From their inception, income assistance programs (welfare) and housing assistance programs (primarily public housing and Section 8 rental assistance) have targeted different populations. Welfare has been an entitlement for families living below the poverty line. Housing subsidies, by contrast, were never considered an entitlement and historically have served a limited group within a broader eligible population—families with incomes up to 80 percent of the area median. Today, about one-fourth of welfare recipients also receive housing assistance, and more than half of the households now living in assisted housing also receive welfare benefits. Policy changes that affect welfare recipients, therefore, also affect a sizable proportion of families living in public and assisted housing. Conversely, the overlap means that changes in housing policy may have significant effects on the income and general welfare of low-income families.

Welfare reform is causing housing advocates, practitioners, and policymakers to acknowledge the growing interconnections between welfare and housing and welfare reform's influence on housing policy. Welfare reform requires recipients to begin work or job training, spurring HUD and many local public housing authorities to step up self-sufficiency programs for residents of their public housing developments and assisted housing projects. Housing advocates, however, question whether the low-income housing shortage will worsen as families leave the low but stable income of welfare. Questions also arise as to whether the need to provide higher subsidies for resident families whose income falls after leaving welfare could push some local housing authorities toward a financial crisis.

Although housing and welfare policy issues have become increasingly intertwined in recent years, research on these policy links has been scarce. Two new research studies explore the interconnections between welfare reform and housing policy. In The Increasing Use of TANF and State Matching Funds to Provide Housing Assistance to Families Moving from Welfare to Work, Barbara Sard and Jeff Lubell of the Center on Budget and Policy Priorities (CBPP) examine the effectiveness of several new state and local programs that use housing subsidies among other incentives to help welfare families make the transition to work. The Home Front: Implications of Welfare Reform for Housing Policy—an Urban Institute study edited by Johns Hopkins University researcher Sandra J. Newman—explores various issues within the general question of what effect welfare reform is likely to have on the ability of low-income Americans to afford decent housing.