HUD’s mistake

A program designed to help break up concentrated poverty that leaves out Baltimore needs to be changed — whether city officials like it or not

To anyone familiar with the plight of Baltimore’s poor, a recent announcement by the federal Department of Housing and Urban Development may seem like a bit of a head-scratcher. Baltimore has been omitted from a list of metropolitan areas slated for a new program designed to help Section 8 recipients move to better areas. The reason: Housing voucher holders here are, by HUD’s measurement, insufficiently concentrated in poor neighborhoods.

It seems unlikely that a place recently ranked as the nation’s worst county (or, in our case, county-equivalent) in terms of escaping poverty has too little economic segregation to be of concern. The fact that places like Detroit, Boston and New Orleans also failed to make HUD’s list suggests there’s something wrong with the metric it used.

It is odd, indeed. HUD included cities in which voucher recipients are 55 percent more likely to live in an area of concentrated poverty than renters in the metro area as a whole. The fact that Baltimore fell short probably says more about the plight of the area’s renters generally than it does about Section 8 recipients.

Fortunately, HUD now has a public comment period after which the rules can be changed. Unfortunately, it looks like the Housing Authority of Baltimore City won’t be pushing for it. City housing chief Paul Graziano argued against the change and said last week that he was “relieved” that Baltimore didn’t make the list.

Mr. Graziano insists that the city housing agency isn’t opposed to the goal of the program — indeed, the region’s mobility program, which is run by a separate non-profit with pass-through funds from HABC, has helped some 3,200 people move to neighborhoods of opportunity so far. And he’s right about some flaws of the HUD proposal, which offers higher rental subsidies in neighborhoods of opportunity — i.e., those with lower poverty, less crime and better schools — and lower ones in other areas. He’s right that differentiating rents on the ZIP code level wouldn’t work in Baltimore, a place where rich neighborhoods and poor ones are often side-by-side. Varying based on census tracts makes more sense. He’s also right that HUD would need to provide an array of supports and services to those who would move under this program. But on the whole, he lends too much credence to the complaints of landlords.

He also argues that lower rents in low-opportunity neighborhoods will reduce choice for voucher recipients. What it will really do is lower revenues for landlords who have made careers out of renting subsidized housing in economically segregated communities. A 2016 study by economists at NYU and Harvard found that blanket increases in rent subsidies (as opposed to differentiated ones like HUD is now proposing) increased the rents that landlords charge but produced no significant increase in the quality of housing for voucher recipients. There is evidence that has been the case in Baltimore as well.

Mr. Graziano’s ideal solution would be for the federal government to provide higher subsidies in communities of opportunity without lowering them elsewhere — a have-your-cakeand-eat-it-too idea that rests on the unlikely hope that Congress will suddenly start pouring more money into subsidized housing.

What’s really at stake, though, is the Baltimore region’s ability to maintain the level of subsidies it presently has. The area has for years been allowed to offer vouchers sufficient to cover rent at the 50th percentile of regional costs as opposed to HUD’s standard 40th percentile. That’s the fruit of an earlier HUD effort to encourage voucher recipients to move to better neighborhoods but one the agency has concluded isn’t working. (Indeed, HUD tried to kick Baltimore out of the program last year on the grounds that it wasn’t making enough progress, but the area retained its status after advocates and elected officials found flaws in the agency’s calculations.) HUD intends to phase out that old program and replace it with the differentiated small-area rents, and unless something changes, regions like Baltimore will be out of luck.