Since the passage of the Brooke Amendment in 1969, rents in subsidized housing have been directly tied to income. A variety of stakeholders have advocated reform of the rent system, some emphasizing its adverse impacts on beneficiaries (and eligible non-beneficiaries) and others emphasizing its impacts on PHAs and their finances. Rent reform has been elusive, however, because moving to a new system involves some fundamental tradeoffs around which agreement has been hard to achieve. For example, simplifying the rent structure may make it more difficult to ensure that tenants with the greatest need receive the most assistance. At the same time, offering deep subsidies for an unlimited term makes it difficult to serve equally needy families on waiting lists -- given a fixed appropriation level. Also, the advantages of standards and protections built into a common federal approach must be weighed against the benefits of allowing local agencies to set rent rules based on local conditions. And finding the right balance in the mission of housing assistance between a strict focus on providing decent affordable housing versus other objectives, such as family self-sufficiency (FSS), is another source of tension among stakeholders.

In September 2012, HUD commissioned a national evaluation of alternatives to the current rent structure for households receiving vouchers from Moving-to-Work housing authorities, which have the legislative authority to change rent rules. While the current income-based system protects most tenants against excessively burdensome rents (in general, the portion of rent that the voucher holder is responsible for is 30 percent of the household’s adjusted income), it may also encourage underreporting of income and a reduction in work effort leading to earned income.

This paper will describe the alternative rent policy’s key features, and the key goals considered in the design of the alternative policy: increasing work effort and earnings for voucher families and cost savings for Moving-to-Work housing authorities via administrative efficiencies or restructuring (simplification) – all while sustaining the voucher program’s important role in reducing homelessness and serving more families with housing assistance. The study will ultimately assess whether the reform achieves such goals as (a) increasing tenants’ employment, earnings, and income; (b) improves a number of quality-of-life outcomes for families flowing from increased work and income; (c) reduces tenants’ reliance on housing subsidies, potentially allowing housing agencies to serve more families who need assistance; and (d) simplifies and reduces the costs of administering the rental assistance program.

The study will use a randomized controlled experiment to compare the current rent structure to an alternate rent structure. Four to five housing authorities will participate in the study, each enrolling up to 2,000 voucher holders in the two study groups. The paper will also describe the scope of evaluation, which is being guided by a comprehensive research agenda structured around three study components: impacts, implementation processes, and benefit-cost. 

The evaluation team includes MDRC and partners at the Urban Institute, Quadel Consulting, the Bronner Group, Branch Associates, DIR, and independent and academic consultants.