Association for Public Policy Analysis & Management

This paper will discuss two types of alternative rent policies, and plans for evaluating them, under the Moving to Work Expansion Statute passed by Congress in 2016. MTW allows PHAs to design and test innovative, locally designed housing and self-sufficiency strategies for low-income families by permitting PHAs to use assistance received under the United States Housing Act of 1937 more flexibly, and by allowing certain exemptions from existing public housing and Housing Choice Voucher (HCV) program rules, as approved by HUD. The Expansion Statute directs HUD to add 100 public housing agencies (PHAs) to the MTW Demonstration Program by cohort and to test one specific policy change for each cohort. The second cohort of the MTW Expansion will evaluate alternative rent policies designed to increase resident self-sufficiency and reduce PHA administrative burden.

Eligible households for this study include tenants in both the public housing and the HCV programs. The evaluation will include existing, currently assisted households and new households admitted during the alternative rent enrollment period. Within each PHA, nonelderly/ nondisabled households will be randomly assigned to either a new rent rules, to which the alternative rent policy will apply, or to a control group, to which the existing rent policy will apply.

A total to 10 PHAs will be included in the study, and each selected PHA will implement one of the specified alternative rent policies. The PHAs may implement either a tiered rent or a stepped rent. With a tiered rent structure, households are grouped by income into bands. Within each band or tier, rents (or, in the HCV program, tenant contribution amounts) are fixed. Any income increase within a tier does not affect the household’s rent/tenant contribution. However, the tenant contribution will go up if the household’s income grows to by an amount that puts it into a higher tier. Its contribution will fall if its income drops by an amount that puts the household in a lower income tier. With a stepped rent structure, the amount tenants pay toward rent is decoupled from income, and rents are increased annually (or, in the HCV program, the tenant contribution is increased) according to a fixed schedule of a certain percent (currently, PHAs can choose between 3% or 5%) of Fair Market Rent (FMR) by bedroom size. This policy attempts to move households steadily to rent contributions closer to market rates, regardless of income growth, so some hardship protections are available.

The paper will discuss why HUD chose these particular policies, the underlying hypotheses about their likely effects on work and self-sufficiency, provisions intended to protect tenants from hardship, and some anticipated tradeoffs among the different policies. It will also outline and the policy implementation plans and the evaluation design.