UCLA Housing Voice

Ep 74: Racial (and Spatial) Disparities in Rental Assistance with Andrew Fenelon

• UCLA Lewis Center for Regional Policy Studies • Season 3 • Episode 16

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Shane Phillips  0:05  
Hello, this is the UCLA Housing Voice podcast, and I'm your host, Shane Phillips. Our guest this week is Andrew Fenelon to share his research on racial disparities in the receipt of rent assistance in the US, and how generations of homeownership incentives and subsidies, primarily benefiting white households, helped establish and sustains those disparities — and how this two-tiered housing support policy hides the more than 100 billion dollars spent annually on those homeowner subsidies behind a complex system of tax expenditures, while shining a light on and problematizing the much smaller amounts spent on rent assistance, and the black households who receive a disproportionate share of it. I can be quick here because I think the title of Andrews paper just about says it all race, housing policy, and the demographic and spatial structure of modern housing programs, who receives rental assistance and where do they live? If you're looking for a primer on the main us rent assistance programs and their beneficiaries, and how race racism and a century of federal and sometimes state and local housing policy have shaped both than this episode is a must listen.

The Housing Voice podcast is a production of the UCLA Lewis Center for Regional Policy Studies, with production support from Claudia Bustamante, Jason Sutedja, and Gavin Carlson. As always, you can reach me at shanephillips@ucla.edu, and you can support the show by giving us a positive review on Apple Podcasts and a five star review there and on Spotify. Now let's get to our conversation with Andrew Fenelon.

Andrew Fenelon is an associate professor at the University of Minnesota Twin Cities School of Public Health, and he's here with us today to talk about his work on the racial dynamics of who receives rental assistance in the US. It is a subject familiar to many housing scholars, but one that I do not think is very well understood outside of academia, and there's an interesting spin on this one, so we're excited to talk about it on the show. Andrew, thanks for joining us, and welcome to the Housing Voice podcast.

Andrew Fenelon  2:23  
Thank you so much for having me.

Shane Phillips  2:24  
Mike, are you with us?

Michael Lens  2:26  
I'm so here. I'm so present. I'm so happy. I'm so Minnesota. Let's go.

Shane Phillips  2:32  
That is my co host Mike Lens. Hey, Mike. As always, we start things off with the tour. Andrew, what is the city or neighborhood that you know well that you'd like to guide us through? Where are we headed?

Andrew Fenelon  2:42  
Yeah, so I know a lot of cities really well. I grew up in Santa Barbara, California. But I've also lived in Philly, Providence, DC, and now I live in Minneapolis. And so this is actually a really hard one to pick. But I'm such a booster of the Twin Cities that I think I have to pick my current home of Minneapolis, Minnesota. I've been here just about a year, but I kind of feel like I know the place really well because I I've been obsessed with Minneapolis for like a decade. I came here in 2015 knowing really nothing about the city. But I was blown away by how much was here and yet how convenient it was to access. And I was here in June.

Michael Lens  3:18  
June is key. 

Andrew Fenelon  3:20  
Yes, yeah. June, June is key, as I have learned. But, so I came back to DC after that trip, and I told my spouse, Heather, we got to move to Minneapolis. And she kind of looked at me with this okay, visit in January, and then come back and talk to me. But by some miracle, we eventually made it work. Now, this might be something that a lot of people already know. But I want to emphasize that the city has incredible bike infrastructure, it's probably the best in the US. Maybe in North America, my son's only six, and he's able to ride his bike, a lot of the places that we go in in the city. And so it really increases our mobility. And I encourage everyone to look up the new Bryant Avenue bike path, check it out. I promise it'll make you want to move to Minneapolis if cycling is your thing. City also is full of lakes quite literally right in the city. And I know that Minneapolis advertises this it builds itself as a city of lakes. But I still feel like they're kind of undersold as an urban amenity. There's this really incredible feeling. You get sort of biking around the lakes, you see kids swimming, you see sailboats, and canoes, and then skyscrapers rising on the other side. It's really unusual. And despite all these things, there is a housing angle, right that somehow it's still affordable. It's the cost of living is still somehow reasonable. And a lot of people will say that winter is deter people from moving here. Maybe they're right. But I honestly think that the Twin Cities have legitimately done pretty well on the housing supply angle, and not just in in Minneapolis and St. Paul, but also kind of regionwide there's been a good mix. 

Shane Phillips  4:44  
I will say just kind of following various reforms that have happened there and seeing some of the projects being built. Also, a lot of the buildings I see getting constructed are just kind of nice looking. Certainly compared to what we're building here. I can also say as someone who is originally from Washington state where we have a fair number of lakes, but has lived in Los Angeles for 10 years, I can really appreciate coming from California and going somewhere and appreciating the lakes because we have a lot going on for us here, It's a great place to live. You know, the mountains and the ocean and everything. But one thing we really do not have in Los Angeles, other than the Lakers, is lakes.

Andrew Fenelon  5:24  
Yeah, that's as close as LA gets to lakes. And it's different from the ocean. I mean, the feeling of a lake is different. 

