Federal rental assistance sharply reduces homelessness and other hardship and lifts 3 million people out of poverty. It also can substantially improve adults’ health and children’s chances for long-term success, particularly if it enables families to move to lower-poverty neighborhoods with strong schools and less crime. Research shows, for example, that housing assistance:

Reduces crowding, housing instability, and homelessness. One study found that rental assistance reduced the share of families living in shelters or on the street by three-fourths and reduced the share of families living in overcrowded conditions by more than half, among other benefits. [2]

One study found that rental assistance reduced the share of families living in shelters or on the street by three-fourths and reduced the share of families living in overcrowded conditions by more than half, among other benefits. Reduces poverty. The 3 million people that rental assistance lifted above the poverty line in 2018 included 665,000 elderly people — more than any other government program except Social Security — and 936,000 children. (These figures use the federal government’s Supplemental Poverty Measure, which, unlike the official measure, counts non-cash benefits as well as cash.)

"Federal rental assistance sharply reduces homelessness and other hardship and lifts 3 million people out of poverty."

Improves outcomes for children. By reducing homelessness, housing instability, overcrowding, and poverty, rental assistance helps children avoid the adverse effects these problems have on their health, development, and education. For example, children in homeless families given rental assistance to help them rent housing experience fewer sleep disruptions and behavioral problems and are likelier to exhibit positive social behaviors such as offering to help others or treating younger children kindly, compared to a control group of homeless children whose families were not given rental assistance. Studies also find that children whose families use rental assistance to move to lower-poverty neighborhoods earn more as adults and are substantially more likely to attend college and less likely to become single parents. And data show that Black and Hispanic children in poor families with housing vouchers are considerably more likely to live in low-poverty neighborhoods than poor Black and Hispanic children overall.

By reducing homelessness, housing instability, overcrowding, and poverty, rental assistance helps children avoid the adverse effects these problems have on their health, development, and education. For example, children in homeless families given rental assistance to help them rent housing experience fewer sleep disruptions and behavioral problems and are likelier to exhibit positive social behaviors such as offering to help others or treating younger children kindly, compared to a control group of homeless children whose families were not given rental assistance. Studies also find that children whose families use rental assistance to move to lower-poverty neighborhoods earn more as adults and are substantially more likely to attend college and less likely to become single parents. And data show that Black and Hispanic children in poor families with housing vouchers are considerably more likely to live in low-poverty neighborhoods than poor Black and Hispanic children overall. Improves adult well-being and can reduce health costs. Rental assistance sharply reduces psychological distress among adults in homeless families, studies find, likely in part by easing the stress related to the risk of eviction, homelessness, and other housing instability. In addition, when rental assistance enables families to move to lower-poverty neighborhoods, adults can experience major health improvements, such as lower rates of diabetes and extreme obesity and better mental health. Rental assistance is often a key component of supportive housing programs that have been shown to reduce health care costs for high users of the health system who also experience homelessness or frequent, ongoing institutionalization in nursing homes, mental health facilities, or jails.

Despite the success of rental assistance, roughly 16 million low-income households that need rental assistance (that is, households that spend more than 30 percent of their income for housing or live in substandard or overcrowded housing) do not receive it due to funding limitations. (See Figure 1.) Policymakers could assist large numbers of additional households by expanding the Housing Choice Voucher program or through other approaches, such as establishing a federal renters’ tax credit to assist some extremely low-income households. Policymakers also should do more to help assisted families to live in higher-opportunity neighborhoods if they wish to do so — most notably by providing “mobility assistance” such as housing search counseling and financial assistance with costs such as security deposits.

Expanding rental assistance and helping more assisted households to live in higher-opportunity areas would extend the benefits described above to many additional households. Fewer people would live on shelters, motels, on the street, or doubled up in unstable arrangements; fewer families, seniors, and people with disabilities would have to choose each month between paying the rent and buying needed medicine or food; and more children would have access to stable housing and opportunity-rich neighborhoods. Taken together, these benefits could substantially reduce low-income Americans’ exposure to hardship and improve their children’s chances of long-term success.

