Amenities, affordability, and housing vouchers

Abstract

Against the background of an emerging rental affordability crisis, we examine how the standard rule that households should not spend more than 30% of their income on housing expenditures leads to inefficiencies in the context of federal low‐income housing policy. We quantify how the current practice of locally indexing individual rent subsidies in the Housing Choice Voucher (HCV) program regardless of quality‐of‐life conditions implicitly incentivizes recipients to live in high‐amenity areas. We also assess a novel scenario for housing policy reform that adjusts subsidies by the amenity expenditures of low‐income households, permitting national HCV program coverage to increase.

Housing supply and affordability: Evidence from rents, housing consumption and household location

“…The table also reports results where the dependent variable is an indicator for whether a household spends more than 30 percent of their income on housing, a common measure of housing "cost burden" in the affordability literature (Anthony 2018, Bieri andDawkins 2019). Both constraints increase the fraction of "cost burdened" households by a small amount, but even the effects of a 2 standard deviation tighter constraint are much smaller than the increase in "cost burdened" households over our sample period.…”