Association for Public Policy Analysis & Management

In a step toward promoting innovative rent subsidy policies and building stronger evidence on the effects they might have on families and public housing agencies (PHAs), HUD launched the Rent Reform Demonstration. The demonstration is testing a new rent policy for working-age/nondisabled voucher holders that changes the ways in which housing subsidies for those families are calculated, introduces or increases the minimum contribution tenants are expected to make toward their housing costs (“minimum rents”), eliminates a requirement for tenants to report to the PHAs any earnings increases for a three-year period (thus limiting increases in their required rent contributions during that period), and introduces a set of safeguards to protect tenants from excessive rent burden. These are substantial reforms, and together the policy’s core features are intended to achieve a balance between increasing the financial incentives for tenants to increase their earnings, protecting families from excessive rent burden, and reducing the PHAs’ administrative burden of operating the rent policy system. In addition, the new policy is intended to achieve these outcomes without increasing the overall subsidy and administrative costs of operating the rent policy system, relative to the costs of the existing rent policy.

The demonstration, which began enrolling voucher holders in 2015, is operating in four cities: Lexington, Kentucky; Louisville, Kentucky; San Antonio, Texas; and Washington, D.C. The housing agencies in these cities are a subset of 39 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. MTW agencies are permitted to change certain policies that would otherwise require changes in legislation or regulations, and this administrative flexibility extends to rent rules.

The centerpiece of the evaluation is a two-group randomized controlled trial to test the effects of the new policy versus the existing policy on voucher holders’ labor market outcomes, use of housing subsidies and other government programs, material hardship, well-being, PHA costs and administrative burden, and other outcomes. The four PHAs are implementing the new rent policy alongside the existing policy to help determine its effects. Families were randomly assigned either to a group that was subject to the new policy or to a control group that remained subject to the existing rent rules.

This paper will discuss the content of the new rent policy, why it was expected to increase tenants’ employment and earnings, what effects it has had on those outcomes, and on housing subsidy receipt and SNAP and TANF receipt, within the first two-and-a-half years of follow-up, how those effects vary across cities and particular subgroups, the implementation of hardship remedies, and, from qualitative data, how staff and tenants view the new policy. The paper will also highlight the next stages of the evaluation, which is slated to conclude in 2022.