The Center's work on 'Budget' Issues


Rental Assistance Kept Over 3 Million People Out of Poverty Last Year, New Census Data Show

October 16, 2014 at 4:33 pm

Rental assistance programs kept millions of people above the poverty line in 2013, according to CBPP’s analysis of new Census data.  The findings highlight the central role that rental assistance plays in helping low-income Americans keep a roof over their heads.

Our analysis using the Census Bureau’s Supplemental Poverty Measure (SPM), which accounts for non-cash benefits and taxes as well as cash income, shows that rental assistance kept 3.1 million people, including 1.0 million children, out of poverty last year (see chart).  (The SPM methodology understates the value of some types of rental subsidies, so the actual impact on poverty likely is somewhat higher than these estimates indicate.)

The SPM data don’t break down what type of rental assistance kept these people out of poverty, but for most, it likely was one of the three primary federal rental assistance programs: Housing Choice Vouchers, Public Housing, and Section 8 Project-Based Rental Assistance.

Rental assistance could lift many more people out poverty, but due to funding constraints only one in four families eligible for assistance receives it.  Families without rental assistance are far more likely to experience homelessness and housing instability, which have been linked to negative health, education, and developmental outcomes over the long run.

Sequestration cuts to Housing Choice Vouchers in 2013 caused tens of thousands more families to be left without the assistance they need to afford stable homes.  Those cuts were only partly restored in 2014.  When it returns in November, Congress will consider legislation setting 2015 funding levels for many federal programs.  As they weigh their options, policymakers should place a high priority on protecting funding for rental assistance to avoid exposing more of the nation’s most vulnerable people to poverty, homelessness, and hardship.

One Way to Help Poor Kids Do Better in School: Help Their Families Move to Better Neighborhoods

October 16, 2014 at 3:18 pm

Housing location makes a difference in low-income children’s short- and long-term success, as we detail in our new paper.  There’s growing evidence that violent, stressful, high-poverty neighborhoods can compromise children’s cognitive development, school performance, and health — and that low-poverty neighborhoods with high-quality schools improve low-income children’s school performance.

Many studies show strong links between neighborhood (and school) poverty and poor student academic performance.  A study led by Harvard University’s Robert Sampson showed, for example, that the verbal skills of children growing up in severely disadvantaged neighborhoods were lower — by an amount equivalent to one to two years of schooling —than those of children in better neighborhoods.  And separate studies (here, here, and here) led by New York University researcher Patrick Sharkey concluded that exposure to neighborhood violence can affect kids’ intellectual development.

These studies line up with the burgeoning research about the harmful effects on children of toxic stress, which affects young children’s brain development of in ways that undermine their cognitive skills, and can contribute to long-term health problems such as heart disease.  While much of the toxic stress research has focused on the effects of child abuse and family dysfunction, severely disadvantaged neighborhoods — particularly those where violent crime is common — can also contribute.

This leads to the question: if high-poverty neighborhoods hurt kids’ school performance, do low-poverty neighborhoods help?  The evidence here is surprisingly complex, as researchers have found it difficult to disentangle neighborhood effects from individual, family, and other influences.  But recent research provides strong evidence that low-poverty neighborhoods with high-quality schools can boost children’s achievement.

A rigorous study by RAND researcher Heather Schwartz of low-income children living in public housing in Montgomery County, Maryland, found that:

  1. Low-income students who lived in low-poverty neighborhoods and attended low-poverty schools made large gains in reading and math scores over a period of seven years, compared with other students living in public housing and attending moderate- or moderately high-poverty schools (see chart).
  2. These educational gains accrued over time, with the majority of the gains accruing in years five to seven.  Residential stability in low-poverty neighborhoods and schools thus appeared to be a crucial condition of the children’s success.
  3. Students benefited academically from living in low-poverty neighborhoods, but most (two-thirds) of the gains came from attending a low-poverty school.


The research shows that children can benefit from living in neighborhoods that provide better opportunities, but federal rental assistance programs fall short in helping families make such moves.  We’ll take a closer look at this challenge — and what federal, state, and local agencies can do to meet it — in follow-up posts.

