A pilot program offering “flexible subsidies” to DC renters shows promise, a report says
This article was first published on Aug. 13 by Greater Greater Washington.
In late 2017, D.C. launched a pilot program, D.C. Flex, to try giving families a smaller, more flexible rent subsidy than a standard voucher. Now, a new report released by the U.S. Department of Housing and Urban Development (HUD) evaluating the program’s first year has found that it shows promise.
Voucher programs such as HUD’s Housing Choice Voucher Program (colloquially, Section 8) and D.C.’s Local Rent Supplement Program tend to follow the same formula: the tenant rents a unit on the private market, pays a given portion of their income in rent, and the voucher program pays the rest.
But those vouchers are in short supply. D.C.’s Housing Choice Voucher Program, for instance, hasn’t opened its waitlist since 2013. And many other available programs are either short-term (like the Emergency Rental Assistance Program) or designed for people with intensive case management needs (Permanent Supportive Housing).
D.C. Flex was designed to fill a specific gap those other programs don’t address. The program offers households a smaller, or “shallow,” annual subsidy of $7,200 (about half of Housing Choice Voucher annual subsidies in 2017) and allows them to choose how much of it to use throughout the year.
The program was designed for low-income families who have experienced housing instability but currently have employment and housing. The initial participants often had steady, low-paying jobs and were supporting children with an average income of $18,505 per year.
It works like this: Participants get two bank accounts, an escrow account and a checking account. Every year, the escrow account gets $7,200. Every month, enough money is moved from the escrow account to the checking account to cover a full month’s rent for that household.
Then, the household can decide how much money to take out of the account that month (it must be used on rent). One month, a household might have enough cash to cover most of their rent and only take out a few hundred dollars. The next month, they might need the subsidy to cover the whole rent check. Money left over at the end of the year rolls over into the next; the pilot program lasts four years.
The Lab @ D.C., a District government research arm, worked with the Urban Institute to evaluate the program’s first year, a period ending September 2019. One hundred and two households received subsidies in that period.
The verdict: It’s too soon to tell what effect the program has on long-term housing stability, but the results look promising.
The study selected a group for the program and compared them to a control group. It found that the groups experienced homelessness at similar rates (1.8% for participants, 2% for the control group) in the first year. But researchers wrote that those differences could grow in subsequent years, particularly as one of the main differences between D.C. Flex and other available housing programs is its promise of more long-term assistance.
That stability was a major draw for participants, who had to choose between enrolling in D.C. Flex and using other assistance programs.
“Participants who chose D.C. Flex over rapid rehousing cited the predictability of knowing that they could receive assistance for 4 years as long as they remained eligible and the lack of required case management meetings as major factors in their decision,” the report says.
The $600 per month average subsidy wasn’t always enough to make ends meet for every participant.
“Both participants and stakeholders indicated that the value of the subsidy … was too low for many households with extremely low incomes to afford rent in Washington, D.C.,” the report says. “They recommended either increasing the subsidy amount or allowing participants to use their subsidy in Maryland suburbs with lower rents.”
Still, about a third of participants didn’t use the full $7,200 by the end of the first year. And almost all of the participants researchers surveyed said they were satisfied with the program, according to the report.
Researchers are preparing to study further years of the program, though they caution that the COVID-19 pandemic complicates those findings. So far, they write, the program shows promise and could take on particular importance in a time of financial instability.
“This is the moment for trying and testing flexible subsidies more broadly, and the D.C. Flex program is a promising example of how these programs can be structured,” the researchers wrote.