HUD Proposed Rule Change Will Help Families Leave High-Poverty Neighborhoods

This week’s Crain’s Chicago Business featured a thoughtful story on housing mobility, quoting BPI’s own Alex Polikoff.  The story focuses on a rule change currently under consideration by the federal Department of Housing and Urban Development that will help more families move out of high-poverty neighborhoods.

Evidence-based research overwhelmingly demonstrates that when low-income families of color move from segregated high-poverty neighborhoods to integrated lower-poverty communities, their life prospects are significantly improved. Beyond shelter, benefits include higher-performing schools, better health outcomes, increased job opportunities, and greater safety.

But current HUD rules governing how fair market rent is calculated have made it difficult for families to use the federal Housing Choice Voucher program to move to neighborhoods of greater opportunity.  This is because fair market rent—which is used to determine the maximum subsidy HUD provides—is currently determined based on rental rates across an entire metropolitan region.  When there is wide variance in rental markets across a region (as is the case in the Chicago region), the rule has the effect of making it unaffordable for voucher holders to rent apartments in wealthier neighborhoods.

The new proposed rule will allow fair market rents to be calculated by zip code instead of regionally.  This in turn means that low-income families will have “greater choice to move into higher opportunity neighborhoods with better housing, better schools and higher-paying jobs,” said HUD Secretary Julián Castro. BPI strongly supports HUD’s small area fair market rent proposed rule.

HUD is accepting public comment on the rule change through August 15.