Rent Reform Demonstration
Overview
The Housing Choice Voucher Program is one of the federal government’s major programs for helping very low-income families with children, elderly people, and disabled people afford decent and safe housing in the private rental market. Housing vouchers are administered locally by public housing agencies with funding from the U.S. Department of Housing and Urban Development (HUD). The voucher is a housing subsidy paid directly to the landlord by the housing agency on behalf of the participating household. The household then pays the difference between the actual rent charged by the landlord and the amount of the subsidy. Since the passage of the Brooke Amendment in 1969, rents in subsidized housing have been directly tied to income. In general, the voucher holder is responsible for a portion of rent equal to 30 percent of the household’s adjusted income, after accounting for various allowable deductions.
In September 2012, HUD commissioned MDRC and its partners to help design and to conduct a national evaluation of alternatives to the current rent structure in the Housing Choice Voucher Program. While the current income-based system protects most tenants against excessively burdensome rents, it may also discourage efforts to increase earned income, and it is difficult and expensive to administer. A long-standing public policy goal has been to identify an alternative system that would be simpler and less expensive to administer and that would encourage tenants to increase their employment rates and earnings and reduce their reliance on housing subsidies.
Additional Project Details
Agenda, Scope, and Goals
The objective of this demonstration is to work with HUD and local housing agencies to design an alternative rent policy and to test the effects of that policy using a randomized controlled trial. The alternative policy changes the ways in which subsidies are calculated; introduces a minimum dollar amount families are expected to pay toward their rent and utilities (typically referred to collectively as “minimum rent”) or increases that minimum amount; requires no income reporting to the housing agency and no reductions in families’ housing subsidies for three years if their incomes grow; and includes a number of safeguards to protect families from excessive rent burdens, as can occur if their incomes decline.
The study is assessing whether the reform achieves such goals as (1) increasing tenants’ employment, earnings, and income; (2) protecting tenants from an excessive rent burden; (3) reducing tenants’ reliance on housing subsidies, potentially allowing housing agencies to serve more families who need assistance; and (4) simplifying and reducing the costs of administering the rental assistance program.
The demonstration began enrolling voucher holders in 2015, includes a sample of 6,665 voucher holders, and is administered by four housing agencies: Lexington-Fayette Urban County Housing Authority (or Lexington Housing Authority), in Lexington, KY; Louisville Metropolitan Housing Authority, in Louisville, KY; San Antonio Housing Authority, in San Antonio, TX; and District of Columbia Housing Authority, in Washington, DC. These housing agencies are a subset of 39 public housing agencies (PHAs) that, at the time the project was launched, were part of HUD’s Moving to Work demonstration program, which allows selected PHAs more administrative flexibility in operating their housing assistance programs. The evaluation will assess the effects of the alternative rent policy through six years after it took effect for families (2015-2016 through 2021-2022).
Design, Sites, and Data Sources
The evaluation has four research components:
An impact study: The impact analysis will examine the program’s effects on a wide range of outcomes, including participants’ employment, earnings, family income, benefit receipt, rent burden, and homelessness. The impact study will draw on baseline and follow-up surveys, PHA administrative records, unemployment insurance wage records obtained through the National Directory of New Hires (which capture employer-reported employment and earnings), and data from Temporary Assistance for Needy Families, the Supplemental Nutrition Assistance Program, and the Homelessness Management Information System.
A survey: Additional outcome data for the impact analysis will come from a household survey of heads of household fielded around four years after families enrolled in the study. The survey will cover a wide range of outcomes, including job characteristics, reasons for not working, family composition, total family income, family poverty, housing stability, relationships with landlords, savings, debt, financial practices, material hardships, and additional quality-of-life indicators.
An implementation study: This component will describe the implementation of rent reforms from both the housing agency and tenant perspectives. For the housing agencies, the study could cover staff members’ experiences operating and implementing the new rent policy and their relationships with participants. For tenants, it could cover their understanding of and perspectives on the new rent policy, and their relationships with housing agency staff.
A cost study: Data from housing agencies and data collected through direct observations, interviews, surveys, and other standardized measurements will be used to compute the costs of operating the new rent policy and to determine what cost savings if any the alternative system yields relative to the traditional rent policy.
The evaluation also includes technical assistance provided by MDRC and its subcontractors to aid the study’s PHAs in implementing the alternative rent policy and in expanding the alternative rent model to the control group or their entire Housing Choice Voucher population, or returning the alternative rent policy group to the existing rent model or a different alternative model at the PHAs discretion.
A series of six reports will be produced on the study’s short- and long-term findings.
Featured Work
Rent Reform Demonstration Baseline Report
