeatedly refuses to comply with lease terms
    • The unit has been used for illegal purposes
    • There is excessive traffic or noise from the unit
    • The tenant has habitually paid rent late
    • The tenant has created a health hazard
    • The tenant has not adequately cleaned the unit

    To learn more about housing rights in Michigan and where to get help:    

    Consult the website for local housing resources and tenant counseling services. 

    Consult the website for legal education articles and local service information.

    If you received court papers or otherwise need free or low cost legal advice:

    This article appears courtesy of the Michigan Tenants Counseling Program.