HUD Publishes Study About Attracting Landlords to the Housing Choice Voucher Program

In
February, the Department of Housing and Urban Development (HUD) continued
exploring how to increase participation in the Housing Choice Voucher (HCV)
program with a paper by their Multidisciplinary Research Team titled “Landlord
Participation Study.” The study found that the most common method for incentivizing
landlord participation is increasing payment standards, though many of the
methods described below are still relatively new. However, HUD believes that
these landlord incentives may apply to rental housing markets across the
country.

Conclusions
about Rental Markets

The
study was conducted in two parts: a quantitative analysis of administrative
data and a qualitative set of interviews with nine innovative Public Housing
Authorities (PHAs). The primary quantitative findings are as follows:

• vouchers per landlord increased from 2010
  to 2016, from 2.6 to 3.1;
• the concentration of vouchers is
  increasing mainly in neighborhoods with higher rates of poverty, unemployment,
  and residents without high school degrees; and
• the change in voucher concentration is
  unequal across states.

The
qualitative interviews confirmed that three common hypotheses about why
landlords decline to participate in HCV programs are financial concerns, administrative
burdens, and negative perceptions of voucher tenants. These interviews revealed
several key points about rental markets:

• each PHA interviewed works in a
  competitive place to find housing;
• PHAs frequently have to increase payment
  standards, the amount that they pay to landlords to assist tenants with
  vouchers;
• tenants frequently need help with more
  than rent, such as searching for units and paying security deposits; and
• supply and demand for housing can become
  unbalanced due to other local housing factors.

Why
Landlords Do Not Participate

Staff
identified three primary concerns when asked about the most important reason
why landlords do not participate in the HCV program: five PHAs answered with financial
or profitability considerations, 3 named concerns about the bureaucratic and
administrative process, and one cited negative attitudes about voucher holders.
Specifically, PHAs mentioned anecdotes similar to the following:

• low payment standards sometimes made
  vouchers unprofitable for landlords;
• fair market rents (FMRs) can adjust slowly
  to increasing rents;
• money sometimes trumps the social mission
  to landlords;
• neither the hassle of dealing with a
  bureaucracy nor concerns that PHAs do not value landlords’ time exist in the
  free market; and
• stigmas about voucher-holders exist.

Incentives
to Encourage Landlord Participation

Researchers
asked staff from the nine PHAs selected for this study about what activities
they have begun to overcome landlords’ concerns. First, in order to build
confidence in the profitability of the HCV program, the most common approach
has been increasing payment standards. Other frequent activities include:

• helping tenants pay security deposits or
  negotiating other arrangements regarding damages;
• offering bonuses to landlords for joining
  the program; and
• making it easier to complete
  administrative steps and communicate with the PHA.

Second,
the most common strategies for simplifying the bureaucracy for landlords
involve altering inspection requirements to make the process easier and
implementing landlord portals to facilitate communication and conduct business
quickly. Staff also mentioned creating ways for landlords to inform PHAs about
tenant compliance and making other processes like payment electronic or
automatic.

Finally,
PHAs offer an array of strategies to change negative views of tenants, most of
which are based on strengthening ties between landlords and tenants through communication.
The most evidence-based activity for overcoming negative stereotypes is the
District of Columbia Housing Authority’s “Meet-and-Lease event” model, in which
PHAs bring landlords and tenants together to facilitate lease-ups. PHAs have
also implemented regular landlord communications, dedicated communication
positions, and information campaigns.

This
summary has been a brief overview of the “Landlord Participation Study.” The
full paper contains more detailed lists of anecdotes and analysis and can be
found here.