Housing Voucher Reform Will Boost Efficiency and Opportunity

Housing Voucher Reform Will Boost Efficiency and Opportunity, Will Fischer, Center on Budget and Policy Priorities, November 17, 2016, available here

The new policy, announced yesterday, will have two major benefits.  First, it will make it easier for families to rent units in lower-poverty neighborhoods with strong schools.  Recent groundbreaking research shows that using vouchers in low-poverty neighborhoods can greatly expand opportunities for low-income children, including raising their college attendance rates and adult earnings by about 30 percent.  As a result, both the Obama Administration and House Republican leaders have expressed strong support for improving voucher holders’ access to high-opportunity neighborhoods. 

Second, SAFMRs can make the voucher program more efficient by curtailing excess subsidies in low-rent neighborhoods.  As the chart shows, average voucher costs have fallen in areas where HUD has tested SAFMRs, suggesting that the savings in low-rent neighborhoods exceed the costs from added subsidies in higher-rent neighborhoods.  (The policy announced yesterday will also phase out HUD’s costly — and apparently ineffective — effort to expand voucher holders’ access to high-opportunity neighborhoods by setting higher FMRs throughout metropolitan areas where voucher holders are concentrated in a small number of neighborhoods.)   

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