DETROIT – The federal government is laying the groundwork for potentially major changes to the nation’s largest rental assistance program, aimed at testing an idea that would allow low-income renters to pay rent directly with cash rather than using traditional housing vouchers.
Wednesday afternoon in Detroit National Assured Income ConferenceHUD Deputy Assistant Secretary for Policy Development Brian McCabe announced that his agency soon plans to seek public comment on the possibility of examining whether direct cash distributions to tenants could work better for tenants, landlords, governments and even taxpayers.
Officials are keenly aware of some of the tough challenges facing participants in the 50-year-old federal voucher program. To receive a voucher, a family must first prove eligibility. A public housing agency must then issue a voucher subsidy to the landlord on behalf of the household. The landlord must accept that voucher, the unit must pass an inspection, and the landlord must sign a contract with the public housing agency.
These are a lot of steps, and many landlords simply Refuse fares to voucher holders, often citing frustration with slow and complicated processes. Landlord complaints are a bureaucratic headache Delayed lease signing leading to loss of income And Inspection of arbitrary-standard units.
Some tenants, in turn, struggle to find anywhere to use their vouchers, if they are one of the lucky ones who can get one. A federal study found that about 60 percent Beneficiaries can find a landlord willing to rent to them.
HUD will specifically seek input on questions such as whether landlords would be willing to rent to low-income people if they could avoid government red tape and whether using cash would provide higher-quality housing for tenants. More than two million families currently use federal subsidies.
At the conference, McCabe also shared that HUD plans to soon issue guidance to housing agencies on how to run these types of cash pilot programs. McCabe was referring specifically to agencies Going to work, a federal program that allows some public housing authorities to spend their dollars more flexibly than allowed under traditional voucher programs. Moving to Work was established in 1996 and expanded by Congress in 2016.
McCabe’s announcement Reflects a change HUD’s Position on Cash Assistance Last year, HUD lawyers said housing agencies, including Moving to Work, lacked legal authority to test cash assistance instead of vouchers.
The shift comes from advocacy over the past year by housing leaders, who have insisted they believe Moving to Work agencies have congressional permission to innovate such as cash rental assistance. Vox reviewed one such letter sent May 7 by four national housing groups and another sent to public housing agency leaders, including Preston Prince, executive director of the Santa Clara Housing Authority.
Providing cash assistance “can be really disruptive — in a good way,” Prince told Vox. “Cash can help us serve more families.” There are about 37,000 people on Santa Clara’s voucher waiting list, and leaders estimate they currently serve one in six eligible residents.
Prince acknowledged that a study testing cash rental assistance could lead to broader criticism of housing voucher programs or even housing authorities.
“I’m terrified of doing this pilot project, it might prove that what I’ve been working on for 30 years isn’t effective,” he told me. “It can challenge the overall system. That’s the unnerving part. But in the end it takes a little courage to say it’s not for me.”
Advocates for testing cash rental assistance stress that they are only looking to enhance the housing voucher program, not replace it wholesale. If the cash proves effective and even helps the government save money, officials may be able to focus on providing more support services, building new housing and conducting research. The housing authority spends 13.8 hours per year on average Managing individual vouchers, with tasks such as certifying a tenant’s income and assets to ensure they are as destitute as they think they are.
That voucher fraud detection function exists to protect public funds, but it can also be stigmatizing and humiliating. “There was pressure to see our families as broken and untrustworthy, and direct rental assistance can really tell people, ‘You are trustworthy and valuable and we are here to help you succeed,'” said Prince.
The federal government has taken steps in recent years to reduce the paperwork required to access housing assistance. During the pandemic, people seeking help under the $46.5 billion Emergency Rental Assistance Program can simply confirm details such as their income or address, under penalty of perjury, instead of submitting official records.
Most recently, HUD announced that the housing agency may allow people to self-certify their income to qualify for the homeless program, a move that could accelerate voucher access. In the declaration of transfer, HUD agrees Many people who experience homelessness may not have Social Security cards or pay stubs to prove their income status.
While some tenants may prefer vouchers, others may find cash easier And quick to use, especially in some markets. “I suspect that tenants can feel quite empowered by being able to present themselves to landlords and paying like other potential tenants,” Stephanie DeLucaA sociologist at Johns Hopkins, Told me in 2021.
Several sources confirmed to Vox that multiple cash rental assistance studies could begin as early as this year.
