The Effect of Fundamental Housing Policy Reforms on Program Participation, Edgar O. Olsen, University of Virginia – Department of Economics. January 14, 2014

“This paper estimates the effects of alternative reforms of the current system of low-income housing assistance on the number of people of various types who would receive assistance. The reforms are designed to eliminate the system’s substantial inefficiencies, inequities, and bias against homeownership. All would replace HUD’s largest low-income housing programs with alternative tenure-neutral housing voucher programs that serve all eligible families that apply for assistance. Most cost less than the current system. The estimated effects on program participation are long-run effects after the transition to the new system has been completed. The estimates of participation in the reformed voucher programs are based primarily on the five-percent household sample from the 2000 Decennial Census and participation experience in the only similar housing assistance programs that have been operated in the United States. HUD’s administrative records provide data on current recipients of low-income housing assistance. The paper explores the sensitivity of the results to the equations used to predict participation in the reformed voucher programs. The results indicate that even the reformed program that reduces public expenditure by more than 10 percent would serve 75 percent more people in total and many more in families of each type – white, black, and Hispanic; elderly and nonelderly; families living in metropolitan and nonmetropolitan areas; small, medium, and large families; and families in the first two real income deciles. The most underserved types experience the largest increases.”