Michael Lens  5:33  
And rivers as well. So obviously, you have the Mississippi and the Minnesota Rivers, but I was just on the north shore of Lake Superior last week, and I've never really spent much time there at all the farthest have really been as Duluth before. And the amount of times we could stop and hit a waterfall like or some like rushing river, in part because the rain has been incredible all across Minnesota this year. But you know that that sound of rushing water that's very different from the sound of an ocean is not something you get in Southern California whatsoever. And you have to travel, you know, up to Yosemite, the Sierra Nevada has to get anything like that around here, which is not really around here. So that was just really kind of a sonic experience. The other Sonic experience was me constantly in your gear, mosquito time. Wow, that was nuts. And then and then you go back to the Twin Cities, it's like there's no mosquitoes here. Uh-uh. They're all up north, eh.

Andrew Fenelon  6:40  
So if water and mosquitoes are your thing moved to Minnesota.

Shane Phillips  6:44  
So the article we're discussing with Andrew was published in the Journal of Urban Affairs and the title is "Race, housing policy, and the demographic and spatial structure of modern housing programs: Who receives rental assistance and where do they live?" It looks at three big rental assistance programs in the US, which are public housing, Housing Choice vouchers, and privately owned assisted housing, which together provide housing assistance for the good depends on how we're counting here. But let's say around 5 million households in 2023. More specifically, the study compares the household and neighborhood characteristics of black and white families who receive assistance from one of these three programs, finding, for example, that black families live in considerably more disadvantaged neighborhoods than their white counterparts, despite having similar levels of household level disadvantage, and that this disparity is much larger for residents of public housing than for voucher recipients. We've known for a very long time that black households receive rent assistance at higher rates than white households. But something that grabbed our attention about this article is its discussion about how the racial disparities in homeownership assistance play a role in the disparities in these rent assistance programs. Andrew considers how homeowner subsidies that historically excluded black households may explain some of why white families receive rent assistance at lower rates, and why those who do receive it tend to have much lower incomes within their own race compared to black families who receive rent assistance. A very telling statistic to me comes at the very end of the article, black households account for 20 to 25% of participants in Medicaid in SNAP and WIC, which are the two big food assistance programs and are 19% of recipients of the earned income tax credit. But they make up about 45% of rent assistance recipients. It is hard to escape the conclusion that black households much higher participation in rent assistance programs is about more than just generally higher rates of socio economic disadvantage, and that are ongoing challenges with racial segregation in the housing market and unequal access to homeownership subsidies and incentives also play a role. So that's what we're going to be discussing today. Now I will turn it back to you, Andrew. To start, can you give us a quick overview of these three big rental assistance programs or categories public housing, housing, choice vouchers and privately assisted rental housing, I do want to refer listeners to Episode 17 with Rob Collinson for more background on housing choice vouchers, and Episode 37, with Akira Drake Rodriguez for more on US public housing. But we still just want to make sure everyone has a baseline understanding for this episode. And maybe we can also spend a bit more time on privately owned assisted housing since it's not something we've really discussed on the show before, as well as project based section eight and how that fits into this. How do these programs work? Broadly speaking, how many people do they help? And how much do we spend on them each year?

Andrew Fenelon  9:52  
Yeah, so the three programs that you refer to and that are in the article, public housing, housing choice, vouchers and private assisted housing serve about 9 million people a year. And when I was looking this up, I kind of did a double take because this is lower than the figure that I had been using for a while. And so I looked it up. And it's actually a decline of about a million people served in the past 15 years or so. Wow. So the these programs cost the federal government, the US Department of Housing and Urban Development about $55 billion a year. And they differ kind of in how many people they serve, as well as in the form and structure of the assistance. And I of course, encourage people to go and listen to those other episodes for more detail. But just to kind of give an idea of what we're working with public housing is maybe the most well known program, and it refers to assistance that's provided through publicly owned and operated developments that serves about 1.6 million people every year. And that's the program that's actually seeing the largest decline over time. The Housing Choice Voucher Program is a tenant based subsidy. So it provides families with a subsidy that they then use to rent market rate units, and that's the largest program, and it serves about 5 million people in two and a half million households. The third program is not a singular program. It's it's an aggregation of several programs. So I call it privately owned assisted housing, HUD often refers to this set of programs as multifamily housing programs, and they involve several different programs that that kind of have the same underlying structure, which is private development owners receive a subsidy from HUD in order to keep a certain number of units at affordable rates for assisted families. The largest of these is known as Project Based section eight. And this is confusing, because we shouldn't confuse it with Section eight, which is sometimes use as a shorthand for the housing voucher program. But it refers to housing developments where a certain number of units are held at low market rates for assisted families. And this differs from housing vouchers and tenant based assistance, because the subsidy is at the level of the development itself. So if a family decides to move from one of these project based section eight units, they can't take their subsidy with them like they could if they had a voucher. And so that's sometimes why the sets of programs are kind of combined with public housing to form this overall project based assistance category. Since there there is some level of development that subsidies provide at the development.

Shane Phillips  12:15  
That makes sense, just the difference being that the public housing is owned slash operated by the public sector. Right, exactly. So let's do something a little similar. For homeownership programs, you make the argument that homeownership programs drew away potential support for renter assistance programs as they were kind of built up. And this is primarily threw away white residents, basically by helping them become homeowners who didn't have to worry any longer about affording rent, but then not extending that same support to most black residents, especially, you know, in the first two thirds of the 20th century. What is some of that history? And what programs or subsidies and maybe also exclusionary laws or practices do you want to emphasize on the homeownership side?

