Memphis, Tennessee has a long history of racial bias and economic inequality, and often, these forces have worked hand-in-hand. Memphis is where Dr. Martin Luther King, Jr. traveled to stand with African American sanitation workers in protest of inequitable wages and unsafe working conditions in April 1968. While it has been 54 years since Dr. King was assassinated in Memphis, Black Memphians still find themselves fighting against the injustices of racism and economic inequality. Today, the continued convergence of these two problems has manifested itself quite conspicuously in housing availability. This reality prompted the Legal Defense Fund (LDF) and the National Fair Housing Alliance (NFHA) to interrogate economic and racial discrimination in housing, with a specific focus on the Housing Choice Voucher (HCV) Program—otherwise known as “Section 8.” Together, LDF and NFHA conducted a study of Memphis, Tennessee and the greater Shelby County area where Memphis is located, examining the local rental market and performing a fair housing testing audit of housing providers to assess attitudes and identify policies and practices that impede the ability of voucher holders to secure safe and affordable housing.
Conducted over three years, Bad Housing Blues: Discrimination in the Housing Choice Voucher Program in Memphis, Tennessee looks at economic and racial discrimination in housing, investigating the local rental market, assessing attitudes, and identifying policies and practices that impede the ability of voucher holders to secure safe and affordable housing. The report finds that there is significant discrimination based on source of income in both Memphis and Shelby County. The report found barriers to securing safe and affordable housing for Housing Choice Voucher (HCV) holders included “No Section 8” policies; Housing Choice Voucher tenant quotas; steering or restricting access to housing; and employment, minimum income, and payment requirements. Source of income discrimination disproportionately affects renters of color, women, and people with disabilities. Because of this, source of income discrimination perpetuates racially segregated communities and neighborhoods with concentrated poverty. The results seen in The Bad Housing Blues: Discrimination in the Housing Choice Voucher Program in Memphis, Tennessee offer a glimpse into source of income discrimination experienced across the country.
Where you live matters. Your address determines almost everything about you because place and race are inextricably linked to opportunity. When people are offered equitable resources and opportunities to secure safe, affordable housing, they have boundless possibilities and our communities benefit.
Housing discrimination is most evident where racism and income inequality converge. And because we have never gone back to fix the inequities on which our country was built, existing laws, policies, and unfair practices continue to affect people of color and families with low incomes disproportionately and negatively.
These words could aptly explain how Memphis became the “Home of the Blues.” From great pain, something beautiful was created. The stories told through the music of individuals like B.B. King, Howlin’ Wolf, and others were a microcosm of some of the painful experiences of Black people all throughout the Deep South. This dichotomy of the Blues, namely between pain and artistic expression, is personified in Memphis itself. While Memphis has flourished as a city of music, the weights of racism and discrimination continue to be felt by those Black Memphians trying to find home within its boundaries. For many, finding “home” has not only been tenuous in a metaphorical sense, but also in a physical sense. This reality elicits some important questions: What have been the difficulties? How did they develop? Lastly, what remedial policies can assuage those problems? The Thurgood Marshall Institute (TMI) at the Legal Defense Fund. (LDF) and the National Fair Housing Alliance (NFHA) seek to provide answers to those questions in a joint report, “The Bad Housing Blues: Discrimination in the Housing Choice Voucher Program in Memphis, Tennessee.”
Government-assisted housing was established in the wake of the Great Depression and expanded by the United States Housing Act of 1937, which provided funds for the construction of public housing complexes. From the very start, the U.S. government used public housing programs to discriminate against Black people, who were either relegated to separate buildings from Whites or excluded entirely from developments. Today, the Housing Choice Voucher Program is the largest national rental assistance program for low-income households. It provides a housing subsidy to 2.3 million households (consisting of 5.2 million people) nationwide, enabling them to secure affordable, decent-quality housing in the private market. The program was developed to utilize the private housing market to address some longstanding issues with public housing, including the concentration of housing complexes in lower-opportunity areas. Research shows that people benefit when they can move to higher-opportunity areas that have quality housing and employment options, good schools, public transportation, and green spaces. The HCV Program was intended to facilitate housing choice and assist families in moving to these areas.
