Moving to Work

Retrospective

A Picture of Moving to Work

Agencies’ Housing Assistance

Moving to Work Agencies’

Use of Funding Flexibility

Housing Choice and Self

Sufficiency Outcomes at

Moving to Work Agencies

The Impact of the Moving to Work

Demonstration on the Per Household

Costs of Federal Housing Assistance

Evaluating the Effects of

Santa Clara County Housing

Authority’s Rent Reform

Moving to Work Agencies’

Use of Project-Based

Voucher Assistance

U.S. Department of Housing and Urban Development | Office of Policy Development and Research Resear

Visit PD&R’s website

www.huduser.gov

to find this report and others sponsored by HUD’s Office of Policy Development and Research (PD&R). Other services of HUD USER, PD&R’s research information service, include listservs, special interest reports, bimonthly publications (best practices, significant studies from other sources), access to public use databases, and a hotline (800-245-2691) for help accessing the information you need.

The Impact of the Moving

to Work Demonstration on

the Per Household Costs of

Federal Housing Assistance

Prepared for:

U.S. Department of Housing

and Urban Development

Prepared by:

Christina Stacy

Josh Leopold

Daniel Teles

Ruth Gourevitch

Alyse D. Oneto

Yipeng Su

Matthew Gerken

URBAN INSTITUTE

June 2020

A

cknowledgments

Acknowledgments

This report was funded by the U.S. Department of Housing and Urban Development (HUD). We are grateful to HUD and to all our funders, who make it possible for Urban to advance its mission.

The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders. Funders do not determine research findings or the insights and recommendations of Urban experts. Further information on the Urban Institute’s funding principles is available at urban.org/fundingprinciples.

Many people reviewed and contributed to this report. The authors appreciate the feedback and support that Elizabeth Rudd, the government technical representative for the Moving to Work (MTW) Retrospective Evaluation, provided throughout the course of the study. Noah Strayer provided valuable research assistance and Emily Peiffer provided editorial support. In addition, the authors thank leadership from Boulder Housing Partners, the Columbia (Missouri) Housing Authority, the Charlotte Housing Authority, the Housing Authority of the City of Pittsburgh, Home Forward (Portland, Oregon), the San Antonio Housing Authority, the San Diego Housing Commission, the San Mateo County Housing Department, the Seattle Housing Authority, and the Housing Authority of Tulare County for taking the time to speak with us. We also thank MTW

Program Office and other HUD staff, including Lynn Rodgers, Lydia Taghavi, Alison Christensen, John Concannon, Debra Hamblin, Nick Miele, Marianne Nazarro, and many others, for their assistance in understanding administrative data sources. HUD staff, including Mark Shroder and Kurt Usowsksi, also provided helpful feedback on our research design. Jason Casterline helped us to understand administrative financial data. We thank our reviewers, Doug Wissoker and Martin Abravanel, along with Diane Levy and Martha Galvez, for providing input throughout the research process. Other members of Urban’s MTW Evaluation team provided insights, data, and comments on this study along the way. Final y, we thank the 39 MTW agencies for their review of an early version of this report.

Disclaimer

The contents of this report are the views of the contractor and do not necessarily reflect the views or policies of the U.S. Department of Housing and Urban Development or the U.S. Government.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance

Foreword

Foreword

The Moving to Work (MTW) demonstration, launched in 1996, gives participating public housing agencies (PHAs) the flexibility to design and test new ways of providing housing assistance, provided that new policies are intended to achieve one or more of the fol owing statutory objectives: (1) to reduce cost and achieve greater cost effectiveness in Federal expenditures; (2) to give incentives to families with children where the head of household is working, seeking work, or preparing for work; and (3) to increase housing choices for low-income families. This study, one of six reports produced by HUD’s retrospective evaluation of MTW, focuses on costs.

Based on a rigorous analysis of changes over time in funds received and households served, beginning with a pre-MTW baseline, this study shows that participating in the MTW demonstration was not associated with increased or decreased costs to HUD per household served. The study finds that, after joining MTW, agencies experienced an increase in funding, but also served a greater number of households. Further, the research tested whether altering program mix, decreasing housing quality or affordability, or serving higher income or easier to serve households might explain the stable cost per household, and found that these factors did not account for cost per household staying the same after joining the demonstration. Final y, although MTW agencies continued to serve the same or more households per dol ar received and did not reduce per household spending, they generated large reserves (traditional agencies are not al owed to do this).

This study is the best evidence to date that MTW agencies are innovating in cost effectiveness, but it stops short of describing and explaining how MTW agencies do it. The next steps for policy research are to understand how they are doing this and the extent to which activities of the current MTW agencies could improve cost effectiveness at all public housing agencies.

Seth D. Appleton

Assistant Secretary for Policy Development and Research

U.S. Department of Housing and Urban Development

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance

Contents

Contents

Executive Summary ............................................................................................................................ viii

Introduction ........................................................................................................................................... 1

Background ...........................................................................................................................................4

Moving to Work Funding and Fund Flexibility ........................................................................................................... 5

Prior Research on Moving to Work and the Cost of Housing Assistance ................................................9

Housing Choice Voucher Administrative Costs ........................................................................................................ 9

Housing Choice Voucher Rental Payment Subsidies .............................................................................................10

Public Housing Operations .............................................................................................................................................11

HUD Funding Levels .........................................................................................................................................................11

Reserves ..............................................................................................................................................................................11

Total Costs per Assisted Household ...........................................................................................................................12

Limitations of Prior Research .........................................................................................................................................12

Research Questions and Research Design ........................................................................................... 13

Research Design...............................................................................................................................................................13

Research Questions.........................................................................................................................................................15

Research Question 1: What is the effect of Moving to Work status on HUD cost per assisted

household? .................................................................................................................................................................15

Research Question 2: Do changes in program mix, housing quality and affordability,

or the characteristics of assisted households explain the effect of Moving to Work status on

HUD costs per assisted household? ...................................................................................................................16

Research Question 3: Does Moving to Work status affect agencies’ total per household

operating and housing assistance spending, or per household spending on program

administration, tenant services, or operating reserves? ................................................................................16

Data Collection and Assembly ............................................................................................................. 18

Variable Calculations .......................................................................................................................................................19

HUD Cost per Assisted Household .....................................................................................................................19

Measures of the Type and Quality of Housing Assistance ...........................................................................20

Measures of Public Housing Agency Spending ..............................................................................................21

External Cost Drivers ...............................................................................................................................................21

Sample Construction ......................................................................................................................................................22

Identifying the Comparison Group .............................................................................................................................23

Comparing Moving to Work Agencies with Traditional Public Housing Agencies ........................................24

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance iv

Contents

Estimation Methods .............................................................................................................................27

Estimation Method for Research Question 1: What is the effect of Moving to Work status on

cost per assisted household? ...................................................................................................................................... 27

Understanding the Timing of Changes in Cost per Household ..................................................................28

Estimation Method for Research Question 2: Do changes in program mix, housing quality and

affordability, or the characteristics of assisted households explain the effect of Moving to Work

status on HUD costs per assisted household? ........................................................................................................28

Estimation Method for Research Question 3: Does Moving to Work status affect agencies’ total per

household operating and housing assistance spending, or per household spending on program

administration, tenant services, or operating reserves? .......................................................................................29

Robustness Checks ........................................................................................................................................................30

