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HUD program not effective as planned at helping minority families move from poverty, study shows

Thursday, January 23, 2020

LAWRENCE — The U.S. Department of Housing and Urban Development has long operated programs designed to help low-income individuals and families find housing in “high-opportunity” neighborhoods where they would have access to good schools, employment and less exposure to crime. However, a new analysis by a University of Kansas professor has found the Housing Choice Voucher program has not been effective in helping minorities move to high-opportunity neighborhoods. The research also suggests an amendment to the program could exacerbate poverty in low-opportunity neighborhoods.

Housing Choice Vouchers, known as HCVs, are used in 80 percent of U.S. census tracts with rental housing, as of 2017, yet the majority of voucher holders tend to live in areas with high levels of poverty and racial segregation. To combat that, the federal government established Small Area Fair Market Rents, or SAFMRs, to help HCV holders access high-opportunity neighborhoods. Previously, maximum rents permitted in the HCV program were the same across a metropolitan area. With the SAFMRs, the maximum rents would be higher in high-rent areas and lower in low-rent areas. However, an analysis co-written by Kirk McClure, professor of urban planning at KU, found census and HUD data show the program hasn’t made significant progress, especially for minorities, and that SAFMRs are not likely to address the problems.

“We noticed over time the mobility we hoped to see with this program hasn’t happened. People tend to take the vouchers and stay in the same neighborhoods with poorer schools, higher crime, less access to employment and the like,” McClure said. “So, the question put to us is how to fix it.”

McClure and Alex Schwartz of The New School analyzed HUD and US Census data for their study, published in the journal Cityscape. About 2.3 million homes in the United States receive HCVs, and the vast majority of those are within large metropolitan areas. McClure and Schwartz’s study focused on the 53 metropolitan areas with populations of more than 1 million in 2017. They cataloged location, race and ethnicity of HCV recipients in that year and neighborhood qualities such as poverty exposure, public school performance, labor force engagement and median rents by ZIP code as well as racial and ethnic composition of ZIP code areas.

Each ZIP code was classified as Non-Hispanic White (75% or more of total population); Non-Hispanic Black (50% or more of total population); Non-Hispanic Other (50% or more of total population); Hispanic (50% or more of total population); and Integrated. They were classified economically as very high, high, moderate, low or very low opportunity, respectively.

SAFMRs work on the premise that neighborhoods with higher rents offer higher opportunity, The SAFMR efforts make more units eligible to participate in the program in these higher rent areas, but areas with lower rent have fewer housing units available to HCV recipients. As a result, recipients would be more able to move to higher opportunity areas, if they do not confront barriers based on race or ethnicity. Because many minority households do confront such barriers, they cannot move out of low-opportunity neighborhoods. As a result, the SAFMR effort could have the unintended consequence of exacerbating or concentrating poverty in already-poor areas, the authors point out.

“What our research finds is people of color receiving HCVs are going to have fewer units available to them under SAFMRs,” McClure said. “The only options open to them are census areas that are integrated, but the way the program is going, there will be fewer integrated areas available. HUD had every intention of this program working but now have to decide if it can be fixed.”

The location and ethnic makeup of neighborhoods studied showed that HCV recipients under SAFMR would have to break the persistent racial segregation that has held on for decades in the United States.

“The concentration of ‘opportunity’ within predominantly white and integrated ZIP code areas means that if an HCV recipient wishes to live in an opportunity neighborhood, he or she would essentially need to choose between white and integrated areas,” the authors wrote. “At present, about one-half of all HCV recipients in large metropolitan areas reside in integrated ZIP code areas. Most of the rest live in segregated areas dominated by people of their own race or ethnicity and are highly unlikely to benefit from SAFMRs unless they move out of a segregated neighborhood.”

There are several approaches that could be taken to address the programs’ problems, McClure said. One of the first decisions policymakers could address is whether to lower rent eligibilities in some areas, or lower in some areas while raising them in high-opportunity neighborhoods. That is dependent on the political will and persuasions of officeholders. McClure and Schwartz argued that a good starting point would be to further support social workers who could work with HCV recipients learning about the family, providing individualized counseling to help them find housing, enroll children in schools, support employment and help recipients learn about neighborhood opportunities. Greater outreach to landlords to encourage participation in the programs would also help the SAFMR program succeed, and perhaps most importantly, further support of transportation solutions, such as helping recipients own cars to get to and from employment if they live in low-opportunity areas would be beneficial.

“It’s very easy to get beyond the reach of public transit in America,” McClure said. “Much of the country is not served by public transportation.”

While segregation in the United States has proven quite resilient, McClure said it is showing to be slowly dying. Progress has been made in helping low-income individuals and families find better housing and opportunities, he added, but research is showing recent programs may not be achieving their goals as quickly as intended or hoped.

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