Skip to main content

Evaluating Cohort #2 of the MTW Expansion: Tiered and Stepped Rent Demonstration

HUD.GOV HUDUser.gov

Evaluating the (Moving to Work) MTW Expansion: Stepped and Tiered Rent Demonstration

Evaluating the Expansion of the Moving to Work (MTW) Demonstration Program

Evaluating the MTW Expansion: Stepped and Tiered Rent Demonstration

In the second cohort of the MTW Expansion, 10 PHAs will test alternative rent policies known as stepped rents and tiered rents. Typically, HUD-assisted households pay rent equal to 30% of their income, so when a household increases their income, they also pay more rent. Under a tiered rent, households are grouped by income into tiers, and everyone in a tier pays the same rent. Small income changes would not affect a household’s rent. Under a stepped rent, households start out paying an income-based rent, but in subsequent years their rent will increase by a small amount regardless of their income. Both of these policies might encourage HUD-assisted households to earn more, and the policies might be easier for PHAs to administer. HUD’s evaluation will focus primarily on testing those hypotheses.

In the Stepped and Tiered Rent Demonstration, five PHAs will implement a stepped rent policy designed by HUD. Under this policy each household will start out paying an income-based rent. Each subsequent year, rents will increase by a small amount (roughly $10 to $50 in most places) regardless of household income. The PHAs implementing this policy are: Housing Connect (Housing Authority of Salt Lake County, UT), Housing Authority of the County of Kern (CA), Asheville (NC) Housing Authority, Portsmouth (VA) Redevelopment and Housing Authority, and Fort Wayne (IN) Housing Authority.

Four PHAs will implement a tiered rent policy designed by HUD. This policy will use tiers of $2,500, and the rent for each tier will be affordable to households in the middle of the tier. Each household’s rent will be fixed for three years (unless they experience a hardship and have their rent temporarily reduced). The PHAs implementing this policy are: Everett (WA) Housing Authority, Housing Authority of Washington County (OR), Akron (OH) Metropolitan Housing Authority, and Charleston-Kanawha (WV) Housing Authority.

One PHA – the Houston (TX) Housing Authority – developed its own tiered rent. Their policy is similar to the one designed by HUD but uses smaller tiers ($2,000) and sets rents to be affordable at the low end of each tier.

Because these rent policies limit the connection between income and rent, it is important to note that each PHA will have a hardship policy to help households when they experience job loss, reduced income, or other challenges. HUD’s evaluation will also monitor whether these hardships adequately protect participating households. The study will also exclude households that are elderly, disabled, or participating in other special HUD programs.

The Stepped and Tiered Rent Demonstration will use a randomized controlled trial framework. Eligible households will be randomly assigned to have the regular rent rules or the new rent rules. HUD expects the new rent rules to be in place beginning in the fall of 2022. The study is expected to last six years.


Back


Research Design

In the second cohort of the MTW Expansion, 10 PHAs will test alternative rent policies known as tiered rents and stepped rents. HUD’s evaluation will utilize randomized controlled trial (RCT) design to measure the impact of these new rent policies on employment, earnings, and other key outcomes. The Research Design, Data Collection and Analysis Plan:

  • describes the new rent policies,
  • describes short-term and long-term research objectives,
  • establishes the key research questions and outcomes,
  • describes the approach for supporting PHAs and implementing the RCT, and
  • presents plans for collecting data and for conducting impact analysis.

 


Back


Reports

Rent Reform in Subsidized Housing: Launching the Stepped and Tiered Rent Demonstration. The Stepped and Tiered Rent Demonstration (STRD) is a randomized controlled trial in which 10 public housing authorities (PHAs) are implementing new rent policies: 5 PHAs are implementing a “stepped rent” and 5 PHAs are implementing a “tiered rent.” The new rent policies are intended to reduce administrative burden and provide incentives for assisted households to increase their income, while being roughly budget-neutral for PHAs. PD&R’s long-term evaluation will determine whether households subject to the new rent rules experience different outcomes than those in the control group (standard rent rules). Key household-level outcomes will include earnings and employment, housing subsidy levels, material hardship, and other measures of family well-being. PD&R’s evaluation will also include an implementation evaluation and cost study components to understand implications for PHAs. This report is the first interim report associated with STRD; the report presents the stepped and tiered rent policies, and describes the process of designing and implementing the policies and associated research activities. At the time of publication, study enrollment is ongoing.




 


 
Your information will only be used in accordance with our website privacy policy.
Routine uses can be found in the HUD User System of Record Notice (SORN) at FR-7092-N-27.