“Places That I Know Will Accept Me:” Credit and the Residential Sorting of Low-Income Renters

• In Event: 20425 - Landlords, Developers and Housing Affordability

Abstract

Scholars have identified myriad factors––such as cost, discrimination, landlord screening processes, and administrative burden––that circumscribe where low-income renters conduct housing searches, thereby shaping their residential prospects. However, how credit—a recently introduced factor in rental property screening — affects residential choice remains understudied. Ample research demonstrates that credit determines access to economic opportunities, and more recent work has theorized its role in redefining how individuals view themselves within the social order. We hypothesize that credit scoring may serve as a mechanism helping to explain how residential segregation persists, despite, for example decreases in housing discrimination measured by audit studies. We leverage this literature and analyze 161 interviews conducted as part of a housing voucher experiment to explore how low-income voucher holders respond to landlords’ use of credit in the rental market. Preliminary findings suggest that credit not only constitutes a direct barrier to moving to high-opportunity neighborhoods but also elicits “reactive” responses among low-income renters that may determine whether and where they search for housing to begin with. After experiencing or in anticipation of credit-related rejection, voucher holders either attempted to change their score (e.g. by repaying debts) or how it was perceived by landlords, or they worked to avoid rejection (e.g. not searching in areas where application denial is likely) and settled for less desirable neighborhoods and/or units requiring a lower credit threshold. External assistance from the experimental intervention (i.e. housing “navigators”) often prevented households from losing their voucher or settling for suboptimal neighborhoods by directing intervening with landlords, at times by vouching for the households’ “worthiness” or brokering a deal with inflated security deposits to assuage landlord concerns.

Authors

• Stefanie Ann DeLuca, Johns Hopkins University

• Matthew Gannon, Johns Hopkins University