Research Shows Housing Vouchers Reduce Hardship and Provide Platform for Long-Term Gains Among Children
March 10, 2014
The Housing Choice Voucher program, the nation's largest rental assistance program, helps more than 2 million low-income families rent modest units of their choice in the private market. Vouchers sharply reduce homelessness and other hardships, lift more than a million people out of poverty, and give families an opportunity to move to safer, less poor neighborhoods. These effects, in turn, are closely linked to educational, developmental, and health benefits that can improve children's long-term life chances and reduce costs in other public programs. This analysis reviews research findings on vouchers' impact on families with children, people with disabilities, and other poor and vulnerable households.
Reducing Crowding, Housing Instability, and Homelessness
Housing vouchers have been found to sharply reduce homelessness, housing instability, and overcrowding among program participants. A rigorous evaluation conducted from 2000 to 2004 examined the effect of vouchers on low-income families with children. When researchers compared families that were randomly selected to receive vouchers (and then used a voucher for at least part of the year in which a follow up survey was conducted) to families in a control group who did not use vouchers, they found that vouchers:
- Reduced the share of families that lived in shelters or on the streets by three-fourths, from 13 percent to 3 percent.
- Reduced the share of families that lacked a home of their own -- a broader group that includes those doubled up with friends and family in addition to those in shelters or on the streets -- by close to 80 percent, from 45 percent to 9 percent.
- Reduced the share of families living in crowded conditions by more than half, from 46 percent to 22 percent.
- Reduced the number of times that families moved over a five-year period, on average, by close to 40 percent.
Rigorous studies also show that vouchers are highly effective among other types of low-income households -- including individuals with severe mental illness and veterans with psychiatric or substance abuse disorders -- in reducing homelessness and increasing access to stable, independent housing.
Not only do the housing problems that vouchers address cause immediate hardship, but research also links them to a range of other adverse outcomes with long-term consequences. Among children, homelessness is associated with increased likelihood of cognitive and mental health problems, physical health problems such as asthma, physical assaults, accidental injuries, and poor school performance. Children in crowded homes may lack an appropriate space to do homework and experience higher stress that interferes with academic performance. Studies have found that children in crowded housing score lower on reading tests and complete less schooling than their peers.
Frequent family moves have been linked to attention and behavioral problems among preschool children. Moves often force children to switch schools, and low-income children who switch schools frequently tend to perform less well academically, are less likely to complete high school, and as adults obtain jobs with lower earnings and skill requirements. Housing instability also affects the classmates of students who move; in schools with high turnover, teachers are less able to gauge the effects of instruction, lessons become review-oriented, the pace of curriculum slows, and student achievement is substantially lower.
Vouchers and other rental assistance lifted 2.8 million people -- including 1 million children -- above the poverty line in 2012 under the federal government's Supplemental Poverty Measure, which counts non-cash benefits. Vouchers alone likely produced at least half of that effect. Research has shown that poverty may do long-term damage to children's neural development. In addition, research on a range of other income-support policies also has shown that children in poor families that receive added income do better in school and likely earn more as adults.
By reducing families' rental costs, rental assistance allows them to devote more of their limited resources to meeting other basic needs. Families paying large shares of their income for rent spend less on food, clothing, health care, and transportation than those with affordable rents. Children in low-income households that pay around 30 percent of their income for rent (as voucher holders typically do) score better on cognitive development tests than children in households with higher rent burdens; research suggests that this is partly because parents with affordable rent burdens can invest more in activities and materials that support their children's development. Children in families that are behind on their rent, on the other hand, are disproportionately likely to be in poor health and experience developmental delays.
Helping Low-Wage Workers Make Ends Meet
About two-thirds of non-elderly, non-disabled voucher holders work or worked recently, and vouchers are critical to enabling low-income working families to make ends meet. For a mother of two renting an apartment for $700 and working 30 hours a week at the minimum wage, a voucher is worth about $440 a month.
The research evidence on the impact of rental assistance on employment and earnings is mixed. One rigorous, random-assignment evaluation of vouchers for families with children found that earnings dropped temporarily when families first received a voucher (perhaps because some participants changed jobs when they used the voucher to move) but that this effect disappeared over time, and that vouchers had no significant impact on work over a 3.5 year follow-up period. A second rigorous study found some ongoing reductions in earnings among voucher holders in Chicago, although it isn't clear whether those findings are applicable elsewhere.
