The voices of Urban Institute's researchers and staff
September 22, 2014

Is housing assistance a safety net or a springboard?

September 22, 2014

Roughly 4.6 million households* in the United States receive federal housing assistance. That may sound like a large number, but demand far exceeds supply. Unlike entitlement programs such as Social Security or food stamps, housing assistance does not reach the vast majority of those who are eligible. As the Urban Institute has illustrated, while the number of families that need assistance grows, a dwindling percentage actually receive aid.

Ideally, those relative few who receive help would be kept from falling into extreme deprivation and, eventually, move from subsidy to financial stability. But is this the case? Is housing assistance a springboard to economic opportunity?

Today, with the release of the largest study ever to explore the issue, we have evidence that the answer is, by and large, no.

The study

From the mid-1990s through the 2000s, the US Department of Housing and Urban Development tested whether incentives to move to low-poverty neighborhoods would improve the life chances of very low-income public housing residents. The Moving to Opportunity (MTO) demonstration program followed the progress of more than 4,600 households from five cities—Baltimore, Boston, Chicago, Los Angeles, and New York. In the process, it yielded 15 years of data, including information on 1,149 households who were no longer receiving housing assistance at the end of the demonstration. For this study, my coauthors and I augmented MTO data with in-depth interviews with families that left assistance in Boston and Los Angeles.

Housing “leavers” versus those with assistance

At the end of the demonstration, the income of those who left assistance was 45 percent higher, an average of $23,915 versus $13,153. But income alone does not accurately reflect the changes in leavers’ circumstances. For one, higher income was not always the result of new or better-paying employment, but appeared to be related to marriage, with a new spouse often bringing new financial resources. Furthermore, the bump in income, whatever the source, often came with a downside. In most instances, the new income did not offset the loss of the housing subsidy enough to significantly reduce a family’s housing cost burden, but it did render families ineligible for other forms of social welfare, like food stamps.

Leavers carried a greater debt load and struggled to afford housing: 70 percent spent one-third or more of their monthly income on rent or a mortgage payment. So despite the addition of a new wage earner or another event that boosted cash on hand, after leaving assistance, most families still faced poverty—or near-poverty—and deprivation.

MTO

Why families left the program matters

How families fared after leaving housing assistance depended on why they left. Some exited the program for positive reasons, for example, a bump in income that pushed them above the threshold to qualify for a subsidy, while others left for negative reasons, including eviction or violation of program rules.

This difference mattered.

As a group, positive leavers reported better mental and physical health than those still receiving assistance. They were also 5 percent more likely than those receiving assistance to indicate that they had moved to a better neighborhood and 21 percent more likely to say they felt safe in their neighborhood at night.

By contrast, negative leavers looked a lot like those still on assistance, minus the income support. Nearly half of negative leavers, 46 percent, reported being homelessness at some point (either before or after receiving aid).

A mixed and troubling picture

For families in the Moving to Opportunity demonstration, housing assistance was not a springboard but a safety net. Once it was removed, some were able to increase their incomes, move to better neighborhoods, and report greater mental and physical health than those who stayed. Yet even many of the better-situated families hovered around the poverty line, and some of the least fortunate fell into a deeper level of material hardship.

In a follow-up post, we’ll discuss the policy implications of the varied experiences of those who once benefited from subsidized housing and policies that could help ease the transition off of assistance.

*This post has been updated to reflect the fact that 4.6 million households, not 4.6 million people receive federal housing assistance.

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