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

Abstract

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.

Gentrification-Induced Displacement in Detroit, Michigan: An Analysis of Evictions

“…Voucher). The project-based program has resulted in the construction of over 1.2 million units-all of which were built before 1980 (Reina & Winter, 2019). The Housing Choice Voucher, or Section 8 voucher, is a form of tenant-based assistance that enables recipients to use the voucher in the private rental market (Defilippis & Wyly, 2008).…”

How Do Changes in Housing Voucher Design Affect Rent and Neighborhood Quality?

“…where we predict the rent ceiling for county-bed j with the FMR for j in 2004 ( FM R 2004j ) , the rent ceiling r ̅ for j in 2004, and exogenous variation from the 2005 FMR for j ( FM R 2005j ) with error term ε . 10 In the short term, housing authorities use their discretion in setting rent ceilings to offset the immediate impact of FMR changes, but a $1 increase in the FMR from 2004 to 2005 corresponded to a $0.58 increase in the rent ceiling by 2010, as estimated by coefficient γ ˆ . We estimate our second stage where j indexes county-bed pairs, _ r j ˆ is the fitted value from the first stage equation, and the coefficient of interest is β the effect of rent ceiling changes on the outcome Δ y j :…”

“…11 Tract-level measures are a good way to detect even small improvements in neighborhood quality because census tracts typically have 4,000 9 Online Appendix B.3 analyzes prior and contemporaneous changes in non-voucher rents in more detail and online Appendix Table 1 shows the relevant regression results. 10 The motivation for controlling for 2004 FMR is driven by the nature of our quasi-experimental variation. Prior to the FMR change, average rents across all units were rising for places about to receive a downward revision and that rents were falling for places about to be revised upward; this was likely because of mean reversion in regional rents combined with infrequent FMR resets.…”

Sheltered From Eviction? A Framework for Understanding the Relationship Between Subsidized Housing Programs and Eviction

“…Although some research suggests many of the early units developed through the LIHTC program with only a 15-year affordability restriction remained affordable after their compliance period (Meléndez, Schwartz, & de Montrichard, 2008), there is uncertainty about whether existing tenants were able to remain in those properties. Research on project-based Section 8 shows only 48% of the households in properties where subsidy expired used the voucher they were offered that was meant to shield them from the loss of rental support (Reina & Winter, 2019). Although it is not possible to conclude from this that tenants were displaced, the 52% of households who did not use the voucher would have needed to increase their rent payment by over 300%, on average, to make up for the loss of the rental subsidy and afford their current rent (Reina & Winter, 2019).…”

“…Research on project-based Section 8 shows only 48% of the households in properties where subsidy expired used the voucher they were offered that was meant to shield them from the loss of rental support (Reina & Winter, 2019). Although it is not possible to conclude from this that tenants were displaced, the 52% of households who did not use the voucher would have needed to increase their rent payment by over 300%, on average, to make up for the loss of the rental subsidy and afford their current rent (Reina & Winter, 2019). Therefore, we expect the odds of eviction would increase across all subsidized housing programs where affordability restrictions are due to expire, particularly those in neighborhoods experiencing price increases.…”