Deconcentrating the poor via public housing policy: What really matters?

This paper explores the role of costs of moving in Housing Choice Voucher (HCV) households' residential location choices and performs a policy simulation predicting the impact of geographically targeted rental subsidies and housing search and counseling services on voucher holders' locational choices. We choose households that received housing vouchers from 2008 to 2010 in the twin cities of Champaign-Urbana in Illinois and track their residential locations using restricted-use administrative data. We adopt the Mixed Logit (ML) approach to model voucher holders' locational choices accounting for heterogeneous preferences over costs of moving factors and dwelling and neighborhood attributes. Our main findings show that the HCV households are responsive to costs of moving indicating that there is a strong disincentive for the moves. The ML model results reveal a high level of statistical significance of heterogeneity in preferences among the HCV households providing empirical evidence to support previous literature that recipients would face different levels of costs of moving based on their socio-economic characteristics. The estimates also suggest that geographically targeted rental subsidies exert a larger relocation effect, moving 22.87% of high-poverty residents into low- and mid-poverty neighborhoods, when they are combined with a local housing authority's housing search counseling and supportive services.