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Housing Voucher Policy Designed to Expand Opportunity Targets Areas That Need It

January 9, 2018

A 2016 rule from the Department of Housing and Urban Development (HUD) required state and local housing agencies in 23 metropolitan areas to start using small area fair market rents (SAFMRs) — a promising policy approach that ties housing voucher subsidies to market rents in individual zip codes — in their voucher programs in 2018. HUD suspended this requirement in August 2017, but in December 2017 a federal court ordered HUD to withdraw the suspension and reinstate the original requirement. SAFMRs are designed to enable families with vouchers to rent housing in a wider range of neighborhoods, and research shows that SAFMRs are more effective at helping low-income families move to high-opportunity neighborhoods than HUD’s longstanding approach of setting a single fair market rent for an entire metro area.

HUD's 2016 rule selected the 23 mandatory SAFMR areas in part because voucher holders there were disproportionately concentrated in low-income areas, indicating that the potential benefits of SAFMRs were particularly great. The data below compare the location of voucher holders in the SAFMR metro areas in 2016 — before agencies there were required to begin using SAFMRs — to the location of all renter households and all households overall. In each of the 23 areas, voucher holders were more likely than other renters to live in high-poverty and high-minority neighborhoods, usually by a wide margin.