Fundamental Housing Policy Reforms to End Homelessness Jun 01, 2010 By Edgar O. OlsenIngrid Gould EllenBrendan O'Flaherty (eds) Fundamental Housing Policy Reforms to End Homelessness The failure to offer assistance to all individuals of the types who become homeless is a major defect of the current system of low-income housing assistance. Fundamental reforms of the system that are justified on other grounds would eliminate this defect. Plausible assumptions about taxpayer preferences argue strongly for replacing the current patchwork of non-entitlement low-income housing programs with an entitlement housing assistance program for the poorest individuals. Evidence on the excessive costs of all forms of project-based housing assistance argues for exclusive reliance on tenant-based assistance. Replacing the current system with an equally-costly entitlement housing voucher program would insure that housing assistance is available to all individuals who would otherwise be homeless. This chapter describes the rationales for major reforms of low-income housing assistance in more detail and a politically feasible set of transitional reforms that would disproportionately benefit individuals who would otherwise be homeless. The key to understanding the benefits of the proposed reforms to homeless people is to recognize that almost all homeless individuals have extremely low incomes. Their median is less than half of the relevant poverty threshold. Reforms of mainstream programs that concentrate more assistance on the poorest individuals will disproportionately benefit individuals who would otherwise be homeless. Adopting all of the transitional reforms would provide the long-term housing assistance needed to serve all homeless households without any increase in spending and leave more of the budgets of programs for the homeless for solving their other problems. Edgar O. Olsen Ed Olsen is a professor emeritus of economics at the University of Virginia, where he has served as chairman of the economics department and was heavily involved in the creation and development of the Frank Batten School of Leadership and Public Policy. Olsen's teaching and research has focused on public policy issues, especially concerning the welfare system. Within this broad area, his research specialty is low-income housing policy. Read full bio Ingrid Gould Ellen Brendan O'Flaherty (eds) Related Content Edgar O. Olsen Does HUD Overpay for Voucher Units, and Will SAFMRs Reduce the Overpayment? Research One argument for Small Area Fair Market Rents (SAFMRs) is that they would reduce overpayment for voucher units in low-rent neighborhoods. This article provides a more comprehensive theoretical analysis that leads to the conclusion that the worst voucher units and those in the worst neighborhoods will usually rent for more than the mean market rent of identical units, and the best units in the best neighborhoods will rent for less than this amount. Racial Rent Differences in U.S. Housing Markets Research This paper exploits an unusually rich data set to estimate racial differences in the rents paid for identical housing in the same neighborhood in U.S. housing markets and how they vary with neighborhood racial composition. It overcomes the shortcomings of the data used in previous studies. Results suggest that households led by blacks pay more for identical housing in identical neighborhoods than their white counterparts and that this rent gap increases with the fraction of the neighborhood white.