Evaluation Finds that Participants in HUD’s Family Self-Sufficiency Program May Still Face Barriers to Upward Economic Mobility

By Mackenzie Pish, NLIHC Research Analyst 

A recent Cityscape article, “Supporting Economic Mobility Through HUD’s Family Self-Sufficiency Program: Findings and Recommendations From the National Impact Evaluation,” provides findings from the first national randomized controlled trial on the effects of HUD’s Family Self Sufficiency (FSS) program on households’ financial well-being. The research found that the FSS program increased households’ participation in financial services over the control group, but did not significantly affect outcomes tied to employment, income, or continued need for public benefits.  

Launched in the 1990s, the FSS program is designed to promote upward economic mobility of households receiving federal housing assistance by increasing household income from employment and reducing dependency on federal public benefits. Upon enrollment in the program, FSS participants sign a Contract of Participation that outlines individualized training and service plans designed to help households achieve two goals required to graduate from the program within a 5-year period: ongoing employment of the head of household and no household receipt of cash assistance from the Temporary Assistance for Needy Families (TANF) for twelve consecutive months. To ensure participating households are not inadvertently penalized by increasing rents due to rising household income from work earnings, the program includes an interest-bearing savings account to which net increases in rent during the program are credited. These funds are made available to households as a one-time payment only upon satisfaction of graduation requirements. 

The researchers recruited 18 public housing agencies (PHAs) in seven states to represent the diversity of conditions under which PHAs operate across the U.S.; each PHA was responsible for recruiting a share of the survey participants between October 2013 and December 2014. Eligible participants were heads of Housing Choice Voucher (HCV) recipient households between 18 and 61 years of age who were in good standing with the PHA, had completed an annual or interim recertification within the prior 120 days, and were not already enrolled in the FSS program. Within each PHA, half of these householders were randomly selected to participate in the FSS program (“FSS householders”), and the other half agreed to not enroll in the FSS program for three years (“control householders”) but received information about available community resources. The study followed participants for up to seven years. The total sample size was 2,556 individuals. 

At the start of the study period, about 56% of study participants were employed, with 31% working 35 hours or more per week. Seventy percent were receiving Supplemental Nutrition Assistance Program (SNAP) benefits, 16% were receiving TANF benefits, and 31% had received Section 8 housing assistance for at least ten years. Nearly half (41%) of participants reported experiencing barriers to employment, such as physical health difficulties (19%) or lack of access to affordable childcare (17.8%). Most participants expressed interest in receiving financial services (96%) or job-related services (71%). 

While most participants in both study groups reported using at least one FSS-related service during the study period, the researchers found a statistically significant increase in use of financial counseling, job search services, and education and occupational skills training among FSS householders versus control householders. Despite this increased use of services, only 20% of study participants enrolled in FSS graduated from the program. Within each of the 18 PHA study sites, graduation rates ranged from as little as 4% to as much as 44% of study FSS householders. Among FSS graduates, 90% received an escrow disbursement, with the average disbursement of $10,800. 

Notably, more than 70% of FSS householders in the study exited the FSS program without graduation for reasons other than not meeting graduation requirements. The researchers note that while detailed data were not collected on program exits, the available data suggests that many of these participants voluntarily left the FSS program, left the HCV program generally, or moved to another PHA. Of the participants who exited, 46% had a positive escrow balance, forfeiting nearly $4,000 on average by leaving the program.  

The authors call for more effective ways to use housing assistance programs to promote economic mobility and reduce reliance on government assistance, which they argue account for the barriers recipients face. For example, they suggest that interim escrow disbursements or PHAs’ discretionary funding could help cover the costs of childcare, transportation, and other expenses that limit households’ ability to fully participate in the workforce. They also call for flexibility for FSS participants who face specific challenges in seeking or maintaining employment, such as individuals with serious health conditions. 

Read the report here.