Rental Assistance Can Do More to Help Kids Live in Better Neighborhoods

October 15, 2014 at 12:13 pm

Where children grow up can influence their lifelong health and success, and improvements to federal rental assistance programs could substantially better their life outcomes, our new report explains.

Nearly 4 million children live in families that receive federal rental assistance.  But just 15 percent of the kids whose families receive rent subsidies through the Department of Housing and Urban Development’s (HUD) three major rental assistance programs — the Housing Choice Voucher (HCV) program, public housing, and Section 8 Project-Based Rental Assistance — live in high-opportunity neighborhoods with access to good schools, safe streets, and high rates of employment.  A larger share (18 percent) of children in assisted families live in neighborhoods of extreme poverty, where at least 40 percent of the residents are poor.

Children exposed to neighborhood violence and extreme poverty often suffer cognitive, health, and academic deficiencies, research shows, while low-income children who can move to safer neighborhoods with better schools have experienced significant improvements in their lives, including gains in academic performance.

Over several decades, policymakers have tried to reduce the extent to which low-income families receiving federal rental assistance are concentrated in distressed neighborhoods and, instead, to improve these families’ access to higher-opportunity neighborhoods.  To do so, they’ve relied increasingly on housing vouchers (rather than housing projects) so that families may choose where to live.

The HCV program has performed much better than HUD’s project-based rental assistance programs in enabling more low-income families with children to live in lower-poverty neighborhoods (see chart).  Having a housing voucher also substantially reduces the likelihood of living in an extreme-poverty neighborhood.

Nevertheless, a quarter of a million children in the HCV program live in these troubled neighborhoods.  As now administered, the HCV program doesn’t adequately deliver on its potential to expand children’s access to good schools in safe neighborhoods.

Based on the evidence on how housing location affects low-income families, particularly children, and federal rental assistance programs’ performance on location-related measures, we recommend two near-term goals:  1) federal rental assistance programs should provide greater opportunities for families to choose affordable housing outside of extreme-poverty neighborhoods; and 2) the programs should provide better access for families to low-poverty, safe communities with better-performing schools.

We can make substantial progress toward these goals in the next few years, even in the current fiscally constrained environment and without congressional action or more funding.

Federal, state, and local agencies can take four key actions to help more families in the HCV program to live in better locations:

  • Create stronger incentives for local and state housing agencies to help families move to better neighborhoods.
  • Modify policies that discourage families from living in higher-opportunity communities.
  • Minimize jurisdictional barriers to families’ ability to choose to live in high-opportunity communities through the HCV program.
  • Better assist families in using vouchers to live in high-opportunity areas.

Click here to read the full report.

Sequestration’s Effects Linger for Housing Agencies

September 16, 2014 at 7:47 am

The 2013 sequestration budget cuts caused severe shortfalls at state and local housing agencies that administer federal rental assistance programs, and the cuts are continuing to affect low-income families, as the New York Times reports.  Most agencies sharply reduced the number of families they assisted by not reissuing housing vouchers when the families using them left the program.  These cuts have continued into 2014, despite the fact that Congress partly reversed sequestration this year.  As of March, housing agencies were assisting some 90,000 fewer low-income families due to sequestration.

The agencies are passing the budget strain on to low-income families in other ways, too.  In New York, the city’s Department of Housing Preservation and Development is raising the rent for nearly one-third of the 32,000 low-income families using its housing vouchers.  This forces families to make tough choices: either absorb rent increases of as much as several hundred dollars per month or move to a smaller, lower-priced unit, if they can find one in New York’s tight rental market.

Such choices are particularly difficult for seniors, who are disproportionately affected by the rent increases in New York.  Many have lived in their current apartment for many years, and they may have difficulty navigating the process of finding, moving, and adapting to a new apartment and neighborhood.

Housing authorities across the nation — from Napa, California, to Alexandria, Virginia — have continued to make similar changes in response to sequestration.  While Congress partly reversed the sequestration cuts in 2014, many housing agencies have been reluctant to reverse rent increases or cuts in the number of families they’re assisting, due in large part to the uncertain budget outlook for 2015.

