The Trump administration’s fiscal year 2019 budget proposes to amend the U.S. Housing Act—which authorizes federal public housing and voucher programs—to permit work requirements and raise participants’ rents. Changes like these along with proposed budget cuts for housing programs and changes to other safety net programs would increase hardship among low-income families.
Only a small share of US households who are assisted by public housing and voucher programs are unemployed. By increasing rent and thereby reducing the amount of money families have to cover employment-related costs, these proposed changes to the Housing Act could counteract their own goal of boosting employment.
The changes could make it more difficult for people who aren’t working to get a job and make it harder for those who are already working to keep their jobs, much less to increase the number of hours they work.
What’s in the proposal?
Under the proposed changes to the Housing Act, public housing agencies and owners of project-based voucher properties would be allowed to establish a work requirement that would apply to all adults in assisted households, except those who are elderly or disabled.
Housing agencies and owners could require up to 32 hours of work a week per adult household member—defined as employment, vocational training, or education. Volunteer work would not qualify. Beyond these broad outlines, agencies would have leeway to determine the details as they think best for their communities.
Other amendments would increase challenges for assisted residents who are looking for work or already working. For example, families would pay rent based on 35 percent of their gross income, a substantial increase from the current 30 percent of net income. Not only does this proposal increase the proportion of family income that would go toward rent, it eliminates deductions, including childcare and medical expenses. The proposal also sets an effective minimum monthly rent of $152.52, or 35 percent of gross income from working 15 hours a week at the federal minimum wage of $7.25.
What could higher rental costs mean for families?
Raising rental costs changes the amount of money people have to pay for other essential costs that support employment, like childcare and transportation. We also need research on how policies like these proposed changes affect individuals’ ability to find employment or stay employed, and the impact on their well-being in general.
The proposal would affect rents for elderly and disabled household heads by basing rent on 30 percent of gross rather than net income and establishing a minimum rent of $50. And housing assistance safety valves, such as requesting a temporary reduction in rent, would be modified so that increased childcare or medical costs would no longer be acceptable reasons for a reduction.
Proposed cuts in other safety net programs—including Temporary Assistance for Needy Families (TANF), the Supplemental Nutrition Assistance Program (SNAP), the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), and childcare subsidies—would amplify challenges for families who receive benefits from one or more other programs. The Urban Institute’s analysis of the 2018 proposed changes to safety net programs estimated that rent increases and reductions in other benefits would lead to an average annual loss of $1,230 in resources for low-income families and increase the number of families in poverty.
We know that families experiencing high rent burdens will reduce costs wherever possible to pay rent, even if it means cutting back on food and other necessities. With increased expenses and reduced income supports, the potential for negative outcomes for families and especially children is considerable.
Do work requirements really work?
Previous research on work requirements in TANF found modest employment increases that decreased with time and did not increase stable employment in most cases. Most TANF recipients also remained poor.
No research has produced evidence showing that increasing rent for assisted households will lead to increased employment and income. Further, no evidence shows that imposing work requirements on housing assistance will increase employment or earnings and reduce the need for assistance. And it’s unclear whether there are enough jobs available for low-skilled workers within their communities that will pay sufficient wages, offer family-friendly schedules, and provide benefits so families can care for their children.
We do know that these types of changes are likely to leave very low-income families who are already struggling to make ends meet worse off than they were before.