Working Paper

Landlords and Access to Opportunity

Abstract: Despite being eligible for use in any neighborhood, housing choice vouchers tend to be redeemed in low-opportunity neighborhoods. This paper investigates how landlords contribute to this outcome and how they respond to efforts to change it. We leverage a policy change in Washington, DC, that increased voucher rental payments only in high-rent neighborhoods. Using two waves of a correspondence experiment that bracket the policy change, we show that most opportunity landlords screen out prospective voucher tenants, and we detect no change in average screening behavior after a $450 per month increase in voucher payments. In lease-up data, however, enough landlords do respond to increased payments to equalize the flow of voucher tenants into high- vs. low-rent neighborhoods. Using tax data and listings from a website specializing in subsidized housing, we characterize a group of marginal opportunity landlords who respond to higher payments. Marginal opportunity landlords are relatively rare, list their units near market rates, operate on a small scale, and negatively select into the voucher program based on hard-to-observe differences in unit quality.

Keywords: small area fair market rent; opportunity neighborhood; SAFMR; mobility; landlord; housing choice vouchers;

JEL Classification: H30; I38; J15; R21; R23; R31;

https://doi.org/10.26509/frbc-wp-201902r

Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Working Papers

Publication Date: 2019-08-30

Number: 19-02R

Note: This is a revision of working paper 19-02, titled "Can Landlords Be Paid to Stop Avoiding Voucher Tenants?”