Measuring and Explaining the Decline in Voucher Take-up: New Evidence from Administrative Data

• In Event: Evaluating and Improving the Housing Choice Voucher Program

Abstract

The Housing Choice Voucher program helps nearly 2.3 million low-income households to afford their rent each year. However, since the program requires that participants find their own housing on the private market, many households fail to use their vouchers, thus losing out on the substantial benefits that vouchers provide. In this paper, we document a striking decline in voucher success rates in the post-pandemic period. Between 2020 and 2021, the share of households nationally who were able to use their vouchers dropped 7 percentage points to a new low of 60 percent. While success rates have since ticked up, they remain substantially lower than pre-pandemic levels. The decline in success rates in the post-pandemic era was widespread; 60 percent of housing authorities saw a decline of at least 5 percentage points, with 12 percent of housing authorities seeing declines of over 20 percentage points.

The heart of the paper examines the drivers of these recent changes in voucher success rates. First, we leverage the high frequency and broad coverage of our sample to examine how changes in local housing market conditions affect voucher success rates, including data on asking rents from Zillow, new restricted-use data on vacancy rates, metro area level data on land use regulations, and information on the size and composition of the rental stock. 

Second, we look specifically at housing availability at the low-end of the rent distribution.  We calculate vacancy rates specific to the voucher-affordable stock for each agency’s catchment area to see if they are more correlated with voucher outcomes than overall rental vacancy rates. We also consider changes in the stock of “voucher-friendly units,” or homes that have been occupied by voucher holders in the past. In 2020 and 2021, there was a pronounced decline in the share of voucher households exiting the program or moving homes, which translates to fewer voucher-friendly units available each month. We assess how the declining availability of voucher-friendly units relates to search experiences for new voucher recipients.

Lastly, we exploit policy variation to measure how different interventions either contributed to or curtailed the decline and subsequent partial recovery of success rates. First, we test a change HUD made to the methodology used to calculate rent ceilings for the program. This change aimed to correct the lag between the maximum rents for the program and actual market rents that can occur when rents rise rapidly. We employ a dosage event study design to determine if sudden and large increases in rent ceilings helped to boost success rates. 

A second source of policy variation arises from variation in eviction moratoria in the pandemic and post-pandemic era. If eviction bans reduced the rate of turnover in the voucher-affordable segment of the housing stock, this could impede the ability of new voucher recipients to find homes and use their vouchers. We use a staggered differences-in-differences approach to estimate how these moratoria may have affected voucher turnover, and ultimately, success rates.

Authors

• Sarah Strochak, Princeton University
  Presenting Author

• Ingrid Gould Ellen, New York University
  Non-Presenting Co-Author

• Katherine O'Regan, New York University
  Non-Presenting Co-Author