Basic Facts About HUD’s Family Self-Sufficiency Program
End Notes
[1] This piece represents significant contributions from Barbara Sard, former CBPP Vice President for Housing Policy, and Jeffrey Lubell, Director of Housing and Community Initiatives at Abt Associates.
[2] A PHA that had previously received funding for new units (between 1993 and 1998), however, had to operate its FSS programs until the number of families graduating from its FSS program equaled the number of new units funded. Because Congress funded substantially more new housing vouchers than additional public housing units in this period, the initial FSS mandate (which HUD calls the “required minimum program size”) largely applied to PHAs that received housing vouchers. Some PHAs have not yet satisfied this requirement.
[3] Consolidated Appropriations Act, 2015, Pub. L. 113-235. It is likely that Congress excluded PBRA families from FSS participation because the program was originally structured as a mandate based on receipt of funding for additional units, and Congress had rescinded the authorization for new PBRA units in 1983.
[4] E.g., Department of Housing and Urban Development, Office of Public and Indian Housing, Administering an Effective Family Self-Sufficiency Program: A Guidebook Based on Evidence and Promising Practices, 2017, https://files.hudexchange.info/resources/documents/FSS-Program-Guidebook.pdf (“HUD Guidebook”). HUD’s materials on FSS are gathered at https://www.hudexchange.info/programs/fss/#1-introduction and, for PBRA programs, at https://www.hudexchange.info/programs/multifamily-fss/. Also see https://www.federalregister.gov/documents/2018/11/15/2018-24949/family-self-sufficiency-performance-measurement-system-composite-score.
[5] FY 2020 Further Consolidated Appropriations Act, Pub. L. 116-94, Division H, section 236.
[6] Section 306 of Pub. L. 115-474, May 24, 2018. The FSS provisions originated in the Senate, derived from S. 1344 which had bipartisan co-sponsors. A virtually identical bipartisan bill previously passed the House nearly unanimously.
[7] 85 Fed. Reg. 59234 (Sept. 21, 2020).
[8] For a brief explanation of HUD’s major rental assistance programs, see https://www.cbpp.org/research/housing/policy-basics-federal-rental-assistance.
[9] 79 Fed. Reg. 78100 (Dec. 29, 2014).
[10] Housing Notice H-2016-08 (August 26, 2016).
[11] Department of Housing and Urban Development, Office of Public and Indian Housing, Fiscal Year 2021 Congressional Justifications for “Self-Sufficiency Programs,” based on data for the 12 months ending June 2019. This represents a small share of potentially eligible households. HUD’s enrollment level does not include PBRA families enrolled in FSS, although HUD staff indicated that approximately 80 PBRA properties operate or have HUD approval to operate an FSS program as of May 2020.
[12] Nandita Verma et al., “Promoting Work and Self-Sufficiency for Housing Voucher Recipients: Early Findings From the Family Self-Sufficiency Program Evaluation,” March 2019, Table 2.4, includes race/ethnicity and other demographic data on FSS enrollees nationally in 2014. It indicates that 58.6 percent of such enrollees were Black/non-Hispanic, 15.5 percent were Hispanic or Latino, 22.8 percent were white, and 3.1 percent “other.”
[13] Common goals include employment, education and training, financial management and security, and homeownership-related activities. See Verma et al. Multiple household members can set their own goals and receive assistance from the FSS coordinator in achieving them. HUD Guidebook p. 27.
[14] See 79 Fed. Reg. 78100, Dec. 29, 2014, in which HUD changed its prior policy that allowed PHAs to terminate HCV assistance based on families’ failure to comply with FSS requirements without good cause. The 2018 statutory amendments make HUD’s policy change permanent. But HUD policy allows PHAs and PBRA owners to terminate families’ FSS participation (and forfeit any escrow savings) if families do not comply with the requirements of their FSS contract — such as meeting periodically with the FSS coordinator, participating in agreed-upon training programs, or seeking or maintaining employment — without good cause.
[15] Fiscal Year 2021 Congressional Justification.