Background

Federal rental assistance helps more than 10 million people with low incomes afford modest housing, more than two-thirds of them seniors, people with disabilities, and children.[3] Most rental assistance recipients who can work do work: among non-disabled, working-age households with rental assistance, 60 percent include at least one worker and the majority receive assistance for less than three years.[4] Rental assistance is tightly targeted on the neediest Americans: more than three-fourths of participants live in households with incomes below the poverty line, and nearly all live in households with incomes below 200 percent of the poverty line.[5]

About 90 percent of assisted households participate in one of three main programs: (1) Housing Choice Vouchers, which help families rent modest units of their choice in the private market;

(2) public housing, which provides affordable homes in buildings typically owned and managed by the local housing agency; and (3) Section 8 Project-Based Rental Assistance, which provides long-term subsidies to largely private owners of rental housing who agree to keep rents affordable.[6] In all three programs, families generally pay about 30 percent of their income toward rent and utilities — a widely used standard for the amount a household can reasonably be expected to pay for housing — and the federal subsidy covers the remaining cost.

Due to funding limitations, more than 3 in 4 low-income families who need rental assistance do not receive it, and the number of assisted families has remained largely stagnant since the early 2000s even as the need for assistance has grown.[7] There are long waiting lists for assistance in most of the country.[8] Many low-income Americans struggle with housing problems that rental assistance could address: roughly 23 million people in low-income households pay more than half of their income for rent, for example, and approximately 1.3 million school-age children live in shelters, on the street, doubled up with other households, or in hotels or motels.[9]

Rental Assistance Reduces Crowding, Housing Instability, Homelessness

The most direct, fundamental benefit of rental assistance is to enable families to afford decent, stable homes. A strong body of rigorous research shows that families with rental assistance are less likely than unassisted families to experience homelessness, housing instability, or overcrowding — problems linked to far-reaching harmful effects on families and children, as discussed later in this analysis.

One six-city study, which compared families randomly selected to receive vouchers with similar families in a control group that did not use vouchers, found that vouchers:

Reduced the share of families living in shelters or on the street by three-fourths, from 13 percent to 3 percent.

Reduced the share of families without a home of their own — a broader group that includes those doubled up with friends and family in addition to those in shelters or on the street — from 45 percent to 9 percent. (See Figure 2.)

Reduced the share of families living in overcrowded conditions by more than half, from 46 percent to 22 percent.

Reduced the average number of times that families moved over five years by close to 40 percent.[10]

A second multi-site evaluation, which compared homeless families with children that were given rental assistance to enable them to rent housing to families randomly assigned to other anti-homelessness interventions (such as transitional housing or short-term rapid rehousing assistance) and families not receiving special assistance, found that rental assistance reduces homelessness, overcrowding, and instability far more effectively than the other interventions.[11]

When combined with support services, rental assistance is also highly effective in reducing homelessness among individuals with severe mental illness[12] and veterans with psychiatric or substance use disorders,[13] rigorous studies find.

Rental Assistance Reduces Poverty

Rental assistance not only enables families to meet their housing needs but also, by lowering their rental costs, leaves them with more resources to meet other basic needs. When this effect is taken into account, rental assistance lifted 3 million people above the poverty line in 2018 under the federal government’s Supplemental Poverty Measure, which (unlike the official measure) counts non-cash benefits as well as cash. This included about 665,000 elderly people — more than any other government program except Social Security — and 936,000 children.[14]

Families with rental assistance can better afford items like food, medical care, and clothing, since families with high rent burdens often must divert resources away from those needs. Among families in the bottom fourth of total expenditures, those paying over half of their income for rent spent significantly less on food and health care than families with lower housing costs.[15] (See Figure 3.) Research shows that when families receive rental assistance, they are substantially likelier to be able to afford adequate food. They also experience lower “economic stress,” measured by indicators such as whether the family can afford needed clothing and medical care and has some money left over at the end of the month.[16]

Rental Assistance Improves Outcomes for Children

The effectiveness of rental assistance in reducing homelessness, housing instability, overcrowding, and poverty has far-reaching implications for other aspects of children’s lives. A broad body of research links those problems to adverse effects on children’s health, development, and education.

