"Twenty-five years ago, the Federal Government created what would become the largest rental housing subsidy in the Nation's history: Section 8. The Section 8 program now helps 3 million families around the country afford decent housing, more than double the number of families assisted by the next largest housing program, public housing. Section 8 includes two forms of subsidy: tenant-based and project-based, each assisting roughly one-half the total Section 8 units. The tenant-based program provides vouchers that give residents the freedom to use their subsidies in a wide range of private market housing, while the project-based program provides subsidies tied to specific properties so that the properties themselves remain subsidized. Between the two types of subsidy, Section 8 provides assistance to thousands of families in each and every State around the country-in urban centers and rural farmland, in high rise apartments and single family homes.
    "Celebrating its twenty-fifth anniversary, the Section 8 program stands at a crossroad, facing a challenge that threatens its viability for the next 25 years and beyond. ....Starting in 1975, HUD signed 20-year contracts with private owners to provide project-based Section 8 subsidy to their properties. These long-term contracts are now expiring, creating widespread fear and uncertainty about whether the properties will continue as affordable housing."

According to the HUD report, "Based on the latest data, about half of all project-based Section 8 properties have rents above market. Estimates of the rate HUD pays above market run as high as $1 billion per year."

In 1997, HUD has set up the Mark-to-Market (MTM) program to renew these above-market-rent properties "while reducing their subsidies to market." For those projects whose rents are above 120% of area FMR, will be reduced through restructuring to 120% or, where such a reduction cannot be sustained, enrolled in the MTM demonstration program. The ultimate goal of this program is to restructure Section 8 projects with the least disruption to tenants and owners. The lone Mark-to-Market designated property in the state to date is Carvel Gardens in Laurel, Delaware.