Study Compares Direct-to-Tenant Cash Assistance and Housing Vouchers in Philadelphia

By NLIHC Research Team

The Housing Initiative at Penn just released an evaluation comparing the impact of direct-to-tenant cash assistance to tenant-based housing vouchers. Specifically, the researchers examined housing outcomes for Philadelphia households participating in the PHLHousing+ cash assistance program with those receiving Housing Choice Vouchers through the Philadelphia Housing Authority. The researchers found that all households receiving cash assistance were able to use it, compared to 75% of households receiving vouchers. Further, the average time between subsidy delivery and a household’s ability to use it was on average three months shorter for households receiving cash assistance than those receiving vouchers.  

The randomized control trial relied on survey data from five online surveys conducted at six-month intervals for three assignment groups:  

1. households who received monthly cash payments on a debit card (cash households);
2. households who received a tenant-based housing voucher (voucher households); and
3. households who receive no rental subsidy (control households).  

The study compared subsidy use rates and the time between subsidy delivery and use for both cash and voucher households. Further, the study evaluated forced moves, homelessness, and housing quality for both types of assistance against no assistance. All participating households were renters with incomes less than 50% of the Area Median Income who did not receive other federal rental assistance. Both cash and voucher subsidy amounts were similarly calculated to eliminate housing cost burden so that households did not pay more than 30% of their income on housing. However, to increase efficiency and access to the PHLHousing+ program, rents for cash households were based on relevant Small Area Fair Market Rent, while voucher household rents represent the actual rent of their unit. While cash households can use their subsidy immediately and without restrictions on how it is spent, voucher households must first find a landlord willing to accept the voucher with a rental unit that passes an initial housing inspection. 

All cash households were able to successfully use their assistance and did so more quickly than voucher households, though cash households were not restricted to using their assistance for rent. Cash households received their subsidy on average 16 days after program enrollment and 100% were able to successfully use it on average 21 days after enrollment. In comparison, only 75% of voucher households were able to redeem their voucher for housing. The average time between voucher offering and successful voucher use was 110 days, nearly three months longer than cash households. 
 
Both cash and voucher holders experienced lower informal or formal forced move rates compared to the control group overtime, but the effect was realized more quickly for cash-assistance households. Cash assistance led to a 63% reduction in forced moves relative to no assistance after one year. In comparison, the voucher program led to a 64% reduction in forced moves but only at two years. Further, cash households had a significantly lower rate of homelessness compared to the control group at 18 months (67% lower) and 24 months (57% lower), while differences in homelessness rates were not statistically significant for voucher households. However, the authors expect that the effects of vouchers on homelessness would be statistically significant with a larger voucher group sample. 

Both the PHLHousing+ and Housing Choice Voucher program improved reported housing quality for participating households. Compared to control households, cash households experienced a 22% reduction in serious housing quality concerns after two years, whereas voucher households had a larger 31% reduction after the same amount of time. The authors speculate that the greater reduction in housing quality concerns for voucher households is most likely due to the voucher program’s housing inspection requirement but could also reflect the housing authority’s assistance with housing search and lease-up processes. 

The authors conclude that both direct-to-tenant cash assistance and vouchers improve housing security outcomes for renters and that the effects of either form of rental assistance are stronger the longer it is provided. However, given that 25% of Philadelphia households who receive vouchers are unable to use them, the authors argue that cash assistance is a valuable addition to the tools used to keep low-income families housed. The authors caution that providing cash assistance could increase household income beyond public benefit limits and lead to a loss of those benefits. The PHLHousing+ strategically mitigated benefit loss by providing counseling, obtaining income waivers for key benefits, and establishing funding to compensate households for lost benefits.  

Read the research brief and working paper here.