While housing leaders are pitching the research As a modest policy inquiry, the officials involved are keenly aware of the potentially dramatic implications of this research, if studies show that cash actually works better. A small pilot could lead to a larger federally funded demonstration study, which officials say could then prompt Congress to make permanent changes to the massive bipartisan program.
How the concept of cash rental assistance has progressed
The road to McCabe’s announcement in Detroit traces its origins to the 1970s, a now largely forgotten nationwide study of cash rental assistance. Known as the Experimental Housing Allowance Program, 50,000 families 12 U.S. cities across the country received cash subsidies for rent. Evaluators of the program found that the subsidies were well received and successfully administered, but policymakers turned their attention to the new federal housing voucher program, then known as Section 8.
In 2017, Todd Richardson, a longtime HUD employee whose team inadvertently discovered old reports of these federal tests, Recommended That these results can inform the existing Moving to Work voucher program.
Enthusiasm has been boosted since the successful trial of cash assistance for Covid-19, ranging from rental assistance and stimulus checks to child tax credits and dozens of Guaranteed Income Pilot. In 2022 Philadelphia also launched its own Cash Rent Assistance Pilot, study of 300 households selected to receive money on a prepaid debit card each month.
By September 2023, Vox reports, HUD officials will begin formally pitching philanthropies and basic income advocates for a partnership to study this cash rental assistance idea. Part of their hope was that private charitable dollars might have fewer legal restrictions than federal voucher funds, which HUD attorneys still considered ineligible to use for research.
Since then HUD has been meeting regularly with nonprofits, funding, and housing experts on how to get this cash assistance idea off the ground. The Federal Housing Agency is holding monthly virtual meetings in November Invite a private event in Washington, DC.
James Riccio, along with the national policy research group MDRC, participated in those monthly calls led by HUD analyst Paul Joyce, and he told Vox that his nonprofit should know “within the next month” if they can formally move forward with the cash rent assistance study design. If they go ahead, Riccio thinks their design work could be completed by late summer or early fall.
“We’ve taken the gauntlet that HUD has thrown down and are trying to create a demonstration that will inform HUD’s efforts,” he said.
MDRC aims to conduct a two-year randomized control trial across five geographically diverse cities studying 1,000 households. Half of these will pay for their accommodation with traditional vouchers and the other half will use cash.
“We don’t really know how it’s going to play out, if landlords are more inclined to rent to people,” Riccio said. “There seems to be very good reason to think this could be true, but it’s something we can learn from.”
Advocates of basic income see a big opportunity
The pilot program is particularly exciting for guaranteed income advocates, who believe that governments should provide individuals with unconditional cash payments to reduce poverty, promote economic stability and ensure a basic standard of living.
In the early years of the pandemic, federal emergency aid fueled some testing of this guaranteed income concept. But that money has largely run out, and the billions of dollars in federal voucher dollars allocated annually present advocates with a much more potentially reliable funding stream.
For now, movement leaders stress that they see cash rental assistance as a supplement to, rather than a replacement for, other forms of housing assistance.
“We don’t want to inspire HUD to take away funding for the voucher program, which, along with other rental assistance, lifts 900,000 people out of poverty every year,” said Nika Soon-Shiong, executive director of the Fund for Guaranteed Income, which currently cash rents. Support is raising funds for the pilot. “It’s not about more or less government, it’s about what kinds of interactions officials are investing in. If every call to verify the income of a low-income tenant is instead, ‘Hey, I hear you need a ride. I can drive you.’
The Fund for Guaranteed Income, which has conducted a dozen basic income pilots across the United States, is Hoping to launch a rental assistance study Later this year. It will be less statistically precise than what an MDRC is pursuing, but Soon-Shiong says they will focus more on practical design questions, specifically helping people move into apartments more easily. Their small pilot will aim to study 100 people for one year who receive direct cash, compared to 100 people from the waiting list who receive vouchers.
“What we’re trying to pilot is the process of creating that cash on-ramp, and that looks specifically at redesigning the housing inspection form, and making sure that the contract that they sign can be converted into a housing assistance payment contract, sooner rather than later.” -Shiong told Vox. “Our particular intervention is focused on how we can solve one of the main problems with the program, which is people not being able to use their vouchers.”
At the Detroit conference on Wednesday, McCabe gave a shout-out to the Fund for Guaranteed Income’s work and emphasized that he sees a variety of studies as helpful in building the evidence base.
“I want to emphasize that there are a million different ways that this type of program could be built, and they’re going to test different things and solve different problems in the voucher program,” he said. “But ultimately, we’re wondering what it means for families to pay cash to pay their rent.”