There also is important evidence, however, that welfare-to-work programs that help parents find jobs are more effective among families that receive housing assistance than among other families. This finding suggests that stable housing may be an important prerequisite for a parent's ability to succeed in job training and employment.
The Department of Housing and Urban Development (HUD) is sponsoring national random-assignment evaluations of two policies designed to increase earnings among voucher holders. The first evaluation will test changes to the rules for setting voucher holders' rents that are intended to simplify administration and strengthen work incentives for participants. The second evaluation will assess HUD's Family Self-Sufficiency (FSS) program, which provides some voucher holders and public housing residents with employment counseling, service referrals, and financial incentives to encourage work and support saving. Non-experimental findings show substantial earnings growth among FSS graduates, and early results from an experimental study in New York show that after 30 months of implementation, the program raised earnings substantially among some (though not all) subgroups of voucher holders.
Giving Families Access to Neighborhoods with Better Opportunities
By allowing families to rent a unit of their choice in the private market, vouchers enable them to move to safer neighborhoods with less poverty and higher employment rates. A growing body of evidence indicates that growing up in neighborhoods of concentrated poverty can adversely affect children's health, education, and long-term economic prospects.
For children living in particularly violent neighborhoods, using a voucher to move to a less poor, safer neighborhood appears to lead to an increase in their test scores. And where rental assistance has enabled low-income children to attend high-performing, economically mixed schools over an extended period, students have scored higher on math and reading tests than comparable children who attended poorer schools. Research also shows that families that used a housing voucher to move to a less poor neighborhood were less likely to suffer from extreme obesity and diabetes, a result that could reflect better access to public exercise space or reduced stress due to lower crime.
While some critics claim that moves by voucher holders lead to more crime in destination neighborhoods, a careful study of neighborhood crime rates in ten large cities found no evidence of this effect.
Instituting promising reforms in the voucher program could enhance the effectiveness of vouchers in giving families access to higher-opportunity neighborhoods.
Reducing Costs in Health Care and Other Public Services
In addition to improving the lives of vulnerable low-income people, vouchers and other rental assistance can produce savings in other program areas that offset part (in some circumstances all) of the cost of the rental assistance. For example:
- One study found that rental assistance combined with supportive services for families at risk of losing their children to the child welfare system kept families together and improved outcomes for children. The study documented savings in the emergency shelter and child welfare systems that offset almost the entire cost of providing rental assistance and supportive services. A larger evaluation is underway to confirm and expand on these findings.
- Rental assistance combined with supportive services for homeless people with serious health problems can achieve savings in the health care, corrections, and emergency shelter systems. The combined savings may be close to or above the cost of the rental assistance and services.
- Vouchers can help the elderly and people with disabilities retain their independence and avoid or delay entering more costly institutional care facilities by enabling them to rent accessible units in the private market or live in supportive housing developments that meet their needs. Helping elderly people and people with disabilities to live independently can help reduce health care costs.
Extending Voucher Assistance to More Families
Due to funding limitations, only about one in four families eligible for a voucher receives any form of federal rental assistance; there are long waiting lists for vouchers in much of the country. The findings discussed above suggest that significantly expanding the number of vouchers would have powerful benefits for poor families and society more broadly. At a minimum, Congress should provide sufficient funding in 2015 to maintain all vouchers now in use and restore the approximately 70,000 vouchers lost last year due to the "sequestration" budget cuts.
 For an overview of the voucher program, see "Policy Basics: The Housing Voucher Program, Center on Budget and Policy Priorities, January 25, 2013, http://www.cbpp.org/cms/index.cfm?fa=view&id=279.
