Chetty Study Offers Guide to Move Families to High-Upward-Mobility Areas

Opportunity Insights–a Harvard-based group of researchers and policy analysts, including economist Raj Chetty, who analyze data to help stakeholders make more informed policy decisions–has published a paper titled “Creating Moves to Opportunity: Experimental Evidence on Barriers to Neighborhood Choice.” The researchers, working in cooperation with the Seattle Housing Authority and King County Housing Authority, found that when families received the Creating Moves to Opportunity treatment (the treatment consisted of customized search assistance, landlord engagement, and short-term financial assistance), the fraction of families who moved to high-upward-mobility areas increased by forty percent between a control group and a treatment group.

Findings

The researchers found several insights during the course of their work. First, they found that in the Seattle area, Creating Moves to Opportunity (CMTO) interventions increased the fraction of families who moved to high-upward-mobility areas by forty percent between a control group and a treatment group. The researchers also found that utilization rates among groups remained the same (i.e., those families that chose to move to high-upward-mobility areas were able to use their vouchers at the same rate as the control group); all families across racial and ethnic groups benefited from the treatment; and families in opportunity areas were more satisfied with their new neighborhoods. The researchers also found that the customized manner of providing services according to each family’s need was crucial. Finally, the researchers found that other policy interventions such as higher payment standards (e.g., Small Area Fair Market Rents [SAFMR]) by themselves or providing additional rental information in a standardized manner were not effective. Indeed, on page 38 of the study, the researchers write “[o]ur analysis . . . shows that raising payment standards in more expensive neighborhoods —  as is typically done in SAFMR policies — does not necessarily induce families to move to higher-opportunity areas.”

Services Offered

The CMTO services consisted of three prongs (see pages 12 and 13 of the study):

  1. Search Assistance (page 12);
    1. Information about high-opportunity areas and the benefits of moving to such areas for families with young children;
    2. Help in making rental applications more competitive by preparing rental documents and addressing issues in credit and rental history; and
    3. Search assistance to help families identify available units, connect with landlords in opportunity areas, and complete the application process;
  2. Increased Landlord Engagement (page 13);
    1. Explaining to landlords in high-opportunity areas the program and encouraging them to lease their units;
    2. Damage mitigation fund to cover possible damages to a unit not included in the security deposit (up to $2,000);
    3. Expedited lease-up process for landlords through fast inspections and streamlined paperwork;
  3. Short-term Financial Assistance (page 13);
    1. Funds for application screening fees, security deposits, and other expenses that stood in the way of lease-up;
    2. Payments were customized by staff to address the specific impediments a family faced; and
    3. On average families received $1,070 for these payments.

The researchers stressed that these services were tailored to meet the needs of individual families.

Defining Opportunity Areas

Opportunity areas were defined using Census tracts that have upward mobility in approximately the top third of the distribution across tracts within Seattle and King County. The definitions were adjusted to provide for contiguous areas and to take into account changes in neighborhoods. They were defined using data from the Opportunity Atlas.

Slides on the study can be found here.

A non-technical summary can be found here.

The full study can be found here.

 

FMR Methodology Changes Under Consideration

The Department of Housing and Urban Development (HUD) is proposing to change the methodology used for estimating fair market rents. Fair market rents (FMRs) are used as the basis for payment standards which determine the maximum level of assistance in the housing choice voucher program. They are also used by certain other programs. The Department’s FMRs are set at a level that should allow a program participant to afford to rent a unit for approximately 40 percent of an area’s standard quality stock.

The Department is updating the methodology for calculating FMRs because in the past it has received comments stating that “FMRs need to incorporate more local and more timely data.” In its comments on the fiscal year (FY) 2019 FMRs, NAHRO recommended that HUD use more timely data when calculating FMRs, fund local research surveys, and continue to refine its methodology for calculating FMRs. Additionally, the Senate Transportation and Housing and Urban Development (THUD) Appropriations subcommittee, in report language, urged HUD to improve its FMR estimates to “better reflect the rent inflation that occurs between the time that American Community Survey data is collected and the fiscal year for which the FMRs are produced.”

Comments on the updated process are due in 30 days. (6/5/19 edit – Comments are due by July 5, 2019.)

Click below to read more.

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HUD to Host MTW Expansion Call on Wednesday (4/17/19) for Eligible Cohort #1 Agencies

In its effort to publicize the Moving to Work (MTW) Expansion, HUD will host a call dedicated to potential cohort #1 applicants this Wednesday (4/17/19). This is in addition to NAHRO’s complementary MTW application webinars. Relevant details on the call, provided by a HUD official, can be found below:

On Wednesday, April 17th from 3-4PM EDT the MTW Team will hold a conference call for all agencies eligible for MTW Cohort 1. Please join the call to get any questions you may have regarding MTW Cohort 1 and/or the application process answered.

The conference begins at 3:00 PM Eastern Time on April 17, 2019; you may join the conference 5 minutes prior.

Dial-in: 1-877-369-5243 or 1-617-668-3633
Access Code: 0397071##

Need an international dial-in number?

Need technical assistance? Call the AT&T Help Desk at 1-888-796-6118 or 1-847-562-7015.

New Evidence Matters Focuses on Landlords and Vouchers

The Department of Housing and Urban Development’s (HUD’s) Winter 2019 issue of Evidence Matters focuses on landlords and their role in the Housing Choice Voucher (HCV) program. The issue has three articles which provide insight into different aspects of landlord behavior and landlord retention. The first article offers an overview of the HCV program; provides a description of the nation’s rental units and its landlords; provides a broad overview of recent research on landlords; provides an overview of research on the impacts of low landlord participation; and offers strategies to increase landlord participation. The second article, again, discusses research on landlords and voucher acceptance. The third article discusses strategies that two PHAs are using to incentivize landlord participation.