As of 2020, 78% of families with vouchers nationwide had a female head of household and 37% had a female head of household with children. Vouchers also serve a significant population of people with disabilities. The HCV program is overseen by HUD and administered by more than 2,200 Public Housing Agencies (PHAs). In order to participate in the HCV Program, a voucher recipient must be low-income. HUD requires that a family’s income not exceed 50% of the median income for the county or metropolitan area where they live. Additionally, PHAs must provide 75% of their vouchers to applicants whose income does not exceed 30% of the area’s median income, defined as “very low income.” As of 2020, 78% of voucher recipients fall within this extremely low-income category. There are other eligibility requirements: at least one member of the household needs to have legal documentation to live in the United States and certain convictions which vary by PHA, or a prior eviction within the last three years for drug-related reasons, will render an applicant ineligible.
The amount of the voucher is based largely on HUD’s determination of the “fair market rent” (FMR) for the size and type of dwelling. HUD estimates FMRs to set limits on the cost of standard-quality housing units for voucher holders in specific geographic regions. HUD is required to calculate FMRs annually for different unit sizes in each market area and publish them in the Federal Register. Local PHAs use those FMRs to establish payment standards for each unit type, effectively setting a cap on permissible “gross rent.” As long as the actual gross rent is at or below the relevant payment standard, the participating household usually pays the landlord 30% of its monthly income toward the rent, while the PHA pays the balance directly to the landlord. If rent exceeds the payment standard, the voucher holder is usually responsible for the balance. As of 2020, the average subsidy per voucher household nationwide was $886 per month and the average family contribution was $390 per month.
Through the HCV Program, a voucher holder must find and secure the housing themselves, with the landlord agreeing to accept the voucher. Landlord participation in the HCV Program is voluntary. Landlords negotiate the contract rent with the PHA and sign a Housing Assistance Payments (HAP) Contract, which is an agreement between the landlord, tenant, and PHA. The landlord then separately enters into a lease with the tenant. The PHA then inspects the unit for housing quality standards. HUD created a checklist for tenants to consider when selecting a unit to maximize the likelihood of passing the inspection, including “must haves” like a bathtub or shower with hot and cold running water, walls in good condition, at least one window in every room used for sleeping, and a plumbing system served by the local water supply.
Terms like Section 8 and public housing complexes related to government-assisted housing or other programs have been given a negative connotation over time. Public housing complexes, particularly those in deteriorating conditions in high-poverty neighborhoods, are regularly referred to as “the projects” or as being located in “the ghetto.” Many know the Housing Choice Voucher Program as “Section 8,” referring to the authorization of the program in Section 8 of the Housing Act of 1937 and use it as a pejorative. Like the myth of the “welfare queen,” these words are often used as derogatory code words for predominantly Black, low-income neighborhoods or buildings or to refer to Black families with vouchers (particularly those headed by women). These terms are often based on stereotypes about public housing or families with vouchers and reflect racist attitudes toward Black people, harmful stereotypes about women, and hostility toward the poor.
Throughout this report, we use the terms “public housing complexes” or “developments” instead of “projects” and generally refer to the HCV Program by its name rather than using “Section 8.” Our testing audit, described in Part Two of this report, did use the term “Section 8” when conducting tests to determine if landlords would accept HCVs, given that housing providers are more familiar with this term.
Throughout the 1930s, and as was typical during the Jim Crow era, public housing complexes were constructed for White families in established White neighborhoods and for Black people in Black neighborhoods. The segregation of Black and White families in public housing was later codified into law through the Housing Act of 1949 which permitted local public housing agencies (PHAs) that managed public housing units to continue to separate Black and White families, also provided funding for the construction of major high-rise public housing complexes. This governmental policy of forced segregation relegated Black families to large high-rise buildings located outside of mainstream society in high-poverty neighborhoods. These isolated towers were frequently poorly constructed and lacked sufficient funding for maintenance and improvements; they fell into disrepair quickly.
