What is the right time limit for subsidized housing?
When Congress eventually comes back into session, it will take up a White House budget that proposes to dramatically change life for tenants of public and subsidized housing by enacting a time limit on stays for millions of current and future tenants.
A Trump administration preliminary budget would set a two-year residency limit for non-elderly, non-disabled tenants in a system where nearly 90 percent of 9 million tenants in some 5 million households currently stay five years or more — and more than half stay for more than ten years. These figures, from an analysis of federal housing data, are viewed by public-housing proponents as a secure and stable lifeline for those in need — but by critics as a kind of honey trap leading to long-term dependency on government aid, all while other potential tenants of similarly low income languish on waiting lists. The Milwaukee Housing Authority, to take just one example, has 121,000 people on waiting lists for its subsidy programs.
A two-year residency limit would mean that 87.8 percent of households in 2019 would have needed to quickly make alternative arrangements in the housing market. The White House justifies the proposed time limit as incentivizing a growth in “self-sufficiency” among low-income households. It’s a housing policy the administration is not wrong to consider — but it must be careful to not adopt a draconian new approach.
Subsidized rental housing is a major element of America’s “safety net” program for low-income persons. There are more residents of public housing projects and “Section 8” voucher units than there are those assisted by cash welfare through the Temporary Assistance for Needy Families program. But in contrast to TANF’s five-year lifetime limit on assistance, there has never been a limit on how long a household can continue to receive housing aid, which pays 70 percent of a beneficiary’s rent.
Congress must balance the extent to which it is willing to upend the lives of millions of subsidized housing residents and invite the inevitable political backlash with the crucial need to send a strong signal that public housing should not be forever.
Department of Housing and Urban Development data encompassing the decade between 2010 and 2020, obtained by the American Enterprise Institute through a research request, provided insight into tenancies in public and government-subsidized housing. Based on admission and 2019 tenant income-qualifying recertification dates, a two-year residency limit would affect about 1.9 million tenants — nearly 90 percent of all those receiving housing subsidies. Even a less stringent five-year limit would affect 1.5 million tenants.
Based on analysis of Department of Housing and Urban Development public and subsidized tenancies, 2010–2020
The impact of some of the nation’s largest cities would be even more dramatic. A two-year limit would affect roughly 134,000 New York City Housing Authority households — the largest single-city concentration of public-housing tenants nationwide — and would necessitate the relocation of potentially hundreds of thousands of people in a city with a rental vacancy rate below 2 percent. Notably, 10 percent of all public housing residents in New York have lived in their unit for 40 years or more. This is a system that’s serving only a fraction of those in need through what essentially amounts to a lottery whose winners get lifetime subsidies.
Thus the conundrum: How can the federal government change the character of public and subsidized housing to make it a temporary safety net on the road to upward mobility — but without creating mass short-term hardship and generating political backlash?
Two years is too short, at least for cities with low vacancy rates. A five-year limit — similar to what exists for cash welfare, and which has proved successful in reducing public assistance caseloads and increasing employment — would be less disruptive but still significant in signaling a culture change for public and subsidized housing.
But if even a five-year limit is viewed as too draconian — or too politically poisonous for Congress to pass it — the restriction might be limited to new tenants. Our analysis suggests that such a policy would immediately affect far fewer tenants — possibly even as low as 11,000, based on an examination of 2015 housing data.
The combination of ongoing organic turnover among current residents and a time limit for new tenants would allow more of those on wait lists to be served, while still incentivizing post-subsidy planning on the part of new tenants.
Additionally, local housing authorities should have some flexibility in setting time limits that are more restrictive than the nationwide benchmark (whether two or five years), and between certain types of households, such as single parents, veterans, or the elderly. Because the White House’s budget proposal exempts the elderly and disabled from its proposed time limits, a time limit may have the effect of forcing out younger households and replacing them with non-time-limited older ones.
The choice of which time limit policy to pursue, if any, will ultimately fall to Congress. A universal two-year limit would undoubtedly send the strongest signal and, by introducing the greatest turnover, make available the most units for those currently on waiting lists. A five-year limit would share many of those attributes but allow more time for tenants — and housing authorities — to prepare for change, while minimizing disruption and potential political backlash. Either approach would, over time, engender a significant and constructive culture change in one of the United States’ most important social safety net programs.
