Preserving Neighborhood Opportunity: Where Federal Housing Subsidies Expire

Lens, Michael; Reina, Vincent

doi:10.1080/10511482.2016.1195422

Cited by 27 publications

(16 citation statements)

References 29 publications

(45 reference statements)

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“…Several scholars have investigated the merit of adjusting subsidy levels or duration for public housing programs in scale with the presence of local amenities (Bieri & Dawkins, 2016) and location efficiency (Lens & Reina, 2016;Tremoulet, Dann, & Adkins, 2016). Kaza, Riley, Quercia, and Tian (2016) analyze mortgage performance and location efficiency, arguing that mortgage concessions for low-income families in high-efficiency locations may not be warranted.…”

Section: Background and Reviewmentioning

confidence: 99%

It’s Good but Is It Right? An Under-the-Hood View of the Location Affordability Index

Ganning

2017

Housing Policy Debate

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In 2012, the U.S. Department of Housing and Urban Development (HUD) released the Location Affordability Index (LAI) as an online portal and downloadable data set. The LAI has elevated the U.S. conversation on affordability to include transportation and access to opportunities, and has been used in state and federal programming, by researchers, and by private households. However, although some researchers have noted concerns with and potential limitations of the data, none has provided practitioners and researchers with an under-the-hood view of the data, analysis of its reliability or validity, or its conceptual limitations. This article recommends methodological improvements dealing with issues of variable construction, aggregation, and modeling. A recreation of the LAI at the census-tract level suggests the LAI overestimates both costs and cost burden, but especially among renters, and especially in metropolitan areas. On the transportation side, model recreation requires partnership and resourcing to both gain access to restricted data and to develop a reliable database on transit supply and use.In 2012, the U.S. Department of Housing and Urban Development (HUD) released the Location Affordability Index (LAI) as an online portal and downloadable data set. HUD adopted and revised the LAI from its origin as the Center for Neighborhood Technology's Housing and Transportation (H+T) Affordability Index. This database seeks to inform households and public agencies of the costs of living in various places, changing the discussion about affordability from one focused solely on housing to one inclusive of transportation costs. Numerous scholars have analyzed the LAI estimates, resulting in a special issue of Housing Policy Debate as well as other publications. These publications have addressed housing subsidies, mortgage risk, and racial disparities in costs, among other things. However, these publications have not provided practitioners and researchers with an under-the-hood view of the data, analysis of its reliability or validity, or its conceptual limitations. As this article shows, some elements of the LAI introduce either considerable error or the potential for considerable error. Many of those issues, based in variable construction, aggregation, and modeling decisions, can be fixed. Others-notably, data on transit use-are more problematic. If left unchecked, such error could misinform decisions regarding household location or public policy issues in housing or transportation-potentially costing private households or public agencies considerably. This article uses data from across the state of Ohio, intending it as an illustrative case study of the national implications of the conceptual and technical bounds of the LAI. ARTICLE HISTORY

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Section: Background and Reviewmentioning

confidence: 99%

It’s Good but Is It Right? An Under-the-Hood View of the Location Affordability Index

Ganning

2017

Housing Policy Debate

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“…There is evidence that owners of subsidised properties in strong markets (Finkel et al, 2006;GAO, 2007;Ray et al, 2018) and those in areas with higher home price appreciation (Reina and Begley, 2014) are more likely to exit subsidy programmes. As a result, properties where contracts ended were in neighbourhoods that were improving, and going forward, many of the properties eligible to leave the programme are in areas that offer more opportunity than those currently accessed by voucher households (Lens and Reina, 2016).…”

Section: Existing Literaturementioning

confidence: 99%

“…In the mid-1990s, the subsidy contracts on these properties began to expire, and between 1996 and 2010, there were over 115,000 households in properties where either the owner, or HUD, terminated the contract. This represents a loss of subsidised rental units, many of which are located in improving neighbourhoods where affordability is declining and it is difficult to build new affordable housing, even with federal subsidies (Lens and Reina, 2016). Upon termination, tenants are offered a Section 8 voucher that is designed to shield them from being displaced or spending a higher share of their income to rent a different unit on the private market.…”