Congress has yet to complete the fiscal year 2015 budget for the Department of Housing and Urban Development (HUD), which administers the housing voucher program and most other federal rental assistance programs, and it likely won’t until after the November elections.  Moreover, the HUD funding bills approved by the House and the Senate Appropriations Committee would increase housing voucher funding modestly, but not enough to cover the increase in program costs due to rising rent and utility costs.  As a result, they would risk locking in most of the sequestration voucher cuts.

As Congress completes the 2015 budget this fall, it should make a priority of fully restoring the vouchers lost to sequestration, or current voucher holders will face higher rents, while families on waitlists continue to pay unaffordable rents, risking homelessness if they fail to make ends meet.

Why the Ryan Plan Should Worry Those Concerned About the Affordable Housing Crisis, Part 2

August 5, 2014 at 11:52 am

House Budget Committee Chairman Paul Ryan’s proposal to consolidate 11 safety net and related programs, including the four largest federal rental assistance programs, into a single block grant to  states risks significant funding cuts to housing assistance that helps 4.7 million low-income families, as we explained last week.  Today, we’ll describe how the combination of those cuts, and the possible elimination under Ryan’s plan of program rules that ensure housing stability and affordable rents, could undercut rental assistance programs’ effectiveness and put substantial numbers of vulnerable families at risk for homelessness.

Federal rental assistance programs are effective.  They sharply reduce housing instability and homelessness and lift 2.8 million people out of poverty (with the bulk of these impacts coming from the programs included in the Ryan plan).  These effects, in turn, are linked to educational, developmental, and health benefits that can improve children’s long-term life chances.

But Chairman Ryan’s proposal, which would give states broad latitude in spending block grant funds, could enable states to jettison federal rules that are essential to the rental assistance programs’ success, or even to eliminate one or more programs.  The drops in funding that likely would occur over time would increase the risks that states would make damaging changes to housing assistance programs.  The following actions are among those states could take:

  • They could cut the number of families receiving rental assistance.  Such cuts would cause the long waiting lists to grow longer and could occur despite Ryan’s promise that his plan would honor existing rental assistance contracts. Most assistance included in the proposed Opportunity Grant is provided through the Housing Choice Voucher and Public Housing programs, which are typically funded annually (with assistance provided through annual contracts).  Most contracts with private owners under the other two rental assistance programs that Ryan would fold into the block grant also are short term, so this protection would not last long.  Moreover, if states seek to shift some funds from housing programs to other uses and don’t renew a substantial share of these contracts or maintain public housing properties, cities and towns — which may have little say in state decisions on how to use the Opportunity Grant funds — could see housing developments become unaffordable for many low-income households.  And if there is a perception that a state could fail to renew contracts or maintain rental subsidies, that almost certainly would make it more difficult and costly to attract private investment for affordable housing.
  • They could reduce per-unit subsidy levels, since the rules that set those levels in existing rental assistance programs would no longer apply.  In the Housing Choice Voucher program (which allows most participants to rent modest units of their choice in the private market), such cuts could force families to rent lower-priced units in higher-poverty neighborhoods with high crime rates and poor schools.  The other three programs that Ryan would include in the Opportunity Grant (Public Housing, Section 8 Project-Based Rental Assistance, and rural rental assistance, which the U.S. Agriculture Department administers) tie subsidies to particular developments; in those programs, subsidy cuts could make it difficult to pay for adequate building maintenance — already a major problem among Public Housing developments — or for owners to make units available to poor families at an affordable rent.
  • They could shift costs to participating families by raising rents.  Rent rules currently require most assisted families to contribute 30 percent of their income for housing, a share consistent with commonly accepted standards of affordability.  Rental assistance fills the gap between this contribution and actual costs, within reasonable limits that the federal and local agencies set.  Some poor families who may not be able to pay higher rents might find they could no longer afford their apartments if their rents rose substantially.