In 1965, Congress passed the Housing and Urban Development Act, which, in addition to creating HUD, allowed PHAs to pay market-rate rents to privately-owned apartment buildings in exchange for leasing units to low-income tenants, who paid minimum-rate rents back to the PHAs. This was called the Section 23 Program. In 1968, the Kerner Commission released its report on residential segregation, concluding that public housing suffered from a lack of funding and a concentration of complexes in low-income neighborhoods. Weeks after the publication of the Kerner Commission Report and just days after the assassination of Dr. Martin Luther King, Jr. on April 4, 1968, the Fair Housing Act was enacted. The Fair Housing Act prohibits housing discrimination on the basis of race and other protected categories and requires HUD and PHAs (and other recipients of federal funding) to affirmatively further fair housing within their programs. This duty, known as affirmatively furthering fair housing (AFFH), requires HUD and PHAs to, “as much as possible,” achieve “the goal of open, integrated residential housing patterns” and “prevent the increase of segregation. Unfortunately, by the time the Fair Housing Act was passed, the geographic concentration of race and poverty was firmly entrenched in public housing and beyond.
In the 1970s, it was clear that public housing was racially identified as Black housing and associated with poverty, and public attitudes toward government-subsidized housing reflected negative stereotypes about Black people and the poor. Citing high costs and government waste (but in reality, driven by a desire to curtail housing assistance to the poor), in 1974 President Nixon imposed a moratorium on federal spending for subsidized housing, beginning the government’s long period of disinvestment in public housing that continues today.
During this period, the federal government looked to the private market. In 1974, Congress enacted the Housing and Community Development Act, which created the Section 8 Certificate Program (so named because it was authorized by Section 8 of the statute). Through the program, a tenant would choose their own housing and pay 25% of their income directly to the landlord, and the PHA would enter into a contract with the landlord to pay the remaining rent balance.
Throughout the 1980s and 1990s, public housing complexes remained segregated and in failing condition, particularly when located in Black neighborhoods. In 1987, the Rental Voucher Program was formally authorized as a program in the Housing and Community Development Act.49 In 1989, Congress appropriated $600 million to the Homeownership and Opportunity for People Everywhere (HOPE) VI Program 46 to demolish the most severely distressed public housing units and replace them with mixed-income housing. This program displaced tens of thousands of public housing residents, many of whom could not afford rent in the mixed-income complexes.
Like the Certificate Program, the Rental Voucher Program allowed tenants to choose their own housing, but offered more options because the program did not have a fair market rent limitation.50 Under the Rental Voucher Program, Depending on the actual cost of the housing they rented, families could pay more or less than 30% of their adjusted income toward rent.51 In 1999, HUD officially combined the Certificate Program and Rental Voucher Program into what is now known as the Housing Choice Voucher (HCV) Program, the focus of this report.
There are approximately 1.2 million households living in public housing complexes that are managed by over 3,300 PHAs throughout the country. But federal housing policy has clearly prioritized vouchers over the past few decades. The shift to vouchers reflects a recognition of the harms caused by residential segregation and the concentration of poverty through public housing, which has been worsened by HUD’s (and PHAs’) failure to abide by their statutory duty to affirmatively further fair housing. The shift also reflects a belief that the private market may be able to provide higher-quality housing for low-income people and avoid the pitfalls caused by a lack of funding for public housing. More than anything, the shift acknowledges the importance of place in determining life outcomes—an awareness that neighborhoods with more resources can offer more opportunities and benefits across the full spectrum of someone’s life, from education to employment to health—and in the importance of giving poorer families a choice in where to live.
Faced with chronic underfunding and an enormous backlog of deferred maintenance, in 2012 Congress authorized HUD to administer the Rental Assistance Demonstration (RAD) Program, which allows PHAs to convert their complex-based rental assistance programs into other types of subsidized housing. Today, public housing remains synonymous with poor, decrepit living conditions. Almost two-thirds of public housing complexes that are still occupied today were built in the 1970s or earlier.
Throughout this report, we regularly reference “high-opportunity” areas and “low-opportunity” areas. In general, high-opportunity areas have less poverty, better schools, employment opportunities, green spaces, food and shopping options, and adequate transportation. Conversely, low-opportunity areas lack these amenities and have higher concentrations of poverty. Studies have repeatedly shown the benefit of living in low-poverty, high-opportunity areas. In Part Two below, we define “high-opportunity” areas as those with a poverty rate of 15% or less. Other studies may use a different metric.
One purpose of vouchers is to improve locational outcomes for low-income families by reducing the concentration of poverty that can occur in public housing complexes. On this front, the program has succeeded in this goal by facilitating families’ access to higher-opportunity areas when compared to public housing. Generally, studies have found that voucher holders live in lower-poverty areas as compared to public housing residents.