Andrew Fenelon  12:59  
Yeah, so I think that this is a really, really important point. And it was actually kind of one of the motivations for this paper, just the recognition that the US treats housing differently than a lot of services. It has kind of a distinct approach with two mostly separate tiers in terms of housing assistance. But there's homeownership support, on the one hand, that's disproportionately benefiting white families, and then rental assistance programs that are disproportionately serving black families. And so I think this is a really important and maybe the primary example of structural racism that these these two tiers began during the New Deal. And in the mid 20th century, white families were the overwhelming beneficiaries of federally backed loans from the Federal Housing Administration, and homeownership support through the GI Bill. And it's well known that black families were largely excluded from these benefits either because racial covenants prohibited selling black families houses in many neighborhoods are because FHA refused to back mortgages in largely black neighborhoods through the redlining. And on top of that, there were just enormous federal investments in other aspects of suburban living that largely benefited white suburban commuters like freeway construction. And so this is often intentionally at the expense of black neighborhoods that were destroyed to make way for the freeways. One of the points I make in the paper is that this is really insidious, because it's not only meant to concentrate the benefits of the suburban housing boom to white families, but it also evaporates a large potential constituency that once once lived in public housing once received federal rental assistance, and that's middle income and lower middle income white families. And so I argued that because a lot of these families were able to take advantage of homeowners support programs, that they were less likely to depend on rental assistance and thus reduced potential political support for improvements in expansions to rental assistance programs. And that's kind of then where we find ourselves today in terms of who receives rental assistance.

Shane Phillips  14:57  
And I know we've talked about this on the show before, but I think it's worth again comparing what we spend on homeowner programs to what we spend on rent assistance programs. So maybe we can just put aside for the moment the indirect cost of the government guaranteeing 10s of millions of mortgages, the cost of which is really only apparent at times like the global financial crisis in the late aughts. Instead, we can just talk about the big annual expenditures. So in 2023, HUD spent around $35 billion on public housing and these various rental housing programs combined. How much do we spend on homeownership assistance programs? 

Andrew Fenelon  15:37  
Yeah, so the the 55 billion a year might sound like a lot, but we actually spend a ton more on homeownership support than that. So the government actually spends a ton of money to protect people's home assets. And this includes well known things like the mortgage interest deduction, which alone used to account for more than total spending on rental assistance before the tax cuts and Jobs Act raised the standard deduction, we also spend about $50 billion a year on capital gains exclusion. So when people sell their their homes and they make a profit, they're able to not pay taxes on some of that growth up to a certain amount. And then we also allow homeowners to avoid taxes on imputed rent. And then that likely costs the government in the range of 120 to $130 billion annually. And so even setting aside what we spent in the mid 20th century, we still do spend a significant amount more on homeownership support than rental assistance. And so this two tiered system is still sort of paying off. 

Shane Phillips  16:34  
So before we move on, I want to make sure we underline the connection that you're drawing here and that you really, you know, emphasizing in the article, we have homeownership programs that are disproportionately benefited white households, and contributed to a 30 percentage point gap in the homeownership rate between white and black households that has been around for at least 50 years, it just really hasn't changed the share of black households who rent is therefore much larger than it is for whites, and so they receive a disproportionate share of rental assistance. Probably not coincidentally, we also tend to privilege homeowners in various ways in this country, economically and socially. Homeowner subsidies that predominantly benefit white households are generally structured as tax expenditures, so they're somewhat hidden in our budget. They take the form of foregone revenues rather than direct expenses. Whereas rent assistance programs disproportionately benefit black households, and are much more visible as direct expenditures, and are more likely to be viewed in a negative light, as say, welfare or worse, even as a handout. Is there anything you want to add to further put this all together for us?

Andrew Fenelon  17:45  
I do think that this is a point worth emphasizing that we we don't just have the two tiers where we spend on homeownership and on rental assistance, that the two tiers operate in separate ways, right. So one is hidden in the tax code and kind of just appears like the natural course of things. It's not something that needs to be constantly justified. And then the other requires annual spending. It appears like a welfare assistance program, and it's constantly on the chopping block needed to be justified. And I do actually do want to give credit to Michael Boudreau, my my collaborator in front of University of Maryland. He's the one who kind of clued me into this this inequality. And one of the implications of this right is it's very easy to quantify how much we spend on rental assistance programs, right that $55 billion a year comes right from HUDs budget, but actually quantifying how much we spend every year on homeownership assistance is super hard, because it comes in a lot of different areas through the tax code, through indirect expenditures on things like transportation on public investments. And so it just means that it's much harder to challenge if one wanted to. That makes sense.

Shane Phillips  18:49  
So let's introduce the listeners to some of the differing circumstances and participation rates of black and white rent assistance recipients, which is really the focus of your article. And then we can come back to how this all relates to housing policies a bit more again later. First, though, tell us a little about the data you use for this analysis. We don't usually spend much time on data and methodology in these interviews. But in this case, it seems like you were able to get a pretty detailed look at rent assistance participants. And I know from experience that probably came with some challenges. So tell us if there's anything we should know about that and a bit about the sample itself, because you weren't looking at the entire population, right? Just families with children in the household? 

