Big Expansion of HUD’S ‘Moving to Work’ Demonstration Not the Smart Way to Improve Housing Assistance

It’s important that federal housing assistance operate as efficiently and effectively as possible.  Unfortunately, some members of Congress are considering a misguided strategy to pursue that goal: expanding HUD’s Moving-to-Work (MTW) demonstration.

Despite its name, MTW is not focused on promoting work.  Instead, it gives state and local housing agencies sweeping authority to operate public housing and “Section 8” voucher programs outside of federal laws and regulations that normally apply.  As I wrote in a new analysis, MTW has been ineffective in testing experimental policies (because it isn’t designed as a rigorous research demonstration) and is a poor way to streamline program rules (because it covers a small share of housing agencies, and it sweeps aside key standards that make programs effective along with poorly designed rules that merit reform).

Among its most damaging effects, MTW has allowed agencies to shift hundreds of millions of dollars from housing vouchers to other purposes.  Many agencies use the money for well-designed projects that meet needs in the local community, but this still means leaving vulnerable families on waiting lists for assistance and at risk of homelessness and other serious hardship.   As the graph shows, MTW agencies provide housing assistance to just 9 families with every $100,000 in federal funds, while other agencies help close to 15.  Expanding MTW — especially at a time when state and local governments are looking urgently for funds to fill gaps in their budgets — would leave more families without assistance.

Fortunately, Congress and HUD could streamline rules, test innovative policies, and empower high-performing agencies without undermining key program standards or permitting funding shifts.  I’ll discuss how to do so in a blog tomorrow.