“… And a suitable living environment”: The failure of housing programs to deliver on neighborhood quality

Abstract

This article evaluates the relative performance of housing programs in terms of neighborhood quality. We profile neighborhood characteristics surrounding assisted housing units and assess the direction of assisted housing policy in light of this information. The analysis relies on a housing census database we developed that identifies the type and census tract location of assisted housing units—that is, public housing, developments assisted under the Department of Housing and Urban Development, the Section 515 Rural Rental Housing Direct Loan Program, the low‐income housing tax credit, certificates and vouchers, and state rental assistance programs.

We conclude that project‐based assistance programs do little to improve the quality of recipients’ neighborhoods relative to those of welfare households and, in the case of public housing, appear to make things significantly worse. The certificate and voucher programs, however, appear to reduce the probability that families will live in the most economically and socially distressed areas.     

Housing Programs Fail to Deliver on Neighborhood Quality,Reexamined

This article revisits the relative performance of housing programs in terms of delivering on neighborhood quality. Newman and Schnare examined this issue in 1997, and this article updates their work more than a decade later. Both efforts examine the neighborhood characteristics surrounding assisted rental housing and assess the direction of assisted-housing policy. The analysis is performed by exploring census data at the tract level for the tenant-based Housing Choice Voucher program plus a set of project-based programs, including public housing, the Low-Income Housing Tax Credit program, and other HUD multifamily programs. We conclude that Newman and Schnare remain correct that rental housing assistance does little to improve the quality of the recipients' neighborhoods relative to those of welfare households and can make things worse. However, things have improved. The Housing Choice Voucher and Low-Income Housing Tax Credit programs have grown in importance over the intervening years and have improved their performance by moving more households into low-poverty, less distressed areas. Importantly, these active programs for assisted housing are beginning to find ways to overcome the barriers preventing entry into the suburbs, although more needs to be done.     

Gateway to Opportunity? Disparities in Neighborhood Conditions Among Low-Income Housing Tax Credit Residents

A key goal of housing assistance programs is to help lower income households reach neighborhoods of opportunity. Studies have described the degree to which Low-Income Housing Tax Credit (LIHTC) developments are located in high-opportunity neighborhoods, but our focus is on how neighborhood outcomes vary across different subsets of LIHTC residents. We also examine whether LIHTC households are better able to reach certain types of neighborhood opportunities. Specifically, we use new data on LIHTC tenants in 12 states along with eight measures of neighborhood opportunity. We find that compared with other rental units, LIHTC units are located in neighborhoods with higher poverty rates, weaker labor markets, more polluted environments, and lower performing schools, but better transit access. We also find that compared with other LIHTC tenants, poor and minority tenants live in neighborhoods that are significantly more disadvantaged.     

Transportation Access,Rental Vouchers,and Neighborhood Satisfaction: Evidence From the Moving to Opportunity Experiment

The Housing Choice Voucher (HCV) program is designed in part to expand the neighborhood choices of assisted households, thereby enabling assisted households to find a living environment that simultaneously meets their housing and neighborhood preferences. While several studies have examined the impact of rental subsidies on neighborhood satisfaction, few have examined whether access to adequate transportation enables HCV recipients to locate housing in more desirable locations. This article relies on data from the Moving to Opportunity experiment to examine the impact of transportation access, rental housing vouchers, and geographic constraints on neighborhood satisfaction. We find that access to both vehicles and public transit positively influences neighborhood satisfaction, and the influence of vehicle access varies with transit proximity. These findings point to the importance of transportation in helping low-income assisted renter households locate housing in more desirable neighborhoods.     

How Do People-Based Housing Policies Affect People (and Place)?

Assisted housing programs in the United States aim to provide decent, safe, and affordable housing for low-income households. Increasingly, policymakers have also considered how assisted housing can provide access to lower poverty, income-diverse, and higher opportunity neighborhoods. The U.S. Department of Housing and Urban Development currently balances two strategies. First, place-based programs—immoveable subsidies linked to particular units—can both revitalize distressed neighborhoods and provide access to higher opportunity neighborhoods. Second, people-based assistance—housing vouchers for use on the private rental market—can facilitate moves out of high-poverty, low-opportunity neighborhoods. During this policy moment with fair housing priorities receiving national attention, understanding the efficacy of each approach is critically important. This article synthesizes past research on housing vouchers to identify the impact of people-based assistance on four outcomes: residents’ neighborhood attainment, education, economic outcomes, and health. I also review the scant literature examining how vouchers affect place rather than people. I conclude by identifying aspects of special voucher programs that promote positive outcomes that could potentially be scaled up.     

