Residents of the nation's public housing developments have long suffered disproportionately from perverse disincentives to work. Under traditional public housing policies, their rents were automatically ratcheted up in lock step with any income increase they realized from earnings, even in a low-wage job. Work often promised them little financial gain. But a series of reforms over the past decade — in welfare and tax policies, as well as in housing policies — have tipped the financial balance more in favor of work, perhaps to a degree that is not fully appreciated by many public housing residents and administrators. Still, some important disincentives remain.

This policy brief, one in a continuing series that presents emerging insights from the Jobs-Plus demonstration, discusses innovative attempts to bring public housing rent policies more fully into line with reforms in welfare and tax policies designed to “make work pay.” The rationale underlying the Jobs-Plus approach is reinforced by a growing body of research on welfare families showing that policies that allow low-wage workers to keep more of their benefits or receive earnings supplements can help raise employment and earnings, reduce poverty, and increase the well-being of young children. Jobs-Plus is an innovative “place-based” employment initiative for public housing residents that mixes new rent-based work incentives with employment and training services and “neighbor-to-neighbor” social supports for work. The Jobs-Plus rent reforms build on the non-housing reform policies of the 1990s and push further in this direction. They help to ensure that full-time work will leave a family with more net income than part-time work (which has not always been the case), and that a full-time job will raise income above what that same job would yield under the old rent policies.

Jobs-Plus anticipated some of the key reforms of the Quality Housing and Work Responsibility Act, passed by Congress in 1998. The strategies and experiences of the Jobs-Plus sites can thus offer guidance to other public housing authorities as they attempt to implement provisions of the new law.