A working paper by Vincent Reina and Ben Winter, Safety Net? The Utility of Vouchers When a Place-Based Rental Subsidy Ends, examines the use of Tenant Protection Vouchers (TPVs) for low income households when their residences lose Section 8 project-based rental assistance. More than half of TPV recipients did not use their vouchers, indicating limitations of TPVs as a safety net. Seniors at least 62 years of age and black households were significantly less likely to use the vouchers. Households not using their vouchers lost an average of $430 per month in rental assistance or 41% of their effective income.
Section 8 project-based assistance provides private owners a contract in which HUD pays property owners the difference between an agreed-upon total rent and the tenant’s contribution of 30% of his or her income. HUD initially required contracts for at least 20 years, after which a contract renewal is optional. TPVs allow tenants to move to other housing, while still only contributing 30% of their income on rent, if their property’s owner does not renew the Section 8 contract or if HUD terminates the contract because of foreclosure or inadequate physical conditions. A recipient can also use a TPV voucher for their current unit if the property remains rental housing.
The study examined how household demand, market supply, and household characteristics influenced whether or not households used their TPVs. They focused on residents who had lived in properties where Section 8 contracts ended between 2002 and 2010. Households for which the vouchers paid only a small percentage of their rental costs were less likely use the vouchers. Surprisingly, households for which the voucher paid more than 90% of the rent were also less likely to use their vouchers, indicating potentially significant barriers to using them. TPV recipients with a greater number of dependents were less likely to use their vouchers, likely due to the challenge of finding an apartment with an adequate number of bedrooms. Seniors at least 62 years of age were also less likely to use their vouchers, possibly due to having more difficulty than younger recipients in navigating the private rental market. Discrimination in the rental housing market against voucher holders and minorities is also a barrier to TPVs. Black households were significantly less likely to use their TPVs than other households.
Fifty-six percent of households who used their voucher moved to a different neighborhood. A move was associated with living in a lower-poverty neighborhood. These findings indicate that TPVs may help some households move to higher opportunity neighborhoods, but these gains are not universal. Black households were more likely to move multiple times but still live in higher poverty neighborhoods than white households.
Safety Net? The Utility of Vouchers when a Place-Based Rental Subsidy Ends is available at: http://bit.ly/2xN1Ihg