[16] The Moving to Work (MTW) demonstration permits state and local housing agencies to obtain broad waivers of federal rules governing the public housing and Housing Choice Voucher programs so they can test alternative policies related to work and other areas. See https://www.cbpp.org/moving-to-work-0 for a compilation of recent CBPP reports on MTW. Some MTW PHAs make FSS participation mandatory, and terminate rental assistance for families that don’t comply with the requirements. See HUD’s compilation of MTW agencies’ FSS policies at https://www.hud.gov/sites/dfiles/PIH/documents/MTWFSSInnovationsJan2020.pdf.
[17] PHAs have discretion to allow FSS participants that have met one or more of their interim goals to withdraw funds from their escrow savings account to offset the loss of income from employment due to COVID-19, and HUD has encouraged them to use this discretion during this period of crisis. See Compass Working Capital, “FSS During COVID-19: A Conversation with HUD and Compass on HUD’s Guidance, Flexibility, and Innovation,” April 30, 2020, available at https://compass-working-capital.s3.amazonaws.com/Webinar_Q_and_A_-_FSS_During_COVID-19_20200521_095254.pdf.
[18] Fiscal Year 2021 Congressional Justifications; data for public housing and HCV only.
[19] Kim Parker, Juliana Menasce Horowitz, and Anna Brown, “About Half of Lower-Income Americans Report Household Job or Wage Loss Due to COVID-19,” Pew Research Center, April 21, 2020, https://www.pewsocialtrends.org/2020/04/21/about-half-of-lower-income-americans-report-household-job-or-wage-loss-due-to-covid-19/#many-adults-have-rainy-day-funds-but-shares-differ-widely-by-race-education-and-income; Jeff Larrimore et al., “Report on the Economic Well-Being of U.S. Households in 2015,” Board of Governors of the Federal Reserve System, updated December 1, 2016, https://www.federalreserve.gov/econresdata/2016-economic-well-being-of-us-households-in-2015-Income-and-Savings.htm.
[20] FSS graduates during the ten-year period ending in 2016 had accumulated an average of $6,270 in their escrow savings accounts at the point of exiting the FSS program. Department of Housing and Urban Development, “25 Years of the Family Self-Sufficiency Program,” 2017, https://www.hudexchange.info/programs/fss/25-years/#p=1. This figure includes families that graduated without any escrow funds (i.e., those with zero escrow), indicating that those who had escrow savings at graduation on average received more than $6,270. For a shorter and later period (the 12 months ending in June 2019), HUD reports that 41 percent of graduates had escrow savings at graduation averaging approximately $6,700. Fiscal Year 2021 Congressional Justification.
[21] For PHAs required to operate an FSS program of a minimum size due to receipt of new tenant-based rental assistance resources in 1992-1998, HUD evaluates compliance with enrollment requirements and performance in establishing escrow accounts for FSS participants as part of the Section Eight Management Assessment Program (SEMAP). Seven to 15 percent of these PHAs’ SEMAP points, depending on the agency’s size and location, are based on these two FSS-related criteria. The SEMAP criteria are not as comprehensive as the FSS performance criteria HUD adopted in 2018, and do not apply to the majority of PHAs that are not subject to the minimum size requirement. HUD’s performance assessment policy for public housing does not include any consideration of FSS performance.
[22] It is not clear whether FSS participation or graduation affects how long families receive rental assistance. While HUD data show that more than a third of FSS graduates left housing assistance within a year of graduation (Fiscal Year 2021 Congressional Justification), it is possible that the types of families that complete the FSS program would have made similar choices without the program. The current random assignment evaluation (see below) will hopefully help illuminate any causal connection.
[23] Federal policy does not specify the duration of employment required to meet the graduation requirement nor what constitutes “suitable” employment. The administering housing provider has substantial discretion to set these policies, consistent with families’ approved FSS plans that reflect their goals. Prior to implementation of new regulations that make the 2018 statutory changes effective, only the individual designated as head of household for purposes of rental assistance program compliance can sign the FSS contract, and that person must meet the employment requirements for graduation as well as their other specified goals. For households in the HCV program, however, HUD policy currently allows a family to graduate from the FSS program when the head of household is not employed but household income has increased to the point that the PHA no longer pays part of the family’s rent or utility costs. Some MTW agencies have received waivers from HUD to adopt a flexible policy on who can meet the employment requirement.
[24] HUD’s proposed FSS regulations would change the 12-month duration requirement for being free of welfare assistance to a policy that applies only at the point of graduation.
