GOAL 3:
Assist: Make Affordable Housing Fair and Accessible

The pandemic has come on the heels of persistent and growing challenges around housing affordability across the United States. Many households faced or were on the verge of housing insecurity before the pandemic. No response to the current crisis can assume that these challenges will disappear after the pandemic is controlled, necessitating a longer-term view focused on building resilience to similar future shocks. Because the housing and financial implications of the pandemic will likely be experienced for some time, Goal 3 encompasses actions to address pandemic-related as well as systemic housing challenges now to support low-income renters and historically underserved populations through the pandemic, during the economic recovery, and in preparation for future hardships.

During the pandemic, low-income households have experienced high levels of unemployment, income losses, and a dramatic increase in rental arrears and all other forms of debt (Reed et al., 2021). Despite these realities, housing affordability and inadequate funding and support for housing assistance for eligible households have been critical issues for decades (see, for example, CBPP, 2017; HUD et al., 2000; U.S. House of Representatives, 1987; Olsen, 2003; Reina and Landis, 2019).

Finding solutions to these intertwined and complex issues exacerbated by the pandemic will require a careful look at the legislation governing housing assistance and preventing discrimination, but also recognition of the disparate impact of the pandemic on BIPOC households, particularly Black and Hispanic renters, who are also more likely to be burdened by housing costs (Airgood-Obrycki et al., 2021). For these communities, a complex interaction among sociocultural, health, and economic impacts, including experiences with racism and discrimination, negatively influences housing stability, a phenomenon amplified by the pandemic (Community Legal Services of Philadelphia, 2020). It is incumbent upon the nation to advance solutions that address these disparities and create more equity in the U.S. housing system. Across all scenarios explored and critical to successfully reducing rental housing instability related to the COVID-19 crisis

and beyond, the Strategy Group found that actions to reduce low-income tenants’ rent burden, as well as to provide housing search support, credit counseling, and protection against discrimination, are robust needs for increasing fair access to affordable housing.

STRATEGY 3A: Increase the Number of Housing Choice Vouchers

Rationale: Based on the 2018 American Community Survey,¹ one in four renter households, including those receiving subsidies, were found to spend more than half of their pretax income on housing expenses (JCHS, 2020). As a result, housing assistance is often seen as one of the most effective social programs for lifting individuals and households out of financial strain. Federal housing voucher programs reduce the rental cost burden by limiting the proportion of income a household pays for rent and utilities. Housing Choice Vouchers (HCVs) that hold housing costs to no more than 30 percent of the tenant’s income can effectively prevent and end homelessness (Gubits et al., 2018; Wood et al., 2008), and households in places that prohibit source-of-income discrimination are more likely to use these vouchers (Cunningham et al., 2018; Tighe et al., 2017). Housing vouchers can also increase both the number and nature of the neighborhoods households can access (Collinson and Ganong, 2018; Reina et al., 2019), and can reduce the need for families to double up in shared housing and suffer other forms of housing instability (Gubits et al., 2018) that can exacerbate the spread of COVID-19. Moreover, housing vouchers have radiating benefits for other aspects of family well-being, including reductions in food insecurity, children’s school absenteeism, psychological distress, substance use, domestic violence, and family separation (Gubits et al., 2018).

While the number of renter households qualifying for financial assistance has increased over time, the number receiving any federal housing subsidy has remained essentially unchanged for the past 10 years (JCHS, 2020). As a result, a majority of eligible households do not receive housing assistance, with many studies showing that only roughly one in four such households receives rental subsidies (CBPP, 2017; Collinson et al., 2015; Reina and Landis, 2019). With respect to the current system, members of the Bipartisan Policy Center’s Housing Commission stated in 2013, “We do not believe our nation’s most impoverished families should be subject to a lottery system or spend years on a waiting list to obtain access to federal rental assistance” (Bipartisan Policy Center, 2013, p. 88), a particularly powerful statement today in the context of the pandemic. For the first time in almost 20 years, the 2021 COVID-19 relief and appropriations bill for HUD provided $43 million for new, incremental vouchers² for approximately 4,300 homeless individuals and families in addition to continued funding for the existing

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¹ The Strategy Group recognizes that available data from surveys may understate labor earnings and the receipt of cash and in-kind transfers (Meyer and Mittag, 2019). However, a large proportion of renters approved for rental assistance may not be able to use their vouchers for various reasons outlined in this section, which supports the need for housing assistance.

