New Cityscape Assesses Small Area Fair Market Rents

January 8, 2020  

New Cityscape Assesses Small Area Fair Market Rents

The most recent issue of Cityscape: A Journal of Policy Development and Research features a symposium examining effects of the use of ZIP code-level Small Area Fair Market Rent (SAFMR) areas in calculating the value of Housing Choice Vouchers (HCV). Articles compare results to SAFMR program objectives, as well as to the older, metropolitan-level Fair Market Rent (FMR) standard.

Guest editors Adam Bibler, Chalita Brandly, Peter Kahn, Marie Lihn, and Lydia Taghavi introduce the issue topic by reviewing the origin and policy objectives of Small Area Fair Market Rents. They also sketch the development of SAFMRs, from demonstration to rulemaking and implementation. Finally, the editors broadly review the symposium papers, noting that the research tended to fall into two general categories: articles related to the SAFMR demonstration program, and articles examining mandated implementation of SAFMRs in certain metropolitan areas.

Small Area Fair Market Rent Demonstration

Samuel Dastrup, Meryl Finkel, and Ingrid Gould Ellen report the effects of the SAFMR Demonstration on families with children, specifically whether holding a voucher makes families more likely to locate in higher opportunity neighborhoods. While the authors find that SAFMRs did not meaningfully affect overall relocation rates of voucher holders five years after program implementation, they meaningfully affect locational outcomes among families with children.

Kirk McClure and Alex Schwartz assess the potential for SAFMRs to decrease racial segregation and discrimination in large metropolitan areas. The authors note that the widespread implementation of SAFMRs could make finding housing more difficult for families if maximum qualifying rents are reduced in neighborhoods with large concentrations of minority voucher holders. They suggest that program implementation be accompanied by transportation and housing counselling services, along with robust landlord outreach.

Judy Geyer, Samuel Dastrup, and Meryl Finkel examine whether a shift to SAFMRs affected participants' length of stay in the HCV program, finding that the introduction of SAFMRs increased program attrition. Their research suggests that the median length of program participation declined approximately two years, with the largest effects felt by working-age adults and by households living in lower- and moderate-rent areas at the time of program introduction.

Edgar O. Olsen conducts a meta-analysis of existing data, methods, and results of prominent studies into overpayment (paying higher than market-rate rents) in the HCV program. Olsen concludes that the available evidence suggests that adoption of SAFMRs will decrease overpayment in the worst neighborhoods and will decrease underpayment (where voucher units rent for less than market rate) in the best neighborhoods.

Marietta E.A. Haffner reviews the history of demand-side housing assistance, comparing the experiences of the United States to those of a number of European countries with their own versions of housing vouchers. Haffner focuses on characteristics of program design.

Christine M.E. Whitehead writes as a respondent to three of the papers in this issue of Cityscape, identifying three main issues in analysis of SAFMRs: that existing datasets are only suitable to conducting a partial evaluation of SAFMR impacts; that current research has so far been capable only of assessing program results without understanding the program impact on participant welfare; and that SAFMRs might significantly alter household decisionmaking and outcomes in ways that studies to date cannot capture.

Alternative Measures of Market Rents

Kelly L. Patterson and Robert Mark Silverman investigate implementation strategies for the 24 metropolitan areas where SAFMRs are currently mandated. Using data collected from the 180 public housing authorities found in those metropolitan areas, the authors measure progress toward opportunity advancement, identify best practices, and make policy recommendations for broader SAFMR implementation.

Christian Hess, Rebecca J. Walter, Arthur Acolin, and Sarah Chasins compare three housing markets with diverse characteristics to assess how the SAFMR rule might produce different residential outcomes given varying local conditions. The authors suggest that local adjustments may be necessary to help housing authorities meet the objectives of the SAFMR in increasing neighborhood choice and access to opportunity.

Mike Blackhurst, Chris Briem, and Sabina Deitrick study the efficacy of SAFMRs in increasing the number of eligible units relative to old FMR areas in Pittsburgh, PA. While the number of eligible units increased overall following the switch to SAFMRs, gains were disproportionately realized in low-rent areas, in contrast to high-rent areas where there were few eligible units. The authors recommend more competitive payment standards to encourage voucher acceptance by landlords in high-rent areas.

Aksel Olsen dives into Craigslist rental data and HUD data for 2,600 FMR areas nationwide to quantify gaps between the actual cost of rentals and the value of vouchers based on FMR payment standards. Olsen then analyzes the effect of shifting to SAFMRs on the potential availability of units, and argues for wider implementation of the SAFMR rule.

Alexander Casey analyzes Zillow rental data to determine the effect of using SAFMRs on the availability of eligible units. Casey finds that SAFMRs increase the proportion of units eligible to voucher holders in low-poverty neighborhoods and decrease the proportion of eligible units in high-poverty neighborhoods. Furthermore, the overall share of listings in a metropolitan area eligible for program participation increased under SAFMR relative to an FMR baseline.

Refereed paper on sexual harassment

In addition to the symposium, a refereed paper by Rigel C. Oliveri presents the results of a qualitative study of 100 low-income women who have been sexually harassed by their landlords. The results of Oliveri's pilot study suggest the need for more systematic measurement of the size of the problem, and some changes in state landlord-tenant statutes.

Departments

Articles in Cityscape's regularly appearing departments include:

• Affordable Design: winners of the 2019 American Institute of Architects (AIA)—HUD Secretary's Housing & Community Design Awards by Regina C. Gray;
  Data Shop: A New Cost-Based Index of Housing Quality and Repair Needs by Eliza Wallace, Eileen Divringi, and Keith Wardrip;

• Foreign Exchange: Observing New Zealand's Housing Crisis: Efforts to Produce and Finance Affordable Housing and its Implications for U.S. Policies by Jeffrey Mosley;

• Graphic Detail: Misalignment Between ZIP Codes and Municipal Boundaries: A Problem for Public Health by Richard C. Sadler;

• Industrial Revolution: Trenchless Technology: A New Way to Install and Renew Utilities by Mike Blanford and Protecting Low-Income Housing from Climate Risks by Michael E. Canes; and

• Policy Briefs: New York City's Affordable Housing Plans and the Limits of Local Initiative by Alex Schwartz and Extremely Low-Income: Has the New Measure Made a Difference? by Chalita Brandly.

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