Increased Use of Vouchers Could Bridge Racial Homeownership Gap

Increased Use of Vouchers Could Bridge Racial Homeownership Gap

New research indicates that increased use of a homeowner voucher program could significantly shrink the racial gap between Black and white home ownership.

The study, conducted by The Urban Institute in partnership with Urban Strategies Inc. (USI) and funded by JPMorgan Chase, found that more Housing Choice Vouchers (HCV) could help reduce the racial disparity in homeownership, which is at its highest in 50 years. A key change would let households with an HCV use it for mortgage payments rather than rent.

One major contributor is the disproportionate burden that mortgage costs place on Black potential homebuyers. Inequity in income along with structural racist policies leads to nearly half of all vouchers going to Black non-Hispanic households.

A summary concluded that successful implementation requires collaboration between housing agencies, lenders, and other first-time-homebuyer programs.

Historically, discrimination has caused a disparity in access to home ownership and its benefits. Living in inadequate housing requires more upkeep and paying relatively more in property taxes. Legacies of redlining and current discriminatory lending have also hampered Black households’ efforts to gain access to quality housing.

Key findings of the Urban Institute study include:

  • The HCV homeownership program is limited in size and scope.
  • The use of homeownership vouchers is higher in places with lower housing costs and lower fair market rent.
  • Public housing authorities that use the highest share of vouchers for home ownership tend not to have majority Black non-Hispanic clientele. However, four out of five of the PHAs with the most participants serve majority Black non-Hispanic households in their programs: PhiladelphiaChicagoNew Orleans, and Louisville.
  • Foreclosures and nonpayment are uncommon.

Strategies that could help close the voucher gap include higher income limits for participants, creation of a distinct class of vouchers earmarked for homeownership, extending the length of subsidy allowed in the HCV homeownership program, and more funding for the lump sum/down payment option.

Founded in 1978, Urban Strategies, Inc. is a national nonprofit leader with extensive experience in implementing results-based human capital development strategies in communities that are undergoing physical revitalization. Visit its website at

The Urban Institute is a nonprofit research organization that provides data and evidence to help advance upward mobility and equity, strengthen decision-making, create inclusive economic growth, and improve the well-being of families and communities.

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