Andrew Fenelon  19:32  
Yeah. So, getting detailed data on rental assistance participants seems like something that should be really easy. It seems like we should just be able to look up on on the internet what what the characteristics of this population is, but it's actually pretty challenging. And so here I'm using a relatively new data set that came out in about 2015. And it links rental assistance participation data from HUD to a national health survey called the National Health Interview Survey, which is next Representative interviews Around 100,000 people a year. And the linkage of between these two data systems means that we can get information on individuals when they're entering and exiting rental assistance programs, and then a lot of their characteristics as well as where they live. And so in this study, I use it to describe adults who are in families with children receiving rental assistance. And this is just to give a sense of the sort of the target population of a lot of rental assistance programs, which is families with children. But in other work, I've used these data to look at the impacts of rental assistance on health and well being I'm neighborhood mobility. Yeah. And that's sort of your background, right, the public health side of things, is there anything? This wasn't a prepared question, but anything interesting you have been doing in that domain or anything recently published, you want to share you think might be of interest to our listeners? One interesting thing to come out of that. So I've done a fair amount of work over the past few years looking at the effects of receiving rental assistance on health and well being and using these data then to compare different housing programs. And to my surprise, and I think I still have difficulty figuring out how to explain it, we see the most consistent health benefits for people in public housing, which is not what I would have expected coming to this given our general housing policy orientation towards vouchers. I mean, it does maybe produce some lessons for what we should take away from studies of rental assistance.

Michael Lens  21:24  
I think that is a bit surprising. I mean, most of the neighborhood characteristics at least, of public housing versus housing voucher or other subsidized households, other poor renters. Most of the time, when we study this, the neighborhood characteristics are clearly less ideal for public housing, and the connections between neighborhood and health are pretty well studied and well known. I do think that the timing might matter, like the last 2025 years, and longer of public housing demolition certainly might relate to some of this where the public housing stock that was most likely to negatively affect your health has probably largely been demolished. And then we demolished some stuff that wasn't bad for your health to probably we, my argument would be that we overshot our demolition hammer or overused it. But you know, there is a, I would think a high degree of variability in the housing stock of where people using vouchers live and and some of that stock, even with the fact that we do is annual inspections of those properties, could be pretty bad. But I'm just holding hypotheses.

Andrew Fenelon  22:35  
That is a very reasonable point. And so one of the most recent papers to come out of of some of this work actually looks at kids lead exposure across programs. And that's where you find that kids in public housing actually have the biggest benefit in terms of lead exposure reduction, compared to vouchers, and part of that may be the children in families receiving vouchers, or just living in a really wide variety of types of places where it is it is tough to keep tabs on what landlords are doing to maintain properties.

Shane Phillips  23:05  
So for the actual results, again, you compared white and black rent assistance recipients separately for each of the three sets of programs, public housing, housing choice vouchers, and private assisted rental housing. And for all of the programs grouped together. at the household level, you found, for example, that black family rent assistance recipients were more likely than whites to be a female led household, and black recipients were more likely to be currently employed. What else is worth highlighting among these household level findings?

Andrew Fenelon  23:37  
A really important thing to notice from the household level characteristics is that we don't actually see the kind of broader nationwide black white economic inequality mirrored within the rental assistance programs that black families who receive rental assistance don't actually experience higher disadvantage, economic disadvantage than white families. And so in fact, you could make the argument from from some of this data that white families are actually more disadvantaged. And that means that we're really seeing an exceptionally disadvantaged subset of white families in rental assistance programs, that's less true for black families.

Shane Phillips  24:11  
A question I had, which the data probably answers, and I just did not look closely enough. But something you point out is that I don't know if it's the median household, but among white rent assistance recipients than the average or median household, is it the ninth percentile for income among white households, and for black households, it's somewhere on the 22nd percentile, so quite a bit higher, but still low. So within race, these, you know, the white households are worse off. But in terms of like, let's just say income, is the ninth percentile for these white households about the same as the 22nd percentile for black households, or is it quite a bit lower?

Andrew Fenelon  24:50  
Yeah, that's a good question. So there weren't significant differences in the kind of income to poverty ratio distribution of white and black how So, in, in rental assistance, I mean, you, you could maybe make kind of an argument that white families were more likely to be below the poverty line. But the differences weren't didn't totally come out. So the difference in percentile that you're talking about kind of reflects, like overall differences instead of kind of nationwide economic circumstances. Right, right there, we're seeing a more disadvantaged subset for white people. Well,

Shane Phillips  25:24  
let's move on to neighborhood disparities, because I think this is where we see bigger differences between the programs. But I do think it's understanding that the household level disadvantages similar informs the neighborhood level results, we might expect that white and black households who receive rent assistance vouchers would end up living in similar neighborhoods, because they have similar economic characteristics. But that's not what we see. You say, quote, rental assistance programs appear to be only a housing option of the last resort for the most disadvantaged white families, though these high levels of economic disadvantage do not translate into highly disadvantaged neighborhoods for white families receiving assistance from any housing program. Can you elaborate on that and also share with us some of the other important differences you see in the data at the neighborhood level? 

