To increase housing choice, try incentivizing landlords
Throughout September, Urban Institute scholars will offer evidence-based ideas for programs and policies public housing agencies can test through HUD’s Moving to Work Demonstration.
The Housing Choice Voucher Program helps about 2.2 million households rent apartments from landlords in the private market. In theory, the program increases housing choice for low-income families by allowing voucher holders to move anywhere a public housing authority (PHA) operates the program.
But can housing voucher holders really move anywhere they want? Not really.
In practice, voucher holders’ housing choices are limited by their ability to locate an apartment below the rental cap with a landlord willing to rent to them. Landlords decide whether they want to participate in the Housing Choice Voucher Program by renting apartments to voucher holders—or not.
National fair housing laws do not include housing voucher recipients as a protected class, though some jurisdictions at the state and local levels have enacted ordinances that require landlords to accept vouchers. Landlords reject voucher holders even where it is illegal to do so. In Washington, DC, where it is illegal for landlords to refuse to take vouchers, a study found that voucher holders faced discrimination about 28 percent of the time.
Landlords decide where voucher holders live, and we don’t fully understand the extent of this power. We know little about landlord behavior and the voucher program. There are no recent national statistics on voucher acceptance rates, how rates compare in good versus bad neighborhoods, or why landlords choose not to participate.
Qualitative data and anecdotes find that some landlords do not participate in the program because of the negative stigma many people attach to voucher holders. Other landlords find PHAs difficult to work with; they complain of low-performing PHAs that do not distribute rent checks on time. Many landlords don’t want to have their apartments inspected—a requirement of the housing voucher program—some because they wouldn’t meet the US Department of Housing and Urban Development’s (HUD’s) quality standards, others because they don’t want to deal with the red tape. And it’s not always clear if participating in the voucher program makes financial sense for landlords, especially if their units are in highly desirable areas with plenty of other potential tenants.
How could PHAs increase landlord participation in the program?
Some PHAs have improved their business relationships with landlords by providing a hot line to call for problems, fast-tracking inspections, or paying rent by electronic deposit.
But what if PHA’s went a step further and offered financial incentives to landlords who rent to voucher holders? What if the incentives targeted landlords with apartments in opportunity neighborhoods? Would that increase landlord participation in the program? Would it increase housing choice for voucher holders?
There are different ways to do this. Illinois and Virginia offer tax incentives to landlords who rent to voucher holders. Some programs offer one-time signing bonuses to entice landlords with units in low-poverty neighborhoods. Programs that help homeless families find housing have also offered landlord incentives to increase housing access for their clients.
West Marin County, one of the most affluent areas in the nation, just announced the Landlord Partnership Program, a two-year pilot program that will provide incentives to private-market landlords to rent to voucher holders and other low-income households. The program will help cover security deposits and the cost of damages, and provide one month’s rent if the tenant vacates. Landlords are also eligible for other financial incentives to keep their rents affordable. For example, the county will waive permit fees for repairs or improvements, and landlords can access interest-free loans for rehabilitation efforts.
We don’t know enough about these incentives. Policymakers need to learn more about how these programs work and measure their outcomes.
HUD’s Moving to Work Demonstration (MTW), which will be expanded to 100 additional PHAs, provides an opportunity to test these ideas. One primary MTW objective is to increase housing choice for low-income families and help them access better neighborhoods, which can improve children’s outcomes substantially. Focusing on landlord participation in the voucher program could significantly increase housing choice for participating families. MTW sites should test different landlord incentive structures, including one-time bonuses, tax incentives, and rental insurance programs. We know little about how providing landlord incentives affect landlord behavior, so any pilots implemented under MTW should be rigorously evaluated.