Success Rates in the Housing Choice Voucher Program Declined Amid Tightening Rental Housing Markets

A recent report released by New York University’s Furman Center, titled “Success Rates in the Housing Choice Voucher Program: 2018–2022,” analyzes trends in the ability of low-income households to secure housing using Section 8 Housing Choice Vouchers (HCV). The study finds that voucher success rates, measured as the percentage of new voucher recipients who successfully lease a home, have declined significantly in recent years, exacerbated by tightening rental markets. The report underscores the growing challenges voucher holders face in using their assistance, highlighting disparities across different voucher types, public housing agencies (PHAs), and markets. 

To assess voucher success rates, the authors relied on data from HUD’s Public and Indian Housing (PIH) Information Center, which compiles voucher issuance, lease-up, and expiration records from PHAs nationwide. The researchers examined success rates over different search periods (60 days, 90 days, 180 days, and 365 days) and accounted for variables such as PHA size, geographic location, surrounding county rent levels, and participation in the initial Moving to Work Demonstration (MTW) program. Additionally, the study differentiated between conventional vouchers and three types of special-purpose vouchers, including the Veterans Affairs Supportive Housing (VASH) program, Emergency Housing Vouchers (EHVs), and Mainstream vouchers. These special-purpose vouchers account for approximately 8% of all vouchers. The study, however, did not account for the presence of local source of income (SOI) protections that can help mitigate landlord discrimination against voucher holders and improve voucher success rates.  

The study reveals a significant decline in overall success rates for voucher recipients. In 2022, the national success rate fell to 57%, down from 66% in 2018. Similarly, the median time required for a successful lease-up increased from 59 days in 2018 to 78 days in 2022. These delays in securing housing are partly driven by tightening rental markets. Additionally, success rates varied by voucher type, with the special-purpose voucher programs showing success rates roughly 10% higher than conventional vouchers. Further research is needed to establish why special-purpose vouchers appear to have higher success rates. It might be the case, for example, that special purpose vouchers are much more likely to be used in affordable housing developed by non-profits than conventional vouchers. 

Success rates and waiting periods also varied significantly across PHAs and market conditions. Rural PHAs reported notably lower success rates than urban PHAs, with success rates in rural areas trailing urban areas by as much as 11% in 2022. Success rates and search times both increased alongside PHA size, with the largest PHAs seeing the highest success rates and more than double the median search time of the smallest PHAs. Success rates and search times were also strongly influenced by local housing market conditions. PHAs in counties with the lowest median rents showed higher success rates over the initial 90-day search period, but lower success rates over a 365-day search period, with PHAs in the highest rent counties faring the best. In fact, the gap in success rates over the 365-day period for PHAs between counties with the lowest and highest rents quadrupled between 2018 and 2022, growing from 5% to nearly 20%. This may be attributed to the ability of PHAs to set their own allowable search periods, with PHAs in more costly areas allowing voucher recipients to search longer. 

The 25 PHAs among the initial participants in the MTW program saw higher success rates compared to all other PHAs every year between 2018 and 2022. By 2022, these initial MTW PHAs reported a success rate of 74.2% compared to 55.9% among all other PHAs. Status as an initial MTW PHA was strongly associated with increased voucher success even after controlling for other factors such as individual voucher recipient characteristics, PHA size, and market conditions.  

The authors suggest the higher voucher success rates observed at initial MTW PHAs could be attributable to the greater flexibilities they are afforded under MTW, which can provide significant exemptions from federal requirements governing the voucher program. The authors note, however, that further research is needed to understand which specific local MTW policies or practices adopted by the initial MTW PHAs might have contributed to their higher success rates. Initial MTW PHAs, for example, could use their flexibilities to provide: higher payment standards or use of Small Area Fair Market Rents (SAFMRs); financial supports such as security deposits, utility hook-up assistance, and first month’s rent; greater supports to voucher recipients in the housing search process such as mobility counseling and housing search assistance; and landlord incentives such as signing bonuses for new landlords and “holding bonuses” to compensate landlords for holding a unit vacant while waiting for a PHA to conduct a Housing Quality Standards (HQS) inspection. Alternatively, initial MTW PHAs could use their flexibilities to target vouchers to higher-income tenants who are easier to house at the expense of serving tenants with more acute housing needs who would otherwise be prioritized under federal law. More research could help identify specific policies that improve voucher success rates and help identify any tradeoffs being made by MTW PHAs. 

The authors emphasize that challenges with voucher success rates highlight broader structural issues in the rental market, including affordability constraints and uneven landlord participation.  They mention the changes made to HUD’s Fair Market Rent calculations in late 2022 may expand the pool of rental homes available to voucher holders, potentially improving success rates. Additional targeted policy interventions are still needed, such as increasing voucher payment standards, offering greater incentives for landlord participation, and streamlining the leasing process. The report also underscores the need for HUD to enhance data collection and tracking mechanisms to monitor voucher outcomes more effectively on an annual basis. 

Read the full report at: https://tinyurl.com/4pvahmc3. 

Read the NLIHC Advocates’ Guide on MTW at: bit.ly/3DZc2H5.