The viability of the thrift industry

Abstract

This paper argues that many widely referenced studies on the cost effectiveness of alternative assistance programs were conducted at a time when rental housing markets were depressed. Recent increases in rent appear to have reduced the apparent cost advantage that demand‐side subsidies hold over supply‐side interventions. In addition, the nonsubsidized poor increasingly must compete for a dwindling supply of low‐cost privately owned housing. Housing vouchers or similar demand subsidies may be appropriate in some contexts, but economic theory and recent empirical analysis suggest that such subsidies are “not the best at all times and under all situations.” Rather, the “best policy” depends on program targeting and the nature and extent of program‐induced price increases and externality effects. Since funding limitations currently block the creation of an entitlement housing assistance program, housing policy must balance the often competing goals of expanding the ability of participating low‐income households to pay for decent housing while at the same time working to limit the adverse effects that rent increases and the loss of low‐cost nonsubsidized stock have on households falling outside of the housing assistance safety net.     

A different lens: administrative perspectives on portability in Illinois' Housing Choice Voucher Program

Over the last decade, the Housing Choice Voucher Program has grown to become the USA's primary strategy for providing safe, decent, and affordable housing. Annually serving more than 2 million low-income households, the program is designed to help low-income households afford private market rental housing. The program also allows for the “portability” of vouchers nationally between housing authority jurisdictions. Both features aim to mitigate the effects of concentrated poverty. Research on the Moving to Opportunity Program and the Gautreaux consent decree have produced data confirming that residential mobility can at times lead to positive opportunities for assisted households. This past research has been conducted on specific programs occurring outside of the general Housing Choice Voucher Program framework and has focused on household-level outcomes, paying little attention to the ways in which program administration may affect outcomes for voucher households. This article aims to understand voucher portability from the perspective of housing authority executive directors and program administrators, in order to better understand how program administration impacts the types of household outcomes observed in prior research. The results reveal that housing authority administrative practices and inter-housing authority relationships play a significant role in shaping the types of outcomes realized by porting voucher households. These findings suggest several changes to program administrative design and policy that may improve support for voucher households as they make portability moves.     

Subsidized Housing and Residential Trajectories: An Application of Matched Sequence Analysis

Scholars have long debated the relative merits of site-based, subsidized housing owned and operated by a public entity or by the private sector. This is the first study to classify long-term residential trajectories of nationally representative low-income households in the United States by their initial assisted housing status. We employ a matched sequence analysis of neighborhood poverty and racial trajectories of low-income households in the Panel Study of Income Dynamics who formed during 1988–1992. Among households carefully matched by their demographic and economic attributes, we find that those first forming households in public housing spend much longer durations over the subsequent 20 years in poorer, minority dominant neighborhoods than similar households first forming in market-rate housing do. In contrast, forming a household in private site-based subsidized housing is associated with superior neighborhood socioeconomic (but not desegregated racial composition) trajectories compared with starting in market-rate housing. Implications for housing policy are discussed.     

More Than Meets the Market? Landlord Agency in the Illinois Housing Choice Voucher Program

The federal Housing Choice Voucher Program currently serves as one of the nation's predominant strategies for providing affordable rental housing for low-income households. The program is designed around two goals: first, to uphold the U.S. Department of Housing and Urban Development's mission to provide safe, decent, and affordable housing; and second, to facilitate household residential location choices, with the idea that such choices can leverage other types of nonhousing opportunities for assisted households. While scholarly research has described a range of positive and negative household outcomes associated with the voucher subsidy, less is known about how those outcomes are produced on the ground. This research describes findings from 72 in-depth interviews with Illinois landlords and other voucher program stakeholders regarding their experiences with the program, with the goal of linking landlord practices to tenant outcomes. Findings of this research underscore the substantial influence that landlords have on assisted-household residential location choice and tenure, and show the potential for voucher program design to more actively engage with landlords as providers of supports that extend beyond the housing unit.     

Section 8: The time for fundamental program change?

Abstract

We argue that Section 8 low‐income rental assistance—now called the Housing Choice Voucher Program—needs to be restructured and integrated with the other elements of the federal safety net for low‐income households. Since the program was introduced in 1974, the quality of the nation's housing stock has continued to improve, to the point that only a very small percentage of it is severely inadequate. Yet low‐income households continue to face problems such as affordability, neighborhood decline, limited access to economic opportunity, and involuntary mobility.

While the Section 8 program has partially addressed some of these problems, it has a number of shortcomings, primarily the fact that it does not materially improve housing conditions for most recipients. Instead, it is little more than a poorly disguised income supplement. Housing vouchers should be directly integrated into the federal safety net as an entitlement to households that qualify for assistance.     