² New vouchers that are not replacements for other assisted housing.

vouchers that serve 2.3 million households³ (Couch, 2020; HUD, 2020a), opening up avenues for immediate relief and potential lasting solutions.

Action 3A-1: The U.S. Congress and HUD, in partnership with local public housing authorities as administrators, should consider increasing the number of HCVs during the pandemic emergency to guarantee that households with incomes below 50 percent of the area median that do not receive housing assistance from other sources are offered this benefit.

Action 3A-2: The U.S Congress and HUD, in partnership with local public housing authorities as administrators, should consider, once the pandemic has been controlled, increasing the number of HCVs permanently to guarantee that households with incomes below 50 percent of the area median are offered this benefit. One approach to long-term commitment would be to consider moving the funding needed for this purpose out of the annual appropriations budget, and instead including it in the mandatory federal budget.

STRATEGY 3B: Provide Housing Search Support for Households Eligible for Housing Vouchers

Rationale: Housing voucher programs can be difficult for both tenants and landlords to use. Landlords may choose not to accept housing vouchers because of the administrative burden and costs associated with waiting for inspections (Cunningham et al., 2018), and tenants who qualify for a voucher may not always have the ability to use it. A national study of voucher use rates in 2001 found that an average of 69 percent of such tenants (range 37–100 percent, depending on the location) successfully found leasing units across large metropolitan areas (Finkel and Buron, 2001), a rate lower than that reported in a previous study commissioned by HUD, published in 1993. A more recent national study focused on tenant protection vouchers found that on average, only 48 percent of households offered a voucher were able to use it (Reina and Winter, 2019).

The reasons for a large range of successful outcomes are varied. For example, households whose head was Black had greater difficulty using their vouchers (Reina and Winter, 2019), confirming previous reports (McKenna and Hills, 1982). Households with larger family size, with children (Finkel and Buron, 2001; Reina and Winter, 2019), or with

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³Transportation, Housing and Urban Development, and Related Agencies Appropriations Act of 2021, HR 7616, 116th Cong. (https://www.appropriations.senate.gov/imo/media/doc/Division%20L%20%20-%20THUD%20Statement%20FY211.pdf).

an elderly head often encountered similar difficulty (Finkel and Buron, 2001; Reina and Winter, 2019). Such discrimination constrains which neighborhoods people can access using their voucher, such that Black voucher households live in neighborhoods with significantly higher poverty rates relative to similar White voucher households (Reina, 2019).

In addition, these programs do not always provide additional support for tenants in finding housing that accepts vouchers, leaving tenants to find such housing themselves on the private market (Cunningham et al., 2018). Voucher households that receive counseling and housing-search support are better able to use their vouchers and to find housing in lower-poverty neighborhoods (Bergman et al., 2019). Such support also reduces differences in location outcomes based on household characteristics (Bergman et al., 2019). Local-area fair market rents allow vouchers to pay more in higher-rent areas and less in areas where rent is lower, and increase both the number and nature of the neighborhoods households can access (Collinson and Ganong, 2018; Reina et al., 2019).

Landlords are important partners in efforts to address the housing crisis, and increasing their willingness to participate in the voucher program will make more units available for renters with the subsidy. Landlord recruitment and retention programs include a combination of education, insurance, and financial incentives (Local Housing Solutions, n.d.). Public housing authorities can provide education to reduce the stigma of vouchers, training in how to navigate the program’s lease-up and screening requirements, and support for marketing (Local Housing Solutions, n.d.). Public housing authorities or states can provide “insurance” for renting to tenants perceived as higher risk by creating funds for security deposits and compensating landlords for damage to units or unexpected vacancies (Cunningham, 2016). Tax credits and other financial incentives could also increase landlords’ willingness to accept voucher holders (Cunningham, 2016).

