PD&R Quarterly Update: Cash Assistance and Housing

PD&R Quarterly Update: Cash Assistance and Housing

At HUD's recent Quarterly Update event, held November 16, 2023, panelists shared research methodology and preliminary outcomes of implementing cash assistance programs in Denver and Philadelphia.

Many communities across the United States are implementing direct cash programs to assist low-income households. To date, more than 100 local programs have issued direct payments to participants. On November 16, 2023, HUD’s Office of Policy Development and Research (PD&R) hosted a PD&R Quarterly Update event featuring two panel discussions that gathered practitioners, government officials, and researchers to share experiences with cash assistance programs and their impact on housing stability. Peggy Bailey, vice president for housing and income security at the Center on Budget and Policy Priorities, moderated the first panel discussion on the Denver Basic Income Project (DBIP), which included Daniel S. Brisson, professor at the University of Denver Graduate School of Social Work; Mark Donovan, founder and executive director at DBIP; and Maria Sierra, community engagement manager at DBIP. Paul Joice, social science analyst in HUD’s program evaluation division, moderated a second panel examining Philadelphia’s PHLHousing+ program, which included Joanna Visser Adjoian, senior program officer in social justice at Spring Point Partners; Matthew Z. Fowle, postdoctoral fellow in the Housing Initiative at Penn at the University of Pennsylvania; and Rachel Mulbry, housing programs manager at the Philadelphia Housing Development Corporation (PHDC). Panelists discussed program implementation, research methodology, program partnerships, and preliminary results.

Providing Cash Assistance in Denver

Donovan founded DBIP in 2020 to deploy cash without any conditions directly to people in need. A year later, Donovan spoke with Brisson and local service providers about expanding the program to more people in need of cash assistance and studying the program's broader impacts. Sierra explained that DBIP selected 19 community organizations that offer job training, day shelters, and transitional housing and that primarily serve minorities and the LGBTQ+ community, populations that disproportionately experience homelessness in Denver. Brisson and his team developed a randomized controlled trial (RCT) to examine DBIP's impact on housing stability, employment, financial well-being, and health. A total of 807 participants enrolled in DBIP from November 2022 through February 2023 to receive direct cash assistance for 12 months, and 92 percent of these participants opted into the RCT. Researchers randomly assigned participants to three groups: Group A receives $1,000 per month for 12 months, Group B receives a lump sum of $6,500 in the first month and $500 per month for the remaining 11 months, and Group C (the comparison group) receives $50 per month for 12 months. All three groups receive the same access to services, although participation in services is not required. Participants could choose to receive the payments through direct deposit into a checking account or on a reloadable debit card. All participants also received a cell phone with a data plan.

Researchers administered a voluntary survey to participants at enrollment and at 6- and 10-month intervals postenrollment. In October 2023, the Center for Housing and Homelessness Research published an interim report that presents preliminary findings. A final report will be published in June 2024 after the program ends. Early findings show improvement in accessing stable housing. Only 5 percent of Group B participants had housing at enrollment, but 6 months into the program, 40 percent of them had housing. Similarly, the proportion of DBIP participants living in an apartment that they rent or own increased from 8 percent to 34 percent for those in Group A and from 11 percent to 31 percent for those in Group C. Rates of unsheltered homelessness decreased for members of all three RCT groups. Among Group A participants, 6 percent reported sleeping outside at enrollment; 6 months later, none were sleeping outside. The full-time employment rate also increased for members of Groups A and B, said Brisson, while the full-time employment rate remained unchanged for members of Group C.

Guaranteed Income in Philadelphia

The city of Philadelphia began developing plans for a cash assistance program in 2019 because many landlords refused to accept housing choice vouchers (HCVs) despite the city’s source of income protections for renters. Fowle cited a 2018 Urban Institute study that found that approximately 67 percent of Philadelphia landlords refuse HCVs as a source of income, and within low-poverty neighborhoods, the denial rate is even higher, reaching approximately 83 percent. In addition, noted Mulbry, the Philadelphia Housing Authority (PHA) waitlist had been closed for approximately 10 years because of the city’s overwhelming need for housing. PHDC, the city of Philadelphia, the University of Pennsylvania, and PHA created the city’s first guaranteed income pilot program, PHLHousing+. The program seeks to examine the impact of cash assistance on residential mobility, health, stress, and child well-being. Researchers developed an RCT to randomly select residents on the PHA’s HCV and public housing waitlists to opt into PHLHousing+. After enrolling online, researchers randomly placed participants into three groups: an HCV group of 300 participants, a treatment group of 300 participants receiving monthly cash assistance, and a control group of 600 people who are on the PHA waitlist. Households participating in the RCT must earn less than 50 percent of the area median income at the time of enrollment and have a child 15 years old or younger living with them.

As Adjoian suggested, cash-based assistance is an “expression of trust-based philanthropy” that emphasizes “individual agency, autonomy, [and] dignity” by offering recipients the flexibility to meet their individual needs. Funding for this pilot included $2.25 million from Spring Point Partners — a Philadelphia-based social impact organization — and other public and philanthropic sources such as Neighborhood Preservation Initiative bond proceeds, Housing Trust Fund, Pennsylvania Housing Finance Agency, William Penn Foundation, Stoneleigh Foundation, and Mayors for a Guaranteed Income. In 2022, the pilot began issuing prepaid debit cards that are reloaded monthly for a period of 2.5 years. Initially calculated from Small Area Fair Market Rents (SAMFRs), the monthly payments are now based on actual housing costs, noted Mulbry. The initial payments were approximately $900 per month but have decreased to approximately $650 per month. Approximately 70 percent of households are renting at or below the SAMFRs, which “speaks generally to the ways that folks are choosing to spend their money or perhaps waiting to move,” noted Mulbry. Households can use the funds to cover expenses other than housing, such as health or education costs. The city implemented safeguards to ensure that participants could maintain their existing public benefits, such as Temporary Assistance for Needy Families and Medicaid. PHDC also provides households with gap funds to compensate for any loss of Supplemental Nutrition Assistance Program benefits. As Mulbry explained, the city needed to ensure that PHLHousing+ “would be additive rather than … putting health or other forms of income or support at risk.”

PHLHousing+ is currently in its first year of implementation, and the research team anticipates full results in late 2025. Semistructured interviews with participants examined how cash and HCVs are influencing low-income households' financial decisionmaking. Mulbry explained that PHLHousing+ is one program among a large pool of housing programs that are speeding up access to housing for low-income households. After having a closed HCV waiting list for several years, PHA reopened the waiting list in early 2023 and is now able to offer more vouchers — an indication that several programs, working together, are reducing the strain on the city's HCV program.

Looking Ahead

The DBIP and PHLHousing+ programs grant participants the flexibility and dignity to manage financial decisions with few restrictions. Among PHLHousing+ participants, initial skepticism of direct cash with very little red tape eventually turned into enthusiasm for the program. Researchers are working to expand DBIP to a longitudinal study to reach more people and apply lessons learned at a broader scale. The panelists view DBIP as an opportunity to build a "playbook" for other programs nationwide. Although routine followup with recipients is important for gauging long-term outcomes, frequent address changes among participants can make accomplishing this difficult. Panelists explained the need to work with city officials to cross-match data to locate participants. To enact cash-based assistance programs, Fowle noted that cities can harness the institutional capacity that grew out of the COVID-19 pandemic to enact expanded child tax credits, stimulus payments, unemployment benefits, and emergency rental assistance. Sierra stated that participants receiving cash assistance should not be regarded as "cases to be managed, [but rather as] relationships being built" and noted that most people receive financial assistance at some point in their lives to reach self-sufficiency.