The Effect of Relaxing Local Housing Market Regulations on the Number of Recipients of Federal Rental Housing Assistance Programs

21 Pages Posted: 20 Aug 2021

See all articles by Kevin Corinth

Kevin Corinth

University of Chicago

Amelia Irvine

Bates White Economic Consulting

Date Written: August 18, 2021

Abstract

The majority of U.S. households that qualify for federal rental housing assistance do not receive it. In the absence of an entitlement to housing assistance for all who qualify, an underexplored cause of the shortfall is that higher rents in some areas driven by supply-constraining local regulations drive up program costs, leaving fewer funds available to serve additional families. In this paper, we first show that because the federal government bears the full cost of any incremental increase in market rents in assisted housing units, stringent local regulations can substantially increase the federal cost of covering a fixed number of families. We then simulate the effect of deregulation that reduces home prices to the cost of producing a home in 11 substantially supply-constrained metropolitan areas, which we translate into reduced market rents and ultimately cost savings for federal rental housing assistance programs. We estimate that post-deregulation, the Housing Choice Voucher program and Section 8 Project-based assistance program could save a combined $3.9 billion, which could serve 13 percent (424,000) more families.

Keywords: Housing assistance, Regulation, Land use, Housing Choice Vouchers, Project-based Section 8

Suggested Citation

Corinth, Kevin and Irvine, Amelia, The Effect of Relaxing Local Housing Market Regulations on the Number of Recipients of Federal Rental Housing Assistance Programs (August 18, 2021). Available at SSRN: https://ssrn.com/abstract=3907645 or http://dx.doi.org/10.2139/ssrn.3907645

Kevin Corinth (Contact Author)

University of Chicago ( email )

1155 East 60th Street
Chicago, IL 60637
United States

Amelia Irvine

Bates White Economic Consulting ( email )

1300 Eye Street NW
Suite 600
Washington, DC 20005
United States

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