Housing Choice Vouchers

The Housing Choice Voucher program is a U.S. Housing and Urban Development (HUD) subsidy that helps extremely low income individuals and families (defined by HUD as earning less than 30% of area median income) afford housing in the private market. The program, commonly known as "Section 8," is administered by local and state housing authorities.

This research was used by USA Today for an investigative series called 'Segregated by Section 8.' The series is available  online here  (paywall).

In addition to providing housing, the voucher program seeks to alleviate the concentrated poverty and racial segregation that historically occurred when low-income renters were confined to only a few public housing projects. The voucher program was developed to give low-income renters the choice of where they want to live.

The vouchers work by subsidizing the difference between the fair market rent, as determined by the Department of Housing and Urban Development, and what a family or individual can afford.

A family with a housing voucher can use that voucher to rent a unit of their choice — if the landlord agrees to rent under the program. Rental units must meet minimum standards for health and safety.

Landlords across the Southeast, however, are generally not required to participate in the housing voucher program. It’s an issue called “source of income discrimination,” and practices vary widely — some states, like California and Vermont, ban source of income discrimination, while others, like Texas, explicitly bar laws that would do so. 

As a result, voucher-eligible units make up only a fraction of the rental housing market in the Southeast, and the locations of these units are not evenly distributed.

This study looks at the distribution of units that are part of the housing choice voucher program, focusing on 19 different cities in the Southeast. The study uses data from the American Community Survey (2015-2019 5-year estimates) to understand the relationship between a census tract's demographics and the distribution of units available for housing choice voucher holders.

Based on interest and data availability, the study includes a mix of large, small and mid-sized cities in Georgia, North Carolina, South Carolina, and Virginia. The following 19 cities were included:

• Atlanta
• Savannah
• Augusta
• Athens
• Charlotte
• Raleigh
• Greensboro
• Fayetteville
• Gastonia
• Asheville
• Wilmington
• Columbia
• Charleston
• Greenville
• Spartanburg
• Anderson
• Virginia Beach
• Richmond
• Portsmouth

• High poverty neighborhoods have absorbed 3 times as much voucher eligible housing as low poverty neighborhoods.

• Over 70% of the voucher-subsidized housing is located in minority concentrated neighborhoods.

• Over 80% of census tracts had median rents that were lower than the Small Area Fair Market Rent(SAFMR).

The purpose of the Housing Choice Voucher program is to allow very low-income families and individuals the opportunity to find their own housing in a neighborhood of their choice, instead of living in the public housing projects, concentrated in specific neighborhoods, that once dominated federally subsidized housing.

What we found, however, is that housing choice voucher units are not evenly distributed. Across most of the cities, high poverty census tracts had higher concentrations of units.

Housing choice is constrained by two key factors: Housing supply and landlord acceptance of vouchers as rental payment.

Constraints on the location and supply of rental housing — especially more affordable units — creates barriers for all renters. Land use and development policies that limit the supply of renter-friendly, multi-family units contribute to this problem. Vouchers, however, can also be used on single-family units, provided the landlord participates in the program. 

But landlords’ refusal to accept a voucher as a form of rental payment further constrains households. This refusal is also referred to as source of income discrimination. 

Our analysis suggests that the neighborhoods in which landlords tend to accept vouchers tend to be neighborhoods where there was already a high concentration of poverty.

Despite program intentions, our analysis shows that the Housing Choice Voucher program does not reduce the concentration of poverty, likely due to the lack of landlords accepting vouchers and, in some areas, the lack of affordable rental housing.

• Out of the 1,294 census tracts we examined, 527 had poverty rates above average and 763 had poverty rates below average.

• High poverty census tracts had almost three (3) times as many housing choice voucher units as low poverty tracts.

In order to assess whether or not the housing voucher program is successful in allowing voucher holders to move to higher income neighborhoods, this study compared the distribution of units across high-and-low poverty census tracts.

Across all 19 cities, the average poverty rate was 17%; Out of the 1,294 census tracts we examined, 527 had poverty rates above that average and 763 had poverty rates below average.