Findings ............................................................................................................................................... 31

Public Housing Agency Trends Before and After Joining Moving to Work ......................................................31

Effect of the Moving to Work Demonstration on HUD Cost per Assisted Household .................................. 34

Effect of the Moving to Work Demonstration Controlling for Program Mix, Housing Quality and

Affordability, and Household Characteristics ...........................................................................................................38

Effect of the Moving to Work Demonstration on per Household Spending by Public Housing

Agencies ............................................................................................................................................................................40

Discussion .........................................................................................................................................................................42

Limitations ......................................................................................................................................................................... 43

Conclusion ........................................................................................................................................................................ 44

Appendix A: History of the Moving to Work Demonstration ................................................................A-1

Appendix B: Additional Analyses.........................................................................................................B-1

Alternate Size Thresholds for Comparison Traditional Public Housing Agencies .........................................B-1

Robustness Checks ...................................................................................................................................................... B-2

Using Propensity Score Matching ..................................................................................................................... B-2

Multiple Imputation .................................................................................................................................................B-4

Weighting Counts of Local, Non-Traditional Housing .................................................................................. B-5

Public Housing Agency-Specific Time Trends ............................................................................................... B-5

Excluding Controls for Median Rent and Government Wage .................................................................... B-5

Event Study ..................................................................................................................................................................... B-6

Repeated Cross Sectional Estimates ........................................................................................................................B-7

Appendix C: Supplemental Exhibits ....................................................................................................C-1

Appendix D: References ......................................................................................................................D-1

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance v

List of Exhibits

List of Exhibits

Exhibit ES1: Moving to Work Funding Flexibility ........................................................................................... viii

Exhibit ES2: The Effect of Moving to Work on HUD Cost per Assisted Household, HUD Funding,

and Number of Assisted Households ................................................................................................................ x

Exhibit ES3: The Effect of Moving to Work on HUD Funding and Number of Assisted Households

(Percent Change) .................................................................................................................................................... xi

Exhibit ES4: The Effect of Moving to Work on HUD Cost per Household Over Time

(Percent Change) ................................................................................................................................................... xii

Exhibit 1: The Moving to Work Retrospective Evaluation ..............................................................................3

Exhibit 2: Timeline of Moving to Work Agreements.......................................................................................5

Exhibit 3: Moving to Work Funding Flexibility .................................................................................................. 7

Exhibit 4: Timeline of Moving to Work Agreements and Evaluation Period (Evaluation

Sample in Bold) ...................................................................................................................................................... 15

Exhibit 5: Research Questions ............................................................................................................................17

Exhibit 6: Variables for Analysis and Data Sources ......................................................................................18

Exhibit 7: Average Levels of HUD Funding and Assisted Households at Traditional Public

Housing Agencies (2003–2017) ........................................................................................................................24

Exhibit 8: Number of Assisted Households, HUD Funding, and HUD Cost per Household

by Public Housing Agencies’ Future Moving to Work Status, 2003 ....................................................... 25

Exhibit 9: HUD Cost per Assisted Household in 2003 and 2017, by Public Housing

Agency Size ........................................................................................................................................................... 26

Exhibit 10: Moving to Work Agencies’ Average HUD Funding Before and After Joining

Moving to Work ......................................................................................................................................................32

Exhibit 11: Moving to Work Agencies’ Average Number of Assisted Households Before

and After Joining Moving to Work ....................................................................................................................33

Exhibit 12: Moving to Work Agencies’ Average HUD Cost per Household Before and

After Joining Moving to Work ............................................................................................................................34

Exhibit 13: The Effect of Moving to Work on HUD Cost per Assisted Household, HUD Funding,

and Number of Assisted Households ..............................................................................................................35

Exhibit 14: The Effect of Moving to Work on HUD Cost per Household Over Time, Using Public

Housing Agencies With at Least 750 Assisted Households (2003) as a Comparison Group

(Percent Change) ...................................................................................................................................................37

Exhibit 15: The Effect of Moving to Work on HUD Funding and Number of Assisted

Households (Percent Change) ...........................................................................................................................38

Exhibit 16: The Effect of Moving to Work on HUD Cost per Assisted Household Controlling

for Program Mix, Quality and Affordability, and Household Characteristics .........................................39

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance vi

List of Exhibits

Exhibit 17: Per Household Total Expenditure, Administrative Costs, Tenant Services Spending,

and Operating Reserves, 2003 ........................................................................................................................ 40

Exhibit 18: The Effect of Moving to Work on per Household Total Expenditures, Administrative

Costs, Tenant Services Spending, and Operating Reserves .....................................................................42

Exhibit A1: History of Moving to Work Agency Involvement ....................................................................A-2

Exhibit B1: Sensitivity of Estimates to Alternative Comparison Groups .................................................B-1

Exhibit B2: Sensitivity of Estimates to Alternative Comparison Groups ...............................................B-2

Exhibit B3: Variables Used to Determine the Propensity Score .............................................................B-3

Exhibit B4: Robustness Check Results ..........................................................................................................B-4

Exhibit B5: Event Study Results for RQ1 Using Public Housing Agencies With at Least

750 Assisted Households (2003) as a Comparison Group .....................................................................B-6

Exhibit B6: Repeated Cross-Sectional Estimation ......................................................................................B-8

Exhibit C1: Data Sources .....................................................................................................................................C-1

Exhibit C2: Variable Calculations From Financial Data Schedule Data ................................................C-2

Exhibit C3: Analysis of Assisted Households ..............................................................................................C-3

Exhibit C4: Research Question and Regression Specifications ..............................................................C-3

Exhibit C5: Number of Assisted Households, HUD Funding, HUD Cost per Assisted Household,

Operating Reserves per Assisted Household, and Number of Local, Non-Traditional Units, by

Moving to Work Agency (Agencies That Joined Moving to Work After 2003) ...................................C-4

Exhibit C6: Number of Assisted Households, HUD Funding, HUD Cost per Assisted Household,

Operating Reserves per Assisted Household, and Number of Local, Non-Traditional Units, by

Moving to Work Agency (Agencies That Left Moving to Work After 2003).........................................C-6

Exhibit C7: Households Assisted by Moving to Work Agencies, by Program, 2003 to 2017 .........C-6

Exhibit C8: Moving to Work Agency Characteristics Compared with All Traditional Public

Housing Agencies and Traditional Public Housing Agencies with More Than 750 Assisted

Households, 2003 ..............................................................................................................................................C-7

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance vi

Executive Summary

Executive Summary

do not account for spending levels before

agencies joined the MTW demonstration, and

thus do not establish whether this difference

Moving to Work (MTW) is a HUD

is caused by the MTW demonstration. This

demonstration that gives selected public

is the first study to examine changes in PHA

housing agencies (PHAs) greater flexibility

cost effectiveness using data from before and

with their spending and the ability to provide

after PHAs joined the MTW demonstration

innovative housing assistance to low-income

compared with traditional PHAs during the

households. The demonstration has three

same period. This study therefore better

objectives: reduce costs and increase cost

accounts for other differences between

effectiveness, promote employment and

housing agencies that can affect costs, and

economic self-sufficiency, and increase

it isolates the impact of MTW status on cost

housing choices for low-income families. This

effectiveness. The study also provides a

report focuses on the first of these objectives:

more comprehensive picture of the impact

increasing cost effectiveness.

of flexible funding and program assistance

on costs by including all public housing and

MTW aims to make PHAs more cost-effective

Housing Choice Voucher (HCV) program

by easing regulations, encouraging innovation,

funding and all households assisted by those

and providing greater flexibility in how PHAs

funds, including families assisted through

use their HUD funding (see exhibit ES1),

local, non-traditional programs, which only

but previous studies have found that MTW

MTW agencies are al owed to operate.1

agencies spend more per assisted household

than traditional PHAs. These studies, however,

Exhibit ES1: Moving to Work Funding Flexibility

MTW Funding Streams

Traditional Funding Streams

Public

Public

Housing

Housing

Housing

Choice

Operating

Capital

Voucher

Funds

Funds

Funds

Public

Public

Housing

Housing

Housing

Choice

Operating

Capital

Voucher

Funds

Funds

Funds

MTW

Fund

..

