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Necessary But Not Sufficient: Small Area Fair Market Rents and Voucher Access to Opportunity Neighborhoods

The Small Area Fair Market Rent Demonstration program (SAFMR) tests the proposition that if Fair Market Rents were more closely aligned with neighborhood-level rents, not to median rents for the entire metropolitan area, recipients of federal Housing Choice Vouchers would be better able to access higher quality neighborhoods and avoid the most distressed neighborhoods. Reina et al. (2019) find limited support for this proposition. Some of the seven sites that participated in the demonstration saw a significant increase in the presence of voucher holders in census tracts with relatively high rents, and with desirable indicators of opportunity (e.g., low poverty, low unemployment). However, that was not the case at other sites, where the residential patterns of voucher recipients showed little if any change after the introduction of SAFMR. These findings are similar to those of the U.S Department of Housing and Urban Development's (HUD) interim evaluation of the demonstration program (Finkel et al., 2017). Using a different methodology, the evaluation found that following the introduction of SAMFRs the number of voucher holders in the five sites who resided in high-opportunity areas increased by 2 percentage points, from 11% to 13% (Finkel et al., 2017). Reina et al. conclude that “the SAFMR approach is not a silver bullet to solve the problem of unequal access to opportunity neighborhoods.” SAFMR enables voucher holders to address the barrier of higher rents in accessing opportunity neighborhoods, but they do not address other barriers. The authors state that “additional counseling support and information campaigns could increase the general efficacy of the SAFMR program.” I agree that more counseling and information may enable more voucher holders to access opportunity neighborhoods with SAFMR, but only to a degree. The biggest and most formidable obstacle is racial segregation, and counseling and information are unlikely to be sufficient by themselves in attacking this most intransigent residential settlement pattern. There is a sharp difference in the neighborhoods in which voucher holders of different races and ethnicities reside. In a study of female-headed families with vouchers, accounting for about half of all voucher holders, Schwartz, McClure, and Taghavi found that whereas 22% of white voucher recipients lived in census tracts with low or very low levels of distress, the same was true for only 10% of black and Hispanic voucher holders. Conversely, 56% of white voucher holders lived in census tracts with high or very high levels of distress, compared with nearly 80% of their black and Hispanic counterparts (Schwartz, McClure, & Taghavi, 2016, p. 215). The primary reason for these disparities is racial segregation. Voucher holders tend to live in census tracts dominated by households of their own race and ethnicity, or in integrated tracts where no one race/ethnicity is dominant. For example, Schwartz et al. found that 42% of all black voucher recipients lived in predominantly black census tracts and 40% lived in integrated tracts. Only 9% lived in predominantly white tracts.