Several states are using housing assistance as an instrument of welfare reform programs according to the CBPP study. This study highlights state and local efforts that "demonstrate the growing recognition by state welfare policymakers that affordable housing—like childcare, medical care, and transportation—can be an important foundation of economic self-sufficiency." Sard and Lubell examine the housing assistance component of welfare programs of six states—Connecticut, Kentucky, Maryland, Minnesota, North Carolina, and New Jersey—and two California counties—San Mateo and Los Angeles. Programs vary in size (75 families in San Mateo County to 1,200 families in Connecticut), length of benefit (12 months in Connecticut and San Mateo to 60 months in Minnesota), type of assistance (tenant- or project-based vouchers and homeownership), and degree of reliance on federal Temporary Aid to Needy Families (TANF) or state welfare funds.

As evidence of the usefulness of housing assistance in helping families make the transition from welfare to work, Sard and Lubell cite an evaluation of Minnesota's welfare reform by the Manpower Demonstration Research Corporation (MDRC), which found that residents of public and assisted housing gained more in employment and earnings than did other poor families. The authors argue that housing subsidies may be useful in several ways: by stabilizing the lives of low-income families and the school placements of their children; by freeing up funds for such work-related expenses as childcare, work clothes, and transportation; and by helping families move to areas with greater job opportunities.