Association for Public Policy Analysis & Management

As rents continue to climb in U.S. cities, there is growing concern that high rents are pushing many low-income renters out of their homes and neighborhoods. One potential tool to protect low-income tenants from rising rents is the Housing Choice Voucher (HCV) program.  Because voucher holders pay 30 percent of their income on rent (up to the allowable payment standard), vouchers may help low-income households stay in their neighborhoods as rents rise. As long as payment standards are at or above the market rents in a neighborhood and transaction costs are modest, landlords should be able to earn the same (or even higher) rental income from serving voucher holders as from market-rate tenants. However, if local rents rise above voucher payment standards, landlords may find market-rate tenants more attractive than voucher holders, and thus, the extent to which housing vouchers protect tenants from rapidly rising rents is unclear. Using restricted administrative data on the HCV program from the Department of Housing and Urban Development (HUD), we examine whether larger increases in median rents in a metropolitan area are associated with more frequent moves among voucher households, more spatial concentration, and greater concentration in high-poverty, low-opportunity neighborhoods. Where possible, we compare the changes experienced by voucher holders to those experienced by the broader set of poor renters to learn if vouchers help to buffer effects.

We start by examining voucher holder mobility rates. Specifically, we exploit the longitudinal nature of the HUD’s voucher data and follow cohorts of individual voucher holders over time. Focusing on the years 2009-2014, a time when rents rose rapidly in many cities, we test how voucher holder mobility rates change in metropolitan areas experiencing rapid rent increases relative to those with more stable housing markets.  In addition to simply examining mobility rates, we also compare the origin and destination neighborhoods of voucher holders who move. Specifically, we test if downwardly mobile moves (moves from higher- to lower-income neighborhoods) became relatively more common and upwardly mobile moves less common in metropolitan areas seeing rapidly rising rents.  To analyze the impacts of rising rents on the spatial concentration of voucher holders, we construct several measures of voucher concentration, which control for changes in the overall voucher share in a metropolitan area.  For example, we compute a voucher-non-voucher dissimilarity index. We then compare changes in these concentration measures in metropolitan areas that saw rapid rent and price appreciation from 2009 to 2014 relative to changes in other metropolitan areas over this same time period. Finally, we undertake a triple difference analysis to examine changes in the characteristics of the neighborhoods reached by voucher holders.  Specifically, we study how the opportunity level (as proxied by such measures as the poverty rate and the share college educated) in the neighborhoods where voucher households live change in rapidly appreciating metropolitan areas relative to the change in neighborhood opportunity observed in metropolitan areas with more stable rents, and how that difference-in-difference in neighborhood opportunity varies for voucher holders and other poor renters.