Searching for Affordability and Opportunity: A Framework for the Housing Choice Voucher Program

Abstract

Affordability, a key factor in the housing search process, becomes critical when locating rental housing in opportunity-rich areas. The Housing Choice Voucher (HCV) program accommodates low-income households searching for housing and encourages recipients to reside in low-poverty areas. Affordable neighborhoods that are accessible to public transportation are often found in distressed areas, and not all HCV recipients succeed in locating qualified housing. To address these challenges, a housing search framework is developed to assist HCV households in the housing search process. This framework builds on the methodology of the U.S. Department of Housing and Urban Development (HUD) for the Location Affordability Index and Affirmatively Furthering Fair Housing assessment tool by creating multivariate indices that incorporate housing supply, accessibility to opportunity, and neighborhood conditions. The framework serves as a foundation for an online housing search application for public housing authorities to further fair housing goals, HCV recipients to locate qualified housing units, and local governments to assess affordability and opportunity.     

Race and Assisted Housing

This article explores racial disparities between assisted housing outcomes of black and white and white households with children. We compare the assisted housing occupied by black and white households with children, and examine whether young adult education, employment, and earnings outcomes in 2011 differ between blacks and whites who spent part of their childhood in assisted housing in the 2000s. We use a special version of the Panel Study of Income Dynamics (PSID) that has been address-matched to federally assisted housing, and the PSID’s Transition to Adulthood supplement, along with geocode-matched data from the U.S. Census Bureau, American Community Survey (ACS), CoreLogic real estate data, and U.S. Department of Housing and Urban Development (HUD). Statistical methods include difference in means, logit and general linear models. We find no evidence of racial disparities in the type of assisted housing program, the physical quality of project-based developments, or the management of public housing developments in the 2000 decade. But black households with children are more likely to live in assisted housing that is located in poorer quality neighborhoods. Multivariate tests reveal that the worse outcomes of black young adults compared with whites disappear once socioeconomic differences are taken into account. The discrepancy in assisted housing neighborhood quality experienced by black and white children makes no additional contribution to predicting young adult outcomes. Nonetheless, black children living in relatively better assisted housing neighborhoods tend to have better outcomes in young adulthood than those who live in poorer quality assisted housing neighborhoods. We discuss sources of racial disparity in neighborhood quality, and the policies enacted and proposed to address it.     

The Use of Rental Housing Assistance by Immigrants in the United States and New York City

Abstract

The large influx of immigrants to the United States and New York City from poorer countries has sparked considerable debate as to whether immigrants are becoming a “public charge” to American society. Most arguments have centered around immigrants’ use of cash assistance programs. This article compares immigrants’ receipt of rental housing assistance with that of native‐born Americans.

Bivariate analyses reveal that immigrants, as a group, are no more likely than native‐born households to use any form of rental housing assistance. Indeed, in most instances immigrants are less likely than native‐born households to receive assistance, with two exceptions: immigrants who have been in the United States since 1970 and immigrants from the former Soviet Union in New York City. Multivariate analyses reveal similar results, except that immigrants who have been in the United States since 1970 are no more likely than other immigrants to receive housing assistance when we control for other factors.     

How Affordable Is HUD Affordable Housing?

This article assesses the affordability of U.S. Department of Housing and Urban Development (HUD) rental assistance properties from the perspective of transportation costs. HUD housing is, by definition, affordable from the standpoint of housing costs due to limits on the amounts renters are required to pay. However, there are no such limitations on transportation costs, and common sense suggests that renters in remote locations may be forced to pay more than 15% of income, a nominal affordability standard, for transportation costs. Using household travel models estimated with data from 15 diverse regions around the United States, we estimated and summed automobile capital costs, automobile operating costs, and transit fare costs for households at 8,857 HUD rental assistance properties. The mean percentage of income expended on transportation is 15% for households at the high end of the eligible income scale. However, in highly sprawling metropolitan areas, and in suburban areas of more compact metropolitan areas, much higher percentages of households exceed the 15% ceiling. This suggests that locational characteristics of properties should be considered for renewal when HUD contracts expire for these properties, based on location and hence on transportation affordability.     

Who benefits from preservation: The people behind the numbers

Abstract

This paper summarizes available information about the characteristics of the 4.4 million renter households in federally assisted housing. Where possible, characteristics are summarized by housing program and include information on income levels and sources, elderly and family households, and minority households. The story of a below market interest rate housing complex in Burlington, Vermont, illustrates the people at risk and one approach to preserving their housing. Accounts by elderly persons displaced in conversions of buildings subsidized under Farmers Home Administration rental assistance bring home the reality of the hardships faced by households at risk. An appendix addresses threats to the continued provision of assisted housing, including owner options to convert properties to market purposes, default, and the much more general issue of continued federal support.     