Public

Housing

Supportive

Operating

Services

Costs

Public

Public

Housing

Housing

Housing

Choice

Local,

Housing

Operating

Capital

Voucher

Non-

Public

Choice

Costs

Projects

Program

traditional

Voucher

Programs

Housing

Component

Capital

Units

Program

Projects

MTW = Moving to Work.

Source: Moving to Work Standard Agreement Attachment C, “Statement of Authorizations,” retrieved from HUD’s MTW portal, https://www.hud.gov/program_

offices/public_indian_housing/programs/ph/mtw/mtwsa

1 The analysis excludes special purpose voucher programs such as the Family Unification Program and HUD-VA Supportive Housing because these programs are not part of agencies’ Moving to Work agreements.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance vi i

Executive Summary

Methodology

Authority, Home Forward (Portland, Oregon),

and the Cambridge Housing Authority—that

This study defines cost effectiveness as

entered the demonstration prior to 2003.

“cost per household,” or the total funding

PHAs receive from HUD each year for public

housing and HCV programs divided by the

Findings

number of households assisted by these

Moving to Work status does not affect public

funds. This measure was selected as the

housing agencies’ cost effectiveness.

most comprehensive measure of cost per

household because it includes all funding

MTW status has no significant impact on cost

sources that are eligible for MTW funding

per assisted household when MTW agencies

flexibility and all households assisted

are compared with traditional PHAs of similar

through this funding, including households

size. Although MTW status is associated with

assisted through local, non-traditional MTW

an increase in HUD funding, the agencies

programs. It also al ows for a more direct

use this funding to assist more households,

comparison of cost-effectiveness between

resulting in no significant change in cost

MTW and traditional agencies than looking at

effectiveness.

expenditures because MTW agencies report

expenditures differently than traditional PHAs.

Exhibit ES2 displays the results from our main

statistical model, which shows the average

The analysis uses 15 years of historical data,

change in cost per assisted household,

from 2003 through 2017, to measure trends

HUD funding, and number of households

within PHAs before and after receiving MTW

assisted by a PHA after joining the MTW

status. It then compares those trends with

demonstration compared with other similarly

traditional PHAs of comparable size during

sized agencies. PHAs receive, on average, 11

the same period. To better understand how, if

percent more funding from HUD after joining

at al , MTW status affects cost effectiveness,

the MTW demonstration and assist 10 percent

it creates separate estimates of the effect of

more households.3 Because these effects

MTW status on PHAs’ annual funding from

are of similar size, the effect of MTW status

HUD and on the number of households PHAs

on cost per assisted household is negligible

assist with that funding.

(exhibit ES2).

This analysis is limited to 2003 to 2017

because of data quality and availability

chal enges in data reported to HUD prior

to 2003. Therefore, the estimates show the

effect of MTW status on cost per assisted

household for the 18 PHAs that entered or

exited the MTW demonstration during this

period and for whom there is reliable data.2

The analysis excludes some of the largest

MTW agencies—such as the Chicago Housing

2 The 18 public housing agencies included in the impact analyses are Alaska, Atlanta, Baltimore City, Boulder, Champaign, Charlotte, District of Columbia, Columbus (GA), Fairfax County, Greene, High Point (NC), Holyoke, King County, Lexington-Fayette Urban County, Orlando, Reno, San Bernardino, and San Diego. The event study discussed in appendix B includes only 12 public housing agencies due to data limitations (see exhibit B5).

3 Because outcome measures entered the regression in log form, percentage change is calculated by exponentiating the coefficient and subtracting 1.

For example, the coefficient for HUD funding is 0.106 and the estimated percentage change is (e^0.106)-1=0.112 or 11 percent.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance ix

Executive Summary

Exhibit ES2: The Effect of Moving to Work on HUD Cost per Assisted Household, HUD Funding, and Number of Assisted Households

Cost per Assisted Household

HUD Funding

Assisted Households

Impact of MTW

0.013

0.106***

0.092***

(0.030)

(0.024)

(0.028)

Control Variables

0.298***

0.144**

-0.154***

Area Median Rent

(0.071)

(0.060)

(0.047)

0.048*

0.023

-0.025

Government Wage

(0.026)

(0.026)

(0.020)

Number of PHAs

727

727

727

Adjusted Within R-Squared

0.096

0.083

0.039

Observations

10,905

10,905

10,905

* p<0.10, ** p<0.05, *** p<0.01

MTW = Moving to Work. PHA = public housing agency.

Notes: Standard errors (listed in parentheses) are heteroskedastic robust and clustered at the PHA level. Data cover 2003–2017. Regressions include only PHAs with at least 750 households and exclude agencies that joined MTW before 2003. They also exclude the Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, and Housing Authority of the City of San Jose because of incomplete data on households in public housing.

(See footnote 2 in this report for a list of included MTW agencies.) All regressions include year and PHA fixed effects. Cost per assisted household, HUD funding, assisted households, area median rent, and government wages enter the regression in logged form.

Sources: Urban Institute Analysis of HUD’s Office of Public and Indian Housing Information Center, Financial Data Schedule, and Voucher Management System data

Examining these effects on an annual basis

shows that the main increase in HUD funding

and assisted households occurred the year

that agencies joined MTW, and then continued

to increase in subsequent years (exhibit

ES3). These two effects combined lead to no

significant difference in cost effectiveness

in any year before or after joining the MTW

demonstration (exhibit ES4).

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance x

Executive Summary

Exhibit ES3: The Effect of Moving to Work on HUD Funding and Number of Assisted Households (Percent Change) 30%

30%

25%

25%

20%

20%

15%

15%

HUD Funding 10%

10%

5%

Assisted Households 5%

0%

0%

-5%

-5%

-10%

-10%

-2

-1

Joined

+1

+2

+3

-2

-1

Joined

+1

+2

+3

MTW

MTW

Year Relative to Joining MTW

Year Relative to Joining MTW

Estimated effect

90% confidence interval

Estimated effect

Estimated effect

90% confidence interval

90% confidence interval

MTW = Moving to Work.

Notes: Vertical dotted line and “Year joined MTW’’ represent the year in which public housing agencies (PHAs) execute their first MTW contract. The solid line represents the point estimate and the dashed lines on either side of this estimate represent the 90-percent confidence interval. Estimates are converted from log form to percent change. Regressions include only agencies with at least 750 households and exclude PHAs that joined MTW before 2005 or after 2015, because they need to have 2 years of data prior to joining MTW and 3 years of data after joining to enter this equation. Impact analyses do not include Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, or Housing Authority of the City of San Jose because of incomplete data on households in public housing. All regressions include year and PHA fixed effects. Median rent and government wages are included as control variables. HUD cost per household, area median rent, and government wages enter the regression in logged form.