[25] If a member of the household receives “child-only” TANF benefits but the household does not include a parent of the child, such benefits do not violate the FSS graduation requirement. See PIH 2007-20, June 6, 2007. HUD’s proposed FSS regulations will codify this policy.
[26] An extension of the FSS contract could be particularly important for families whose contracts are due to expire during the COVID-related economic downturn, to provide an additional two years to regain employment. HUD has notified PHAs that COVID-19 provides good cause to grant such extensions if the PHA acts before December 31, 2020. HUD Notice PIH 2020-05, April 10, 2020.
[27] For an explanation of current rent policies in HUD’s rental assistance programs, see https://www.cbpp.org/research/housing/comparison-of-trump-and-ross-rent-proposals-to-current-law.
[28] Some MTW agencies have adopted different policies to calculate escrow savings, as well as policies for families to receive the funds. See https://www.hud.gov/sites/dfiles/PIH/documents/MTWFSSInnovationsJan2020.pdf.
[29] 24 C.F.R. 985.305(b)(2). Longstanding policy requires that families with incomes above 50 percent but less than 80 percent of the area median income accrue escrow savings at a lower rate. That policy will be eliminated when HUD implements the 2018 statutory changes.
[30] Fiscal Year 2021 Congressional Justification, based on data for the 12 months ending June 2019.
[31] To the extent that families in FSS would have paid higher rent due to earnings increases even without participating in the program, the escrow feature entails an additional cost to the federal treasury. But escrow savings due to income increases that were induced by participation in the program are not an additional federal cost.
[32] Public housing operating subsidy eligibility is based on tenant rent payments and FSS escrow accrued two years earlier. In the last 20 years, Congress has provided sufficient appropriations to fully fund the operating subsidy in only three years.
[33] Unlike public housing, it is quite rare for Congress to underfund HCV rent subsidies by more than one percent. Douglas Rice, “Substantial Funding Boost Needed to Renew Housing Vouchers in 2017,” Center on Budget and Policy Priorities, January 25, 2017, https://www.cbpp.org/research/housing/substantial-funding-boost-needed-to-renew-housing-vouchers-in-2017.
[34] Department of Housing and Urban Development, “25 Years of the Family Self-Sufficiency Program,” 2017, https://www.hudexchange.info/programs/fss/25-years/#p=1.
[35] HUD analysis of recent FSS graduation rates shows that only about a quarter of families in the program for five years or less had successfully completed the program at the median PHA. Some families may have received an extension and graduated within the up-to-two-year extended time frame. See https://www.hud.gov/sites/dfiles/documents/Copy_of_FSS_PMs_Measures_2018-11-13_final_website.xlsx.
[36] Verma et al. The study sample was enrolled between October 2013 and December 2014. Nearly all participants (95 percent) reported that they enrolled in the FSS program because of their interest in receiving financial counseling and management services and, to a lesser extent (70 percent), job-related services. More than half (56 percent) of the study sample was working at enrollment in the study and about 80 percent of both the FSS and control group members were employed at some point during the initial two years of the study.
[37] Abt Associates, “Evaluation of the Compass Family Self-Sufficiency (FSS) Programs Administered in Partnership with Public Housing Agencies in Lynn and Cambridge, Massachusetts,” September 13, 2017, https://www.abtassociates.com/compassFSS.
[38] Samuel Dastrup et al., “Interim Cost-Benefit Analysis of the Compass Family Self-Sufficiency (FSS) Program,” Abt Associates, December 21, 2017, https://www.abtassociates.com/insights/publications/report/interim-cost-benefit-analysis-of-the-compass-family-self-sufficiency. The study found a net cost to governments and private funders of $276 per participant household over the five years studied, after considering reductions in public benefits and increases in taxes. The net cost is reduced in part due to the less generous escrow policy applied by the Cambridge Housing Authority under its MTW program.
[39] 85 Fed. Reg. 59234, (Sept. 21, 2020).
[40] Hannah Thomas et al., “Qualitative Findings from the Rent-to-Save Pilot Demonstration,” Abt Associates, March 9, 2020, https://www.abtassociates.com/sites/default/files/files/Projects/PDFs/2020/qualitative-findings_rent-to-save_final.pdf.