Accessing private market housing

Before making investments in this strategy, city and county leaders should ensure it addresses local needs.

The Urban Institute and Mathematica have developed indicator frameworks to help local leaders assess conditions related to upward mobility, identify barriers, and guide investments to address these challenges. These indicator frameworks can serve as a starting point for self-assessment, not as a comprehensive evaluation, and should be complemented by other forms of local knowledge.

The Urban Institute's Upward Mobility Framework identifies a set of key local conditions that shape communities’ ability to advance upward mobility and racial equity. Local leaders can use the Upward Mobility Framework to better understand the factors that improve upward mobility and prioritize areas of focus. Data reports for cities and counties can be created here.

Several indicators in the Upward Mobility Framework may be improved with investments in accessing private market housing. To measure these indicators and determine if investments in these interventions could help, examine the following:

• Housing stability: Number and share of public-school children who are ever homeless during the school year. These data are collected by local public school districts.

• Housing affordability: Ratio of affordable and available housing units to households with low, very low, and extremely low income levels. These data are available from the Census Bureau’s American Community Survey and the U.S. Department of Housing and Urban Development’s Local Income Bands.
  

• Economic inclusion: Share of people experiencing poverty who live in high-poverty neighborhoods. These data are available in the Census Bureau’s American Community Survey.

• Racial diversity:Index of people’s exposure to neighbors of different races and ethnicities. These data are available through the Census Bureau’s American Community Survey.

• Opportunities for wealth-building: Ratio of the share of a community’s housing wealth held by a racial or ethnic group to the share of households of the same group. These data are available from the Census Bureau’s American Community Survey.

• Expanding tenant-based rental assistance: In most communities, demand for Housing Choice Vouchers outstrips what can be provided with the baseline funding from HUD. Local jurisdictions can address this by offering supplemental rental assistance. Federal grant programs, like HOME and CDBG, and local government and philanthropic funding can be used for rental assistance programs. In some cases, local rental assistance programs supplement HCVs by providing voucher holders with larger rent subsidies or financial assistance for costs such as security deposits. Alternatively, local programs can provide standalone rental assistance, separate from HCVs. These standalone programs can allow cities and counties to target rental assistance to specific groups (e.g., to seniors) in ways that are not possible with HCVs.

• Increasing access to high-opportunity neighborhoods: While HCVs give households a choice in where they live, relatively few voucher holders lease properties in high-opportunity neighborhoods. Recognizing that neighborhood conditions can affect long-term economic outcomes, PHAs and their partners may offer mobility programs for HCV holders. Mobility programs help voucher holders overcome barriers to relocating to resource-rich neighborhoods. Common services include one-on-one case management, apartment search assistance, and support with lease negotiations. See the Creating Moves to Opportunity case study for a strong implementation example.

• Setting standards for homeownership programs: There is a link between participation in homeownership education and counseling programs and positive homeownership outcomes, but the reliability and quality of individual programs can vary. To address this, organizations that deliver these services can develop or adopt existing industry standards. Homeownership education and counseling standards typically address desired competencies, skills, and training for individual educators and broader operational best practices for service delivery organizations. For more, see NeighborWorks’ National Industry Standards for Homeownership Education and Counseling.

• Combining financial supports when necessary: If a household is struggling with one aspect of financing homeownership (e.g., downpayment), it is likely that they will struggle with multiple aspects (e.g., monthly payments or repairs). To address this, jurisdictions should consider offering a range of supports, particularly if supporting lower income and lower wealth households is a primary goal. For example, a homeownership education and counseling program should be equipped to assist a prospective homebuyer with accessing both downpayment assistance and a subsidized mortgage.

• Recycling downpayment assistance: How a jurisdiction structures a downpayment assistance program impacts the number of households the program can serve. This is particularly true in communities with higher home values and/or more extreme resource constraints. Experts generally advise that downpayment assistance programs require participating households to repay the funds they receive. By “recycling” these funds, programs can serve more households with the same resources. There are several approaches that can be used to ensure repayment. Most common, however, is providing downpayment assistance through a second mortgage that defers repayment until the home is resold. For more, see Local Housing Solutions’ downpayment assistance resource.

• Understanding prohibitions around race-based targeting: Racial disparities in housing-related outcomes persist across the United States. However, the Fair Housing Act precludes federal funding from being used for housing programs that consider race when allocating assistance. Targeting benefits based on income, however, is permitted. As racial disparities in income persist, income-based targeting has the potential to increase both racial and socioeconomic parity in a community. That said, jurisdictions interested in explicitly addressing race-based disparities in access to homeownership financing can leverage Special Purpose Credit Programs (SPCP). For guidance on SPCPs, see the Consumer Financial Protection Bureau’s resources.