Sources: Urban Institute Analysis of HUD’s Office of Public and Indian Housing Information Center, Financial Data Schedule, and Voucher Management System data The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance xi

Executive Summary

Exhibit ES4: The Effect of Moving to Work on HUD Cost per Household Over Time (Percent Change) 25%

20%

15%

10%

5%

0%

-5%

Cost Per Assisted Household -10% -2

-1

Joined MTW

+1

+2

+3

Year Relative to Joining MTW

Estimated effect

90% confidence interval

MTW = Moving to Work.

Notes: Vertical dotted line and “Year joined MTW” represent the year in which public housing agencies (PHAs) execute their first MTW contract. The solid line represents the point estimate and the dashed lines on either side of this estimate represent the 90-percent confidence interval. Estimates are converted from log form to percent change. Regressions include only agencies with at least 750 households and exclude agencies that joined MTW before 2005 or after 2015, because they need to have 2 years of data prior to joining MTW and 3 years of data after joining enter this equation. They also exclude the Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, or Housing Authority of the City of San Jose because of incomplete data on households in public housing. All regressions include year and PHA fixed effects. Median rent and government wages are included as control variables. HUD cost per household, area median rent, and government wages enter the regression in logged form.

Sources: Urban Institute Analysis of HUD’s Office of Public and Indian Housing Information Center, Financial Data Schedule, and Voucher Management System data

There is no evidence that Moving to Work

Moving to Work status has varying effects on

agencies maintain cost effectiveness by shifting

other facets of public housing agency rental

their program mix, reducing housing quality or

assistance spending.

affordability, or serving different households.

Although MTW status does not affect

The study also analyzed the effects of MTW

spending per household overal , it does affect

status on cost effectiveness after including

certain spending categories. MTW status is

additional measures to control for changes in

not associated with a statistical y significant

the mix of public housing units, tenant-based

change in spending on administrative costs or

vouchers, and project-based vouchers in

tenant services per assisted household, but it

an agency’s portfolio; housing affordability

is associated with a large increase in dol ars

and quality; and targeting of assistance to

per household held in reserves. In interviews,

households that may be more expensive to

some agencies’ staff said they use these

serve. None of these factors resulted in a

greater reserves to provide gap financing for

significant difference in the estimated effect

affordable housing development projects,

of MTW status on HUD costs per assisted

which may lead to increases in the number of

household, suggesting that MTW agencies

households served in the long run.

do not maintain cost effectiveness by shifting

their program mix, reducing housing quality or

Coupled with the finding that HUD costs per

affordability, or serving different households.

household do not increase for agencies in the

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance xi

Executive Summary

MTW demonstration, these results suggest

• It includes households assisted with housing

that MTW agencies increase their savings in

assistance through MTW agencies’ local,

operating reserves while still serving roughly

non-traditional programs, which are not

the same number of assisted households per

captured in HUD’s administrative data and

dol ar of HUD funding as before joining the

have not been counted in prior studies.

demonstration.

Study Limitations

Differences from Previous

Lack of random assignment limits our ability

Research

to estimate the true causal impact of the

demonstration. Eligible PHAs were not

Previous studies have found that MTW

randomly assigned to the program or a control

agencies receive more funding per assisted

group; instead, they were chosen through

household than traditional PHAs, but these

selection processes that shifted from year to

studies lacked data on MTW agencies’

year before becoming more standardized in

costs per household before joining the

the later years of the demonstration. Although

demonstration. Studies that compare MTW

our panel method al ows us to control for

agencies with traditional PHAs in terms

many of the differences between MTW

of spending on specific activities, such

agencies and traditional PHAs, we cannot ful y

as program administration, find that MTW

control for differences in motivation that may

agencies spend more per assisted household,

prompt PHA leadership to seek MTW status.

but these differences diminish after

accounting for higher housing and labor costs

A lack of data also contributes to three

in the markets where MTW agencies operate.

important limitations for this research:

This suggests that MTW agencies’ higher

costs per assisted household and higher

• The analysis excludes the earliest MTW

spending may reflect preexisting differences

agencies because cost and funding data

between MTW and traditional PHAs, rather

were not available for the earliest years of

than the effects of receiving MTW status.

the program. This leaves out many of the

largest MTW agencies and those that were

This study differs from prior studies in three

most active in using their MTW flexibility.

ways:

• Inconsistent and missing data reduce the

• It accounts for preexisting differences

accuracy and precision of our estimates.

between MTW agencies and traditional

• Differences in how MTW agencies report

PHAs in both internal and external factors

financial information limit the measures

affecting the costs of providing rental

available for analysis. In particular, the

assistance. Prior studies did not differentiate

study does not include information on the

between differences that existed before

mechanisms that allow MTW agencies to

the future MTW agencies joined the

increase their reserves without increasing

demonstration and differences caused by

overall costs per assisted household. Nor

the demonstration.

does it include information on how MTW

• It uses 15 years of data to analyze the

status affects agencies’ ability to leverage

longer-term impact of MTW status,

other funding streams to support assisted

which accounts for agencies’ spending

households.

on affordable housing development,

preservation, and the creation of new types

of rental assistance programs.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance xi i

Executive Summary

Final y, the study focuses only on cost

household existed prior to entering the MTW

effectiveness and defines cost effectiveness

demonstration and that the demonstration

based on the number of households served.

itself was not the cause.

We chose this measure of cost effectiveness

because it reflects federal costs and al ows

for fair comparison between MTW agencies

and traditional PHAs, but it does not take into

account the other two statutory objectives:

promoting employment and economic self-

sufficiency and increasing housing choices for

low-income families. MTW agencies are not

required to pursue cost effectiveness over and

above the other objectives.

Conclusion

The MTW agencies included in our analysis

received higher levels of HUD funding after

joining the demonstration and also were

able to increase the total number of assisted

households served, resulting in no significant

change in overall cost per household. These

agencies also experienced a large increase

in dollars per household held in reserves,

suggesting that they were able to increase

their savings while stil serving roughly the

same number of assisted households per

dol ar of HUD funding as before joining the

demonstration.

Future studies should examine cost

effectiveness in tandem with self-sufficiency

or housing choice to determine the overall

effect of the MTW demonstration on its three

statutory objectives. Future studies should

also estimate the relationship between MTW

status and the number of affordable units

within the PHA’s service area to determine

whether MTW agencies use their reserves

to increase the supply of affordable housing

more than other similar agencies.

The findings in this study do not contradict

prior studies showing that MTW agencies

spend more per household, but rather

show that this higher level of cost per

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance xiv

Introduction

Introduction

Our model estimates the difference

between MTW agencies’ actual trends in

cost per assisted household relative to their

When Congress created the Moving to Work

expected trajectory if they had not joined the

(MTW) demonstration in 1996, one of its

demonstration. The model uses fixed effects

primary goals was to allow public housing

to account for differences between MTW

agencies (PHAs) to use their federal dol ars

and traditional PHAs in size, location, and

more efficiently. Traditional PHAs are highly

other factors not associated with the MTW

regulated. They receive specific funding

demonstration. We also control for changes

allocations for each component of providing

in local rental costs and public sector wages

housing assistance and their funding is tied

in the PHAs’ service area that are known

to the amount of funding and the number of

to affect the costs of housing assistance.5

households they served in the previous year.

