Advancing Choice in the Housing Choice Voucher Program: Source of Income Protections and Locational Outcomes

Research & Policy | June 22nd 2022 | J.R. Reed

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In a new NYU Wagner Research Paper, Ingrid Gould Ellen, Katherine O’Regan, and Katharine WH Harwood used data from the U.S. Department of Housing and Urban Development (HUD) to better understand the impact of source of income (SOI) laws on locational outcomes. These laws prohibit discrimination based on the income a tenant uses to pay rent  and thus make it unlawful to refuse to rent to a household on the grounds that it participates in the Section 8 Housing Choice Voucher program.

 

The authors find consistent evidence that, in jurisdictions that adopted such laws, existing voucher holders who choose to move make more upwardly mobile  neighborhood moves, compared to voucher holders who move in areas that did not adopt such laws. More pointedly, voucher holders who move after a law has been enacted move to neighborhoods with somewhat lower poverty rates and more racially diverse populations than their original neighborhoods. 


Background and Context

The housing choice voucher program, the largest low-income housing subsidy program

administered by HUD, provides assistance to over 5 million people annually across approximately 2.3 million households. But, while research shows vouchers reduce the rent burdens of low-income households and lower their risk of becoming homeless, the program has been less successful in helping voucher recipients gain access to a wider set of neighborhoods and schools.

 

To better understand how the voucher program affects the location decisions of households, the authors of this paper honed in on one particular policy – SOI laws. In states and localities that lack such protections, it is legal for a landlord to refuse to rent to voucher holders, purely on the basis that they use the voucher. And, in some markets without these laws, studies have shown landlords deny as many as 78 percent of prospective tenants with vouchers. The challenges facing voucher holders are even steeper in cities with tight housing markets.

 

​​Local housing authorities and jurisdictions have adopted a slew of reforms to encourage landlords to accept vouchers, involving a combination of administrative reforms, carrots, and sticks. Using household-level data for more than 700,000 voucher households who moved between 2007 and 2017, the paper evaluates how one of those sticks – SOI laws adopted in 31 jurisdictions – shaped where a fixed set of voucher households ultimately lived. More specifically, the authors study whether such laws allow voucher holders to move to neighborhoods (as measured by census tracts) with lower poverty rates, fewer voucher households, and more racially diverse populations. The study also examines whether the impacts of enacting such laws hold for families with children and for households of color, both groups that typically face greater hurdles in the housing market.

 

Findings

The authors find evidence that SOI laws lead to voucher movers experiencing greater reductions in neighborhood poverty rates.

 

The estimated impacts are small in magnitude and do not reach statistical significance until three years after SOIs are enacted, but they are consistent across different samples. Three years after SOI laws are passed, voucher holders who move are less likely to move to a neighborhood with a poverty rate at least five percentage points higher than the tract they left. Conversely, they’re more likely to move to a neighborhood with a poverty rate at least five percentage points lower than their previous neighborhood. SOI laws seem to encourage voucher holders from higher poverty neighborhoods to move and find new homes in lower poverty areas.

 

The results are even stronger among Black households. The authors also find enacting SOI laws can result in voucher recipients moving to somewhat whiter neighborhoods, suggesting this type of legislation opens up a more racially diverse set of neighborhoods for voucher holders.

 

Finally, it’s important to highlight what the authors did not find – or were unable to assess. . The authors were unable to examine whether new (as opposed to existing) voucher recipients are also more likely to make upwardly-mobile moves post SOI, and found no evidence that SOI laws change the average characteristics of neighborhoods reached by households who newly receive vouchers.

 

Conclusions and Policy Ramifications

Overall, the paper’s results suggest SOI laws can facilitate upward neighborhood-mobility for existing voucher recipients, helping voucher movers reach neighborhoods with lower poverty rates relative to their original neighborhoods. However, the authors stress that a full assessment of the impacts of SOI laws requires analyzing not only where voucher recipients are able to use their vouchers, but of how many of them are able to use their vouchers at all.

 

It’s also critical to reflect on the potential policy ramifications. Passing SOI laws does nothing to provide households with more information about neighborhood options, to change other voucher program rules and regulations, or to change landlord attitudes about the program. To realize more significant upward mobility, SOI laws may need to be combined with counseling and mobility assistance, as well as outreach to landlords and programmatic reforms that make vouchers easier for both renters and landlords to use.

 

You can read the full article on SSRN.

J.R. is a first-year Master of Urban Planning student and a Georgina and Charlotte Bloomberg Public Service Fellow at NYU Wagner. He's especially interested in how cities can expand affordable housing while promoting inclusive, community-led development strategies. J.R. joined Wagner and the Furman Center after spending five years in broadcast news. Most recently, he was a field producer based in CNBC's San Francisco bureau, where he covered the tech industry, startup culture, and California's economy. J.R. graduated from Yale University in 2016, double majoring in Economics and Political Science, with a concentration in urban policy. His coursework culminated in a thesis on inequitable transportation planning in his hometown of Chicago.

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