Another positive aspect of the HCV Program is the flexibility given to PHAs to develop standards for their respective voucher programs based on the needs of their local community. For example, PHAs may develop preferences for selecting applicants, such as prioritizing families experiencing homelessness or paying more than 50% of their incomes on rent. This can ensure that the program benefits those most in need and who may have changing circumstances that urgently require government assistance for housing.
Only about 21% of an estimated 22 million low-income households receive assistance through vouchers, leaving over 17 million households without assistance. A 2016 study of HCV waiting lists found that more than 2.8 million families were waiting to be accepted into the program as of 2012. Nationwide, families spend an average of 28 months on the voucher waiting list but the waiting period can range from two to 10 years. For example, in Los Angeles, the estimated waiting period for a voucher is eight years.
Even after years of waiting families who are able to receive a voucher may not even be able to utilize it. Though the percentage of voucher holders who successfully secure housing has increased, today up to 30% of voucher holders still may be unable to use their it. One contributing factor is timing. Families who receive a voucher typically have only 60 days to locate housing. If they are unable to find housing the voucher expires and is reissued to another household on the waiting list. Some PHAs may grant extensions for families or may provide longer search periods but there is no guarantee.
Landlords may also refuse to participate in the HCV Program altogether. HUD estimates that just 695,000 unique landlords participate in the HCV program out of the 10 to 12 million total landlords in the United States. Some landlords may technically accept vouchers as a form of payment but will also impose minimum income requirements for renters that make it impossible for voucher holders to qualify. An example of a minimum income policy is a requirement that the potential tenant must earn three or even four times the full amount of rent per month (meaning both the amount the voucher holder and the PHA would pay) to qualify as a renter. Given that most voucher holders are considered extremely low income and many do not have additional sources of income outside of the voucher, these policies prevent voucher holders from renting in high-opportunity areas. These policies are especially prevalent in jurisdictions that have laws that prohibit landlords from discriminating against voucher holders based on their source of income, because they allow a landlord to assert that it accepts vouchers but acts as a barrier for families with vouchers to actually acquire housing. As demonstrated in Part Two of this report, we found significant evidence of minimum income policies in Memphis that prevent HCV holders from renting properties in higher-opportunity areas.
Racial discrimination against HCV recipients is common, even in areas where local or state laws prohibit landlords from refusing to accept vouchers. Several studies, including by the Louisiana Fair Housing Action Center, have found evidence of preferential treatment of White voucher holders as compared to Black voucher holders. Other rental requirements may prevent a voucher holder from finding housing, including a credit check, a review of past evictions, or a security deposit. Security deposits are not covered by the voucher and must be paid by the voucher family from other funds. PHAs typically do not provide counseling or housing search assistance to voucher holders which can prevent families from becoming aware of the full array of options they may have for using their voucher. Even though vouchers are technically “portable” among PHAs, in practice it can be difficult for families to move to a new location outside of the jurisdiction that originally issued the voucher.
Research has shown that the HCV Program has failed to fulfill its goal of decreasing poverty and enabling lower-income families to move into high opportunity areas. Voucher holders are still better situated than public housing residents in terms of poverty concentration, only a small amount of voucher holders live in low-poverty neighborhoods. Families with vouchers are disproportionately located in lower-opportunity, racially segregated areas. Voucher holders are less likely to live in high-poverty neighborhoods (defined as more than 30% poverty) now than at the start of the program in the 1970s.
These poverty issues are more likely to have an impact on Black families with vouchers and other families of color. Black and Latinx families with vouchers are more likely to live in predominantly minority neighborhoods with the highest levels of poverty, while White families with vouchers are more likely to live in neighborhoods with a higher White population and with lower levels of poverty. Black families and other families of color may be subject to discrimination that White voucher holders do not experience, and they may have less success in using their voucher to move to areas with less poverty and more opportunity. Black families in the HCV Program are also generally disproportionately affected by discrimination given that half of all voucher holders are Black. Discrimination based on disability, gender, and familial status is also rampant within the program. Aside from advocating for changes to the HCV Program itself to address these critical issues, civil rights advocates have attempted to combat discrimination against voucher holders in two primary ways: litigation and legislation.
