The Impact of Tenant-Based Section 8 Housing Voucher Concentration on the Real Estate Market in the City of Philadelphia

Author: Kevin Gillen

Dissertation School: University of Pennsylvania

Abstract:

This study will utilize existing datasets to advance the knowledge about the effects of federal housing policy toward the spatial deconcentration of poverty on real estate markets, as embodied in the Section 8 housing voucher program, and contribute to federal and city efforts to implement a positive cost-effective program that improves the housing outcomes of low-income households. This mission is also consistent with the University of Pennsylvania's continued and ongoing effort to support the revitalization of Philadelphia neighborhoods.

Current housing policies continue to emphasize the use of housing vouchers as a tool to address the housing needs of low-income households. In response to the dramatic expansion of the tenant-based Section 8 and voucher programs in recent years, neighborhood groups, local elected officials, and housing planners have expressed concern about the impact that these programs are having on the social and real estate market dynamics of "urban core" neighborhoods. A number of concerns have been raised in Philadelphia and elsewhere that concentrations of Section 8 units and certificates and housing vouchers may be having a negative impact on the long-term viability of urban neighborhoods. Specific concerns which this report will address include:

• That the recent expansion of the Section 8 program may adversely affect the values of surrounding properties.
• That the cost-effectiveness of the Section 8 program may be hindered by allocative inefficiencies and inequities due to the incentives faced by program participants.
• That the geographic concentration of Section 8 households may negatively impact neighborhood turnover and the housing tenure choices of nearby households.

To address the concerns of Philadelphia residents and continue to promote the effective use of housing vouchers in urban areas, there is a need to assess the impact that the program has had in those areas that have significant concentrations of tenant-based certificates and vouchers.

The research will apply spatial analysis tools to correlate data on more than 30,000 tenant-based Section 8 certificates and vouchers administered by the Philadelphia Housing Authority (PHA) to a citywide database of more than 300,000 private housing market property transactions. The analyses will focus on the past 20 years of activity in Philadelphia, and will identify and quantify the relationship between concentrations of tenant-based certificates and vouchers and the current value of privately owned real estate. The analyses will focus on determining how changes in property values, home sales volume, and tenure choice during the 20-year period of study may be correlated with and caused by, the density of, and distance to, tenant-based certificate and voucher units. Finally, the research will test for distributive inefficiencies and inequities in the housing outcomes of the program.

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