Beyond NIMBY and poverty deconcentration: reframing the outcomes of affordable rental housing development

Policies and research around affordable rental housing remain stuck between the “rock” of not-in-my-backyard (NIMBY) fears and the “hard place” of deconcentrating poverty goals, leading to fragmented outcome measurement in contemporary project-based affordable rental housing programs. This article compares the motivations and results of existing research focused on NIMBY concerns around place to that of programs that promote the deconcentration of poor people. We suggest reframing the argument for project-based affordable rental housing by bolstering outcome measurement on neighborhoods and developments and expanding it to include tenants. Building upon current evaluation practices of mobility studies and the Low Income Housing Tax Credit program, we present a comprehensive framework for evaluating outcomes of project-based rental housing developments within their local context at three relevant scales: project, household, and community. We present an array of indicators and examine data collection needs and limitations, acknowledging the political and financial obstacles to comprehensive evaluation but arguing for the need to justify expenditures and prove results to the public. We recommend that government agencies stretch beyond NIMBY arguments and deconcentration of poverty goals to be proactive in targeting, measuring, publicizing, and redressing an expanded set of outcomes through better comprehensive planning for affordable housing. Through more rigorous and comprehensive evaluation of outcomes at all scales, it may be shown that affordable housing development yields a broad range of benefits for the people housed, projects financed, and the communities where it is built.     

Preserving Neighborhood Opportunity: Where Federal Housing Subsidies Expire

Abstract

Rent burdens are increasing in U.S. metropolitan areas while subsidies on privately owned, publicly subsidized rental units are expiring. As a result, some of the few remaining affordable units in opportunity neighborhoods are at risk of being converted to market rate. Policy makers face a decision about whether to devote their efforts and scarce resources toward developing new affordable housing, recapitalizing existing subsidized housing, and/or preserving properties with expiring subsidies. There are several reasons to preserve these subsidies, one being that properties may be located in neighborhoods with greater opportunity. In this article, we use several sources of data at the census tract level to learn how subsidy expirations affect neighborhood opportunity for low-income households. Our analysis presents several key findings. First, we find that units that left the project-based Section 8 program were – on average – in lower opportunity neighborhoods, but these neighborhoods were improving. In addition, properties due to expiry from the Section 8 program between 2011 and 2020 are in higher opportunity neighborhoods than any other subsidy program. On the contrary, new Low-Income Housing Tax Credit (LIHTC) units were developed in tracts similar to those where LIHTC units are currently active, which tend to be lower opportunity neighborhoods.     

Why Don't Housing Choice Voucher Recipients Live Near Better Schools? Insights from Big Data

Housing choice vouchers provide low‐income households with additional income to spend on rental housing in the private market. The assistance vouchers provide is substantial, offering the potential to dramatically expand the neighborhoods—and associated public schools—that low‐income households can reach. However, existing research on the program suggests that housing choice voucher holders live in neighborhoods with schools that are no better than those accessible to other households with similar incomes. Households, in other words, do not seem to spend the additional income provided by the voucher to access better schools. In this analysis we rely on a large‐scale administrative data set to explore why voucher households typically do not live near to better schools, as measured by school‐level proficiency rates. We combine confidential administrative data from the Department of Housing and Urban Development on 1.4 million housing choice voucher holders in 15 states, with school‐level data from 5,841 different school districts, to examine why the average housing voucher holder does not live near to higher‐performing schools than otherwise similar households without vouchers. Specifically, we use the large‐scale administrative data set to test whether voucher holders living in areas with good schools nearby and slack housing markets move toward better schools when schools become salient for them—that is, when their oldest child becomes school eligible. We take advantage of the thick sample of households with young children provided through our administrative data to implement both a household fixed effects and a regression discontinuity design. Together these analyses shed light on whether voucher households are more likely to move toward better schools when schools are most relevant, and how market conditions shape that response. We find that families with vouchers are more likely to move toward a better school in the year before their oldest child meets the eligibility cutoff for kindergarten, suggesting salience matters. Further, the magnitude of the effect is larger in metropolitan areas with a relatively high share of affordable rental units located near high‐performing schools and in neighborhoods in close proximity to higher‐performing schools. Results suggest that, if given the appropriate information and opportunities, more voucher families would move to better schools when their children reach school age.     

Affordability After Subsidies: Understanding the Trajectories of Former Assisted Housing in Florida

Each year, thousands of units are lost from the assisted rental housing inventory through deterioration and default, subsidy expiration, and market-rate conversion. While a good deal of research and data collection has focused on identifying at-risk developments, less is known about what happens to former assisted developments after they exit income and rent restrictions. This article uses a survey of former assisted properties in Florida to identify their postsubsidy trajectories—that is, as to whether developments continue as rental housing, are converted to condominiums, or leave the housing stock through vacancy and demolition; and for those that continue as rental housing, whether they continue to offer affordable rents. Using logistic regression models, the article examines the property, housing market, and neighborhood characteristics that determine these trajectories. The results show that smaller properties, those that have been out of subsidy programs longer, and those in stronger neighborhood housing markets are more likely to be converted to condominiums. Among developments that continue as rental housing, those that previously had more stringent rent restrictions, those in strong rental submarkets, and those with better transit access tend to become unaffordable compared with previous rent limits.