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Housing assistance needs a basic-income approach

A new subsidy program in D.C. would give recipients a flat payment to help them make rent–and use the leftover money for whatever else they need.

Housing assistance needs a basic-income approach
[Source Image: invincible_bulldog/iStock]

While extremely low-income families face enormous difficulties in the housing market due to a 7.2 million shortage of deeply affordable homes, it’s often people hovering above the poverty threshold, but still financially strapped, who have the hardest time. Very low-income households can qualify for significant, long-term housing assistance like Section 8 vouchers, which effectively stabilize people’s living situations. Other programs, such as New York City’s “One Shot Deal” initiative, provide short-term assistance to households suddenly facing financial stress that impacts their ability to make rent.

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Despite the benefits of these two common housing assistance models, they don’t quite cover a specific and growing demographic: households without enough income to place them above the poverty line, but whose financial situations regularly fluctuate throughout the year due to the nature of their work or various expenses like school and transportation. Some months, they may have enough to make rent; others, they might struggle. These stressors are predictable enough to disqualify those who experience them from emergency assistance, but not drastic enough to merit Section 8 assistance.

[Source Image: invincible_bulldog/iStock]

What would benefit them might look something like a flexible subsidy program, through which a family receives a stipend, distributed over the course of a year, that they can use to offset rent payments in difficult months, but save or use for other expenses in months when their rent feels more affordable. It’s not exactly a new idea–the National Alliance to End Homelessness has recommended that housing assistance subsidies be flexible and responsive to individual need, and in 2016 Los Angeles piloted a small program that followed a similar model–but it’s not widespread.

The District of Columbia Department of Human Services is beginning a pilot program of this type of subsidy this year, called D.C. Flex. To qualify for the annual stipend of $7,200 for up to four years, families must make around 30% of D.C.’s median annual income, be employed, have a valid lease in D.C., and have either applied for or received emergency housing assistance in the past. While the income requirement is similar to that which would qualify a family to receive a Section 8 subsidy, only around 25% of families who qualify for federal housing assistance receive it, and the point of D.C. Flex is to alleviate rent burdens for people whose income fluctuates over the course of a year, rather than people who live in consistent poverty.

[Source Image: invincible_bulldog/iStock]

Over the course of the four-year program, DHS will allocate around $1 million annually to around 120 families. At the end of every year, recipients will be able to withdraw up to $500 that they didn’t use for other expenses; by the end of the four years, they can access anything left over from the $28,800 total that they receive for the program. In short: Even if a household doesn’t use the entire subsidy on rent, they will receive the full sum of the subsidy. The Urban Institute, along with The Lab @ DC, the local government’s data and research arm, will be evaluating the program through interviews with recipients, surveys, and other data collection efforts over the course of the program, says Mychal Cohen, a research analyst at the Urban Institute.

The goal of the program is to stabilize low-income families enough so that they never struggle to pay rent–which can lead to eviction and other negative outcomes–but can still use the money in a fairly unstructured way. “One of the more interesting things about the program is that the decision-making is squarely in the hands of the household,” Cohen says. “That provides people more autonomy in decision-making.”

[Source Image: invincible_bulldog/iStock]

In that respect, the D.C. Flex program feels almost like a basic-income initiative, but with housing at its center. Basic income, a radical concept that’s worked its way into the mainstream in the past several years with cosigns from entrepreneur and 2020 Presidential hopeful Andrew Yang, Facebook cofounder Chris Hughes, and Barack Obama, and several pilot programs, advocates for regular cash payments to people without the requirements that often bog down federal assistance programs like food stamps. Basic income is most beneficial, and most commonly discussed, as a means of lifting people out of poverty, and because it doesn’t come attached with a work requirement or a complex framework for how to spend it, it returns autonomy and agency to people receiving the money and entrusts them with making their own decisions. The studies on basic income so far have found that the extra money enables people to pursue further education, access healthier food, or, as the D.C. Flex program aims to do, stabilize their housing situations.

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While the D.C. Flex program is just getting off the ground–because it’s a relatively new approach, Cohen says, it’s taken some time to build out the implementation framework–it’s expected to have a positive impact on the 120 families that receive it. The data-collection work that Urban Institute and The Lab @ DC do will be important, because other cities, such as Boston, are already looking to D.C. as a model for how to carry out this program. Perhaps as basic income continues to grow in popularity, this model of housing assistance will also become more widespread.

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About the author

Eillie Anzilotti is an assistant editor for Fast Company's Ideas section, covering sustainability, social good, and alternative economies. Previously, she wrote for CityLab.

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