Among children, homelessness is associated with increased likelihood of cognitive and mental health problems,[17] physical health problems such as asthma,[18] physical assaults,[19] accidental injuries,[20] and poor school performance.[21] Studies find that children in crowded homes score lower on reading tests[22] and complete less schooling than their peers,[23] perhaps due to lack of space to do homework and higher stress.[24] Also, frequent family moves are linked to attention and behavioral problems among preschool children.[25] And research shows that poverty may harm children in multiple ways, including by damaging their neural development.[26]

Studies confirm that the benefits of rental assistance go beyond simply keeping a roof over a child’s head. Children in homeless families given rental assistance experience fewer sleep disruptions and behavioral problems and are likelier to exhibit positive social behaviors such as offering to help others or treating younger children kindly, compared a control group. Homeless families given rental assistance are also less than half as likely as unassisted families to have a child placed in foster care (which often occurs when parents cannot afford suitable housing) in the period shortly after the family receives rental assistance.[27]

Rental assistance also sharply reduces the frequency with which children must change schools.[28] Reducing school moves can benefit not just the children themselves[29] but also their classmates: studies show that in high-turnover schools, teachers are less able to gauge whether children are learning, lessons become review-oriented, the pace of curriculum progress slows,[30] and student achievement is substantially lower.[31] Researchers have also found that vouchers improve test scores for at least some categories of children.[32] In addition, a national study found that teenagers had higher earnings and lower incarceration rates as adults for each additional year their family used a voucher or lived in public housing.[33]

Rental assistance can have powerful additional benefits for children when it enables their families to move to neighborhoods with less poverty and crime and better-performing schools. A groundbreaking 2015 paper using data from a rigorous long-term study (the Moving to Opportunity demonstration) found that children whose families used vouchers to move to low-poverty neighborhoods had substantially higher adult earnings and rates of college attendance, and lower rates of single parenthood, than similar children whose families stayed in poor neighborhoods.[34] (See Figure 4.)

Similarly, another study found that low-income children whose families were randomly assigned to public housing in low-poverty neighborhoods and who attended low-poverty elementary schools made large gains in reading and math scores over seven years, compared with similar students living in public housing in higher-poverty neighborhoods. This improvement closed half of the achievement gap between those students and non-poor students in the district in math and one-third of the gap in reading — large gains in comparison to other successful educational interventions.[35]

Federal rental assistance should do more than it does now to expand housing choice for low-income families, as discussed below.[36] But even today, the voucher program plays a substantial role in providing access to low-poverty neighborhoods for low-income children — particularly children of color,[37] who are disproportionately concentrated in high-poverty areas due to a long history of racial discrimination, including discriminatory government policies.[38] Black children in poor families with vouchers are twice as likely to live in low-poverty neighborhoods as poor Black children overall. Similarly, Hispanic, Native American, and Pacific Islander children in poor families with vouchers are considerably more likely to live in low-poverty neighborhoods than poor children of the same race or ethnicity overall.[39]

Rental Assistance Improves Adults’ Well-Being, Can Reduce Health Costs

Rental assistance can also improve outcomes for adults, most significantly by enabling them to experience better mental health and, in some cases, physical health. Studies find that rental assistance sharply reduces psychological distress among adults in homeless families (in addition to reducing social and behavioral problems among their children, as noted above). It likely does so, in part, by easing the stress on family members by reducing the risk of eviction, homelessness, and other housing instability, as well as easing the anxiety that comes each month from having to balance excessive rental costs against meeting the family’s other basic needs. Evidence also shows that rental assistance reduces domestic violence and alcohol and drug use among adults.[40]

