HUD’s Office of Public and Indian Housing (PIH) sent an email to stakeholders on May 21 stating that PIH was rescinding Notice PIH 2021-02, the Moving to Work (MTW) Demonstration expansion selection Notice that sought applications for Cohort 3, the Work Requirements Cohort (see Memo, 1/25 and NLIHC’s summary of Cohort 3). The PIH email stated that HUD is committed to implementing the MTW Demonstration expansion in a way that is responsive to the economic realities and current needs of low-income families.
Public housing agencies (PHAs) that were interested in applying to the Work Requirements Cohort may apply to the Landlord Incentives Cohort (see Memo, 1/25) and future cohorts of the MTW Demonstration expansion. PIH plans Cohort 5, which would evaluate the overall impact of MTW flexibility on PHAs with fewer than 27,000 units. The PIH email hints that it might now anticipate a substitute cohort at this late stage. Notice PIH 2021-03 is the selection notice seeking applications for the Landlord Incentives Cohort. The due date for applications to the Landlord Incentives Cohort is extended through at least September 2021.
NLIHC welcomes the withdrawal of the Work Requirements Cohort, which NLIHC has long opposed. A work requirement does not address the three MTW statutory goals of increasing housing choices for residents, providing residents self-sufficiency incentives, and reducing PHA costs or increasing PHA cost-effectiveness. Work requirements are ineffective; they do not create the jobs with decent pay and opportunities needed to lift people out of poverty. Moreover, most recipients of housing assistance who could be expected to work already do. Imposing such requirements could cut struggling families off from the very housing stability and services that make it possible for them to find and maintain work.
NLIHC sent a memorandum on February 23 urging PIH to pause implementation of the MTW Demonstration expansion and consider concerns NLIHC has with the Cohort 2 (Alternative Rent Policies ), Cohort 3 (Work Requirements), as well as the final MTW Operations Notice (see Memo, 8/31/20) that can harm residents.
However, PIH proceeded with the Alternative Rent Policies Cohort 2, announcing the ten PHAs selected to participate (see Memo, 5/17). Five PHAs will test “tiered rents,” which use “income bands” or “tiers” to determine a household’s rent. Five PHAs will test “stepped rents,” a form of time limit with a household’s rent payment starting at 35% of adjusted income and growing each year even if their income does not increase. Households could experience rent burdens under tiered rents and stepped rents. It is not obvious that requiring residents to pay more rent or be “timed out” of assistance will increase resident self-sufficiency or housing choice, two of the three goals Congress set for the MTW Demonstration.
Although PIH has withdrawn the Work Requirement cohort, it has not eliminated the ability of PHAs not in the Alternative Rent Policies cohort from requesting approval to use alternative rent policies that cause rent burdens, work requirements, time limits, or MTW waivers that allow a PHA to siphon off vouchers to use for non-public housing or voucher activities – potentially harming residents in 90 PHAs.
Background on MTW Expansion
The Consolidated Appropriations Act of 2016 authorized HUD to expand the MTW demonstration to an additional 100 high performing PHAs over a seven-year period to end in 2022. PHAs will be added to the MTW demonstration in groups (cohorts), each of which will be overseen by a research advisory committee to ensure the demonstrations are evaluated with rigorous research protocols, quantitative analysis, and comparisons to control groups. Each cohort of MTW sites will be directed by HUD to test one specific policy change.
The MTW statutory objectives are to reduce costs, give households incentives to achieve economic self-sufficiency, and to increase housing choice. The statute requires MTW agencies to: 1) serve the same number of low-income families as they would without MTW funding flexibility; 2) serve a mix of families by size comparable to the mix they would have served if they were not in MTW; 3) ensure that 75% of the families they assist have income at or below 50% of area median income; 4) ensure that assisted units meet housing quality standards; and 5) establish a reasonable rent policy.
The program has included five cohorts:
- Cohort 1: evaluating the overall impact of MTW flexibilities on PHAs with fewer than 1,000 units
- Cohort 2: evaluating the impact of different rent structures
- Cohort 3: evaluating the impact of work requirements
- Cohort 4: evaluating incentives to landlords to participate in the HCV program
- Cohort 5: evaluating the overall impact of MTW flexibility on PHAs with fewer than 27,000 units
PIH’s Moving to Work Demonstration expansion website is at: https://bit.ly/3fLTie4
NLIHC’s Summary of Notice PIH 2021-02 (Cohort #3) is at: https://bit.ly/3sM95zg
NLIHC’s Summary of Key Provisions of the Moving to Work (MTW) Demonstration Operations Notice is at: https://bit.ly/3ocxCvk
NLIHC’s memorandum to PIH is at: https://bit.ly/2ROdXFR
More information about the MTW Demonstration expansion is on NLIHC’s Public Housing webpage at: https://bit.ly/3y4QvEV