Successful Lease-Up in a Randomized Housing Voucher Experiment

Abstract

This paper analyzes successful lease-up in the Moving to Opportunity for Fair Housing (MTO) random-assignment demonstration, which is designed to measure the impacts of helping very low-income families with children to move from public and assisted housing in high-poverty inner-city neighborhoods to middle-class neighborhoods. Lease-up - actually using the voucher offer - is an important experimental outcome, and has more general policy significance. Vouchers are the least costly mechanism of housing assistance in the U. S., but some critics assert that they do not work in certain markets or for certain households. The government could solve the severe housing problems of more families more quickly if policy makers knew how to raise lease-up rates.

A simple economic model, assisted by rich attitudinal data, captures much of the variation in lease-up among demonstration families. Indicators of the net benefit of moving from the current unit to another and the probability of acceptance by an owner are correlated with lease-up, as are some search-cost indicators. I find limited evidence of heterogeneity between those leasing up under the two treatments; most indicators affect lease-up in the same way in both groups.

Counseling services are found to affect the lease-up rate, while neighborhood restrictions, which program critics often suggest, had large negative effects on program participation in some sites. In loose central-city rental markets the effect of restriction overwhelmed the effect of counseling, whatever the service intensity, while in tight markets, effective counseling programs apparently compensated for the added barrier.

Keywords: Mobility, housing assistance, take-up, participation, voucher, spatial mismatch, lease-up, social experiment, random assignment, public housing, housing counseling, poverty

JEL Classification: C99, I38, R29