Andrew Fenelon  26:14  
Yeah, so the household level set up is important because it it might change our expectations for for neighborhood outcomes, right. So we know that that there are huge differences in neighborhoods for black and white families nationwide. But maybe that's different when we're only looking at the most disadvantaged subset of the population. But what we actually see is kind of a pattern similar to that in the broader society of racial inequality in neighborhoods, black families in every housing program, public housing, housing choice, vouchers, privately owned assisted housing, are living in neighborhoods with lower median incomes and higher poverty rates than white families. And it's important to note that black families are also extremely unlikely to end up in low poverty neighborhoods, even when when receiving vouchers, and they're much more likely to end up in high poverty neighborhoods. And these black white gaps in neighborhood poverty are particularly large for for folks in public housing. 60% of black public housing, residents are in neighborhoods with poverty rates above 30%. Wow. And just 13% of white public housing residents. And so what's interesting is that this doesn't translate into lower neighborhood rents for black families, actually, the rents in neighborhoods for black families in public housing are actually higher than they are for white families despite much greater disadvantage. And that's, that's actually consistent with other findings that black people tend to pay higher housing costs than than white people in the US.

Michael Lens  27:41  
Yeah, so there's a lot going on here. That's really interesting. So as you just said, Andrew, there's that kind of ongoing finding that you don't get a great bang for your buck in either a majority black neighborhoods or, you know, very highly disadvantaged urban neighborhoods that are with a high share of minority residents in it. Home values are often very, very depressed, but rents are much higher than you'd expect, much closer to the median of that city. And this is research that's been pretty well documented by Matthew Desmond others, you know, studying anything from eviction to housing cost burdens and rents. And landlords would say that it's much riskier to do business in those neighborhoods, because there's a higher level of non payment, maybe they would give you cultural explanations as to how people who are poor and living in disadvantaged neighborhoods are less likely to keep up their properties or make or do damage to their properties. And then there's the fact that, you know, since home values are not rising, the investment that the landlord has in that property is also not rising. So it's never a great deal to be poor. But it's definitely not a you don't find a lot of great rent deals when you're poor in neighborhoods like this. The other thing that's really interesting to me is this idea that rental assistance programs are more likely to be a housing option of last resort for the most disadvantaged white families. And I mean, this reminds me of work I did on my dissertation, a long time ago, where when we were comparing crime rates in neighborhoods where people with housing vouchers live versus public housing versus just people who were renters below the poverty line, there was a bigger gap between white households using vouchers and white households that were, you know, just the greater population of low income renters. In terms of their crime rate, you are more likely to live in a higher crime neighborhood as a housing voucher recipient, as a white family compared to just the larger population poor renters. We use the same kind of language or the same kind of hypothesis back then it was like, it seems like the white housing voucher family is more disadvantaged Just then non subsidized families of the same income level than that difference between black families like there's, there's much more similarity at least just in the neighborhoods that they lived in. And so connecting the dots, we kind of made similar theories that there is something different, something more different in the experiences, or the neighborhood characteristics of a white family that you know, is receiving subsidies versus one that's not even kind of controlling for income, which is just purely parodies of race and segregation, and neighborhood and welfare and all that sort of stuff. 

Andrew Fenelon  30:37  
Yeah, I mean, I think that that kind of general pattern is is mirrored here. You know, that even though Black families in public housing are receiving vouchers are living in neighborhoods that are kind of substantially more disadvantaged than the national average, it might not be that different from from the counterfactual write the neighborhoods they would live in otherwise.

Michael Lens  30:57  
Exactly. That's a much pickier way of saying all that stuff I just said.

Shane Phillips  31:02  
I just realized, I think we're probably taking for granted that people understand why neighborhood quality disadvantage, however you want to describe it matters. Do either one of you want to field that question, just kind of explain briefly, why we care about the neighborhoods that people live, what effects the neighborhood has?

Michael Lens  31:23  
I can play it that for a little bit. So I mean, you know, I think, especially when we're we start off talking about race, and if we care about differential incomes by race, you know, obviously, there's a long history of public and private discriminatory decision making that has led to people of different races living in different types of neighborhoods, that problem has been compounded by the fact that we often just in our minds correlate race with neighborhood quality, to the extent that now, for the last 50 years, we've thought about neighborhoods where black and Latino households live in the majority as being less valuable, less safe, less enjoyable, etc. And then that is actually a reality all too often, then the more specific answer to your question chain, I think, is that we have a lot of evidence from research that is under an umbrella that we call neighborhood effects, where we study the effects of living in neighborhoods that are disadvantaged on whether you're going to get a job, whether kids are going to grow up and graduate from high school and go on to college, whether your health is impacted by the neighborhoods in which you live. And we don't understand the causality of neighborhood on these really important life outcomes perfectly. But what we do know, you know, even from some experimental evidence, like in the Moving to Opportunity demonstration program that use the random assignment of people receiving housing vouchers versus not, we know quite a lot about the fact that, yeah, if you grow up in a high poverty neighborhood, you're less likely to graduate high school and you're less likely to go on to college, you're less likely to earn more money, the effects on adults seems to be less than the effects on children, but also the children don't really have a choice in where they grow up. And so I think it's really important that we understand these effects and what we can do to get people in more disadvantaged neighborhoods and of course, alleviate the disadvantage in the neighborhoods where they come from. 

