How Fair Market Rents Limit Voucher Households to Live in Better Neighborhoods: The Case of Baltimore Metropolitan Area

Transcription

1 How Fair Market Rents Limit Voucher Households to Live in Better Neighborhoods: The Case of Baltimore Metropolitan Area JEON, Jae Sik (University of Maryland) ACSP 2014 Conference

2 1. Background Low income households face unique constraints when making housing choices Vouchers are one way to improve the location options facing low income households MTO final evaluation; 2011; Carlson, et al Fair Market Rents (FMRs) limit location choices and neighborhood opportunities McClure, 2013; Collinson and Ganong, 2013 Much has been written about the neighborhood opportunities of voucher households, but we know little about the role of FMRs as it influences those outcomes 2

3 2. Research Questions How affordable are rental units in suburbs for voucher households in suburbs under the current FRMs? How do FMRs influence the types of neighborhoods in which voucher households are able to rent? What is the marginal effect of FMRs on access to better neighborhood opportunities? 3

4 3. Data and Method Household data: HUD data, MTO final survey Neighborhood data: 2010 DHCD MD BRAC, 2010 Census, 2012 ACS, other national data to characterize neighborhood opportunities Neighborhood Opportunities by Rental Availability (HUD-50058) Calculated % of available units in BMC suburbs using household characteristics and FMRs Compared the census tract level neighborhood characteristics of available units with unavailable units Logistic Regression Model (MTO) Dependent variable: 1 = if a voucher household leased up in a low-poverty neighborhood Independent variables: FMR, Total tenant payment, maximum subsidy, and household characteristics 4

5 5

6 4. Rental Availability by FMR Area and Type of Rent Category Percentage BMC Suburbs (4 Counties) Available Rental Units 81.2% Available Rental Units at Market Rent 78.4% Available Rental Units at Below-Market Rent 99.4% Columbia City Available Rental Units 95.9% Available Rental Units at Market Rent 95.5% Available Rental Units at Below-Market Rent 100.0% Smaller area targeted FMR enables voucher households to have more options for available units Voucher holders compete for available units in desirable neighborhoods both at market (less options) and below-market rents (long waitlist) 6

7 5. Neighborhood Opportunities by Rental Availability Variable Description Voucher Households Census Tract Available Units at Unavailable Units Market Rent in at Market Rent in Baltimore City Suburbs Suburbs Suburbs Economic Characteristics Poverty Rate 10.9% 7.6% 22.9% 6.9% Median Income $57,528 $79,517 $41,923 $79,977 Labor Force Participation Rate 71.8% 70.0% 61.6% 69.5% Unemployment Rate 6.9% 4.4% 12.6% 5.7% Housing Characteristics Vacancy Rate 6.5% 6.8% 16.8% 5.5% Social Characteiristics % Minority Population 50.8% 39.0% 71.9% 31.5% % w High School Diploma or Greater 87.7% 92.2% 76.3% 89.8% Student Performance Crime Risk Index Accessibility / Built Environment Characteristics Total Jobs Accessible by Auto 538, , , ,815 Total Jobs Accessible by Transit 15,711 13, ,529 11,107 Transit Access Index Population Density 5,501 3,658 12,071 3,373 7

8 6. Logistic Regression Results Independent Variables Coefficient Marginal Effect Policy Effects Fair Market Rents 0.091* 0.013* Number of Bedrooms Total Tenant Payment * * Total Tenant Payment Squared Maximun Subsidy * * Household Characteristics Car 1.422** 0.248** Age Age Squared Minority (Not Non-Hispanic White Alone) 2.775* 0.593** Children Constant note: *** p<0.01, ** p<0.05, * p<0.1 8

9 7. Predicted Probability of Lease-up in Low-poverty Neighborhoods by FMR # of Bedrooms Increase in FMRs Current 10% 20% 30% Efficiency One Bedroom Two Bedroom Three Bedroom Four Bedroom Average

10 8. Conclusion Voucher households compete for available units in better neighborhoods. Due to a single FMR, voucher holders are unavailable to choose rental units through the market in which neighborhoods with: Lower concentrations of poverty Lower unemployment Lower population density Higher labor-force participation Higher-performing schools Increase in the level of FMRs inclines the probability of lease-up in low-poverty neighborhoods Implementation of Small Area FMRs 10