Study adds to growing body of research on Obama-era Small Area Fair Market Rents Program
In August, the Trump administration halted an Obama-era housing program aimed at leveling the playing field in 23 U.S. metropolitan areas—before it even began. The Small Area Fair Market Rents program was designed to modify HUD’s existing Housing Choice Vouchers (Section 8) by setting subsidy standards by zip code rather than by region. In effect, this program would increase the amount of money the government would pay voucher holders looking to rent in high-opportunity areas, areas that often come with better schools and more amenities.
Several studies point to better outcomes for families who are able to rent in high-opportunity neighborhoods, including higher income and less need for government assistance; children who grow up in low-poverty areas are more likely to go college and have a lower rate of teenage pregnancy. But would the Small Area Fair Market Rule realistically improve access to better neighborhoods? A recent working paper by UMD doctoral candidate Jae Sik Jeon joins an emerging group of studies that compares the new rule with the existing voucher program and shows that, while not perfect, the suspended rule would have increased the number of affordable housing units in low-poverty neighborhoods and predominantly white neighborhoods. Jeon’s research was featured this month in Shelterforce, a leading publication for community development and housing practice.
Using Washington Metropolitan fiscal year data from 2015, the study estimated changes between the current one-price voucher system and the Small Area Fair Market Rule. The results show a number of impacts, including more evenly distributed affordable housing across the region and a net gain of nearly 13,000 affordable units.
“The Small Area Fair Market Rents Program would either pay for itself, even saving budget monies, or require more investment, depending on the number of overcharged vouchers in low-rent zip code areas,” said Jeon. “Although it might make vouchers more expensive, the now-delayed rule can relocate more people into areas of higher opportunity.”
The Trump administration has cited that more research is needed into the cost/benefit of the program. This week, several civil rights groups filed a lawsuit against HUD, challenging the decision.
“If this suspension is not challenged, we will continue to see low-income families and children steered into high poverty neighborhoods where rents are lowest,” said Philip Tegeler, Executive Director of the Poverty & Race Research Action Council in a press release.
Read more from Jeon’s study here.