 Data are from a follow-up survey conducted four and a half to five years after random assignment. Data show the percentage of families that were homeless and without homes of their own during the 12 months preceding the survey, the percentage in overcrowded housing at the time of the survey, and the total number of moves during the period after random assignment. This study targeted families who received, had recently received, or were eligible for Temporary Assistance for Needy Families (TANF), and 80 percent of participants received TANF benefits at the start of the evaluation. By the end of the study period, however, only about 30 percent of participants received TANF benefits. By comparison, 19 percent of all voucher holders with children received TANF benefits in 2010 according to HUD data. Michelle Wood, Jennifer Turnham, and Gregory Mills, "Housing Affordability and Family Well-Being: Results from the Housing Voucher Evaluation," Housing Policy Debate, volume 19, issue 2, pp. 367-412, 2008; Gregory Mills et al., "Effects of Housing Vouchers on Welfare Families," prepared for U.S. Department of Housing and Urban Development Office of Policy Development and Research, September 2006.
 Michael S. Hurlburt, Patricia A. Wood, and Richard L. Hough, "Providing Independent Housing for the Homeless Mentally Ill: A Novel Approach to Evaluating Long-Term Housing Patterns," Journal of Community Psychology, volume 24, number 3, pp. 291-310, 1996.
 Robert Rosenheck et al., "Cost-effectiveness of Supported Housing for Homeless Persons with Mental Illness," Archives of General Psychiatry, September 2003; Maria J. O'Connell, Wesley Kasprow, and Robert A. Rosenheck, "Rates and Risk Factors in a Sample of Formerly Homeless Veterans," Psychiatric Services, volume 59, number 3,March 2008.
 Marybeth Shinn et al., "Long-Term Associations of Homelessness with Children's Well-Being," American Behavioral Scientist, volume 51, number 6, February 2008; Linda C. Berti et al., "Comparison of Health Status of Children Using a School-Based Health Center for Comprehensive Care," Journal of Pediatric Health Care, volume 15, pp. 244-250, September/October 2001.
 Berti et al, note 5.
 Stanley K. Frencher et al., "A Comparative Analysis of Serious Injury among Homeless and Housed Low Income Residents of New York City," Trauma, volume 69, number 4, October 2010.
 Frencher et al., note 7.
 Jelena Obradovic et al., "Academic Achievement of Homeless and Highly Mobile Children in an Urban School District," Development and Psychopathology, 2009.
 Lorraine E. Maxwell, "Home and School Density Effects on Elementary School Children: The Role of Spatial Density," Environment and Behavior, volume 35, number 4, pp. 566-578, 2003.
 Maxwell, note 10.
 Frank Braconi, "Housing and Schooling," The Urban Prospect, Citizens Housing and Planning Council, 2001; Dalton Conley, "A Room with a View or a Room of One's Own? Housing and Social Stratification," Sociological Forum, volume 16, number 2, pp. 263-280, 2001.
 Kathleen M. Ziol-Guest and Claire C. McKenna, "Early Childhood Housing Instability and School Readiness," Child Development, 2013.
 David T. Burkam et al., "School Mobility in the Early Elementary Grades: Frequency and Impact from Nationally Representative Data," prepared for workshop on Impact of Mobility and Change on the Lives of Young Children, Schools, and Neighborhoods, June 4, 2009; Arthur J. Reynolds, Chin-Chih Chen, and Janette Herbers, "School Mobility and Educational Success: A Research Synthesis and Evidence on Prevention," prepared for workshop on Impact of Mobility and Change on the Lives of Young Children, Schools, and Neighborhoods, June 22, 2009.
 Janette Herbers et al., "School Mobility and Developmental Outcomes in Young Adulthood," Development and Psychopathology, volume 25, pp. 501-515, 2013.
 David Kerbow, "Patterns of Urban Student Mobility and Local School Reform: Technical Report," Center for Research on the Education of Students Placed At Risk, October 1996.
 Stephen W. Raudenbush, Marshall Jean, and Emily Art, "Year-by-Year and Cumulative Impacts of Attending a High-Mobility Elementary School on Children's Mathematics Achievement in Chicago, 1995-2005," in Whither Opportunity? Rising Inequality, Schools, and Children's Life Chances, eds. Greg J. Duncan and Richard J. Murnane, Russell Sage Foundation and Spencer Foundation, pp. 359-375; Eric A. Hanushek et al., "Disruption versus Tiebout Improvement: the Costs and Benefits of Switching Schools," Journal of Public Economics, volume 88, pp. 1721-1746, 2004.
