Safety Net? The Utility 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 HUD, terminated the rental subsidy, and many more will face this reality going forward. Households in the project-based Section 8 program are offered a voucher as a safety net when the subsidy contract ends. This represents the only federal rental safety net program in the U.S. Despite these realities, little is known about what happens to tenants when a subsidy contract ends or the utility of vouchers as a safety net. This paper creates a national census of every tenant who lived in a property in the U.S. where the project-based Section 8 subsidy ended through 2010 to analyze this event. The analysis includes a series of models that test whether household demand, market supply, or household characteristics affect voucher use and 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 Black or 62 or older.