Real Housing Choice

Photo by Amanda Wrey

A recent shift in federal housing policy may give low-income families a true choice in where they live, enabling them to find homes is safe, well-resourced neighborhoods. The federal Housing Choice Voucher program is one of the most cost-effective and successful methods for preventing homelessness, and a proposed federal rule change could make it even better.

Background

The Housing Choice Voucher (HCV) program allows very low-income people to live in private housing, partially subsidized by the federal government. Typically, an individual or family with a housing choice voucher pays about 30% of their income toward rent, with the rest covered by the voucher. The intention of the program is to enable poor Americans to live in the neighborhood of their choosing, in a home that suits their needs, instead of living on the streets, staying in shelters, or living doubled up. It takes public housing—a costly and often run-down, insufficient living environment—out of the equation and allows people to live like their higher income neighbors.

Theoretically.

A New Way to Improve Housing Choice

In reality, those lucky enough to secure a voucher (and they are very competitive) often end up right back in the poor neighborhoods they came from. This is because housing acquired through the HCV program must not cost more than the Fair Market Rent, which is determined by the federal government based on the average cost of all housing units in a given metropolitan area. Because most cities have a wide range of housing costs, the cheap, low-quality housing in a city can skew Fair Market Rent toward the low end of those costs and completely lock low-income people out of housing in safer, more well-resourced areas.

A recent Washington Post article entitled, “The big change that could help poor people afford wealthier neighborhoods” describes a promising update to this policy though:

This week, the Department of Housing and Urban Development unveiled a proposed new rule that would remake this system, adjusting the maximum value of vouchers in many major markets to account for the wide variation in what it costs to live in different neighborhoods. Instead of setting "fair market rent" standards at the metropolitan level, in about 30 major metros including Washington, New York and Chicago, HUD will set them by ZIP code instead. That shift will mean significant change for a program that serves 2.2 million households, more than live in public housing projects.

 The policy is designed to enable low-income families to use their housing aid to move to neighborhoods with less poverty, lower crime and better schools — an opportunity that research has shown can boost prospects for poor kids. Until now, the voucher program that was supposed to give families a chance to move out of deeply poor housing projects has largely concentrated them instead in deeply poor neighborhoods. In cities such as the District, a voucher just isn't worth enough to afford entry into truly "high opportunity" places.

Not only will the new rule help low-income families get better access to neighborhoods that would truly benefit them, it also has another important consequence:

It will undercut slumlords who have profited handsomely off the voucher program, distorting its intended effects.

In Milwaukee, where sociologist Matthew Desmond has chronicled life at the rock bottom of the housing market, landlords routinely make more by renting to voucher holders. In a forthcoming study with Kristin L. Perkins, Desmond calculates that voucher holders are charged $51-$68 more in monthly rent than tenants without housing assistance in comparable properties. That adds up to $3.8 million a year — a total that could fund vouchers for 620 more families in Milwaukee.

As someone who has worked with homeless populations before, in both shelters and rapid rehousing programs, I’ve seen how valuable subsidies can be. While a family in an emergency shelter might easily end up back there a few months later (because the shelter provides little more than a bed and temporary services), a family with an income-based subsidy can actually stabilize. Children can attend the same school every day. Parents have time to look for a job (or a better job). The constant turmoil of moving from shelter to temporary home to a friend’s apartment is removed from the equation.

With this new proposed rule, families and individuals would not only be stable, but they could live in safer neighborhoods with access to high quality schools, resources, and more.

Proven Success

Now, critics might say, “Well they don’t deserve to live in those nice places anyway. They’re taking our tax dollars.” Currently federal, state and local governments, as well as non-profits and private donations, all work to end homelessness and improve housing affordability in a number of ways. So if you want to take down all these systems and leave low-income families with no support, you’d better get started soon because you have a long dark road ahead of you.

I hope that most of us can agree it probably makes sense to have some supports in place for those who find themselves unable to access or afford housing. The question is, how is that funding best spent?

“Housing subsidies are the most effective intervention for homeless families. They also cost significantly less than emergency shelters or transitional housing programs.”

According to last year’s Family Options Study conducted by the US Department of Housing and Urban Development housing subsidies are largely shown to be the most effective intervention for homeless families (when compared with shelters, transitional housing or rapid rehousing). Additionally, subsidies also cost significantly less than emergency shelters or transitional housing programs mainly because most of the funding goes directly toward rent, rather than intensive case management, meals, etc. 

If you care about the plight of homeless families, you need to get real about the solutions. Subsidies are one serious way to address the rising costs of housing, especially in big cities. Building more housing is another, and one that we talk about a lot at Strong Towns.

While subsidies are not an ideal, lasting solution to housing affordability issues, the recent change in subsidy policy reflects a shift in the way policymakers understand and react to the rise in housing costs. It suggests a recognition of the desirability of some neighborhoods—with access to good schools, jobs, transit and resources—and an affirmation that everyone deserves the opportunity to live in places like that. As Strong Citizens, we can do our best to help build more neighborhoods like these so that eventually, more people have the chance to live in them. And in the meantime, the imperfect system of subsidies has become a little better suited towards serving the people who need it.

(Top photo by Strong Towns member, Payton Chung)

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