Absence of conflict of interest.
Citation
Highlights
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The study's objective was to examine the impact of the Rent Reform Demonstration on earnings and employment among families served by four large Public Housing Authorities (PHAs). The authors investigated similar research questions for each of the PHAs as separate contrasts, the individual profiles of which are available here:
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The study was a randomized controlled trial that used PHA administrative data and wage records to compare families receiving housing choice vouchers who were subject to the new Rent Reform Demonstration rules to a comparison group subject to the existing rent rules of their PHA.
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The study found that families in the new rent policy group had statistically significant higher employment rates and higher total earnings than those in the comparison group, only in the sixth quarter after random assignment. The study also found that families in the new rent policy group were statistically significant more likely to remain in the HCV program than those the comparison group, and received a housing subsidy for more months than the comparison group.
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The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the Rent Reform Demonstration, and not to other factors.
Intervention Examined
Rent Reform Demonstration
Features of the Intervention
The federal Housing Choice Voucher program that provides rental subsidies to low-income families has been criticized for having a disincentive to work (due to policies that increase rent prices as family income rises) and for requiring substantial administrative costs and effort to implement. In 2015, the U.S. Department of Housing and Urban Development (HUD) launched the Rent Reform Demonstration to design and evaluate an alternative rent-subsidy policy for housing choice voucher recipients.
The new Rent Reform Demonstration policy updated three main areas of the subsidy program: (1) how total tenant payments and subsidies are calculated, (2) recertification time periods, and (3) safeguards for families. First, the policy simplified how the total tenant payment (TTP) is calculated by basing it on gross income over the past 12 months (rather than adjusted income), ignoring income earned from total family assets less than $25,000, and linking utility allowances to voucher amounts. The new policy also included a $50 to $150 minimum total tenant payment (with amounts varying by location) to mirror a typical landlord-tenant relationship. Second, annual income recertifications were replaced with a triennial recertification to ensure that that earnings gains do not increase TTP for at least two years. Finally, the new policy included additional safeguards for families. For example, the revised policy included a 6-month grace period to allow families to temporarily reduce their TTP after the triennial recertification if their current or expected income was lower than their income over the prior 12 months and allowed for the family to apply annually for interim recertifications when their income dropped by more than 10 percent. Additionally, the new policy included a revised hardship policy that allowed TTP reductions under specific conditions (e.g., when facing eviction).
Features of the Study
The study was a randomized control trial designed to evaluate the effects of the Rent Reform Demonstration on earnings and employment. The authors used a statistical model to compare the outcomes of the treatment and control group members based on PHA administrative records and wage records obtained through the National Directory of New Hires.
The study sample included 6,665 households who were not elderly or disabled (as defined by HUD), were currently receiving housing choice vouchers, and were scheduled for recertification in one of four PHA locations (the Lexington-Fayette Urban County Housing Authority in Lexington, KY; Louisville Metropolitan Housing Authority in Louisville, KY; San Antonio Housing Authority in San Antonio, TX; and the District of Columbia Housing Authority in Washington, D.C.). A total of 3,312 households were randomly assigned to the treatment group and were subject to the new rent policy for the duration of the demonstration. Additionally, 3,353 households were assigned to the control group and were subject to the existing rent policies of their PHA. Heads of households were predominately female (94 percent), Black/African-American (69 percent), and 39 years old on average.
Findings
Employment
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The study found that significantly more families in the new rent policy group had been employed at some point in the prior three months (2.9 percent more) in the sixth quarter after random assignment than those in the comparison group. However, the percentage of families who were ever employed in Year 1 (Quarters 3-6), Year 2 (Quarters 7-10), and all other individual quarters was not significantly different across the groups.
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The study found that the average quarterly employment rate was significantly higher for the new rent policy group (1.6 percentage points) than the comparison group in Year 1, but not for Year 2 or in Years 1 and 2 combined.
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The study found that families in the new rent policy group were statistically significantly more likely to be employed in all quarters (2.6 percentage points) during Year 1 (Quarters 3-6) than those in the comparison group.
Earnings and wages
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The study found that families in the new rent policy group had statistically significant higher total earnings in the sixth quarter after random assignment ($141 more) than those the comparison group. However, total earnings in Year 1 (Quarters 3-6), Year 2 (Quarters 7-10), Years 1 and 2 combined (Quarters 3-10), and all other individual quarters were not significantly different across the groups.
Public Benefits Receipt
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The study found that families in the new rent policy group were statistically significant more likely to remain in the HCV program than the comparison group at both 1 year and 30 months after random assignment (2.5 and 5 percentage points, respectively).
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The study found that the new rent policy group had a statistically significant longer time that they received a housing subsidy compared to the comparison group at both 1 year and 30 months after random assignment (0.2 and 1.2 months longer, respectively).
Considerations for Interpreting the Findings
Although the study was a well-implemented randomized controlled trial, there are a few factors that should be considered when interpreting the findings.
The study authors estimated multiple related impacts on outcomes related to employment. Performing multiple statistical tests on related outcomes makes it more likely that some impacts will be found statistically significant purely by chance and not because they reflect program effectiveness. The authors did not perform statistical adjustments to account for the multiple tests in the Employment Domain, so the number of statistically significant findings in this domain is likely to be overstated. Outcomes in the other domains (Earnings and Wages, Public Benefits Receipt) were adjusted for multiple comparisons, and do not have this same concern.
The study examined outcomes across multiple Public Housing Authorities, with the authors noting that the implementation of the Rent Reform Demonstration varied across the four PHAs. Of note, Lexington had already introduced a $150 minimum TTP before the demonstration began, so both the new rent policy and existing rent policy group were subject to the same minimum TTP. Furthermore, Washington D.C. did not implement the triennial certification until after the first year of the study.
These differences in implementation and the existing rent rules also could have impacted the observed outcomes.
For the purposes of this report, the authors defined the follow-up period as “the period that begins in the month after the month in which the family’s new TTP was expected to take effect” and not from random assignment. A family’s new TTP effective date typically occurred 4 to 6 months after random assignment (in Quarter 3). Thus, Year 1 is defined as Quarters 3-6 after random assignment, and Year 2 is defined as Quarters 7-10 after random assignment.
Causal Evidence Rating
The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the Rent Reform Demonstration, and not to other factors.