Senior Policy Analyst
The Senate Appropriations Committee’s 2016 funding bill for the Departments of Transportation and Housing and Urban Development (HUD) would dramatically expand the Moving to Work (MTW) demonstration program, as we discuss in a new analysis. Although MTW has fostered some useful policy innovations, it’s also had significant adverse effects — and expanding MTW without substantial reforms, as the Senate bill proposes, would pose major risks for low-income families.
MTW allows participating state and local housing agencies to obtain broad waivers of federal laws and rules governing the public housing and Housing Choice Voucher programs, to shift funds from those programs to other purposes, and to receive funding under special block grant formulas.
The Senate bill directs HUD to boost the number of housing agencies participating in MTW more than eightfold, potentially extending it to 35 percent of the nation’s vouchers and public housing units. The bill also would block important reforms HUD plans to make at agencies already participating in MTW.
The risks include:
Risk of future cuts. The provisions could lay the groundwork for even deeper voucher cuts in the future by converting more than 40 percent of voucher funds to block grants, which, as the graph shows, tend to be more vulnerable to funding reductions. For example, the Native American Housing Block Grant — which policymakers established to consolidate funding to Native American tribes and tribal housing agencies for vouchers, public housing, and several smaller funding streams — has lost 26 percent of its inflation-adjusted value since 2001, while Section 8 funding has grown by 26 percent to cover the costs of new vouchers approved by Congress and a growing gap between market rents and the incomes of poor families.
Well-designed reforms, such as requirements that participating agencies use most voucher funds for rental vouchers and limits on waivers of key protections for low-income tenants, could lessen MTW’s risks. Unfortunately, the Senate provisions move in the opposite direction by sharply expanding the demonstration while blocking needed reforms.