Action 3B-1: In addition to increasing the number of HCVs as proposed under Action 3A-2, the U.S. Congress should consider expanding the HCV program to include robust housing counseling for both tenants and landlords aimed at expanding the acceptance of housing vouchers, as well as case management services to participants who desire them.

Action 3B-2: HUD, state housing agencies, property owners, and landlord associations should implement HUD’s Small Area Fair Market Rents to enhance the use of HCVs throughout metropolitan areas, as opposed to limiting them to lower-income, often segregated, communities.

Action 3B-3: Public housing authorities and landlord associations should implement landlord recruitment and retention strategies to increase the number of housing units that accept HCVs by educating landlords on the program, reducing administrative burdens, and/or increasing financial incentives to participate in the program.

STRATEGY 3C: Reduce Discrimination to Protect Tenants

Rationale: The Federal Fair Housing Act prohibits discrimination in decisions about whether to lease to particular tenants based on race, color, national origin, sex, religion, disability, or familial status, but not source of income (Cunningham et al., 2018). Some states go further to include source of income—the use of HCVs or other income subsidies to pay rent—in their fair housing laws, so that voucher tenants have an increased lease-up success and better access to housing choices in a variety of areas (Bell et al., 2018). Federal law, however, does not prohibit landlords from discriminating against voucher holders, and only one in three voucher households are protected by state fair housing laws (Bell et al., 2018). The Equal Credit Opportunity Act (ECOA)⁴ provides potential borrowers with many protections, including protection against discrimination on the basis of source of income in “credit” transactions, defined as “defer[red] payment of debt,” but a rental contract does not constitute a credit agreement under this definition (Prestes, 2000). Thus, renters can be subjected to such discrimination, whereas potential homebuyers applying for a mortgage are granted this protection. The ECOA also gives potential borrowers the right to know the specific reason why their credit application was rejected and the source of that information. But potential renters are covered only with respect to provisions under the Fair Credit Reporting Act, which has limited reporting requirements. The Fair Housing Act and the ECOA could be amended to provide both mortgage borrowers and rental applicants the same protections against source-of-income discrimination, allowing potential tenants to invoke protections under the Fair Housing Act⁵ that have largely been unenforceable because of lack of proof (Prestes, 2000).

Discrimination in the decision to evict a tenant is equally important. For example, in 2018–2019, prior to the COVID-19 pandemic, Black and Hispanic households in Philadelphia were nearly three times and twice as likely, respectively, than White households to face eviction (Goldstein et al., 2021). In gentrifying areas, this disparity is even greater, leading to further declines in racial, ethnic, and cultural diversity in these neighborhoods (Goldstein et al., 2021). Studies in other cities have found that the proportion of eviction filings that ultimately result in forced removal is relatively small; however, routine eviction filings can be part of landlords’ rent collection strategy (McCabe and Rosen, 2020; Raymond et al., 2018). In some localities, the laws are such that it is cheaper and easier for landlords to file for eviction to pressure tenants to pay even small amounts of back rent than to use more traditional methods, such as collections. Given that most eviction filings are due to nonpayment of rent, lower-income tenants are most susceptible to such eviction threats⁶ (Desmond, 2012; Garboden and Rosen, 2019; McCabe and Rosen, 2020; Rosen, 2020). Even if they do not result in forced removal,

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⁴ Equal Credit Opportunity Act of 1974, 15 U.S.C. §§ 1691 et seq.

⁵ Fair Housing Act of 1968, 42 U.S.C. §§ 3601 et seq.

⁶ Note that the ratio of filings to eviction judgments varies widely across the country, and citations for local studies are therefore not generalizable. The actions proposed under Goal 2 would provide a national count.

eviction filings alone can significantly harm tenants because they can mar tenants’ credit or rental records, prevent tenants from renting elsewhere or from accessing public assistance, and create financial distress (McCabe and Rosen, 2020; Raymond et al., 2018).