In addition, when rental assistance enables families to move to lower-poverty neighborhoods, adults can experience major health improvements. Research using data from Moving to Opportunity found that adults who moved to low-poverty areas experienced lower rates of diabetes (see Figure 5) and extreme obesity and large improvements in mental health, as measured by a summary index that included psychological distress, depression, and anxiety. The mental health improvements were comparable in size to the most effective clinical and pharmacological interventions, researchers noted. While the reasons for these benefits are not well understood, researchers hypothesized (based in part on qualitative follow-up studies) that families’ stress fell significantly when they left neighborhoods where the fear of random violence was part of their daily lives. Researchers also noted that since stress has been linked to physical health outcomes, these stress reductions could help explain not only mental health improvements but also the lower rates of diabetes and obesity among adults who moved to low-poverty areas.[41]

For people with complex health needs, particularly those who are homeless, rental assistance is a key element of successful strategies to improve access to health care and may reduce health system costs and improve their health. Supportive housing — a housing strategy that combines rental assistance with intensive, coordinated services, such as assistance finding housing and building relationships with landlords, chronic disease management, and help addressing mental health or substance use conditions — can help people with complex health needs get appropriate care by reducing use of emergency health services and increasing use of outpatient services.[42]

For example, one rigorous study targeting homeless, hospitalized people with chronic illnesses associated with a high risk of mortality found that supportive housing generated substantial savings. On average, people offered supportive housing spent 23 percent fewer days in hospitals, had 33 percent fewer emergency room visits, and spent 42 percent fewer days in nursing homes, per year during the study period, among other positive results. (See Figure 6.) These and other savings more than offset the cost of supportive housing, resulting in over $6,000 in annual savings per person.[43] Although this study focused on a very specific population — and other studies suggest that results likely vary across groups — it illustrates the potential savings from providing a high-needs group with supportive housing.[44]

While few high-quality studies of supportive housing have looked at its impact on residents’ health outcomes, the strongest findings in this area have been for people with HIV/AIDS. One study found that supportive housing reduces the risk of death among people with HIV/AIDS.[45] Another found that people with HIV/AIDS living in supportive housing were 63 percent likelier than those in a control group to have an intact immune system; they also had lower amounts of the virus in their bloodstream.[46] Some studies evaluating the impact of supportive housing on mental health and substance use among other groups have also yielded promising findings.[47]

Expanding and Strengthening Rental Assistance

Rental assistance delivers crucial benefits to millions, but it could do far more. Policymakers should begin by ensuring that it remains effective for the families it now assists, for example by providing adequate funding to avoid cuts to Housing Choice Vouchers and Project-Based Rental Assistance, increasing investment to address unmet renovation needs in public housing, and avoiding policy changes that could undercut the benefits rental assistance provides (such as raising the rents charged to assisted families). But policymakers should also prioritize measures to extend assistance to more families. Roughly 16 million low-income households need rental assistance but do not receive it due to funding limitations.[48]

The most effective way to assist large numbers of additional households would be to expand the Housing Choice Voucher program, which can be scaled up quickly and cost-effectively because families use it to rent existing homes in the private market. For example, the Bipartisan Policy Center’s Housing Commission called for extending the program to all households with incomes below 50 percent of the local median.[49] Other approaches to expanding rental assistance include establishing a federal renters’ tax credit that states could allocate to property owners who agree to reduce rents for extremely low-income households to amounts they can afford.[50]

Rental assistance could also do much more to help low-income families that have rental assistance — particularly vouchers — to live in higher-opportunity neighborhoods if they wish to do so.[51] A recent study found that providing “mobility assistance” (including housing search counseling, financial assistance with costs such as security deposits, and outreach to landlords in high-opportunity neighborhoods) raised the share of voucher families moving to those neighborhoods almost fourfold, from 14 percent to 54 percent.[52] The Department of Housing and Urban Development is implementing a new demonstration that will test variations on these policies in communities across the nation.[53]

Policymakers could also combine the benefits of expanding rental assistance and of improving it. For example, they could tie a major expansion of rental assistance for families with young children (who would benefit most from access to high-opportunity areas, research shows) to mobility assistance and other services proven effective at improving children’s outcomes, such as home visits to parents.[54]