Private Provision of Public Housing: Impacts on Targeting

• In Event: Production and Provision: New Evidence on Federal, State, and Local Housing Policies

Abstract

Housing assistance in the United States has undergone a shift from public provision of government-owned and -operated housing toward subsidized provision through private markets. This paper studies how private provision may affect tenant composition and targeting in federal programs by examining conversions of public housing to project-based vouchers through the Rental Assistance Demonstration (RAD) program, introduced by Congress in 2011. RAD allows public housing authorities (PHAs) to convert their public housing to project-based Section 8 contracts in order to leverage financing for long-delayed repairs and renovations, often accompanied by a  transfer of ownership or management to private for-profit or non-profit entities. While RAD was designed primarily as a way for PHAs to address capital needs, the switch to private provision could also affect how managers decide which households to admit or retain and how residents weigh tradeoffs between improved buildings and the option to move with a voucher, gradually changing the targeting of the program. We use nationwide administrative data on public housing tenants and a difference-in-differences design that leverages plausibly exogenous variation in the timing of RAD conversions to study impacts of RAD on tenant targeting between 2014 and 2023. We find that RAD conversion leads to lower-income households living in converted developments over time on average, partly driven by lower Section 8 income eligibility and waitlist priority rules for new tenants. Among households living at developments prior to conversion, relatively higher-income incumbent households and households with children are more likely to move out over time as tenant-based vouchers are offered to residents after conversion. We provide suggestive evidence that there is targeting of relatively lower-income residents at conversions with non-profit managers compared to for-profit managers, primarily through the channels of waitlist priorities for new admissions and self-selection of households moving out with vouchers, rather than for-profit managers pursuing terminations based on perceived costs.

Author

• Elizabeth Lochhead, New York University
  Presenting Author