Because of constraints due to data quality and

The 39 PHAs in the MTW demonstration

availability, we limit our analysis to the years

have greater flexibility in how they use their

2003 through 2017 and, therefore, estimate

HUD funding and can ask HUD to waive

effects of MTW status on cost per assisted

or relax certain program regulations. This

household for the 18 PHAs that entered or

report, one of several produced for the

exited the MTW demonstration during this

MTW retrospective evaluation described

period and for whom we have reliable data.

in exhibit 1, assesses the effect of the MTW

The analysis, therefore, excludes some of

demonstration on the per household cost of

the largest MTW PHAs—such as the Chicago

assistance. This study examines the impact of

Housing Authority, Home Forward (Portland,

the MTW demonstration on one measure of

OR), and the Cambridge Housing Authority—

cost effectiveness—the number of households

that joined MTW before 2003.

PHAs assist per dol ar of HUD funding. The

Although MTW was intended to increase

cost effectiveness measure, which we cal

cost effectiveness (among other goals), most

“cost per household,” is the total funding

empirical studies of the demonstration have

PHAs receive from HUD each year for the

shown that MTW agencies spend more per

public housing and Housing Choice Voucher

assisted household than traditional PHAs

(HCV) programs, divided by the number of

and use a lower proportion of their annual

households assisted by these programs.4

budgets on direct housing assistance (Buron

Fifteen years of historical data are used to

et al., 2017; Fischer, 2011; GAO, 2018). Based

measure trends within PHAs before and after

on these studies, we hypothesized that MTW

receiving MTW status to compare with trends

status increases the per household costs to

in traditional PHAs of comparable size during

the Federal government of providing housing

the same period. To better understand how, if

assistance. We find, instead, that MTW

at al , MTW status affects cost effectiveness,

status has no significant impact on cost per

we create separate estimates of the effect of

assisted household when compared with

MTW status on PHAs’ annual funding from

traditional PHAs of similar size.6 PHAs do

HUD and on the number of households PHAs

receive significantly more funding after joining

assist with that funding.

the demonstration (an estimated 11-percent

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 1

Introduction

increase in annual HUD funding), but they

status leads to an increase in HUD funding

use this money to serve significantly more

for housing assistance and a comparable

households (an estimated 10-percent increase

increase in assisted households, resulting in

in assisted households). This results in a slight

no significant effect on cost effectiveness.

and not statistical y significant increase in

Although our study finds no evidence of MTW

HUD costs per assisted household. We find

meeting its statutory objective of achieving

that average HUD funding increased in the

greater cost effectiveness, we also find no

year that a PHA joined MTW, peaked the next

evidence that MTW induces the higher costs

year, and then leveled off, and the number of

found by previous studies.

assisted households increased slightly in the

year PHAs joined and then continued to grow

Results differ from prior studies for four

over time.

main reasons. First, the fixed effects model

accounts for pre-existing differences

We test our results after adjusting for

between MTW and traditional PHAs and

differences between MTW and traditional

the communities they serve that affect the

PHAs in the types of programs they offer

costs of providing housing assistance. MTW

(that is, public housing, tenant-based

agencies received and spent more funding

HCVs, project-based HCVs, and local, non-

per assisted household prior to joining the

traditional programs), housing quality, housing

demonstration. Cross-sectional studies

affordability, and the characteristics of

cannot differentiate between differences

assisted households. None of these controls

that existed before MTWs joined the

change our finding that MTW status has no

demonstration and differences caused by the

significant effect on the costs to HUD of

demonstration. Second, by using 15 years

providing housing assistance.

of data, it is possible to analyze the longer-

term impact of MTW agencies’ al ocation of

Final y, we estimate the impact of MTW status

funding in affordable housing development,

on how much PHAs spend per household

preservation, or the creation of new types

(aggregate spending), how much they spend

of housing assistance programs. Third,

on program administration and tenant

this study includes households assisted

services, and how much funding they hold

through MTW agencies’ local, non-traditional

in operating reserves. We find no increase

programs, which are not captured in HUD’s

in aggregate spending associated with

administrative data and have not been

MTW. We did find, however, that MTW status

included in prior studies. Final y, the analysis

is associated with statistical y significant

excludes the earliest MTW PHAs, which joined

increases in the amount of funding PHAs hold

when there was less standardization in how

in operating reserves of approximately $840

PHAs were selected to the demonstration and

per assisted household.This suggests that

more variation in their funding formulas.

MTW agencies are able to serve the same

number of households per dol ar of HUD

funding while also saving money in reserves

for future developments and other uses.7

Our results suggest that the MTW

demonstration has little to no impact on the

average costs to the Federal government

of providing housing assistance. MTW

7 There appears to be no impact of MTW on spending on administrative costs per household and tenant services per household, but there is too much variation between PHAs and within PHAs over time to measure these impacts with precision.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 2

Introduction

Exhibit 1: The Moving to Work Retrospective Evaluation

The HUD-sponsored Moving to Work (MTW) Retrospective Evaluation includes six reports and an online data feature that examine different aspects of the MTW program and MTW agencies’ activities and performance under the program’s three statutory objectives.

A Picture of Moving to Work Agencies’ Housing Assistance describes MTW agencies, the assistance they provided, and the characteristics of the households they served in 2008 and 2016. A related online data feature provides access to MTW agency-level data.

Moving to Work Agencies’ Use of Funding Flexibility examines how agencies have used MTW funding flexibility, alone and with regulatory waivers, and categorizes funding flexibility activities by their primary objectives—cost effectiveness, self-sufficiency of assisted households, or increased housing choice for low-income families. The study includes an indepth examination of funding shifts for a subgroup of eight agencies.

Housing Choice and Self-Sufficiency Outcomes at Moving to Work Agencies examines the extent to which MTW agencies meet two of the program’s three statutory objectives, increasing housing choice and promoting self-sufficiency for assisted households.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance examines how MTW

status affects the costs, to HUD, of providing housing assistance to households in the public housing and Housing Choice Voucher (HCV) programs.

Evaluating the Effects of Santa Clara County Housing Authority’s Rent Reform examines the impacts on work, earnings, and housing subsidies among assisted households of Santa Clara’s unique rent reform, which increased the proportion of income that households must pay toward rent.