Current fair housing laws do not cover discrimination in evictions per se; however, such claims can be brought under the rubric of disparate impact under certain conditions. The 2013 HUD “disparate impact” implementation established a three-part burden-shifting test to determine whether a housing practice that results in discrimination violates the Fair Housing Act (HUD, 2013). In 2020 HUD initiated a new burden-shifting framework for disparate impact claims, one that generally reduces the burden on parties defending against such claims and increases the burden on plaintiffs. Following a preliminary injunction issued by the U.S. District Court for the District of Massachusetts,⁷ the secretary of housing and urban development submitted a new draft rule for review with the Office of Management and Budget on April 12, 2021, which would reinstate the 2013 rule.⁸

Amendment of the fair housing laws is also needed to expressly cite landlords’ illegal discriminatory actions in evictions. As discussed under Strategy 2A, the establishment of a comprehensive, timely, and detailed eviction database would support the crafting of effective legislation allowing for the prosecution of landlords for unlawful evictions; unfair, deceptive, or abusive acts and practices (UDAAP); and discriminatory and predatory actions using the evictions process to harm tenants. Moreover, as landlords are overwhelmingly more likely than tenants to be represented by legal counsel, tenants are greatly disadvantaged in presenting their cases in the court system without support for legal assistance and local enforcement of protections (Stout Risius Ross, LLC, 2020).

Action 3C-1: The U.S. Congress should consider amending the Fair Housing Act to include discrimination based on source of income as a prohibited factor in rental screening, and the ECOA to include rental agreements as credit transactions.

Action 3C-2: The U.S Congress should consider amending the federal fair housing laws to create a path to prosecution for landlords who abuse the eviction process based on source of income and violate these laws, focusing on data integrity for eviction court records and prevention measures. This and other predatory practices should be monitored for serial patterns, investigated, and prosecuted as tenant abuse under the Unfair, Deceptive, and Abusive Practices law or fair housing or fair lending laws as applicable.

Action 3C-3: The U.S Congress should consider increasing internal resources available to enforce federal fair housing laws that support localities in providing legal assistance and protection for tenants.

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⁷Masschusetts Fair Housing Center v. HUD: No. 3:20-cv11765 (D. Mass.). Memorandum and Order Regarding Plaintiffs’ Motion for Preliminary Injunction Under 5 U.S.C. § 705 To Postpone The Effective Date of HUD’s Unlawful New Rule, October 25, 2020 (https://www.clearinghouse.net/chDocs/public/FH-MA-0007-0002.pdf).

⁸ See https://www.reginfo.gov/public/do/eoReviewSearch, Department of Housing and Urban Development, “Reinstatement of HUD’s Discriminatory Effects Standard (FR-6251)” submitted April 12, 2021.

STRATEGY 3D: Establish a Program to Provide Credit Counseling for Tenants

Rationale: In addition to the threat of immediate loss of housing, evictions and delinquent rent can impact a tenant’s long-term opportunities to find future housing (Leung et al., 2020). The impact of the COVID-19 pandemic on employment and the economy put millions of somewhat resilient households in an unexpectedly precarious position. Credit counseling can help renters in arrears or at risk of becoming delinquent on their rent or utilities to build their financial strength and improve their credit history, thus ameliorating long-term housing vulnerabilities (Cities for Financial Empowerment Fund, 2017).

Action 3D-1: The U.S. Congress and HUD should consider establishing a program under HUD to provide free credit counseling for renters in housing or utility arrears who apply for rental assistance to help them avoid the lasting effects of eviction during the unprecedented period of the pandemic and thereafter.

Action 3D-2: HUD, USDOL, HHS, and USDA, in coordination with credit counseling agencies and state and local agencies that administer low-income assistance programs, should integrate the offering of free credit counseling services to those newly unemployed with the process of applying for unemployment insurance benefits or for any low-income assistance program to mitigate the risk of falling into housing or utility arrearages. This action could be taken in conjunction with Action 1B-1, with the service coordinator program identified in Action 3B-1, or separately.

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