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HUD Broadcasts Webinar on MTW Cohort #1

Earlier today, HUD broadcast a webinar on the Moving to Work (MTW) Expansion Cohort #1. The webinar explained what MTW was, explained the benefits of an MTW designation, provided presentations from current MTW agencies, and discussed the process by which agencies could apply for Cohort #1. Additionally, questions from webinar participants were answered.

The webinar also gave the following timeline for MTW Expansion activities:

  • Spring 2019 – Revise MTW Operations Notice based on public comment and publish final MTW Operations Notice;
  • Summer / Fall 2019 – Designate the initial cohort of MTW agencies; invite the second cohort of agencies to apply;
  • Winter 2020 – Designate the second cohort of MTW agencies.

The full webinar with audio and the slide presentation will eventually be posted on HUD’s MTW Expansion site, but an unofficial copy of the slides from the webinar can immediately be found here.

HUD Now Accepting Applications for MTW Expansion Cohort #1

Late last week, HUD published a notice–titled “Request for Letters of Interest and Applications under the Moving to Work Demonstration Program for Fiscal Year 2019: COHORT #1 – Overall Impact of Moving to Work Flexibility” (PIH-2018-17)–inviting applications for the first cohort of the Moving to Work (MTW) Expansion. The first cohort of the MTW Expansion will include 30 PHAs with 1,000 or fewer aggregate units (including special purpose vouchers).

In addition to laying out the application process for the first cohort of the MTW Expansion plan, the notice also notes the research topic each cohort will examine. The first cohort will examine the overall impact of MTW flexibility, while future cohorts will examine rent reform, work requirements, and landlord incentives. Applying for MTW status with the first cohort is a two-step process including submitting a letter of interest (due January 11, 2019) and submitting a MTW plan and application.

NAHRO will host a MTW application e-briefing for potential first cohort applicants on Wednesday, November 7th from 1:30 to 3 pm ET. Registration for the e-briefing can be found here.

The MTW Operations Notice can be found here.

The first cohort application notice can be found here.

Click below for additional information on the application process.

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HUD Creates New Landlord Task Force

Earlier today, HUD published a press release announcing that it would create a new Landlord Task Force. The task force is being created as a response to two new studies which found that most landlords do not accept vouchers and, in those instances where landlords do accept vouchers, the landlords are dissatisfied with the administrative burdens associated with the vouchers. The Department will begin a landlord engagement campaign on September 20th in Washington DC, where it will present findings from the two studies. There will also be landlord forums in Philadelphia, Atlanta, Dallas, Los Angeles, Salt Lake City, and Salem, Oregon. After receiving feedback from these forums, the task force will provide policy recommendations to the Secretary to increase landlord participation in the Housing Choice Voucher program.

The two studies which served as the impetus for the creation of the task force are titled “Pilot Study of Landlord Acceptance in the Housing Choice Voucher Program” and “Urban Landlords and the Housing Choice Voucher Program: A Research Report.” The former study will be released in a month and looked at five cities: Philadelphia, Los Angeles, Fort Worth, Newark, and Washington, D.C. It found that many landlords did not accept vouchers, especially in high opportunity areas. The latter study examined three areas: Baltimore, Cleveland, and Dallas. It found that while many landlords appreciated the reliable rent payments of the Housing Choice Voucher program, they were frustrated with inspections and how housing authorities handle tenant disputes.

A summary of Pilot Study of Landlord Acceptance in the Housing Choice Voucher Program can be found here. (The full study will be released next month.)

The Urban Landlords and the Housing Choice Voucher Program: A Research Report can be found here.

The Department’s press release on the new task force can be found here.

HUD Publishes Study on Racial and Ethnic Differences in Housing Search

Yesterday, HUD published a study titled “Racial and Ethnic Differences in Housing Search: Final Report.” The study seeks to answer four research questions:

  1. How do people search for rental housing?
  2. How do housing searches differ by race and ethnicity?
  3. What are the consequences of these differences for relative housing outcomes?
  4. What are the implications for future research?

To answer these questions, the study used a mixed-method approach. Researchers fielded telephone interviews with a sample of 135 recent movers and 351 current searchers in the Washington, D.C. area. A subsample of 40 respondents were given a face-to-face interview. Finally, researchers also utilized three large datasets–the Panel Study of Income Dynamics (PSID), the America Housing Survey (AHS), and the Chicago Area Study (CAS)–to provide “statistically rigorous tests of racial or ethnic differences on a limited set of variables.”

While all the findings of the study are outside the scope of this short blog post, here are a few of the findings:

  • When asked about barriers while searching for housing, renters stated poor credit history, lack of a security deposit, and not having transportation to get to a units;
  • Most searchers said that both a unit and its neighborhood were equally important;
  • Renters use their social networks to find vacancies and learn about them;
  • Searchers tend to prioritize building security, landlord responsiveness, and rent; Safety and transportation are top criteria for neighborhoods;
  • Price range was a primary reason for the difficulty of a search;
  • Use of social networks is the most common information gathering method used by Black and Latino renters, and Black and Latino renters are more likely than White renters to use this method;
  • White renters are less likely to have a failed search than are Black and Latino renters;
  • Black renters report longer searches than White and Latino renters;
  • People who move for school or work are more likely to use online resources; and
  • Involuntary movers are more likely to end a search with less favorable outcomes because of constrained alternatives.

There is much more in the full report, which NAHRO staff has only begun to read.

The full study can be found here.