Moving to Work Agencies’ Use of Project-Based Voucher Assistance examines multiple aspects of MTW agencies’ use of project-based voucher (PBV) assistance, including the share of assistance and HCV budget authority devoted to PBVs, the relationships between PBVs and the Low-Income Housing Tax Credit and Rental Assistance Demonstration programs, the locations of PBV-assisted units, and case studies of three agencies’ MTW goals and activities.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 3

Background

Background

through a competitive application process,

and HUD selected them because they

were high performers with strong plans for

Enacted by Congress in 1996, the Moving

how they would use greater flexibility. One

to Work (MTW) demonstration8 al owed

agency entered through HUD’s Jobs-Plus

designated public housing agencies (PHAs)

initiative. Additional y, in 2000, 2007, and

greater regulatory and funding flexibility

2008, Congress directly granted MTW status

to test innovations in housing assistance.9

to seven PHAs.13 Some of these agencies

MTW agencies can apply for waiver authority

were low performers at the time of their

to test innovations that aim to meet one or

selection and were given MTW status to help

more of the demonstration’s three statutory

improve their financial sustainability. The

objectives:10

list of MTW agencies shows that they are

disproportionately located in large, coastal

1. Reduce cost and achieve greater cost

urban areas.

effectiveness in federal expenditures

2. Give incentives to families with children

where the head of household is working,

is seeking work, or is preparing for work

by participating in job training, educational

programs, or programs that assist people

to obtain employment and become

economical y self-sufficient

3. Increase housing choices for low-income

families

MTW agencies still must abide by statutory

requirements and regulatory requirements for

which they do not have a waiver. They also

must serve “substantial y the same” number

of families as they would have if they had not

joined the demonstration.11

Exhibit 2 displays the years in which MTW

agencies signed, and in some cases

terminated, their MTW agreements.12 Most

MTW agencies entered the demonstration

8 An additional 100 agencies will be granted MTW designation by HUD by approximately 2022 through the MTW Expansion. For more information on the MTW demonstration, as well as the MTW Expansion, see https:/ www.hud.gov/mtw.

9 In this report, we refer to the 39 PHAs that held MTW status as of 2018 as “MTW agencies” and the roughly 3,000 agencies without MTW status as

“traditional PHAs.” The MTW Demonstration includes 39 PHAs, but the Housing Authority of the County of Santa Clara manages all housing programs for the Housing Authority of the City of San Jose so these two are treated as a single agency in the analysis and throughout the remaining sections of this report. Two agencies, Greene Metropolitan Housing Authority (Ohio) and High Point Housing Authority (North Carolina) were part of the demonstration but have since exited.

10 Omnibus Consolidated Rescissions and Appropriations Act of 1996. Pub. L. No. 104-134, tit. II, § 204, 110 Stat. 1321, 1321-281 (codified as amended at 42

U.S.C. § 1437f note).

11 For information on how this is calculated, see Notice PIH-2013-02 (HA) Baseline Methodology for Moving to Work Public Housing Agencies (https://

www.hud.gov/sites/documents/PIH2013-02.PDF).

12 Additional information on agency selection into the demonstration and a more detailed timeline appear in appendix A.

13 The three PHAs selected mainly based on proposed activities rather than performance were the San Diego Housing Commission, Vancouver Housing Authority, and Minneapolis Public Housing Authority (Cadik and Nogic, 2010). The seven PHAs invited to join by Congress through an Appropriations Act were the Charlotte Housing Authority and the Housing Authority of the City of Pittsburgh in 1999; the Chicago Housing Authority in 2000; and the Alaska Housing Finance Corporation, the Housing Authority of the County of San Bernardino, the Housing Authority of the City of San Jose, and the Santa Clara County Housing Authority in 2008.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 4

Background

Exhibit 2: Timeline of Moving to Work Agreements

1999

Cambridge

2004

Oakland

Delaware

2008

Greene

Alaska

Greene and

High Point

Baltimore

Keene

High Point

San Bernardino

Lawrence-Douglas County

left

San Jose

demonstration

Lincoln

Santa Clara County

Louisville

San Diego (reentered)

Massachusetts

2001

Portage

New Haven

Portland

Philadelphia

2010

San Antonio

Champaign County

2013

Tulare County

Tacoma

2003

Columbus

Vancouver

Atlanta

Fairfax

Washington, DC

2011

Holyoke

1998

2000

King County

Boulder

Reno

Minneapolis

Chicago

Lexington-

San Diego

Pittsburgh

San Diego left

2007

Fayette

Seattle

San Mateo

demonstration

Charlotte

Orlando

Notes: The graphic shows the year that agencies signed their Moving to Work (MTW) agreement. In the initial cohort, six agencies were accepted but dropped out before gaining MTW status: Birmingham, Alabama; Cherokee Nation, Los Angeles County, California; Stevens Point, Wisconsin; Tampa, Florida; and a consortium of five PHAs in Utah.

Source: Urban Institute analysis of documents retrieved from HUD’s Moving to Work (MTW) portal, https://www.hud.gov/mtw

Moving to Work Funding and

obligations. Shortfal s can result in PHAs being

Fund Flexibility

unable to serve additional households or, in

extreme cases, terminating assistance for

Traditional PHAs are funded for discrete

current households.

activities through a set of clearly defined

formulas with strict specifications about how

The MTW demonstration was designed with

they can use their funding. Each year they

the assumption that giving PHAs more local

receive separate funding allocations from

control to set policy and invest in programs

HUD for the Housing Choice Voucher (HCV)

will al ow them to make more efficient use of

Housing Assistance Payments (HAP) and

federal dol ars. Each MTW agency has its own

administrative fees, public housing operations,

funding agreement with HUD that typical y

and public housing capital improvements.

provides the same base voucher funding

With some exceptions, funds cannot be

each year, with an inflation adjustment. As

used for anything other than the designated

long as agencies remain compliant with the

purposes.14 If traditional PHAs spend less

requirement to serve “substantial y the same”

than their annual allocated HAP amount, they

number of households as they assisted before

receive less HAP in subsequent years. If PHAs

joining MTW, their funding does not go up if

spend more than their allocated amount,

they serve more households or go down if

they risk going into “shortfall,” meaning they

they serve fewer households.

do not have adequate funding to cover their

14 The Housing Opportunity Through Modernization Act of 2016 (HOTMA) gave traditional PHAs the flexibility to use up to 20 percent of their Operating Subsidy funds each year for Capital Fund Program activities. HUD issued guidance on how PHAs can use this flexibility on February 28, 2018, through PIH Notice 2018-03 (HA) “Guidance on the Use of Operating Subsidy for Capital Fund Purposes for Subsidy Appropriated and Al ocated for Calendar Year 2018 and Subsequent Years.” Retrieved from: http:/ commdevstrategies.com/wp-content/uploads/2018/03/HUD-PIH-Notice-2018-03.pdf.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 5

Background

MTW agencies have two mechanisms not

Fund flexibility al ows MTW agencies to apply

available to traditional PHAs that they can use

fungibility to the three traditional funding

to pursue greater cost effectiveness or other

streams—the Public Housing Operating Fund,

statutory objectives—waiver authority and

the Public Housing Capital Fund, and the

fund flexibility. Waiver authority means that

Housing Choice Voucher Fund (exhibit 3).

MTW agencies may be al owed by HUD to

This al ows MTW agencies to real ocate funds

waive parts of the U.S. Housing Act of 1937 (as

across programs, by, for example, using HCV

amended) in order to implement innovations

program funds to build or preserve affordable

intended to achieve one of the three statutory

housing. This could al ow MTW agencies to

objectives (cost effectiveness, self-sufficiency,

shift money from less efficient programs to

and housing choice). For example, through

more efficient ones. They can also use their

waiver authority, MTW agencies can increase

public housing and voucher funds to improve

their revenue by increasing the amount that

their balance sheets or provide matching

tenants are expected to contribute to their rent

funds to leverage other funding sources

or reduce administrative costs by reducing the

for housing development or preservation

frequency of Housing Quality Standards (HQS)

(Levy, Long, and Edmonds, 2020). Given

inspections or income recertifications.

this fungibility, MTW agencies report their

spending on public housing, HCVs, and LNT

Through waiver authority, MTW agencies

assistance collectively as MTW program

can also offer local, non-traditional

spending, and the fungible funding used for

(LNT) assistance. There are four types

these activities are often referred to as the

of LNT programs: (1) rental subsidy, (2)

MTW fund. Note that HUD funding for other

homeownership, (3) housing development,

programs cannot be used in this way. Most

and (4) service provision.15 Local, non-

importantly for this study, funding for special

traditional rental subsidy programs provide

purpose vouchers can only be spent on those

a rental subsidy to a third-party (not a

vouchers and cannot become part of the

landlord or tenant) who manages intake

MTW fund.

and administration of the subsidy program.

