Reforming the Delivery of Rental Assistance

The federal government currently spends $25 billion a year to provide rental housing assistance to more than four million families. Given the economic downturn, more families will require assistance. But the time is right to experiment with new ideas for strengthening federal rental assistance–especially ones that help families get back into the mainstream as quick as possible.

One idea I would like to see get some consideration is the creation of an asset account that would be made available to every recipient of federal rental housing assistance. The idea is described in this recent piece I published in Shelterforce Magazine with Jeff Lubell of the Center for Housing Policy. A longer explanation and justification is available here. The essential idea is that each recipient gets an account where money is automatically diverted when their earnings rise. Instead of raising their rents we should be them save resources which can eventually make them self sufficient. This takes away a potential disincentive to work as well as helps a family make the transition away from assistance. And it also frees up another slot to help the next family in need.

I think this is a good idea which should be pursued but I also hope it is the kind of reform we should expect from new HUD Secretary Shaun Donovan, who i think will be one of the rising stars of the Obama team.