State-Funded Rental Assistance Programs Are Increasingly Critical to Keeping Lower-Income Renters Housed

By Katie Renzi, NLIHC Research Intern 

A recent report from the Center on Budget and Policy Priorities (CBPP) titled “States Should Fund Rental Assistance as a Frontline Strategy to Address the Housing Affordability Crisis” examines the scale and implementation of state-funded rental assistance programs for low-income renters and their potential for alleviating the housing affordability crisis. The authors find that while most states fund some form of rental assistance, these programs are typically too small, time-limited, and narrowly targeted to meet the scale of the need, leaving a substantial gap in support for the lowest-income renters. They recommend using more stable revenue sources for ongoing, universal rental assistance programs that can provide stability and affordability for low-income renters. 

To produce this analysis, the researchers created a comprehensive database of state-funded rental assistance programs. Using the NLIHC’s Rental Housing Programs Database as a baseline, the authors identified 109 programs that provide statewide rental assistance, excluding programs that subsidize the development or preservation of affordable housing which account for more than half of all state-level programs addressing housing affordability. For each program, the analysis defines and categorizes key features, including the type of state agency administering the program, the program type (tenant-based or project-based), and the funding mechanism. They also detail whether the program is designed only for specific populations and the duration of assistance (ongoing, time-limited, or one-time assistance). 

The analysis reveals that while state-funded rental assistance is widespread, its implementation varies significantly. As of 2025, 36 states (including Washington, D.C.) fund at least one rental assistance program. Among these, all provide at least one tenant-based assistance program, which helps renters to afford to live in a place of their choice. Twenty states plus D.C. also fund project-based assistance programs, where support is tied to a specific property or unit. Despite their prevalence, most state programs are small in scale and scope. Only around a third of programs provide ongoing assistance in which eligible households receive support for as long as they need, the most effective form of support for providing renters stability. In contrast, nearly half of all programs offer only time-limited subsidies, 78% of which last for less than two years.  

Only seven states and D.C. operate broad, voucher-like programs available to the general low-income population. Most of these programs are restricted to specific sub-populations, like those experiencing or at risk of homelessness, foster youth, survivors of domestic violence, and people with disabilities or serious mental illnesses. Targeting these priority populations is often a method of rationing limited resources, though it also leaves many low-income renters in need of assistance.  

The structure and stability of these programs can vary based on their administration and funding sources. Many programs (55%) are run by a state’s housing agency, while others are administered by social services (27%) or health-focused agencies (20%). Critically, 60% of the programs are funded through state general revenue, often on a one-time or inconsistent basis, which creates volatility due to annual fluctuations in state budgets and revenue. Less than one-fifth of programs are funded by a stable, dedicated revenue source, such as a real estate transfer or millionaire tax, which the authors identify as a key feature for program sustainability and growth. 

The paper concludes that states must make rental assistance a central pillar of their housing strategy by expanding and improving existing programs. To be maximally effective, the authors recommend that states design programs to be ongoing rather than time-limited, provide subsidies that cover the entire gap between housing costs and 30% of a household's income, and pass and enforce source-of-income protections to combat landlord discrimination. The authors emphasize the important role state policy makers can play, while also acknowledging the persistent and widespread scale of housing insecurity that makes increased federal investment in rental assistance a necessity. By funding their own rental assistance programs, states can make a meaningful impact on housing stability for low-income renters at a time when no state has an adequate supply of affordable housing for people with extremely low incomes. 

The CBPP article can be found here.