Safety net? The use of vouchers when a place-based rental subsidy ends

Abstract

The US government moved to a private ownership model for providing affordable housing in the 1960s, which resulted in millions of housing units being developed and governed by affordability restrictions that expire at some later point. By 2010, thousands of tenants lived in properties where a private owner, or US Department of Housing and Urban Development, terminated the rental subsidy, and many more will face this reality going forward. Households in the project-based Section 8 programme are offered a voucher when the subsidy contract ends. This as of right voucher represents the only federal rental safety net programme in the USA. Despite this reality, little is known about what happens to tenants when a subsidy contract ends, including whether or how they use their vouchers. This paper creates a national census of every tenant who lived in a property in the USA where the project-based Section 8 subsidy ended through 2010 to analyse this event. The analysis includes a series of models that analyse what factors are associated with voucher use, moves, and opportunity moves. This paper finds that the voucher is not used by the majority of households, despite high levels of household demand for the subsidy. Those who use the voucher and move tend to move to lower poverty tracts. However, the subsidy offers the weakest safety net for households where the head is older than 62 or Black.