A paper in Cityscape: A Journal of Policy Development and Research, “Impact of Expanded Choice on Attrition in the Housing Voucher Program,” finds that the introduction of Small Area Fair Market Rents (SAFMRs) increased attrition in the Housing Choice Voucher program. The authors’ analysis indicates that introducing SAFMRs increased the probability of tenants exiting the program by 27% and reduced the median length of stay in the program by about 20%. The reasons for attrition are not known, but increased attrition could be an unwelcome development if households are not leaving the voucher program because of increased wages.
The authors use longitudinal administrative data from HUD on program participants in 145 public housing agency (PHA) jurisdictions between 1995 and 2017. Using a combination of difference-in-differences and a survival analysis model, the authors compare tenant exit rates from the program in the seven PHAs that initially implemented SAFMRs to the 138 PHAs that continued to use traditional metropolitan-wide Fair Market Rents (FMRs). Whereas traditional FMRs determine a single rent standard for an entire metropolitan region, SAFMRs set varying rent standards in different U.S. Postal Service ZIP codes within a metropolitan region (see Memo, 11/14/16 or 12/9).
On average, the introduction of SAFMRs increased the probability of tenants exiting the program by 27% and reduced the median length of stay by 27 months – a decrease of about 20%. The authors determined this finding was not due to chance. The paper examines varying attrition rates among different demographic groups. The introduction of SAFMRs did not have disparate impacts in terms of attrition on disabled heads of household compared to nondisabled heads of household or households with children compared to those without children. Attrition rates did differ, however, based on neighborhood rent levels. The introduction of SAFMRs increased exit rates in low- and moderate-rent neighborhoods by 26% and 41%, respectively, but not in higher rent neighborhoods. Finally, the authors found that exit rates were significantly higher for households with no seniors compared to households with seniors.
The authors are confident in their findings but highlight the need for further research to better understand them. There are a variety of factors involved with implementing SAFMRs that could either increase or decrease attrition, such as landlords in low-rent areas becoming less willing to accept lower payment standards or to deal with a more complicated program. The authors cite previous research that suggests most households leaving the program are not doing so because they are financially better off. The authors recommend improved processes for gathering exit information to better understand program exits and inform future research.
This paper is part of a larger special issue in Cityscape on SAFMRs. The next edition of Memo will highlight more work from this issue.
The full paper can be read at: https://bit.ly/2szJLBF