Homeownership programs provide subsidies

that help low-income households purchase

homes. Housing development programs

use MTW funds to acquire, renovate, and/

or build units that are not public housing or

HCV units, but are still affordable (although

not necessarily to the lowest income families

typical y served by HUD rental assistance).

Thus, LNT housing programs may provide

shallower subsidies than the regular voucher

and public housing programs. Final y, service

provision programs provide services to low-

income households who are eligible for, but

may not receive, housing assistance.

15 HUD Office of Public and Indian Housing Notice PIH-2011-45 (HA) issued August 15, 2011, on the subject of parameters for local, non-traditional activities under the Moving to Work Demonstration Program.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 6

Background

Exhibit 3: Moving to Work Funding Flexibility

MTW Funding Streams

Traditional Funding Streams

Public

Public

Housing

Housing

Housing

Choice

Operating

Capital

Voucher

Funds

Funds

Funds

Public

Public

Housing

Housing

Housing

Choice

Operating

Capital

Voucher

Funds

Funds

Funds

MTW

Fund

..

Public

Housing

Supportive

Operating

Services

Costs

Public

Public

Housing

Housing

Housing

Choice

Operating

Capital

Voucher

Local,

Housing

Costs

Projects

Program

Non-

Choice

traditional

Public

Voucher

Programs

Housing

Component

Capital

Units

Program

Projects

Source: Urban Institute analysis of Moving to Work (MTW) Standard Agreement Attachment C, “Statement of Authorizations,” retrieved from HUD’s MTW portal,

https://www.hud.gov/program_offices/public_indian_housing/programs/ph/mtw/mtwsa

Some aspects of the MTW demonstration,

without serving more households. For

however, may not be conducive to greater

example, some of the original MTW agencies

cost effectiveness. Unlike traditional PHAs,

have their Public Housing Operating Subsidy

funding for MTW agencies is not directly tied

funding frozen at the levels they received

to the number of households assisted in the

when they entered the demonstration,

prior year. This could reduce their motivation

adjusted annual y for inflation. As public

to make sure vouchers are ful y utilized. In

housing units have been removed from use

addition, MTW agencies can use their public

and federal funding for public housing has

housing and voucher funding to pay for more

declined, these agencies have received a

robust services, spend more on staff salaries

greater share of HUD’s overall Public Housing

and other administrative costs, or build-up

Operating Subsidy budget. Similarly, funding

reserves for future use. In the short-term, this

for HCV programs at most MTW agencies is

use of funds may result in MTW agencies

determined based on their MTW agreement

having higher costs per assisted household

rather than based upon the national HAP

than traditional PHAs because less of their

and administrative fee formulas. HUD applies

budget goes directly to housing assistance.

Congressional budget cuts to the voucher

program by applying a proration percentage

Historical y, MTW agencies have also been

to the full funding an agency was scheduled

more protected from Congressional budget

to receive. For traditional PHAs, HUD applies

cuts than traditional PHAs, which may al ow

a separate proration amount to their HAP

them to receive a greater share of funding

funding and their administrative fee funding.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 7

Background

For MTW agencies, the HAP proration rate is

applied to both HAP and administrative fee

funding. Congress has made deeper cuts

to administrative fee assistance than HAP

funding. At its lowest point, in 2013, PHAs

were receiving 69 percent of full funding for

administrative fee expenses and 94 percent

of their full funding levels for HAP.16 Thus,

MTW agencies that combine their HAP and

administrative fee funding have been less

affected by recent cuts.17

16 Federal Register. 2016. “Housing Choice Voucher Program—New Administrative Fee Formula.” https:/ www.federalregister.gov/

documents/2016/07/06/2016-15682/housing-choice-voucher-program-new-administrative-fee-formula.

17 Discussions with MTW program office at HUD headquarters.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 8

Prior Research on Moving to Work and the Cost of Housing Assistance

Prior Research on

Housing Choice Voucher

Moving to Work and

Administrative Costs

Program administration accounts for a smal

the Cost of Housing

fraction of the total costs of providing housing

assistance, but it is an area where MTW

Assistance

status could create potential efficiencies. The

MTW demonstration was expected to create

efficiencies in program administration because

MTW agencies have fewer administrative

In this section, we review the relevant

requirements. An analysis of MTW agencies’

literature on the Moving to Work (MTW)

annual administrative plans found that most

demonstration’s effects on cost effectiveness.

agencies use their flexibility to scale back

The most rigorous prior studies have

the frequency of annual Housing Quality

compared MTW and traditional public housing

Standards (HQS) inspections or income

agencies (PHAs) on per household spending

recertifications (Galvez, Simington, and

on specific aspects of providing housing

Treskon, 2017).18 These changes, however,

assistance, including program administration,

do not typical y translate into lower overal

housing assistance payments, public housing

administrative costs per assisted household

operations, and operating reserves, rather

for a few reasons. First, implementing

than looking at either total PHA expenditures

policy changes carries its own costs related

or total HUD spending per assisted household

to developing the new policy, providing

(Buron et al., 2017; GAO, 2018). General y,

community outreach and education to

these studies show that MTW agencies

explain the new policy, and training staff and

spend more per assisted household on

updating software (Khadduri et al., 2014).

specific activities than traditional PHAs, but

Second, MTW PHAs typical y use any savings

these differences diminish after accounting

generated from reduced regulation to shift

for higher housing and labor costs in the

how administrative staff spend their time

markets where MTW agencies operate. This

rather than reduce overall staffing. Officials

suggests that observable differences in costs

from several MTW agencies reported that

may be caused by differences between MTW

staff were still spending as much time with

and traditional PHAs unrelated to the MTW

residents as before their agency joined the

demonstration itself. The studies that have

demonstration, but the relationship had

tried to compare MTW and traditional PHAs on

shifted from one of “auditor or investigator to

overall costs find that MTW agencies spend

one of mentor or advocate” (Abravanel et al.,

much more per assisted household, but do

2004).

not account for other factors that may drive

spending differences.

Two recent studies analyzed the effects of

MTW on administrative costs per household in

the Housing Choice Voucher (HCV) program

as part of their larger MTW evaluations. Abt

Associates compared average household

costs between MTW and traditional PHAs by

matching each MTW PHA to 3–5 traditional

18 Income recertification is the process through which a PHA determines a family’s income for purposes of setting the total tenant payment toward rent.

