Landlords and Access to Opportunity
||Original Paper: WP 19-02|
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. [First version circulated under the title “Can Landlords Be Paid to Stop Avoiding Voucher Tenants?” ]
Keywords: Housing Choice Voucher, landlord, opportunity neighborhood, mobility, Small Area
Fair Market Rent (SAFMR).
JEL Classification Codes: I38, R21, R23, R31, J15, H30.
Suggested citation: Aliprantis, Dionissi, Hal Martin, and David Phillips. 2019. “Landlords and Access to Opportunity.” Federal Reserve Bank of Cleveland, Working Paper no. 19-02r. https://doi.org/10.26509/frbc-wp-201902r.