What a thought provoking post, OP! For instance, my first thought was "this person has no idea what they are talking about." You see, we really don't have section 8 housing anymore. The Department of Housing and Urban Development now favors a Housing Voucher program. Their website does an excellent job of explaining how the program works. For instance, folks who receive housing vouchers have to pay 30% of their income towards rent and utilities. If that amount were $700, why, then their family income would disqualify them from receiving any vouchers!
Consider the following information, OP: around %15 of American households are below the poverty line; somewhere around %2 of American households receive vouchers. Tack onto that the concept of rent showing inelasticity in regards to supply and demand while it generally follows property value and inflation. Put all of this together and you'll find that housing vouchers add less than $dick to your taxes and rental rate.
Now, let me end with an anecdote, OP. I live in a 1200 sq foot apartment with fancy fixtures and vaulted ceilings. This costs about $1200 per month, an amount affordable to any voucher recipient with more than one non-spousal dependent. Why doesn't anyone there receive vouchers? Because folks living below the poverty line can't afford to put up 3months of wages for the security deposit.