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Policymakers Should Expand and Strengthen HUD’s Family Self-Sufficiency Program

Congress may soon consider bills to improve and expand the Department of Housing and Urban Development’s Family Self-Sufficiency (FSS) program for low-income families that get rental assistance. Senators Roy Blunt, Jack Reed, Tim Scott, and Bob Menendez introduced the Family Self-Sufficiency Act, which would make a recent FSS expansion permanent and improve program efficiency, and Rep. Emanuel Cleaver said he’ll introduce similar legislation in the House.

FSS, which has a long history of bipartisan support, is a public-private partnership that works, and expanding its reach would help more low-income families build a path out of poverty.

Established in 1990 based on a proposal by the George H.W. Bush Administration, FSS is an employment and savings incentive program that serves low-income families who live in public housing or have Housing Choice Vouchers. About 72,000 families are now enrolled. Starting last year, families who receive Project-Based Rental Assistance (PBRA) also have been allowed to participate if the owners of the property where they live opt into it. Public housing agencies (PHAs) leverage partnerships with the philanthropic and business sectors to connect participants to resources that improve their access to economic opportunities, such as jobs or affordable mortgages.

Program participants voluntarily enroll in FSS and work for five years with coordinators who connect them to vocational training, educational opportunities, jobs, and other services to help them achieve their self-sufficiency goals. As participants’ earnings rise, their increased rent payments are deposited in an escrow savings account that they receive when they complete the program. Many use their savings to buy a home or invest in education or a business.

At a recent hearing, the House Financial Services Committee’s Housing and Insurance Subcommittee examined FSS’ key successes and challenges, and the ways in which it could be improved.

Witnesses discussed its benefits:

  • Voluntary participation. As Stacy Spann, Housing Opportunities Commission of Montgomery County, noted, “Self-sufficiency is a continuum and one size cannot fit all.” Under the program’s model, families choose FSS when they’re best positioned to invest in themselves and their futures.
  • Improved financial outcomes. Participants in an FSS program combined with financial coaching experienced larger earnings growth, reductions in welfare income, and improved credit, compared with similar families who didn’t have the option to enroll in FSS, a recent FSS study showed.

FSS benefits PHAs by improving relationships among tenants, agencies, and property owners, and by helping PHAs provide better and more comprehensive services to residents, research has shown.

Though FSS has generated positive outcomes for participants and PHAs, witnesses also offered recommendations to improve the program, several of which are included in the Family Self-Sufficiency Act, such as:

  • Permanently expanding FSS to PBRA. Until recently, families receiving Section 8 PBRA couldn’t enroll in FSS. The President and Congress have provided a temporary expansion of FSS to PBRA in recent appropriations laws. Permanently expanding the program to PBRA would serve more families and encourage PBRA owners to participate in it.
  • Combining separate FSS programs under unified policies to improve program efficiency. As originally designed, FSS for public housing and the Housing Choice Voucher program operate separately. Combining them would make it easier and more efficient for PHAs to administer the program. Recent appropriations laws have temporarily removed the statutory barriers to PHAs operating a single FSS program for families regardless of which housing program they participate in. Modifying the FSS statute would make the combination of the two programs permanent.