Rockville, Md. – Home is the foundation of health and wellbeing, but over 20 million American renters bore burdensome housing costs even before the COVID-19 pandemic began. Housing subsidies provide vital support to such renters, enabling them to remain in stable housing and devote more of their resources to covering other basic needs.
For decades, this assistance has been based on a formula under which recipients of housing subsidies contribute about 30 percent of their monthly income to rent. Studies have shown that housing assistance has a slight negative effect on recipients’ employment outcomes, but it’s unclear how much of that effect is because their portion of the rent goes up as they earn more (thus acting as a disincentive to increasing wages), as opposed to simply having less need to work because, thanks to the subsidy, their rent is more affordable. Under HUD's Moving to Work authority, 10 public housing agencies are testing two different formulas for determining housing assistance to see if they result in improved employment outcomes. Abt has been awarded a grant to research the impacts of both formulas in two different communities. We’ll work alongside residents of HUD-assisted households to understand how they are affected by these new ways of calculating households’ contributions to the rent.
The two formulas used in the Stepped and Tiered Rent Demonstration (STRD) offer different approaches to changing rents:
- The stepped approach raises a household’s portion of the rent over time regardless of what happens to income.
- The tiered approach recalculates a household’s income-based rents every three years instead of every year.
Each approach includes hardship provisions for households who experience a loss of income or other challenges.
Recipients will be randomly assigned to one of these approaches or the status quo. Abt will collaborate with a panel of housing assistance participants throughout the study so we can learn more about both the usage and challenges of housing subsidies from those who understand them best.
“This project will enable us to learn about the impacts of these proposed policies from those most affected by housing subsidies,” explained Abt’s project director, Anna Jefferson. “It’s a great opportunity to demonstrate why equity is the cornerstone of Abt’s work to improve the wellbeing of people worldwide.”
About Abt Associates
Abt Associates is a global consulting and research firm that combines data and bold thinking to improve the quality of people's lives. We partner with clients and communities to advance equity and innovation—from creating scalable digital solutions and combatting infectious disease, to mitigating climate change and evaluating programs for measurable social impact. https://www.abtassociates.com