This is due to a variety of factors, including the general lack of affordable housing in the United States; exclusionary zoning, which often clusters multi-family housing opportunities in segregated areas; the limitations of FMRs, particularly when calculated on a market-wide basis; and other regulatory limitations in the HCV Program. In 2014, 46 affordable housing units were available for every 100 low-income households. When HUD sets FMRs for an entire region, rather than by smaller geographic components like zip code, the payment standards are generally too low for high-cost, higher-opportunity areas, relegating families to low-cost, lower-opportunity neighborhoods. And affordability is just one factor—as discussed above, many landlords do not accept vouchers at all. Landlords who are willing to participate in the program are disproportionately located in lower-opportunity areas.
Running along the Mississippi River is Tennessee’s second largest city: Memphis. It is known as “the Home of the Blues” and the birthplace of rock n’ roll. Memphis is a city with a rich and diverse cultural identity aptly expressed through its music. However, the richness of these diverse cultures has not come without its challenges. The racial history of Memphis is as mournful as the Blues itself.
Despite its racial and cultural diversity, segregation has long kept the city from uniting. Racial injustice in Memphis has not been limited to physical violence—it has been pervasive throughout the city’s policies, public discourse, and laws from the 1800s through the present. Racial segregation is a defining feature of the city’s past and present that has been maintained and extended through unfair housing practices.
The continued legacies of explicitly racist governmental policies have done much to shape Memphis into what it is today—a city with extremely high racial residential segregation and concentrated poverty. It is clear that many housing “opportunities” for Black Memphians over the course of its history have not lived up to their billing. Public housing was presented as a vehicle of upward mobility. It instead became a tool to concentrate poverty and Black people. Homeownership was touted as an avenue to generational wealth. In the Black neighborhoods of Memphis, however, home values were manipulated through practices like redlining and predatory lending.
Part 2 of the report documents the history of housing in Memphis and the HCV Program in Memphis and Shelby County and described the results of LDF and NFHA testing audit. Memphis residents have contended with a history of segregation and housing disparities, with people of color having less access to opportunity. There is stark geographic racial segregation in the HCV Program in Memphis and Shelby County. Ninety percent of voucher households in Memphis and nearly 90% of voucher holders in Shelby County live in majority-minority Census tracts. Memphis has a local ordinance that bans source of income discrimination including discrimination against HCV holders, but the ordinance does not include an explicit private right of action allowing victims of discrimination to sue in court and it is unclear whether Memphis’ source of income ordinance is preempted by state law.
LDF and NFHA’s testing audit found that there is significant discrimination based on source of income in Memphis and Shelby County. The testing audit identified several policies and practices impacting the ability of voucher holders to obtain safe and affordable housing. The policies and practices include “No Section 8” policies, quotas on the number of HCV tenants, steering or restricting access to housing and employment, minimum income and payment requirements.
Memphis faces many challenges to address racial bias and economic inequality and ensure that voucher recipients have access to fair and affordable housing. This report documents critical information about the incidence of discrimination against voucher recipients in Memphis and Shelby County.
Fair housing testing is a controlled method of determining whether housing providers are complying with the Fair Housing Act’s prohibition against discrimination because of race or other protected classes. For this fair housing testing audit, we deployed testers throughout Shelby County in 2019 and 2021 to determine whether housing providers were engaging in source of income or race discrimination against potential HCV tenants. Single-part testing (the use of a single tester) and matched pair testing (the use of two similarly-situated testers) were used for the audit. Single-part tests involved a single Black cisgender female tester. During the “matched-pair” tests, one Black tester and one White tester with similar personal and financial profiles contacted or visited the same housing provider within a short period of time of each other and their experiences were analyzed for any differences in treatment due to their race. Our audit sought to determine, at the pre-application stage of the rental process, whether potential tenants with HCVs were subject to discrimination because of their status as voucher holders and whether Black testers were treated differently from White testers because of their race.
For the audit, testers were assigned a tester profile with certain characteristics to use. To accurately reflect the background of an average HCV holder in Shelby County, the tester profiles were structured around Shelby County’s HCV demographic data. All testers were currently living in highly racially segregated areas in which there was an above-average concentration of active HCVs and high levels of poverty. The profiles were also structured so that the testers were looking to move into rental housing in high-opportunity census tracts. The tester profiles also specified that children were living in the home.