 CBPP calculations from Kathleen Short, The Research Supplemental Poverty Measure 2012, Census BureauSeries P60-247, November 2013, http://www.census.gov/prod/2013pubs/p60-247.pdf, accessed 2/26/14. The Current Population Survey data used to produce these estimates do not reliably distinguish between the effects of vouchers and other forms of rental assistance, such as public housing and project-based rental assistance. However, vouchers assist approximately half of the people with rental assistance and target a larger share of assistance on the poorest families than other forms of rental assistance do. Thus, vouchers likely account for at least half of rental assistance recipients lifted out of poverty.
 Jack P. Shonkoff, et al., "The Lifelong Effects of Early Childhood Adversity and Toxic Stress," PEDIATRICS, volume 129, number 1, pp. e232 -e246, 2012, http://pediatrics.aappublications.org/content/129/1/e232; Mark M. Kishiyama et al., "Socioeconomic Disparities Affect Prefrontal Function in Children," Journal of Cognitive Neuroscience, 21(6), pp. 1106-15, 2009.
 Greg J. Duncan and Katherine Magnuson, "The Long Reach of Early Childhood Poverty," Pathways, Winter 2011,
 Joint Center for Housing Studies of Harvard University, "America's Rental Housing: Evolving Markets and Needs," December 2013, p. 32, http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/jchs_americas_rental_housing_2013_1_0.pdf.
 Sandra Newman and Scott Holupka, "Housing Affordability and Child Well-Being," Center on Housing, Neighborhoods, and Communities working paper, August 2013.
 Sandra J. Newman and C. Scott Holupka, "Housing Affordability and Investments in Children," Journal of Housing Economics, December 2013.
 Elizabeth March et al., "Behind Closed Doors: The Hidden Health Impacts of Being Behind on Rent," Children's HealthWatch, January 2011, http://www.childrenshealthwatch.org/upload/resource/behindcloseddoors_report_jan11.pdf.
 Barbara Sard, "Most Rental Assistance Recipients Work, Are Elderly, or Have Disabilities," Center on Budget and Policy Priorities, July 17, 2013, http://www.cbpp.org/cms/index.cfm?fa=view&id=3992.
 For assessments of the research, see James A. Riccio, "Subsidized Housing and Employment: Building Evidence of What Works," in Nicolas P. Retsinas and Eric S. Belsky, eds., Revisiting Rental Housing, Joint Center for Housing Studies and Brookings Institution Press, 2008; Sandra Newman, C. Scott Holupka, and Joseph Harkness, "The Long-Term Effects of Housing Assistance on Work and Welfare," Journal of Policy Analysis and Management, volume 28, number 1, 81-101, 2009; and Jeff Lubell, "Rental Assistance: A Drag on Work or a Platform for Opportunity?," Spotlight on Poverty and Opportunity,December 12, 2011, http://www.spotlightonpoverty.org/ExclusiveCommentary.aspx?id=8f1764fe-5e54-4e1d-aee1-71e51f8bbc2e. While these assessments were published before the final version of the most rigorous study (Jacob and Ludwig, note 28) finding that vouchers reduce work, they were able to consider the central findings of that study -- along with other research -- because those findings had been published in working papers as early as 2006.
 Wood et al, note 2. As discussed above, this study examined families with children that received, had recently received, or were eligible for TANF benefits at the start of the study (although fewer than a third actually received TANF benefits by the end of the study). This may limit the applicability of the findings to other groups, particularly households without children. Two recent non-experimental studies that examined the effects of rental assistance on work among broader populations also found early negative effects on work but found that those effects were not sustained over the course of the study period. See Deven Carlson et al., "Long-Term Effects of Public Low-Income Housing Vouchers on Labor Market Outcomes," Institute for Research on Poverty discussion paper no. 1363-09, April 2009; and Newman et al, note 26.
 Brian A. Jacob and Jens Ludwig, "The Effects of Housing Assistance on Labor Supply: Evidence from a Voucher Lottery," American Economic Review, 101(1): 272-304, 2012. This study uses an experimental design and has a large sample size, making the findings highly reliable for the population it studies. But because it only assesses families in Chicago (an unusually segregated city) that were issued vouchers in 1997-98, 2000-01, and 2002-03 (a period when the city was beginning the nation's largest public housing transformation, a process that resulted in many public housing residents being displaced, issued vouchers, and placed in competition with other voucher holders for apartments), it is unclear whether the findings can be generalized to voucher holders in other places and times. Moreover, the study found significant adverse effects on employment only among one of the three cohorts examined -- those issued vouchers in 1997-98 -- further suggesting that the findings may not be generalizable.
