​The Effectiveness of Source of Income Laws in Increasing Access for the Housing Choice Voucher Program
September 6, 2022

Authors: Ingrid Gould Ellen, Katherine O’Regan, Katharine W.H. Harwood
Published Online: Aug 2, 2022
DOI: https://www.tandfonline.com/doi/full/10.1080/10511482.2022.2089196 ​

Source of Income Protections: Advancing Choice in Location and Quality of the Housing Choice Voucher Program

How effective are Source of Income (SOI) protections in increasing access to lower-poverty neighborhoods for households with housing vouchers? Authors Ingrid Gould Ellen, Katherine O’Regan, and Katharine W.H. Harwood explore this question in their article, “Advancing Choice in the Housing Choice Voucher Program: Source of Income Protections and Locational Outcomes.” They find that those living in jurisdictions that have enacted SOI protections access neighborhoods with lower poverty rates, fewer voucher users, and higher percentages of households that are White. 

Discrimination Against Households with Vouchers

The Housing Choice Voucher (HCV) program is a federal program administered by the U.S. Department of Housing and Urban Development (HUD) that provides rental assistance to 2.3 million low-income households who rent homes on the private market. Despite these subsidies, however, voucher recipients often live in high-poverty neighborhoods with low-performing schools (Galvez, 2010). They also tend to live among others of the same racial background (Horn, Ellen, and Schwartz, 2014). 

Previous research shows that landlords discriminate against households with vouchers, especially when it comes to high-rent units (Phillips, 2017). The design of the HCV program incentivizes landlords to seek out voucher users in low-income neighborhoods, but deny them in wealthier ones (Rosen, 2014; Cunningham et al., 2018)[1]. Discrimination against voucher users also occurs on the basis of demographic characteristics like family size (Finkel and Buron, 2001) and possibly race, though evidence here is mixed (Finkel and Buron, 2001; Reina and Winter, 2018; Chyn et al., 2018).  

Efforts have been made to prevent this discrimination, with 14 states and 60 localities passing laws forbidding landlords from discriminating against rental applicants by source of income. Ellen, O’Regan, and Harwood analyze how effective these laws have been in giving voucher users greater choice in housing by comparing changes in the location outcomes of voucher users living in SOI-protected areas with those of their counterparts in the same metropolitan areas that fall out of the SOI-protected jurisdiction. 

Methods

The authors rely on three sets of data: first, Poverty & Race Research and Action Council’s most recent summary of SOI protections (PRRAC, 2019); second, HUD administrative data on HCV households from 2004 through 2020; and third, American Community Survey (ACS) estimates of poverty, race, and other characteristics for the census tracts in which voucher holders live. Using these data, they create a sample of nearly 745,000 households that entered the HCV program between 2004 and 2020, and another sample of 736,000 existing voucher holders who move from one address to another during that time period, across 31 jurisdictions that implemented SOI laws between 2007 and 2017 and 82 jurisdictions that did not.

The authors then conduct a difference-in-difference analysis that first compares the origin and destination neighborhood (or census tract) for every voucher holder in their sample, and then compares these neighborhood differences for voucher holders who moved before and after the enactment of SOI laws. This research design is especially useful because it does not focus on whether average destination neighborhoods had lower poverty rates after the implementation of SOI, but whether individual voucher holders made upwardly mobile moves. In this way, the authors control for any compositional change in the neighborhoods where voucher holders originate after SOI laws are passed. They also examine whether SOI laws were particularly beneficial for certain groups of voucher holders that may have originated in especially high-poverty neighborhoods or groups that are especially vulnerable to discrimination, such as households of color or households with children. 

Findings and Conclusions

Summary statistics reveal that both the sample of households newly entering the HCV program and existing voucher holders who move are predominantly Black and Hispanic, have extremely low household incomes (averaging $13,300 and $12,600, respectively), and are usually families with children. 

The analysis finds that three years after the enactment of SOI laws, voucher holders experience a 0.6 percentage point larger decrease in neighborhood poverty rate when they move than they did pre-SOI. They are also 1.6 percentage points less likely to move to much higher-poverty neighborhoods and 2.0 percentage points more likely to move to much lower-poverty neighborhoods. While small, these impacts are significant.

