Big Expansion of HUD’S ‘Moving to Work’ Demonstration Not the Smart Way to Improve Housing Assistance

September 27, 2011 at 4:21 pm

It’s important that federal housing assistance operate as efficiently and effectively as possible.  Unfortunately, some members of Congress are considering a misguided strategy to pursue that goal: expanding HUD’s Moving-to-Work (MTW) demonstration.

MTW Agencies Assisted Fewer Families Per Dollar of Federal Funding Than Non-MTW AgenciesDespite its name, MTW is not focused on promoting work.  Instead, it gives state and local housing agencies sweeping authority to operate public housing and “Section 8” voucher programs outside of federal laws and regulations that normally apply.  As I wrote in a new analysis, MTW has been ineffective in testing experimental policies (because it isn’t designed as a rigorous research demonstration) and is a poor way to streamline program rules (because it covers a small share of housing agencies, and it sweeps aside key standards that make programs effective along with poorly designed rules that merit reform).

Among its most damaging effects, MTW has allowed agencies to shift hundreds of millions of dollars from housing vouchers to other purposes.  Many agencies use the money for well-designed projects that meet needs in the local community, but this still means leaving vulnerable families on waiting lists for assistance and at risk of homelessness and other serious hardship.   As the graph shows, MTW agencies provide housing assistance to just 9 families with every $100,000 in federal funds, while other agencies help close to 15.  Expanding MTW — especially at a time when state and local governments are looking urgently for funds to fill gaps in their budgets — would leave more families without assistance.

Fortunately, Congress and HUD could streamline rules, test innovative policies, and empower high-performing agencies without undermining key program standards or permitting funding shifts.  I’ll discuss how to do so in a blog tomorrow.

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More About Will Fischer

Will Fischer

Fischer is a Senior Policy Analyst, focusing on federal low-income housing programs, including Section 8 vouchers, public housing, and the Low-Income Housing Tax Credit.

Full bio | Blog Archive | Research archive at CBPP.org

3 Comments Add Yours ↓

Comments are listed in reverse chronological order.

  1. Ted Van Dyke and Jim Armstrong #
    1

    We’ve read your response. Thank you for taking the time to address our point. We continue to question whether you are correctly measuring the number of families assisted by MTW agencies. The statute reads, “…continuing to assist substantially the same total number of eligible low-income families as would have been served had the amounts not been combined…” Of these 75 percent must be very low-income. It makes no mention of a qualification that these families must “receive some MTW funds that year” that you stipulate be required in order to count as a family assisted by the agency. As we wrote, you have created a “subjective standard which does not apply…to MTW agencies.” If an MTW agency builds or otherwise plays a critical role in creating units that serve the statutory population and which do not require direct HUD subsidies from the public housing or Section 8 programs, it is a significant accomplishment. In fact, that is a valuable component of the program–determining whether agencies can produce more affordable housing when freed from strict HUD regulations and funding guidelines. Although there may be some gray areas, we fail to see why providing housing to eligible families should not be considered to be “assisting” them. While we do not know the exact number, that is why we believe it is important that an analysis include all LIHTC and other “affordable” units developed in this manner, if its purpose is to evaluate the MTW program accurately.

  2. Ted Van Dyke and Jim Armstrong #
    2

    We question whether the methodology you use to derive the Number of Families Assisted is accurate. All HAs, including MTW agencies must assist “low-income” (80% of AMI) families. MTW agreements require that 75% of the families agencies serve be very low-income (50% of AMI). Targeting requirements for all other agencies only cover new admissions to programs. CBPP’s exclusion of LIHTC and other “affordable” units and inclusion of only units serving ELI families (30% of AMI) fails to recognize housing that meets MTW agreements and that could even be interpreted to exceed targeting standards applicable to all other programs. Analyzing a program based on subjective standards which do not apply either to MTW agencies or any other sponsor of deeply assisted housing and then criticizing it for not meeting these standards runs the risk of coming to a false conclusion. It would be like saying spending a lot of money on the Boston Red Sox was a waste, because they cannot play football. Granted, in this example, it’s questionable how well the Boston Red Sox play baseball. In the context of the MTW program, though, what would the paper’s analysis be like if you included the legitimate LIHTC and affordable units?

    • 3

      Thanks for the comment

      It’s unlikely that adopting the approach that the comment suggests would alter our findings significantly. The data MTW agencies report in this area is spotty, but it appears that the number of families in question — those that lived during 2009 in Low-Income Housing Tax Credit (LIHTC) units and other “affordable” units that received some MTW funds that year but not substantial rental assistance — was well below 1 percent of the total number of families that MTW agencies assisted.

      But we think our approach is the right one, and that it results in the fairest comparison possible between MTW and non-MTW agencies with the available information. The LIHTC is a separately funded program that supports the construction or rehabilitation of housing with rents affordable to families with incomes up to 60 percent of the local median. Even if an MTW agency supplements LIHTC funding for a given unit with some public housing or voucher funds, if the owner charges a rent at or close to the maximum permitted by the LIHTC it makes little sense to count the tenant as an additional family assisted due to the agency’s MTW program. On the other hand, when MTW-funded subsidies reduce rents in an LIHTC unit substantially, residents should count as assisted families. We adopted this approach in our analysis (and also applied it to a small number of vaguely described “affordable” units whose subsidy structure was unclear), as the appendix explains.



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