In 2019, 90% of people in Shelby County using a subsidized housing program were female-headed households, 59% were female-headed households with children, and 74% were considered extremely low-income. Within Shelby County, 27% of all HCV holders rented a two-bedroom unit and 59% rented a three-bedroom or larger unit. For these reasons, we used cisgender female testers, provided testers with extremely low family incomes, as defined by HUD, and selected providers with two- and three-bedroom units for rent. According to HUD’s 2019 income limit calculations for housing programs in the Memphis, TN-MS-AR HUD Metro FMR Area, the extremely low-income limit for a family of three was $21,330 and for a family of four, $25,750.
Maximum monthly rent budgets for the testers were selected by utilizing HUD’s 2019 or 2021 FMR payment standards for the Memphis Metro FMR Area, corresponding with the year that the testing was conducted (see Table 1 above). While HCV holders may be permitted to select housing options above HUD’s payment standards if they can pay the additional amount in excess of the FMR, this audit used FMRs as a firm maximum budget limit, particularly because 74% of Memphis-area HCV holders were categorized as extremely low income in 2019.
Our report finds that there is significant discrimination based on source of income in both Memphis and Shelby County. Out of the 32 tests conducted in Phase Two, 84.4% of tests, documented discrimination based on the tester’s source of income. In Memphis, 75% tests showed evidence of source of income discrimination. In Shelby County, a total of 93.8% tests revealed evidence of source of income discrimination. Source of income discrimination disproportionately affects renters of color, women, and people with disabilities. Because of this, source of income discrimination perpetuates racially segregated communities and neighborhoods with concentrated poverty.
Black voucher holders faced additional discrimination and additional barriers to finding housing due to race. This was evident through differences in customer service, differences in pricing or availability, differences in access to housing, and differences in terms and conditions. Out of 16 matched-pair tests between Black and White female testers, 37.5%, showed evidence of discrimination based on race. The housing providers for three of these tests were in the City of Memphis and three were located in Shelby County.
All six matched-pair tests that showed evidence of racial discrimination involved differential customer service given to Black and White testers. White testers were coached on how to navigate the rental process in general as well as the specific company’s processes; White testers were provided with leasing agents’ contact information and were encouraged to follow up with questions or updates; and leasing agents told the White testers that they themselves would follow up if any new properties became available. During one test, the Black tester was told that units would not be available until two weeks after her desired move-in date, but the White tester was given information about units that were available during her move-in time frame, which was the same as the Black tester’s time frame. In one test, the White tester was told that to apply she must have a credit score of at least 580, while the Black tester was told that she must have a credit score of at least 600 to qualify for a single-family home.
LDF and NFHA recommend a number of legislative and policy fixes to strengthen the HCV Program and add more protections for individuals and families with vouchers. These strategies will help increase housing choice for HCV recipients and better enable them to move to higher-opportunity areas
To better protect voucher holders from discrimination, the Fair Housing Act should be amended to include source of income as a protected class. This amendment has been repeatedly introduced in Congress, most recently in the Fair Housing Improvement Act of 2019. Any amendment should be explicit that “source of income” includes HCVs. Additionally, states and localities should continue to enact SOI laws that are meaningful, effective, enforced, and provide a private right of action for aggrieved persons. Advocates should also continue to urge states not to enact (or to repeal) preemption laws that render local SOI laws ineffective and unenforceable. In Tennessee specifically, the state Human Rights Act should be amended to include source of income as a protected class, which would ensure that all residents of the state are protected from this type of discrimination and ensure that Memphis’s local SOI ordinance is not preempted. Even without a Fair Housing Act amendment, HUD should meaningfully and efficiently investigate complaints of discrimination in the HCV Program and take appropriate action to enforce the law. HUD should also continue to support fair housing testing seeking to uncover discrimination in the HCV Program.
HUD and housing authorities should also carefully examine housing providers’ policies that appear to accept vouchers but restrict the ability of HCV families to rent their properties. As described throughout this report, minimum income policies serve as a significant barrier to HCV holders acquiring housing in high-opportunity areas. If these policies prevent voucher holders from renting when they otherwise would qualify, they should be considered a violation of any applicable state or local SOI laws. Private litigants should also consider litigation on these grounds.