Shane Phillips  33:30  
Right. And I think this is— you referenced the Moving to Opportunity Program. But I think just generally, this is one of the ideas behind housing vouchers, specifically, is that you can use them to choose where to live, and you're not obligated to live wherever we happen to have put public housing or have these privately owned rental homes, which, especially in the case of public housing, because of systemic racism in particular, or just direct racism, individual level racism, as well are often placed among the most disadvantaged neighborhoods intentionally. Yep. Okay. So, in the next section of the article, Andrew, you look at the odds, a household who's eligible for rental assistance actually receives it again, for white and black households. Overall, black families who are eligible for one of these rent assistance programs are about three times more likely to receive them. 20% of eligible black households receive rent assistance compared to about 6% of white households. I think those figures can be interpreted a bunch of different ways. But really, my biggest takeaway might just be that the share of eligible households who actually receive assistance is very small, regardless of race. Beyond that point, though, you looked at a variety of household attributes to see which were more or less associated with receiving rent assistance, stuff like whether the adult was single or partnered, education levels, employment status, income relative to the poverty line and so forth. What did you find here, including similarities and differences between black and white families in your sample.

Andrew Fenelon  35:06  
This is a, an important thing to keep in mind about these programs. And we'll probably come back to it a little bit later. Because this shows up in a lot of areas is that there's a relatively small number of these units available relative to those who would be eligible. We it's generally accepted that only about 20 to 25% of eligible families actually receive rental assistance at any given time. And so participation in these programs is not super high in any income group despite need being quite high from what we know sort of about rent burden in some of these income groups. But the main takeaway is from predicting who actually receives rental assistance, is that while there are specific characteristics that we would expect to predict participation, such as economic need, and these actually do predict participation, economic disadvantage is a more important predictor for white families. So it's just a much stronger predictor of participation for white families than than black families. And so we see this with income, we see it with employment, or lack of employment, what we do find actually that a significant fraction of near poor but not below the poverty line, black families participate in these programs, participation for white families who are above the poverty line is essentially non existent. Hmm. And so it's kind of just to hammer home this idea that black families participate more often. But the white families who do participate are really clustered at the bottom of the income spectrum. 

Shane Phillips  36:33  
So you just kind of mentioned this, but I think it's worth dwelling on a little bit more. In the article, you say, quote, furthermore, living in poverty is a substantially stronger predictor of receiving HUD rental assistance for white than black adults. I'm just curious if you could elaborate on that a little bit more. And maybe, I guess, what does that gap look like for white households in particular, where you're going from above the poverty line, just like almost no participation to below the poverty line? There's a very significant amount, what are we looking at there?

Andrew Fenelon  37:07  
Yeah, so although income predicts participation overall, and for both white and black families, we get flatter income gradients in participation for black families and white families. And so what I mean here is that black families who are below the poverty line are seven times as likely to participate as those who are above 200% of the poverty line, kind of in the near poor range. among white families, that similar statistic is 48 times. Wow. And so it's just a huge, huge difference. And so I it kind of raises this question of why are near poor white families participating in rental assistance. So there's the initial question of why are poor white families not participating as much, but then there's this fully additional question of why are essentially no near poor white families participating? So I mean, I can speculate about some aspects of that. But I but we, we also may want to come back to homeownership, and and kind of the structural racism of the housing market a little bit later. 

Michael Lens  38:05  
So, Andrew, you know, I think it's hard for me not to put myself in a little bit of the mind of perhaps somebody who's a little bit more conservative than I am, when you talk about this disparity where essentially near poor white households are less likely to access or receive housing vouchers than near poor black people. If you compare to the very poor versions of those households, is it at all accurate to say that there are perhaps some cultural reasons that might lead white households to be less likely to go after that, that assistance? If they're near poor and not extremely poor? You know, what do you say to that conservative critique that has been with us, you know, ever since welfare has been available to non whites? Yeah,

Andrew Fenelon  38:59  
I think it's not accurate to say that there's some sort of cultural difference in needing to access rental assistance. And I think this is where we can kind of come back a little bit to some of the large scale federal investments made in the mid 20th century that accrued almost exclusively to white families that a lot of a lot of individuals in the middle class, lower middle class of white America are still benefiting from those investments. And so even though they may show up as near poor and income, they're able to get sources of support from family assets, Family Resources, they're able to rely more on family members to provide short term financial assistance, short term help with housing, that for the reasons of being excluded from those programs, black families are less likely to be able to rely on those sources of support. And there's actually I mean, research kind of on what happens to black and white families when they go through a foreclosure and the outcomes are just substantially worse for black families, because they're much less likely to be able to rely on these other sources of support. 

Michael Lens  40:00  
Right, right. And then, you know, I think there's also a drain on resources of the even the near poor when they are more likely in the case of black families to be probably related to people who are in more desperate circumstances. So I think there's at least two things going on there, right, there's a block families a more likely to fall behind be when they're more likely to fall behind, they have fewer people to turn to. And then see, when there's just slightly ahead. There's more people in their orbit, who have also fallen behind and are also relied on them for assistance, perhaps.

