There's a new problem facing low-income individuals seeking affordable housing: Even if they have a housing choice voucher to subsidize rents in the private market, landlords do not want to accept voucher tenants.
HUD data tells the story: Only 18,000 of more than 20,000 such vouchers distributed by the Philadelphia Housing Authority are actually in use. A recent Urban Institute study of five cities — Philly, Los Angeles, Fort Worth, Washington, and Newark — found that landlords consistently rejected the applications of voucher tenants. The underlying cause: As city neighborhoods become more attractive, landlords can charge more rent in the private market than they can get from voucher holders, so voucher holders are being turned away.
Expect there to be pressure on HUD Secretary Ben Carson to push landlords to accept voucher tenants, as well as to increase the value of the vouchers. There will likely, too, be calls to build more low-income housing and force all property owners to accept voucher tenants.
Whatever one's view of such approaches, they will be difficult to achieve. But there are other ways to address the problem, which the PHA should consider.
It should start by making better use of the low-income housing the city already has, including existing public-housing projects. In the process, it should address some of the ways in which low-income housing creates a dependency trap.
Consider the fact that 10 percent of the city's public-housing units are vacant. That means that the Housing Authority should have at least 1,300 apartments available for the city's poorest citizens. What's more, some 32 percent of tenants in occupied units are "overhoused,"meaning they live in units with empty bedrooms. Philadelphia is not atypical. Nationally, HUD data shows that 50,000 of the 1 million public-housing units in the nation are vacant and that 15 percent have bedrooms not being used.
These facts suggest another approach that Secretary Carson should consider: Call on housing authorities to make all empty units available to voucher holders who can't find private housing. Nor should change stop there. In order to encourage turnover and economic upward mobility, new, non-elderly voucher holders should not be granted a lifetime, open-ended subsidy. Rather, they should agree to time-limited assistance, perhaps the same five-year limit attached to cash welfare. (In fact, the Philadelphia Housing Authority has had a HUD waiver to allow it to experiment with such limits and has indicated that it may do so.)
Additionally, to help tenants save money, their rents should no longer be linked to income, as is currently the case. Instead of paying a higher rent if their income increases, all subsidized tenants should be given fixed-rent leases, meaning a normal, private sector-type lease with a set rent for a specific time period. Why would we continue an income-based rent policy that discourages work and marriage among the poorest Americans? Yet our current policy does just that by increasing rents when the household income grows.
Steps should be taken, as well, to make available the apartments now characterized by "overhousing." Housing authorities should consider offering cash to tenants in such units in exchange for an agreement to move out — or they can be required to move to smaller units.
In the deep background of all of these housing policy issues is the demographic reality of who lives in voucher units and public housing: apart from the elderly poor, the largest group is single mothers and their children. Public and subsidized housing was originally envisioned, in the New Deal era, as a benefit for the working class. But today, it is a de facto poorhouse that accommodates and rewards those who have children out of wedlock, which only perpetuates the cycle of poverty.
It will be tempting to require all private property owners to accept voucher holders — but this, too, is a misguided approach. The program's red-tape burdens small, mom-and-pop landlords, who often prefer tenants they know will pay the full rent. (Voucher tenants are responsible for 30 percent, while the housing authority pays the rent.)
Of course, making better use of public housing units means making sure they're habitable and that the premises are safe and secure, just as all private landlords must do. To the extent the PHA lacks the resources or labor flexibility to achieve such goals, Philadelphia's philanthropic community or public-minded construction firms should step up.
Somehow or other, we should make better use of our public housing, but do so in a way that does not lead to dependency and ongoing poverty. So, rather than forcing landlords to accept voucher tenants or raising rents on subsidized units, we should structure low-income housing policy to encourage short-term assistance and long-term upward mobility.
Howard Husock is vice president for policy research and publications at the Manhattan Institute whose Economics21 this essay was adapted from. He is the author of "America's Trillion-Dollar Housing Mistake: The Failure of American Housing Policy." (Ivan R. Dee, 2003).