We drilled down further to separate low and high poverty census tracts. Using the definition of high poverty census tracts (those with poverty rate greater than 30%) and low poverty census tracts (those with poverty rates less than 10%), a total of 204 census tracts were identified as high poverty as compared to 491 tracts which are categorized as low poverty tracts.

Housing choice voucher units are not evenly distributed. The analysis found that high poverty census tracts had higher concentrations of units.

High poverty census tracts had almost three times as many units as low poverty tracts; a total of 23,124 units were available for housing choice vouchers in high-poverty areas, compared to just 8,620 in lower poverty areas. Overall, areas with high poverty had 32% of the entire units available (71,323) for housing choice vouchers holders.

Over ⅓ of units are located in high poverty tracts, despite the fact that high poverty tracts make up only 15% of the neighborhoods included in the study. This highlights the general concentration of available units in less affluent tracts.

• Out of the 1,294 census tracts analyzed, 470 were minority-concentrated.

• Minority Concentrated tracts accounted for 70% of Housing Choice Vouchers units available for occupancy.

• 33% of minority concentrated census tracts were high poverty census tracts while only 11% were low poverty census tracts.

To assess whether or not Housing Choice Vouchers have allowed users to move to more diverse neighborhoods, we looked at the distribution of voucher eligible units in minority-concentrated census tracts.

Overall, we found that vouchers have not done so. Out of the 1,294 census tracts analyzed, 470 were minority-concentrated. These census tracts accounted for 50,009 out of 71,323 units available for occupancy. Further, 33% of minority concentrated census tracts were high poverty as compared to 11% of low poverty census tracts.

HUD defines minority-concentrated census tracts as those in which the share of Black, Hispanic/Latino, Asian, Native American, and multi-racial residents are at least 20 percentage points higher than the metropolitan area share. For example, in Charlotte, the overall share of minority residents in the metro area is 33%. Minority-concentrated tracts are those in which more than 53% of residents are racial or ethnic minorities.

Voucher-subsidized units are highly concentrated in both minority-concentrated census tracts and high-poverty census tracts.

In Atlanta, for example, we found 65 minority-concentrated census tracts. Out of these, 34 were high poverty census tracts, and these 34 census tracts accounted for 52% of total units under contract for federal subsidy and available for occupancy. 

• Out of the 1,294 census tracts analyzed, 80% were voucher affordable per small area fair market rent (SAFMR) metric.

• A total of 317 low-poverty census tracts were voucher affordable compared to a total of 193 for high-poverty census tracts.

• The 317 low poverty census tracts had only 7,104 voucher subsidized units. That's compared to 22,934 voucher-subsidized units in the 193 high-poverty census tracts.

Holding a housing voucher doesn’t mean you can rent any unit a landlord agrees to lease you — that unit has to be affordable enough so that a voucher can cover the rent. The federal government sets a standard called the “small area fair market rent,” which becomes the amount a Housing Choice Voucher will cover in that area.

A Census tract is “voucher affordable” if the small area fair market rent is higher than the median rent in that Census tract; that is, a voucher should be enough to cover the median cost of renting a housing unit in that area.

Housing vouchers allow users to rent a unit that falls at or under the Small Area Fair Market Rent (SAFMR). The small area fair market rent is calculated by HUD, based on the median rent in a zip code.

Perhaps surprisingly, most of the census tracts we analyzed should be affordable for voucher holders using the SAFMR metric. Out of 1,294 census tracts analyzed, 80% were voucher affordable. A total of 317 low-poverty census tracts were voucher affordable compared to a total of 193 for high-poverty census tracts.

However, those 317 low poverty census tracts had only 7,104 voucher subsidized units. That's compared to 22,934 voucher-subsidized units in the 193 high-poverty tracts.

That means even though most of the low-poverty, higher-income Census tracts should be voucher-affordable, the reality is very few options for low-income renters with housing choice vouchers exist in those areas.

Instead, properties those voucher holders can rent are disproportionately concentrated in high-poverty areas — counter to the program’s purpose of helping break up concentrations of poverty.