Are Landlords Overcharging Housing Voucher Holders?

Abstract

The structure of rental markets coupled with the design of the Housing Choice Voucher Program (HCVP), the largest federal housing subsidy for low–income families in the United States, provides the opportunity to overcharge voucher holders. Applying hedonic regression models to a unique data set of Milwaukee renters combined with administrative records, we find that vouchered households are charged between $51 and $68 more in monthly rent than unassisted renters in comparable units and neighborhoods. Overcharging voucher holders costs taxpayers an estimated $3.8 million each year in Milwaukee alone, the equivalent of supplying 620 additional families in that city with housing assistance. These findings suggest that the HCVP could be made more cost–effective—and therefore more expansive—if overcharging were prevented.