Leveraging Housing Vouchers to Address Health Disparities

The Center for Medicare and Medicaid Services’ recently announced Accountable Health Communities (AHC) model aims to better integrate social needs into the clinical realm. Housing quality and insecurity is a core area that providers should screen for and address by linking beneficiaries with community service agencies. However, the effectiveness of the AHC model may be limited if there is a paucity of services to meet the needs that health care providers identify and if these services are not optimized to improve health. Changes in housing policy that better enable low-income families to live in low-poverty neighborhoods that promote health are critical in advancing the goals of the AHC model.

Since the 1970s, housing policy has shifted away from building housing developments toward providing vouchers that help pay the costs of private rentals. The Housing Choice Voucher Program (commonly known as Section 8 vouchers) helps more than two million low-income families secure affordable housing. When vouchers are used to help families move to low-poverty neighborhoods, they have been shown to improve health outcomes. The Moving to Opportunity for Fair Housing (MTO) experiment of the Department of Housing and Urban Development (HUD) was a decade-long randomized controlled trial involving the participation of 4600 families with children. By the end of the MTO study period, women who had received a voucher to move to a low-poverty neighborhood were less likely than members of a control group to have diabetes and to be extremely obese.¹

Although housing vouchers have been shown to provide essential support to the families that receive them, their effectiveness in offering access to more advantaged neighborhoods has been more limited. Only 15% of all children in families that receive vouchers live in low-poverty neighborhoods (those with poverty rates below 10%), whereas 18% live in neighborhoods with the most extreme poverty (those with poverty rates of 40% or more). Minority voucher holders are more likely than nonminority ones to live in these extreme-poverty neighborhoods.²

Multiple structural barriers prevent voucher recipients from renting in “opportunity” neighborhoods, defined as stable, low-poverty neighborhoods with high-performing schools, low crime and unemployment rates, and access to jobs. First and foremost, the supply of rental housing in these areas may be limited. Second, higher rents in more advantaged neighborhoods are unaffordable, even with assistance. In the voucher program, participants pay approximately one third of their income on rent and utilities; their vouchers cover the remaining amount up to a fair market rent (FMR) set at the 40th percentile. Currently, the FMR is based on a region-wide amount, although in practice rents vary widely within a region.

Another barrier involves the housing search itself. When vouchers are issued, voucher agencies typically require families to find a rental within a limited time frame; otherwise, they forfeit the rental assistance. Many families avoid searching for housing in high-opportunity areas because they are concerned they will waste valuable time only to be rejected. Some landlords take advantage of the predicament of these families by steering them toward hard-to-rent units in high-poverty neighborhoods where the FMR is above neighborhood rent levels.

Source of income (SOI) discrimination, in which landlords and apartment management companies refuse to rent to voucher holders, is another barrier that can limit voucher holders from renting in affluent areas where market demand is already strong. The federal Fair Housing Act of 1968 (42 USC 3601-3619) outlawed discrimination related to the sale, rental, or financing of housing based on race, religion, national origin, disability, family status, or gender.

However, the Fair Housing Act and most cities and states do not specifically prohibit SOI discrimination. This situation leaves prospective renters who may be denied housing in the difficult position of having to prove that a landlord’s refusal was attributable to a form of discrimination covered by fair housing laws, such as racial or ethnic bias, as opposed to SOI discrimination. Given that 45% of households that receive housing vouchers are African American and 16% are Hispanic, SOI discrimination insidiously maintains racially segregated housing while evading local, state, and federal fair housing laws.²

In addition to these barriers, housing assistance is not guaranteed to all people who qualify. Vouchers help only a small fraction of those with housing needs, with only one in five income-eligible families receiving assistance. Many housing authorities have closed their wait lists for housing assistance; the demand is simply too great.

Multiple solutions have been proposed and enacted to address these challenges in using vouchers effectively. Ultimately, it is necessary to increase both the supply of rental units in opportunity neighborhoods and the number of housing subsidies. The political will to change local zoning regulations is lacking, and the availability of resources for expanding the supply of rental units and subsidies remains uncertain owing to constrained budgets. However, HUD, recognizing the problem in how it determines FMR, recently issued rule changes that would calculate rents on the basis of smaller areas. According to this approach, the maximum amount of money that vouchers provide would correspond to neighborhood market levels, providing higher rent caps in more affluent areas and potentially increasing access to housing in a wider range of neighborhoods.

Stemming from the historic legacy of unequal access to housing opportunity and the barriers that families continue to face, HUD’s new “Affirmatively Furthering Fair Housing” planning process requires state and local jurisdictions to evaluate racial and economic segregation in communities.³ The process provides tools and resources to help jurisdictions identify existing patterns of segregation and address barriers to fair housing. Research increasingly suggests that such segregation is a fundamental cause of health disparities.⁴

SOI antidiscrimination laws are another tool that can be used to improve access to areas with strong schools and job growth. Thirteen states and 43 cities and counties have passed laws that prevent landlords from engaging in SOI discrimination (Figure 1).⁵ Two additional states—New York and Hawaii—currently have laws under consideration. Although not a panacea, SOI laws represent a budget-neutral step in unlocking the potential of the voucher program to meet housing needs more effectively and efficiently.⁶

FIGURE 1—

The 13 US States and 43 Localities With Laws Prohibiting Housing Market Discrimination Based on Source of Income in 2016

Note. Data were derived from the Poverty & Race Research Action Council.⁵ New York and Hawaii have laws under consideration as of November 2016.

Advocacy by the public health community can provide leverage for policymakers by highlighting the potential health benefits of increasing access to housing in high-opportunity neighborhoods. Allowing vouchers to be used more effectively through changes such as FMR reform and banning of SOI discrimination is essential for aligning housing policies with the AHC model’s mission to promote health.