HUD is seeking to test whether rental assistance is more effective if it’s provided directly to families, with no requirement that a site owner enter a contract with a housing agency or meet other administrative requirements of the Housing Choice Voucher (HCV) program, the most common form of federal rental assistance.
HUD says some researchers, advocates, policymakers, and public housing agencies have expressed interest in testing a ‘‘direct rental assistance’’ model. The model would provide a rental housing subsidy directly to the renter, rather than providing it to the site.
The approach is similar to what HUD did with its Experimental Housing Allowance Program (EHAP) in the 1970s. The EHAP program ultimately helped to inform the design of the HCV programs. One notable feature of EHAP, which wasn’t adopted by the HCV program, was that the subsidy was paid directly to the assisted household, rather than being paid to the owner. One reason that HUD is now interested in direct rental assistance is to better understand the implications of that policy design choice.
HUD’s Office of Policy Development and Research (PD&R) and Office of Public and Indian Housing (PIH) have released a Request for Information (RFI) to seek public input on the concept to inform future policy development. HUD is requesting comments by Aug. 30 but late-filed comments will be considered to the extent practicable. HUD strongly recommends that interested persons submit comments electronically through the Federal eRulemaking Portal at www.regulations.gov.
Housing Choice Vouchers are highly effective at reducing homelessness, overcrowding, and housing instability. However, too many families aren’t able to use their vouchers before they expire, in part because many owners don’t accept vouchers and most states and localities lack laws against discrimination based on source of legal income.
In addition, even though vouchers theoretically offer a pathway for those who wish to move to lower-poverty neighborhoods with high-performing schools and other resources, voucher holders don’t locate in low-poverty areas at significantly higher rates than other families with low incomes. This is because of the difficulty of finding owners in lower-poverty neighborhoods who will participate in the voucher program.
Direct rental assistance could be one of the ways to overcome this challenge. The direct assistance approach could potentially make it easier for families to find a place to live, including in a wide range of neighborhoods, and may also reduce administrative costs. It could also be designed to allow families to keep some savings if they find lower-cost housing, using program resources more efficiently and giving families more flexibility to address other pressing needs.
HUD’s RFI states that HUD is not currently developing a direct rental assistance demonstration or pilot but may do so in the future under the Moving to Work (MTW) Demonstration program or under other new legislative authority if provided by Congress. HUD says its interest in research on direct rental assistance is tied to it being a rental assistance program, not an unrestricted cash transfer. For direct rental assistance to support HUD’s evidence-based policy development and program improvement goals, HUD believes it should align with the HCV program in the following ways:
HUD’s RFI asks six questions to the public. HUD is interested in learning about the effect of direct rental assistance on the following outcomes: