In this report for the Massachusetts Department of Housing, we analyzed Small Area Fair Market Rents (SAFMRs), a policy that makes higher-opportunity neighborhoods more accessible by providing housing vouchers to low-income families. Existing research has shown that the adoption of SAFMRs improves neighborhood quality for voucher holders. Whether the implementation of SAFMRs affects private rental markets, however, remains an open question.

In theory, SAFMRs reallocate voucher recipients from lower-rent neighborhoods to higher-rent neighborhoods, driving up demand and potentially affecting prices. We quantified this effect by studying the adoption of SAFMRs by five different Public Housing Agencies. To measure local private-market rents, we use Zillow Observed Rent Index (ZORI) data at the zip code level. Ultimately, using a synthetic control approach, we fail to find convincing evidence that SAFMRs meaningfully affect private market rents.