Choice Vouchers on San Francisco’s Open Rental Markets: Nowhere Near Enough?

Why Talk About Vouchers?  They’re one of the largest supply-side housing programs in the US, and they may not go far enough in San Francisco’s hot market.

Choice Vouchers are given to low income families to spend on the open rental market.  When recipients secure a unit using a voucher, they pay up to 30% of their income in rent, the rest is paid for by the voucher… unless the rent is higher than the maximum limit for a voucher payout.  Every dollar above that maximum is theoretically paid for by the renter.  The maximums are the Fair Market Rents (FMRs) established by Housing and Urban Development (HUD) using census rental data.  The idea behind vouchers is to help low income families choose where to live instead of ‘stack and packing’ people in housing projects in “bad” neighborhoods.  As I will show below, vouchers do not go very far in San Francisco’s hot market.

San Francisco has a dataset of for-rent postings from June to December of 2012, freely available on their website.  For each rental offer, I’ve coded if it is below the FMR threshold for San Francisco using HUD’s reference (pg 4).

The Map below shows which units from that dataset are voucher-eligible (in red) and those that would require a voucher recipient to pay more than the max rent charged (basically, in-eligible in blue), but limited (for simplicity purposes) to single bedroom units.

Rental Listings Available By Eligibility With Vouchers June-Dec 2012. Note: the underlying map taken from Google is not perfectly aligned with the listings, hence a few units appear to be in Lake Merced and the Bay.


1.  Only 18.5% of the units could be paid for via voucher, even though the fair market rent which sets thresholds is based on average rents.

How did that happen?  The 2012 voucher maximum was based on 2005-2009 American Community Survey (ACS) Data average rent for a two bedroom (which gets adjusted up and down for units with more or less bedrooms). That was initially ~$1,477. But HUD adjusted it upwards to the mean rent of the newcomers in the dataset (moved in within the last year) at two bedrooms which was ~$1,800.  They then add a few cost-increase adjustments and set the two-bedroom FMR threshold at ~$1900.  However, according to the data gathered by the ACS in 2012, rents in the San Francisco HUD Market Area (which includes Marin and San Mateo County), two bedrooms ran, on average, at ~$1700 with a median of $1600.  Among new renters, it was even higher at $2150 on average with a median at $2000.  Table One details the difference between the data HUD had to work with when setting the FMR and what ended up being actual average rents:

Table 1: Mean Rents Used for 2012 FMR Limits Versus Actual 2012 Rents
Dataset Two Bedroom Average Rent Two Bedroom Average Rent (New Renters)
05-09 ACS (used to make 2012 Limits) $1,447 $1,800
2012 ACS* $1,700* $2,152*
2012 ACS-Only San Francisco County* $1,750* $2,375*
June-Dec 2012 Rent Listings (* $2,388**

*Authors calculations using PUMS of Datasf data, R-scripts available upon request.  I should admit I did not bring these estimates up to 2013 dollars but kept them in the amounts reported for each year, so all my calculations are already under-estimates.

** This is in actual 2012 dollars, from

I want to note how strikingly similar the rent listings are to estimated new-renters rents in the ACS, the ACS is truly a powerful data-tool at scales of this size and greater.  So the ACS does in fact keep up with the market in San Francisco, but the market has moved much faster than the FMR.

2.  The Eligible Units are Concentrated in Census Tracts with Higher Commute Times, More Poverty and Lower Incomes

Table 2: Tract-Level Correlations Between DataSF Rent Listings Percent Eligible Vs. Census Demographic Variables*
PCT Voucher Eligible (1BED) Mean Commute Time PCT Families in Poverty PCT Families on Food Stamps Mean Income
PCT Voucher Eligible (1BED) 1
Mean Commute Time 0.275 1
PCT Families in Poverty 0.233 0.063 1
PCT Families on Food Stamps 0.248 0.064 0.7 1
Mean Income -0.202 -0.15 -0.46 -0.51 1

*Data is from the 2007-2013 wave of the ACS.

See anything interesting?  Where are the eligible units disproportionately concentrated?  I’ll tell you where: away from transit access, away from jobs, and in parts of the city that haven’t clearly benefited from the Tech Boom (or suffered through it, depending on who you ask).

3. Many Areas With Ample Voucher-Eligible Units Are Some of the “Next” Hottest Neighborhoods; Slated For Redevelopment

Map 2 Below Shows The Share of One Bedroom Apartments in the DataSF database that were Voucher Eligible at the Census Tract Level Across the City:

Share of 1-Bedroom Listings Eligible for Vouchers, By Tract
Share of 1-Bedroom Listings Eligible for Vouchers, By Tract

Notice the areas with few voucher eligible units include SOMA, CASTRO, and parts of the Mission.  There’s nothing on Twin Peaks (but there were very few listings there anyways) and not a whole lot north of Market except for parts of the Tenderloin.

I chose to overlay this map with the City’s Priority Development Areas (PDAs), areas which may see concentrated infrastructure and housing development under Plan Bay Area.  Some of the neighborhoods with the highest concentration of voucher-eligible one bedrooms are in areas slated for redevelopment: Bayview, Outer Mission, Visitacion Valley, Balboa Park, Bernal Heights, Park Merced, etc.)   If the concentrated development in these areas contributes to a decrease in the amount of voucher eligible units available, you have a case for compensation to the community for transit oriented gentrification.  But to some extent, these neighborhoods are already the next front lines of gentrification as buyers on the private market are already driving prices up (The people in the photograph for this article are a great exampleHere’s some more stats).


HUD’s policies may need to be reformed or agencies may need greater power to “flex” the FMRs to ensure residents can find decent units.  There is also a growing body of research on the possible benefits of re-scaling the FMR to the zip code level.  There are both scale and temporal issues in HUD FMR thresholds that should be re-evaluated for cities like San Francisco.  Perhaps the city could provide an additional “bonus” to vouchers so that renters can still access neighborhoods that they are currently priced out of with or without vouchers?  Maybe AirBnB could donate that kind of money instead of giving people $10 on the street randomly?  I’m grasping at solutions a bit here–but really we need to get more creative and move beyond the basic formula system if we are serious about vouchers enabling low and middle income families affording quality units in jobs-richaccessible communities.

Published by mattdpalm

Doctoral Student UC Davis USDOT Graduate Eisenhower Fellow 2014-2015

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