As noted throughout this report, the HCV Program only serves about a quarter of low-income families that need housing assistance. Housing has never been an entitlement in the U.S. like Social Security or food stamps. As suggested by Matthew Desmond in Evicted: Poverty and Profit in the American City, Congress should consider enacting a universal voucher program for every American who needs it. In September 2021, the Housing Initiative at the University of Pennsylvania released a report finding that 4.9 million families would be lifted out of poverty if every family with an annual income at or below 50% of area median income was given a housing voucher.
Absent an initiative to provide for universal vouchers, the HCV Program should certainly be expanded to provide for significantly more vouchers. In March 2022, President Biden signed into law a fiscal year 2022 budget which includes funding for 25,000 new HCVs and $25 million for housing mobility services. While this is an important step forward, it is not enough to meet the demand for the program, particularly considering that one in seven Americans were projected to live below the poverty line in 2021.
HUD’s SAFMR Rule is an important step in increasing access to high-opportunity areas for voucher holders. But it currently is only required in 24 metropolitan areas and must be expanded further. As has been noted by other housing policy experts, concerns in expanding the SAFMR Rule include the overall cost and possible reduction in the total number of available housing for voucher holders (particularly if housing opportunities in lower-income areas becomes more limited under the adjusted payment standards). But the Rule is intended to be relatively cost-neutral when payment standards are lowered in lower-cost areas and raised in higher-cost ones. As noted above, PRRAC and other organizations have advocated for years for the implementation and expansion of SAFMRs. As PRRAC recommends, HUD should allocate additional administrative fees to PHAs and permit them to apply different payment standards to different parts of an SAFMR zip code when appropriate, which could help offset additional cost burdens.
While the independence of PHAs can be beneficial in ensuring that the needs of the local community are met, issues at PHAs can deter landlords from wanting to participate in the HCV Program and ultimately prevent individuals and families with vouchers from accessing safe and affordable housing, especially in high-opportunity neighborhoods. Several policy experts have suggested that PHAs in regional housing markets be consolidated to provide more services for tenants and protections against discrimination. Consolidation could help reduce the restrictions on voucher holders looking to move across jurisdictional lines to a higher-opportunity neighborhood administered by a different PHA. Experts have also recommended that PHAs simplify their administrative processes, including inspection procedures, to improve landlord participation. PHAs should also improve their customer service and offer more support to landlords through trainings and other outreach.
Additionally, PHAs should provide more assistance to families with vouchers, including through mobility counseling services.As discussed in this report, mobility counseling has been shown to increase the ability of families with vouchers to find housing in high-opportunity neighborhoods. PHAs should also be flexible in extending the time to locate approved housing, when needed. Financial assistance to families to help with security deposits and other fees would also help reduce barriers to entry in higher-opportunity neighborhoods.
In April 2021, HUD announced its new HCV Mobility Demonstration, funded by the Housing Choice Voucher Mobility Demonstration Act of 2019. Nine PHAs (including New Orleans, Nashville, Minneapolis, and Los Angeles) will participate in the demonstration. The program will provide $10 million for new vouchers and $40 million for mobility-related services. Mobility services provided through the demonstration will include a range of services, such as customized plans for families who encounter barriers to acquiring housing, such as criminal records or poor credit; information on schools for families with children; financial assistance for application fees and security deposits for voucher holders; and signing bonuses for landlords. The demonstration will run for several years, during which HUD will study the effect of the mobility services offered to determine whether they increase housing choice and expand access to high-opportunity neighborhoods. Additional funding for programs like these could provide critical services to families that need them most, and PHAs should independently look to increase the services they offer to voucher recipients and to landlords to encourage their participation in the program.
The Federal Housing Finance Agency (FHFA) could do more to ensure that the GSEs meet the greatest needs of the nation’s lowest-income renters. The nation’s lowest-income renters often require the use of housing vouchers, Social Security Disability Insurance, or other sources of lawful income to pay rent. Yet, currently, there is no requirement for multi-family rental owners receiving GSE f inancing to accept all forms of lawful income from new applicants and no protections in place to ensure that existing renters do not face eviction when attempting to pay rent using a government source of income. Such requirements would greatly improve the GSEs’ ability to fully serve communities and renters with the greatest needs.