Association for Public Policy Analysis & Management

Recipients of housing assistance struggle in the labour market. Their employment challenges partly reflect their human capital limitations, personal and situational challenges, and other impediments to work. In addition, the rules that determine their housing subsidies could discourage them from working or advancing as much as they could, out of fear of losing their subsidies entirely or having them reduced if their incomes were to grow. The U.S. has experimented with various strategies, including immediate and more distant financial incentives, and incentives operating from within or outside the rent rules established by the federal subsidized housing assistance system.  However, they all share the goal of helping assisted tenants increase their employment and their earnings. The original Jobs-Plus demonstration, for example, tested alternative rent rules intended to encourage residents of public housing developments to work by allowing them to keep more of their earnings and avoid earnings-based rent increases.

 The U.S. Department of Housing and Urban Development’s Family Self-Sufficiency (FSS) programme takes another approach that is largely aimed at recipients of housing vouchers available for use with private landlords (somewhat akin to Housing Benefit in the U.K.). FSS includes case management support services and a longer-term asset-building component according to which rent increases based on tenants’ earnings increases within a 5-year period are held in escrow by the housing authority and then rebated in a lump sum to tenants who are working and not receiving cash welfare at the end of that period.  Yet another approach operates completely outside of the rent rules.  It offers special time-limited incentive payments conditioned on work to promote job entry and employment retention. Tested in the UK Employment Retention and Advancement (UK ERA) demonstration, the intervention produced promising results for long-term unemployed benefit recipients living in social housing.  Building on these results, the NYC Work Rewards demonstration, a randomized trial, tested a similar financial incentives component for housing subsidy recipients, in two ways:  first by combining that component with the FSS programme in one intervention, and also testing the incentives component alone in a companion intervention. The results point to promising labour market effects for a subgroup of non-working participants who received FSS services combined with the special time-limited incentives.   

 Based on the growing body of evidence, it appears that incentives external to the rent system can make a difference for non-employed tenants. The paper will review lessons from these prior studies, focusing particularly on new (not-yet-published) findings from the NYC Work Rewards demonstration.  It will also describe the design of an even newer incentives strategy that adapts the NYC Work Rewards and UK ERA model to be more differentiated. This revised approach will be tested as part of a new workforce intervention in the US that combines executive skills coaching with financial incentives. The paper will also consider its relevance for subsidized tenants in the context of Universal Credit in the U.K.