Throughout this month, Urban Institute scholars will offer evidence-based ideas for programs and policies public housing agencies can test through the US Department of Housing and Urban Development’s Moving to Work Demonstration.

There is not enough federal rental assistance to go around; but Public Housing Authorities (PHAs) are testing alternatives that might extend the reach of housing assistance and provide greater stability to more people.

The Housing Choice Voucher (HCV) program, the largest federal rental assistance program, provides a deep subsidy to assisted households. However, only 24 percent of eligible households receive assistance. The lack of federal rental assistance is a major contributor to the rise in homelessness, evictions, and severe rent burdens. Increasing the availability of vouchers, particularly for the poorest households, is critical.

Absent a significant increase in federal vouchers, PHAs are trying to figure out how to do more with less. The expansion of Moving to Work (MTW), which gives PHAs greater flexibility to adjust policies, provides an opportunity to experiment with different models of “shallow subsidies.” Shallow subsidies would serve more people with the same budget by offering a smaller subsidy than what is currently provided in the HCV program. Shallow subsidies could offer less assistance per month than the voucher program, provide assistance for a shorter period, or both.

Some PHAs, like the Minneapolis Public Housing Authority, have used their MTW status to create shallow subsidies. Minneapolis’s Soft Subsidy Initiative provides formerly homeless families a $500 monthly subsidy for no more than five years. In comparison, Minneapolis households with an HCV receive an average monthly subsidy of about $1,000. 

An Urban Institute paper details the shallow subsidy models that merit testing and how the experiments could be designed. PHAs could choose from several shallow subsidy models to test, including

• a flat subsidy not based on household income, with a lower monthly value than the average subsidy in the voucher program;
• a flexible subsidy with an annual cap to allow households to decide how much assistance they need each month; and
• a stepped-down structure where the level of assistance diminishes over time.

There are many unanswered questions about shallow subsidies, so it is important to proceed with caution. Research shows that long-term rental assistance helps prevent homelessness, reduce other hardships such as hunger, and, in some circumstances, lead to better health and education outcomes. Research also shows that emergency assistance programs such as rapid rehousing, which provides rental assistance for no more than two years, can help people exit homelessness and move into permanent housing, but is insufficient to create long-term housing stability.

While some households, particularly those on fixed incomes or those with severe disabilities, require a deep subsidy, others may be successful with a shallow subsidy that falls somewhere in between emergency assistance and the HCV program. Policy experiments through the MTW expansion can help us determine if there is middle ground that would allow more households to receive rental assistance without undermining its effectiveness. PHAs could test these shallow subsidies against each other or against traditional vouchers. The resulting research could benefit policymakers eager to have more tools in their toolbox to provide assistance to low-income renters.