• Evaluate potential disparate impacts of new policies: More broadly, racial equity assessments can help local leaders evaluate proposed policy changes and identify the benefits and burdens they may place on different stakeholder groups. The Government Alliance on Race and Equity’s Racial Equity Toolkit can be used as a framework for such assessments.

• Public housing agencies: Public housing agencies administer federally-funded Housing Choice Voucher (HCV) programs at the local level and generally drive the development of mobility programs for HCV holders.

• Affordable housing developers: Many affordable housing developers offer client-facing services, in addition to their work developing new housing. These organizations may operate (or could successfully administer) housing education and counseling programs, downpayment assistance programs, rental assistance programs, among others.

• Private landlords: Rental assistance – including through the Housing Choice Voucher program – is typically paid to private landlords. By engaging landlords, public housing agencies and their partners can better understand and address misconceptions and concerns that landlords may have toward accepting rental assistance. Engagement may be particularly important when developing a mobility program if voucher holders will be searching for housing in areas where landlords may be unfamiliar with the HCV program.

• Clients: Clients can be a key source of information on the barriers low- and moderate-income households face to accessing private market housing and how those barriers may be addressed.

• Social services and other non-profit organizations: As jurisdictions begin setting their strategy for increasing access to private market housing, community-based organizations with strong connections to low-income households can serve as partners during community engagement efforts. Additionally, these organizations may be supporters of any push for policy changes that advance rental assistance, homeownership, fair housing, and similar programming. Key national nonprofit stakeholders include Enterprise Community Partners, LISC, and Housing Partnership Network.

• State and federal housing agencies: Federal programs, like LIHTC, HOME, and CDBG, can often be used to fund rental assistance, housing counseling, and other initiatives designed to increase access to private market housing. In addition to distributing funding from some federal programs, state housing finance agencies often offer additional state-level financing or grants to support these programs.

• Mortgage lenders: Mortgage lenders are important stakeholders when developing initiatives to increase homeownership opportunities. Ensuring lenders will provide financing on lower-cost units, which typically involve smaller and less lucrative loans, is a key consideration. In addition to traditional banks, CDFIs and credit unions may be strong partners in this space.

• Using data to assess local housing conditions: Housing needs assessments can provide local leaders with the data needed to identify appropriate solutions to increasing access to private market housing in their communities. For example, a needs assessment may provide homeownership rates over time. When disaggregated by race and ethnicity, age, income level, and other characteristics, this can be helpful in assessing where and for whom access to homeownership is most difficult. To access a high-level assessment of housing conditions in your county, see Local Housing Solutions’ Housing Needs Assessment resource.

• Simplify access to services: In many communities, housing programs may be administered by a constellation of different government and non-profit organizations. While a household may benefit from participating in multiple programs, accessing services across disconnected organizations can be difficult. As such, experts encourage jurisdictions to adopt a “no wrong door” approach to service delivery. This approach generally involves developing universal intake processes and conducting warm hand-offs when referring clients between agencies. When a regional, “no wrong door” approach is infeasible, individual organizations may consider smaller steps, like co-locating service delivery.

• Develop relationships with landlords: For rental assistance and voucher mobility programs, which rely on clients leasing private market rental units, developing stronger relationships with landlords can pay dividends. Outreach efforts to educate landlords on program requirements, for example, may increase their interest in leasing to program participants. For an example of effective landlord outreach, see the Creating Moves to Opportunity case study.

• Ensure housing quality without excessive barriers: Due to regulations from HUD, a housing unit must be inspected and meet defined housing quality standards (for details, see HUD NSPIRE) before it can be leased and payments can be issued through an HCV program. Inspections are an important means to ensuring housing is safe and healthy for occupants. However, federally required housing quality standards represent a major barrier to greater landlord participation in HCV programs. One approach that PHAs and other local allocating agencies can use to reduce this barrier is to integrate the federal quality standards into other local housing inspection and code enforcement standards. This approach can create a clearer set of expectations for housing quality and reduce the likelihood of redundant home inspections.

• Waitlist size and duration: As need often outstrips available resources, many rental assistance and homeownership-focused programs have waitlists. Tracking waitlist size and the average length of time prospective clients wait for services can help measure demand and demonstrate a need for greater resources.

• Duration from intake to lease or home purchase: Rental assistance, mobility, and homeownership-focused programs ultimately aim to get participants into housing. Tracking the average length of time from when participants begin an intake process to when they secure housing is an important measure of participant experience. The attrition rate can also be used to identify when participants may be encountering barriers that prevent them from succeeding in the program.

• Location of housing: Access to resources and opportunity for upward mobility varies across neighborhoods. Tracking where program participants ultimately rent or purchase their homes allows jurisdictions to understand how their housing programs contribute to or run counter to existing patterns of segregation. This is particularly relevant to mobility programs for voucher holders, which explicitly aim to increase the number of households living in high-opportunity neighborhoods. However, locational data may be of interest when analyzing fair housing, rental assistance, and homeownership-focused efforts as well.