The dual nature of rent growth : a theory-based approach to the housing choice voucher program

Abstract

The Housing Choice Voucher program is the largest low-income housing subsidy program in the U.S., serving over 2.2 million households annually. The Department of Housing and Urban Development provides the same subsidy level for program participants, whether new and searching for a unit, or continuing. In its design of the subsidy amount, the Fair Market Rent, HUD negotiates the balance between enabling voucher holders to access better quality housing, and spending efficiently. In this thesis, I argue that the FMR methodology does not recognize the different mechanisms that influence rent for available units, compared to continually occupied units. Through a theoretical model and empirical analysis of a case study in San Francisco, I present a new methodology with two subsidy levels - one for searching voucher holders, and one for continuing voucher holders. This proposal builds on the theory presented and considers the implications for program budget and decision making for the agents involved.