Section 8 Renters in the Phoenix, Arizona, Foreclosure Crisis: Implications for Poverty Deconcentration

Abstract How the recent U.S. foreclosure crisis affected federal housing mobility programs has not been well studied. This article explores the crisis’s impact on low-income renters receiving Section 8 vouchers in Phoenix, Arizona. We find that (a) 8% of voucher holders lived in homes that underwent foreclosure, (b) they were in comparably affluent neighborhoods, and (c) most eventually moved after foreclosure. Yet, those who moved after foreclosure were not overtly disadvantaged in the housing market. This unexpected finding may be explained by the opening up of new housing opportunities for voucher holders as foreclosures in more affluent areas were converted to rentals. Overall, this research suggests that the foreclosure crisis did not adversely affect the Section 8 program’s goal of deconcentrating poverty in Phoenix and may have even advanced it—a dynamic potentially occurring in other formerly booming and economically distressed Sunbelt regions.