 Riccio, note 26.
 Lalith de Silva et al, "Evaluation of the Family Self-Sufficiency Program: Prospective Study," prepared for U.S. Department of Housing and Urban Development Office of Policy Development and Research, February 2011; Nandita Verma et al, "Working Toward Self-Sufficiency: Early Findings from a Program for Housing Voucher Recipients in New York City," Manpower Demonstration Research Corporation, December 2012.
 Michael Lens et al, "Do Vouchers Help Low-Income Households Live in Safer Neighborhoods? Evidence on the Housing Choice Voucher Program," Cityscape, volume 13, number 3, 2011; Wood et al., note 2.
 Patrick Sharkey, Stuck in Place: Urban Neighborhoods and the End of Progress toward Racial Equality, The University of Chicago Press, 2013.
 Julia Burdick-Will et al., "Converging Evidence for Neighborhood Effects on Children's Test Scores: An Experimental, Quasi-Experimental, and Observational Comparison," in Duncan and Murnane, note 17, pp. 255-276.
 Heather Schwartz, "Housing Policy is School Policy," The Century Foundation, 2010, http://tcf.org/publications/pdfs/housing-policy-is-school-policy-pdf/Schwartz.pdf.
 Jens Ludwig et al., "Neighborhoods, Obesity, and Diabetes -- A Randomized Social Experiment," New England Journal of Medicine, 365:16, October 2011, http://www.nejm.org/doi/full/10.1056/NEJMsa1103216.
 Ingrid Gould Ellen, Michael E. Lens, and Katherine O'Regan, "American Murder Mystery Revisited: Do Housing Vouchers Cause Crime?" Housing Policy Debate, volume 22, number 4, pp. 551-572, 2012.
 For example, early research shows that a "small area fair market rent" policy that sets voucher subsidy caps in particular neighborhoods based on market rents for that neighborhood (as opposed to rents for the entire metropolitan area, as under the current policy) is more effective at enabling families to live in neighborhoods with better schools, more college graduates, and less violent crime, poverty, and unemployment. Robert Collinson and Peter Ganong, "Incidence and Price Discrimination: Evidence from Housing Vouchers," April 2013, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2255799.
 Corporation for Supportive Housing, "Is Supportive Housing a Cost-Effective Means of Preserving Families and Increasing Child Safety? Cost Analysis of CSH's Keeping Families Together Pilot," 2011; Donna Tapper, "Keeping Families Together: An Evaluation of the Implementation and Outcomes of a Pilot Supportive Housing Model for Families Involved in the Child Welfare System," Metis Associates, November 2010. The Department of Health and Human Services is currently carrying out a broader demonstration testing this approach.
 Michael Nardone, Richard Cho, and Kathy Moses, "Medicaid-Financed Services in Supportive Housing for High-Need Homeless Beneficiaries: The Business Case," Center for Health Care Strategies, Inc., June 2012,
http://www.rwjf.org/files/research/74485.business.case.pdf; Mary E. Larimer et al., "Health Care and Public Service Use and Costs Before and After Provision of Housing for Chronically Homeless Persons with Severe Alcohol Problems," Journal of the American Medical Association, 301:1349-1357, 2009; Dennis P. Culhane, Stephen Metraux, and Trevor Hadley, "Public Service Reductions Associated with Placement of Homeless Persons with Severe Mental Illness in Supportive Housing," Housing Policy Debate, volume 13, issue 1, 2002.
 Roger J. Stancliffe and K. Charlie Lakin, "Analysis of Expenditures and Outcomes of Residential Alternatives for Persons with Developmental Disabilities," American Journal on Mental Retardation 102(6): 552-68, 1998; Barbara A. Haley and Robert W. Gray, "Section 202 Supportive Housing for the Elderly?: Program Status and Performance Measurement," U.S. Department of Housing and Urban Development, Office of Policy Development and Research, June 2008.