Andrew Fenelon  40:38  
Yeah, that's a great point. 

Shane Phillips  40:39  
I can also imagine that, given the higher levels of participation in these rent assistance programs by black households, as a poor or near poor black family, you're just more likely to know someone who receives rent assistance and has gone through the process and might be understanding that it exists might make you more likely to apply for it. And also knowing people who have done it and know the process, and we can maybe walk you through it could also help. And that's not a commentary on culture. That's just true of anyone, the more aware you are something, the more likely you may be to participate in it. And I don't think that reflects negatively on anyone in any way. 

Andrew Fenelon  41:19  
Yeah, so like more more exposure to the program facilitates being able to navigate the Stygian bureaucratic processes required, right to participate. I mean, I guess what to be able to call it administrative burden. Yeah, it's easier if somebody else's, you know, is already navigated it.

Shane Phillips  41:35  
Yeah, yeah. Well, as we wrap up, I want to come back to this relationship between the history of US housing policy based on or influenced by race, the evolution of what you refer to as this two tiered approach to housing assistance between homeownership and renting. And then the disparate outcomes between white and black households, including the likelihood that an eligible household receives rental assistance and where they ultimately end up living. I'll break this up into one more question about how to interpret all this, then we can talk a little bit more about what we might do about some of these disparities going forward. We've mostly talked about how black households are more likely to be rent assistance recipients. But we should also think about why white households are less likely to use it. We've talked about that a little bit. But I think there's there's more we could say. Part of this is about homeownership, because you show that among those earning less than 100% of the federal poverty line. Half of white households own their home compared to less than a quarter of black households. Between 102 100% of the poverty line. The homeownership rates are 61% and 37%, respectively. I don't imagine that's the whole story. So you know, what else might be contributing to this disparity, and I do want to remind listeners, again, that black households make up about 20% of the recipients of other programs like SNAP and Medicaid, but 45% of rent assistance receipts in your sample. So what more can we add to this story, especially relating to housing.

Andrew Fenelon  43:07  
So undoubtedly, some of the racial disparity in rental assistance participation reflects the fact that white families have had unequal access to homeownership. So the racist dynamics of the housing market, but it's not the whole story. Certainly, that there, there are other processes at work here. And I can speculate about some of those potential processes that would contribute to this. One additional sort of notable difference between HUD rental assistance and the other public assistance programs like say SNAP and Medicaid, is that SNAP and Medicaid typically cover anybody who meets the income and eligibility requirements, there are no either no waiting periods or minimal waiting periods to get access you your income qualifies you're in. And then if we think you know, if we go further and think about other assistance programs that we don't even often think of as assistance programs, like social security, or Medicare Access is sort of as close to automatic as possible. But rental assistance is different. There there just not enough available units for the number of eligible families. And so families that do qualify don't get access right away, they end up waiting, on average for about two years. But the weights can be kind of interminable in certain urban markets, like upwards of 10 years. 

Shane Phillips  44:20  
Yeah, I think that's true for Los Angeles, certainly.

Andrew Fenelon  44:22  
Yeah, so you wait years to for the waitlist to open, you get on the waitlist, and you wait more, and then you finally get access. And then you have to find someone willing to take your voucher. So it can just sometimes be a really long process to get access to it. And that that's different from the other other programs. And I don't think it's a coincidence that the assistance program that largely serves black families more so than the other ones happens to be the one that you wait two years to get into. But I think we also have to think about how this process administrative burden or this like kind of burden on the participant deters families from participating if they indeed have other options. And so the this I think that this difference, people know about this right people know how hard it is to get access to rental assistance. And so you you often if you have other options, you seek those out first. I mean, despite the what we know, would be the benefit of receiving rental assistance. And then there's this other piece, you know, I could speculate that. And to bring this back to sort of racial segregation and the types of neighborhoods that people live in segregation makes it possible to charge on equal rents, right. So we know that black people pay higher rents than white families, we even know kind of from from evidence from the voucher program itself, that even within the voucher program, identical housing ends up being charged at higher rates to black families than white families. And this difference is, is sort of counterintuitive, if you think about just larger economic inequality. But when you think about the fact that white families are just structurally maybe more able to move to larger different larger types of neighborhoods, and black families more constrained in this, it starts to make more sense that this concentration of black families in particular neighborhoods makes it possible to charge high rents. What this means then is that black people end up paying higher housing costs. And so they're more likely to be burdened by housing costs at the same income level. And this could lead to just, you know, greater underlying need for assistance than you would find with white families. And so I do think it's important to recognize that not all poverty is the same that there are just larger returns to housing costs for white families and black families. 

Shane Phillips  46:22  
It's really interesting to think about the black family living in a poor neighborhood who is not receiving rental assistance. But because of those dynamics, is paying more than they should more than a similarly situated white household in another neighborhood would pay for the same type and quality of housing, and how that itself would, you know, probably motivate you to seek rent assistance a little more strongly, because you're overpaying in a way that some other household might not be? 

Andrew Fenelon  46:50  
Yes, yeah, that's a fantastic point.

