Association for Public Policy Analysis & Management

Finding a home is not easy, especially for low-income households who find only a small share of listed units to be affordable. This is all the more true in metropolitan areas with tight housing markets, where fewer units become available. Consider that a household with an income at the 25^thpercentile of the local renter income distribution in one of the nation’s ten largest metropolitan areas in 2014 would have found less than 5 percent of available rental units to be affordable (Ellen and Karfunkel, 2014). While low-income households who are lucky enough to obtain a housing choice voucher should encounter many more affordable units, they still typically live in neighborhoods that are only slightly less disadvantaged than the typical poor household (Pendall, 2000; Wood, Turnham and Mills, 2008; Galvez, 2011).

Recent studies have probed this puzzle of voucher holder neighborhoods, and they have pointed to a number of potential contributors: the geographic concentration of units renting below voucher rent caps, limited search time, trade-offs between housing structure and neighborhood, and unwilling landlords. The existing literature has yet to pay much attention to the role of informal information networks. We explore whether voucher holders appear to use informal networks in their housing search and whether those networks tend to steer them to higher poverty neighborhoods.

We use geocoded longitudinal data on the universe of housing choice voucher holders between 2011 and 2014 to learn whether and how households with vouchers use informal networks to aid their housing searches. While we do not have direct information on search methods, we can observe whether voucher holders tend to move to the same neighborhoods as other voucher holders who live in the same building or block, after controlling for the initial neighborhood and household attributes. We find robust evidence that pairs of voucher holders who live in the same building or in very close proximity to one another are more likely to move to the same neighborhood than other pairs of voucher holders who also live in the same neighborhood but further away from one another. We find that these effects are magnified in tight housing markets where searches may be more challenging. They also appear to be magnified in more segregated metropolitan areas, where voucher holders, about two thirds of whom are black or Hispanic, may also face more significant constraints. Finally, voucher holders who live close to other voucher holders who move are more likely to move to higher poverty neighborhoods than other voucher holders from their same neighborhoods, suggesting that social networks among voucher holders tend to guide them to higher poverty areas.