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Overview of Research on the Role of Housing Assistance in Welfare Reform Efforts

This overview explores the early stage research on the role of housing assistance in welfare reform efforts. Major evaluations of various programs are underway, providing preliminary insights on the impact of housing assistance on work efforts. Different aspects of housing assistance have varying effects on work, and there may be a special interaction between housing and welfare interventions. Subsidized housing residents may respond to financial incentives, and housing subsidies can stabilize low-income families' lives and help them secure and retain jobs. Additionally, the composition of households and the presence of a second adult can affect outcomes.

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Overview of Research on the Role of Housing Assistance in Welfare Reform Efforts

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  1. Overview of Research on the Role of Housing Assistance in Welfare Reform Efforts by Jeffrey M. Lubell, HUD PD&R Conference on TANF Reauthorization and Housing Policy, April 12, 2002

  2. Research is at an early stage; conclusions are preliminary • Major evaluations are underway: • Welfare to Work Housing Voucher Program • JOBS Plus Demonstration • Moving to Work Demonstration • Moving to Opportunity Demonstration • Family Self-Sufficiency Program • We’ll know more in a year or two, but still won’t know long-term effects.

  3. 1. Different aspects of housing assistance may have different effects on work • Standard economic theory suggests that subsidized rent rules depress work effort. • Most studies show, however, that residents of subsidized housing do not earn less than other similarly situated households. • David Reingold (Chicago); Paul Ong (California) • Potential explanation: disincentives of rent rules may be counteracted by some other aspect of housing assistance.

  4. 2. Welfare interventions may have greater effects on subsidized housing residents. • Minnesota Family Investment Program (MFIP) • Impact on subsidized housing residents: 17.9 percentage points (61.2% vs. 43.3% control) • Impact on residents of private housing:7.9 percentage points (53.2% vs. 45.3% control) • Trend held only for group targeted to receive special benefits under welfare reform intervention. • There may be something special about interaction of housing and welfare reform interventions.

  5. 3. Subsidized housing residents may respond to financial incentives. • Impact of financial incentives only on employment rates in MFIP: • Residents of subsidized housing:9.8 percentage points (53.1% vs. 43.3% control) • Residents of private market housing:0.1 percentage points (45.4% vs. 45.3% control) • Potential explanation: MFIP incentives may have counteracted negative effects of rent rules, allowing work-supporting aspects of housing assistance to dominate.

  6. 4. Potential Contribution ofHousing Subsidies • Housing subsidies may help to stabilize the lives of low-income families, improving their ability to secure and retain jobs. • Housing subsidies can free up funds within the budgets of low-income families for work-related expenses, such as child care, work clothes, and transportation. • Housing subsidies can help families move to areas with greater job opportunities.

  7. 5. Subsidized housing residents may be less likely to live with a second adult. • Massachusetts Leavers with housing assistance: • had a higher employment rate (74.2%) than those without housing assistance (67.7%) • were more likely to have two or more children and substantially more likely to be Black or Hispanic. • were substantially less likely to have an adult in the householdthan unassisted leavers. • had lower household earnings. • Similar results in San Mateo, Santa Clara & Santa Cruz, CA.

  8. Massachusetts Leavers Study

  9. Bear in mind: • Results likely to vary from area to area • Housing admissions policies vary. • Welfare reform policies vary. • Study of Los Angeles leavers found tenant-based assistance (but not other forms of housing) contributed significantly to employment stability. • Study of welfare recipients in Michigan found hints of a correlation between public housing receipt and earnings, but no strong effects. • Few studies look at long-term effects • Newman and Harkness found correlation between residence in public housing as a child in 1970s and adult employment.

  10. Summary (Research preliminary / likely to vary from area to area / mostly short-term / small samples) • Different aspects of housing assistance may have different effects. • Subsidized housing residents may benefit more from welfare reform interventions than non-residents. Interaction effect. • Financial incentives may be effective. • Housing subsidies provide stability, opportunities for mobility, and free up cash. • If we’re interested in children’s well-being, need to focus on household composition.

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