Shane Phillips  46:52  
So, finally, are there any solutions to any of this? I feel like it's common to point to efforts to close the racial homeownership gap, among other things, and I am 100% on board with that. But I'm also very aware that it's a super long term project that homeownership traditionally has not benefited black households as much, at least financially, and that we've got a very tight rope to walk if we want to encourage homeownership among underrepresented groups without further reducing housing costs and subsidizing relatively wealthy homeowners even further, increasing funding for vouchers and other rent assistance programs has also become a pretty big talking point among Democrats in recent years, but has not seemed to gain much traction among Republicans. Obviously, no one has the definitive answer on this. And there is no definitive answer. But what is all this analysis brought to mind for you? 

Andrew Fenelon  47:48  
So, yeah, there is no definitive answer. But there are some pretty clear areas of policy development that I think we have general agreement on among housing scholars that steps we can take right now. And so one takeaway, I think, is that expanding, expanding these programs is particularly important, or they don't serve everybody that they could, we know that there's greater demand and there is supply, we could pretty quickly expand these to cover everybody who needs assistance. And that was actually part of the build back better bill. So Biden's plan had actually made it in there. And so it was to expand the Housing Choice Voucher program, so that any eligible family could participate, kind of like Medicaid. And so not only would this increase access to affordable housing, it could also, you know, broaden the constituency for rental assistance. So all of a sudden, you have all these people who are benefiting from rental assistance, and have now a political stake in improving the program and giving resources to housing authorities in order to administer these programs. Well, and also to increase the salience of the benefit. You just have more people who are receiving this kind of this benefit. And you know, it is true, yes, that this sort of policy proposal has not gotten much support from Republicans. But honestly, I think it's refreshing to see it even get traction among Democrats. Since previously, the this sort of thing, expanding rental assistance programs had been on the fringes of any policy discussion. Yeah, right. It's something that housing scholars were yelling, but nobody was really listening, because simply because the constituency had little power.

Shane Phillips  49:16  
You could say this about federal housing policy of all kinds, really, it's kind of come to the fore, but no one was talking about housing at the federal level. Prior to, I shouldn't say no one there were certainly people. I don't want to dismiss their work. But it's just gotten partly because the crisis has become so much worse. It's getting a lot more attention, which it rightly deserves now. 

Andrew Fenelon  49:37  
Yeah, right. So housing is on a lot of people's minds now where it hadn't been previously. And that's, that's nice to see. So I'm still hopeful that that's going to continue to be the case, even if you know that particular bill wasn't successful. I also think increasing access to homeownership for black families is a worthy goal, of course, but I don't think that homeownership should be the only path to housing stability. Hmm And another another potential lesson comes from the early days of us rental assistance and the public housing program during the 1930s. So unlike modern public housing, the early program actually sought to provide housing to a larger swath of the US income distribution. So not just for the most disadvantaged households, not just for those who couldn't afford housing in the private market, but actually to offer kind of a high quality product to a broader range of household incomes, including middle class and lower middle class families. And this is something that there's been maybe a little bit of grassroots renewed support for a reinvigoration of the public housing program to sort of renew this modern rental housing for the US population. 

Michael Lens  50:46  
But if you're cool and European inspired, you call it social housing. 

Andrew Fenelon  50:50  
That's right. If you want to rebrand it in a way, that sounds more fun, you say social housing, which I guess I'm not opposed to that, but I love the term public housing, actually, because it makes it feel more like it's owned by by all of us. Right, I wrote an op ed a few years ago with Donya. Keen, that said, to reduce housing disparities build public housing in the suburbs. And so I think, you know, if we were going to undertake this reinvigorated public housing program, we would really have to pay attention to where, where this housing is constructed. And obviously, there is a lot of opposition to building of any kind. But I mean, especially building low income housing in high income areas. And not just from Republicans, we see this kind of a across the political spectrum. So it's something we'd have to overcome. But I do see places that are doing it. Well, in Minneapolis, my home city has actually built some small public housing projects across the city, some in very high income neighborhoods. And the cool thing is that a lot of people don't even know they're there, but they're providing access to families. And then the last thing I would say is that whatever whatever the solution is, we might be more effective if we take a page out of the homeowner assistance playbook, and do our best to make support for rental assistance more permanent, kind of by making it less a budget item and an expenditure, and that needs constant justification. But something that's maybe established within the tax code or within kind of federal bureaucracies that have their own discretion that are not at the whims of congressional budget discussions. Now, I don't know exactly what that would look like. But I think it's certainly not impossible. Since we've we've clearly done that with hundreds of billions of dollars a year in homeownership assistance. 

Shane Phillips  52:29  
All right. Andrew Fenelon, thank you for that comprehensive set of recommendations. We always appreciate that on this show. And thank you for coming on the Housing Voice podcast.

Andrew Fenelon  52:38  
Thanks so much for having me.

Shane Phillips  52:43  
You can read more about Andrew's work on our website, lewis.ucla.edu. Show Notes and a transcript of the interview are there too. The UCLA Lewis Center is on all the main social media, I'm on Twitter at @shanedphillips, and Mike is at @mc_lens. Thanks for listening, we'll see you next time.

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