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 the Public Housing Authority (PHA) in Washington, DC. The authors also investigated similar research questions for each of the three other PHAs as separate contrasts and conducted a pooled analysis across all four sites, the 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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In Washington D.C., the study found that the families in the new rent policy group received a housing subsidy significantly longer than those in the existing rent rules group at 30 months. The study found that employment, average quarterly employment, total earnings, and likelihood of remaining in the HCV program were not significantly different across the new rent policy group and 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.
In Washington, DC 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. Additionally, a $75 minimum total tenant payment designed to mirror a typical landlord-tenant relationship was also implemented for the first time as part of the new rent policy. 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).
The study served existing tenant-based housing choice voucher holder families that were not an elderly or disabled household (as defined by HUD).
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 for the District of Columbia Housing Authority in Washington, D.C. 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 D.C. PHA study sample included 1,909 households who were not elderly or disabled (as defined by HUD), were currently receiving housing choice vouchers, and were scheduled for recertification. 944 households were randomly assigned to the treatment group and were subject to the new rent policy for the duration of the demonstration. 965 households were assigned to the control group and were subject to the existing rent policies in place at the D.C. PHA. Heads of households were predominately female (91 percent), Black/African-American (97 percent), and 42 years old on average.
Findings
Employment
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The study found that employment and average quarterly employment were not significantly different across families in the new rent policy group and the comparison group.
Earnings and Wages
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The study found that total earnings were not significantly different across the new rent policy group and the comparison group.
Public Benefits Receipt
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The study found that the likelihood of remaining in the HCV program was not significantly different across the new rent policy group and the comparison group.
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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 30 months (0.6 months). However, the length of time receiving a housing subsidy was not significantly different across the groups in Year 1.
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, Earnings, and Public Benefits Receipt. 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, so the number of statistically significant findings in these domains is likely to be overstated.
Prior to the Rent Reform Demonstration, Washington, D.C. had instituted a biennial recertification schedule for working-age, nondisabled families. D.C. did not implement the 3-year recertification period and income-reporting requirements until after the 1st year of implementation for the new rent policy group. Thus, the authors suggest that the findings cannot represent the impact of the updated recertification period, which they assert as the most important policy change.
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.