Section: Introductionmentioning

confidence: 99%

Safety net? The use of vouchers when a place-based rental subsidy ends

Reina

Winter²

2018

Urban Studies

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The US government moved to a private ownership model for providing affordable housing in the 1960s, which resulted in millions of housing units being developed and governed by affordability restrictions that expire at some later point. By 2010, thousands of tenants lived in properties where a private owner, or US Department of Housing and Urban Development, terminated the rental subsidy, and many more will face this reality going forward. Households in the project-based Section 8 programme are offered a voucher when the subsidy contract ends. This as of right voucher represents the only federal rental safety net programme in the USA. Despite this reality, little is known about what happens to tenants when a subsidy contract ends, including whether or how they use their vouchers. This paper creates a national census of every tenant who lived in a property in the USA where the project-based Section 8 subsidy ended through 2010 to analyse this event. The analysis includes a series of models that analyse what factors are associated with voucher use, moves, and opportunity moves. This paper finds that the voucher is not used by the majority of households, despite high levels of household demand for the subsidy. Those who use the voucher and move tend to move to lower poverty tracts. However, the subsidy offers the weakest safety net for households where the head is older than 62 or Black.

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“…Several scholars have investigated the merit of adjusting subsidy levels or duration for public housing programs in scale with the presence of local amenities (Bieri & Dawkins, 2016) and location efficiency (Lens & Reina, 2016;Tremoulet & Adkins, 2016). Kaza, Riley, Quercia, and Tian (2016) analyze mortgage performance and location efficiency, arguing that mortgage concessions for low-income families in high-efficiency locations may not be warranted.…”

Section: Literature Reviewmentioning

confidence: 99%

What Do We Know About Location Affordability in U.S. Shrinking Cities?

Ganning¹,

Tighe²

2017

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In late 2013, the Department of Housing and Urban Development (HUD) launched the Location Affordability Index (LAI) portal. Their dataset uses models to estimate typical amount households spend on housing and transportation at the block group level, and calculates "H + T Affordability," the percent of household income spent on these items. In our previous research, we analyzed 81 shrinking cities to determine how location affordability differs across various neighborhoods. Our results suggest that households in declining neighborhoods, as compared to stable or redeveloping neighborhoods, face the greatest H + T affordability challenges in shrinking cities. Furthermore, in declining neighborhoods, virtually all of the additional affordability challenges encountered can be accounted for by differences in transportation affordability rather than housing. Since there is virtually no research to either validate or suggest bias in the LAI data, and a declining neighborhood in a shrinking city presents both a relatively common yet entirely dissimilar context to the norm, we feel that this data should be carefully calibrated to, and tested for, this setting to ensure that appropriate and efficient policy follow.In this report, we present the results of two research phases: a strictly quantitative first stage in which the LAI is disassembled and reassembled, taking stock of assumptions, methods, and accuracy. This work finds that the LAI generally over-estimates housing costs, but more for renters and more in metropolitan areas. Estimations of transportation cost burdens are built largely from unreliable data and using models which cannot be replicated, leading us to conclude that these cost burden estimates may not be reliable. In the second research phase, which is survey-based, we gather household-level data from 12 Census tracts in Cleveland, Ohio, to estimate household housing and transportation costs and cost burdens and gain a clearer sense of budget trade-offs where costs are unaffordable. The survey results support the first research stage. The LAI over-estimates housing costs for these neighborhoods by approximately 17% and transportation costs by approximately 126%, meaning the LAI estimates for transportation are not reliable. By and large, households trade essentials, investing, and paying bills (at all or in full) to cover their costs in housing and transportation.17.

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Preserving Neighborhood Opportunity: Where Federal Housing Subsidies Expire

Cited by 27 publications

References 29 publications

It’s Good but Is It Right? An Under-the-Hood View of the Location Affordability Index

It’s Good but Is It Right? An Under-the-Hood View of the Location Affordability Index

Safety net? The use of vouchers when a place-based rental subsidy ends

What Do We Know About Location Affordability in U.S. Shrinking Cities?

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