A new flexible rent subsidy program aims to help working families afford housing
Photo by Jeff Greenough/Getty Images.
The District of Columbia Housing Authority waiting list for Housing Choice Vouchers contains more than 40,000 families, even though the list closed in 2013. Like cities across America, DC has an immense need for stable, safe, and affordable housing, with thousands of households struggling to pay their rent each month.
Nationally, resources for providing families with housing assistance are inadequate. DC is piloting a new approach, the DC Flexible Rent Subsidy Program (DC Flex), to test whether shallow (smaller than the average subsidy, over a defined period) and flexible subsidies can help more families maintain affordable, adequate housing.
Housing vouchers work but have gaps
Current housing programs focus on long-term subsidies or short-term emergency rental assistance. For many families, deep, long-term vouchers, which pay a significant portion of housing costs, are necessary to afford housing, particularly in a high-cost area like DC. We know that Housing Choice Vouchers, or Section 8 vouchers, reduce housing costs, improve housing stability, and help children move out of poverty.
But funding for vouchers is limited, vouchers may be inefficient or difficult to use, and time on waiting lists can often be measured in decades (project-based Section 8 units and public housing face similarly long waits).
How shallow subsidies can help address the need
Short-term emergency rental assistance provides immediate support for families in or at risk of homelessness but does not always provide a pathway to long-term stability. Shallow subsidies provide families smaller amounts of money over a defined period. These subsidies could distribute scarce housing resources among more families that are on the cusp of housing stability, for whom a small subsidy could yield a large increase in stability. In theory, shallow subsidies would add another layer to the housing safety net, easing the transition from housing instability and relieving some of the demand on housing programs with deeper subsidies.
DC’s new program aims to test this idea. The DC Flex program allocates $7,200 a year to each family, via a program-specific bank account, for up to four years (the term of the pilot), or longer if the program is continued.
To be eligible, families must make 30 percent of DC’s median income, be employed, have a valid lease in a registered apartment within DC, and have applied for or received emergency housing or homelessness assistance in the past.
These requirements are designed to assist low-income working families whose earnings and expenses may fluctuate from month to month. These families might not require the long-term deep subsidy provided by a voucher but need a cushion to prevent them from becoming homeless and to help them maintain financial stability.
The program allows families to decide how much of the subsidy to spend each month, up to their full rent amount. This gives families flexibility in how they use the money. An off month might see the family use the full subsidy, but in a boom month, the family might use none.
The program does not offer case management or housing search assistance, but families are required to attend at least two one-on-one financial coaching sessions. At the end of each year, the family can withdraw up to $500 of leftover funds for household expenses, and at the end of the program, the family can withdraw any remaining savings.
The pilot uses a lottery to select households and to facilitate a rigorous evaluation of how the program affects participant outcomes relative to a control group.
Evaluation will help gauge and boost effectiveness
The Urban Institute and The Lab @ DC, the DC government’s applied scientific team, are partnering to evaluate the program. The evaluation will use interviews, surveys, and administrative data to understand whether the subsidy helped families maintain housing, avoid eviction, and build stability and wealth.
This work will shed light on whether shallow subsidies can be a positive tool to fight housing instability and prevent homelessness.