An article in Housing Policy Debate “Do Small Area Fair Market Rents Reduce Racial Disparities in the Voucher Program?” by Vincent Reina found that Small Area Fair Market Rents (SAFMRs) are associated with important but marginal improvements in accessing less disadvantaged neighborhoods for black and Hispanic Housing Choice Voucher (HCV) holders and accessing less minority-concentrated neighborhoods for black HCV holders. While SAFMRs are an important tool, a broader range of fair housing policies are needed to fully address racial segregation and access to opportunity.
SAFMRs set voucher payment standards at the ZIP code level rather than the metropolitan level to better reflect neighborhood versus city-wide rental prices; the voucher payments are higher in more expensive neighborhoods and lower in less costly neighborhoods. The intention of using SAFMS is to increase the number and types of neighborhoods HCV households can access, including higher opportunity neighborhoods, and to reduce racial and economic segregation.
The author used HUD administrative data on voucher holders from 2003 to 2015 to identify the impact of SAFMRs on racial and ethnic groups’ locational outcomes in six SAFMR demonstration sites: Dallas, TX; Cook County, IL; Long Beach, CA; Mamaroneck, NY; Chattanooga, TN; and Laredo, TX. He evaluated neighborhood based on minority concentration and a disadvantage index of neighborhood opportunity, which included data on poverty, unemployment, housing vacancy, violent crime rates, percentage of children in single-mother homes, and percentage of fourth graders not proficient in reading or math.
Mr. Reina found minority HCV households tended to live in majority minority neighborhoods. The average black voucher household lived in a census tract that was 86% minority in Long Beach, 74% in Cook County, 69% in Dallas, 65% in Chattanooga and 56% in Mamaroneck. Hispanic voucher households, on average, lived in tracts that were 84% minority in Long Beach, 62% in Dallas, 52% in Cook County, 50% in Mamaroneck, and 45% in Chattanooga.
SAFMRs appeared to result in improved neighborhood outcomes for black voucher households in all sites except Chattanooga, TN. Black HCV households lived in less disadvantaged neighborhoods after SAFMR implementation with an average 0.136 percentage-point reduction in the neighborhood disadvantage index. SAFMRs also resulted in black HCV households living in neighborhoods that had, on average, a 0.33 percentage-point lower share of minorities. Hispanic HCV households saw an average decrease of .039 percentage points in neighborhood disadvantage. The use of SAFMRs, however, did not result in black and Hispanic HCV households living in neighborhoods with a lower share of minorities relative to all HCV households.
The findings suggest that use of SAFMRs results in important but marginal improvements in black voucher holders’ ability to access less minority-concentrated and less disadvantaged neighborhoods. A broader range of fair housing tools is needed to fully address racial segregation and access to opportunity.
“Do Small Area Fair Market Rents Reduce Racial Disparities in the Voucher Program?” is available at: https://bit.ly/2UMMa4G