Unpacking these trends further, the authors find they are even stronger for Black households and households with children. Voucher households who move and whose heads are Black are 2.4 percentage points less likely to experience a large increase in neighborhood poverty rate and 2.7 percentage points more likely to experience a large decrease in neighborhood poverty rate by the third year after the enactment of SOI protections. The impacts are similar for households with children. Interestingly, the analysis also finds that SOI seems to have shifted which voucher holders move. Post-SOI enactment, the share of voucher movers originally living in high-poverty neighborhoods (those with poverty rates above 20%) was more than 10 percentage points higher.

The authors also explore whether SOI facilitates moves to neighborhoods with higher or lower shares of households with vouchers or higher or lower percentages of White population. If the latter, it may be a sign that SOI decreases segregation by voucher use and race. They find that voucher movers who move post-SOI experience a 0.2 percentage point greater reduction in the share of households in the neighborhood who use a voucher. Post-SOI movers also experience a 2.3 percentage point greater increase in neighborhood percentages of households that are White on average. 

One puzzling finding regards new voucher recipients. There is no evidence that households entering the HCV program post-SOI reach lower-poverty neighborhoods. Because, in the case of new entrants, the authors lack information about where voucher holders are moving from, they cannot tell if SOI helped with upward social mobility.  However, they hypothesize that new entrants may need additional support to best enable them to benefit from SOI protections. 

Overall, Ellen, O’Regan, and Harwood conclude that SOI protections have enabled voucher recipients to move to neighborhoods with lower poverty rates, lower rates of voucher use, and higher percentages of households that are white. Furthermore, the laws most benefit precisely those groups most likely to need protection: those previously living in high-poverty neighborhoods, and those most vulnerable to discrimination and segregation.

About the Authors: 

Ingrid Gould Ellen is the Paulette Goddard Professor of Urban Policy and Planning at the NYU Wagner Graduate School of Public Service and a Faculty Director at the NYU Furman Center.  Professor Ellen has published books and numerous articles on housing policy, neighborhood change, and residential segregation.

Katherine O’Regan is Professor of Public Policy and Planning at the NYU Wagner Graduate School of Public Service and a Faculty Director at the NYU Furman Center.  She has written extensively on affordable housing policy and issues of segregation and neighborhood change.

Katharine Harwood is a PhD Candidate at the NYU Wagner Graduate School of Public Service and a Doctoral Research Fellow at the NYU Furman Center. Her current research focuses on affordable housing policy, household mobility and neighborhood change.








[1]  An HCV covers the difference between 30% of a participating household’s income and a predetermined “fair market rent” (FMR), which is usually calculated for an entire metropolitan area. FMR is generally the 40th percentile of gross rents for a standard-quality housing unit. Landlords who are able to lease up their units at rents above FMR, or who can reliably attract non-voucher tenants and avoid the inspections and paperwork associated with the HCV program, may have little incentive to take on voucher tenants.

Works Cited:

Chyn, E., Hyman, J., & Kapustin, M. (2019). Housing voucher take-up and labor market impacts. Journal of Policy
Analysis and Management, 38(1), 65–98. https://doi.org/10.1002/pam.22104

Cunningham, M., Galvez, M. M., Aranda, C., Santos, R., Wissoker, D. A., Oneto, A. D., Pitingolo, R., & Crawford, J.
(2018). A pilot study of landlord acceptance of housing choice vouchers. Urban Institute.

Finkel, M., & Buron, L. (2001). Study on section 8 voucher success rates: Volume I: Quantitative study of success rates
in metropolitan areas. Abt Associates.

Galvez, M. (2010). What do we know about housing choice voucher program location outcomes? A review of recent lit-
erature. What works collaborative white paper. The Urban Institute.

Horn, M. K., Gould Ellen, I., & Schwartz, A. E. (2014). Do housing choice voucher holders live near good schools?
Journal of Housing Economics, 24, 109–121. https://doi.org/10.1016/j.jhe.2014.04.004

Reina, V., & Winter, B. (2019). Safety net? The use of vouchers when a place-based rental subsidy ends. Urban
Studies, 56(10), 2092–2111. https://doi.org/10.1177/0042098018782407

Rosen, E. (2014). Rigging the rules of the game: How landlords geographically sort low-income renters. City &
Community, 13(4), 310–340. https://doi.org/10.1111/cico.12087

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