Housing quality inspections are required to ensure that tenant- and project-based housing choice HCVs are used to house families in units that meet HUD housing quality standards.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 9

Prior Research on Moving to Work and the Cost of Housing Assistance

PHAs that were most similar based on the

Housing Choice Voucher

number of HCV and public housing units,

fair market rents, poverty rates, area income,

Rental Payment Subsidies

and unemployment. It found that, in 2014,

Another major focus of the existing research

the average MTW agency spent $163 more

has been PHAs’ average spending on Housing

per assisted household on administrative

Assistance Payments (HAP) per assisted

costs in the HCV program than the average

household. Both MTW and traditional PHAs

comparable traditional PHA (Buron et al.,

receive HUD funding for HAP, which makes

2017). The difference in costs was driven

up the largest budget item for most PHAs.

primarily by a few MTW agencies that used

For traditional PHAs, this funding must be

their funding flexibility to spend administrative

used to provide rental subsidies to landlords

funds on resident services. Nearly one-

in the HCV program. MTW agencies have the

half (15 of 35) of MTW agencies had lower

flexibility to shift HAP funds into the public

administrative costs per assisted household

housing operating or capital funds programs,

than their comparison traditional PHAs (Buron

build up reserves, or develop new types of

et al., 2017). Traditional PHAs cannot use HCV

assistance. They can also adjust the amount of

funds for resident services and general y

subsidy that households in the HCV program

rely on grants or partnerships with non-

receive or provide financial incentives to

profits if they offer these services. Excluding

landlords to participate in the program.

resident services, MTW agencies tended to

have comparable administrative costs with

The Center on Budget Policies and Priorities

traditional PHAs (Buron et al., 2017).

(CBPP) estimated that, in 2010, MTW agencies

left 16 percent of their HAP funds unused

The U.S. Government Accountability Office

compared with 4 percent for traditional PHAs.

(GAO) also analyzed differences in HCV

The authors estimated that MTW agencies

administrative costs between MTW and

provided HCV assistance to 45,000 fewer

traditional PHAs as part of its 2018 report to

households than they were authorized to

Congress on the MTW demonstration. Like

assist because they did not ful y use their HCV

Abt Associates (Buron et al., 2017), GAO

funding for subsidies (Fischer, 2015). Although

(2018) constructed a comparison group of

MTW agencies could have transferred a

traditional PHAs similar to MTW agencies

portion of HCV funds to assist households in

based on the number of assisted units,

local, non-traditional (LNT) or public housing

location, and housing market characteristics.

programs, CBPP was not able to track the

Rather than looking at a single year, the GAO

funds in this way and thus considered the

report compared median costs per household

funds unused. CBPP’s analysis did not attempt

between MTW agencies and the matched

to control for other differences, beyond MTW

comparison group between 2009 and 2015.19

flexibility, that could have contributed to lower

GAO estimated that median per household

usage rates at MTW agencies.

administrative expenditures was $922 for

MTW agencies and $642 for traditional

GAO’s report, which accounted for differences

PHAs. GAO’s estimate of administrative costs

in size, location, and market characteristics

includes median spending of $37 per HCV

between agencies, estimated that MTW

household on resident services for MTW

agencies have a median voucher utilization

agencies, compared with a median of $0 for

rate of 93 percent while traditional PHAs

traditional PHAs (GAO, 2018).

have a median utilization rate of 96 percent.

19 Although they used multiple years of data, they pooled the years together and did not undertake an analysis of changes pre- and post-entry into the MTW demonstration.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 10

Prior Research on Moving to Work and the Cost of Housing Assistance

In their analysis of utilization, neither GAO’s

operations than traditional agencies (GAO,

(2018) nor CBPP’s report (Fischer, 2015) was

2018). The Abt Associates report found no

able to account for the number of households

statistical y significant differences in per unit

assisted by MTW agencies using their HAP

public housing operations costs between

funds to build or preserve housing or create

MTW and traditional PHAs after accounting for

LNT forms of housing assistance.20

differences in local wages (Buron et al., 2017).

The GAO report also found that MTW

agencies spend more per household on

HUD Funding Levels

rental payment subsidies than traditional

Some research suggests that MTW agencies’

PHAs. The authors estimated that the median

funding tends to be more predictable

rental payment subsidy was about 25 percent

and potential y more generous than it is

higher at MTW agencies than for comparable

for traditional PHAs. For example, CBPP

agencies—$8,295 per household for MTW

found that the alternate funding formula 11

agencies and $6,629 per household for the

MTW agencies receive for public housing

comparison group (GAO, 2018). The 2017

operating subsidies accounts for $260

Abt Associates report, however, found no

mil ion in additional funding compared with

statistical y significant differences in average

traditional PHAs (Fischer, 2015). In years of

rental payment subsidy costs between MTW

reduced appropriations, MTW agencies were

and traditional PHAs after adjusting for

still funded based on their MTW funding

differences between agency fair market rents

agreement for both their HCV and public

and national averages (Buron et al., 2017).

housing programs.21 By contrast, traditional

PHAs are funded according to a formula that

Public Housing Operations

accounts for local housing costs, past usage of

HUD funds, and current obligations. HUD then

With public housing, program administration

prorates each traditional PHA’s funding levels

and housing provision are funded and

to adjust for changes in total funding levels

frequently examined col ectively as public

from Congress.

housing operations. Capital improvements

are funded separately and have received

less research attention. In part because

Reserves

of differences in funding formulas, CBPP

MTW agencies can use their flexibility to place

estimated that, in 2010, MTW agencies

more money into reserves, which they can

received almost $3,000 more per unit for

allocate to affordable housing development or

public housing operations than traditional

preservation, or as a “rainy-day fund” in case

agencies (Fischer, 2015). This estimate,

of future funding shortfal s. GAO’s 2018 report

however, did not account for variations

estimated that, as of June 2017, the 39 MTW

between PHAs in local housing or labor

agencies had $808 mil ion in HCV reserves—

markets. The GAO report, which did attempt

more than all of the 2,000 traditional PHAs

to control for some of these differences,

in their comparison group with a combined

found that MTW agencies spent about $1,600

$737 mil ion (GAO, 2018). This may indicate

more per unit per year on public housing

MTW agencies are not using as much of their

20 The GAO (2018) report, which presented the number of households assisted through local, non-traditional activities, explained their inability to capture costs associated with these activities and discussed the limitation and implications of the absence of local, non-traditional spending data in their analysis.

21 For more information, see Title 24—Housing and Urban Development (2017) §982.503, Payment Standard Amount and Schedule, PIH Notice 2008-15(HA) “Implementation of the Federal Fiscal Year 2008 Funding Provisions for the Housing Choice HCV Program,” Notice PIH 2009-13(HA)

“Implementation of the Federal Fiscal Year 2009 Funding Provisions for the Housing Choice HCV Program,” and PIH Notice 2012-9 “Implementation of the Federal Fiscal Year 2012 Funding Provisions for the Housing Choice HCV Program.”

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 11

Prior Research on Moving to Work and the Cost of Housing Assistance

annual funding for direct housing assistance,

public housing developments, which studies

but it can give them advantages over

have shown are more expensive to maintain or

traditional PHAs in completing deals to build

repair (Stockard et al., 2003).

or preserve affordable housing (Abravanel

et al., 2004). HUD’s data systems do not

track PHAs’ affordable housing al ocations

Limitations of Prior Research

but Abt Associates conducted a survey of

Prior studies that examined the relationship

PHAs as part of its MTW evaluation and found

between MTW status and cost effectiveness

MTW agencies preserved significantly more

show that MTW agencies spend more per

affordable housing units than traditional PHAs

household than traditional PHAs. None

(Buron et al., 2017).

of these studies, however, used data on

MTW agencies before they joined the

Total Costs per Assisted

demonstration. Therefore, they were unable

to identify the impact of MTW status on the

Household

agencies. The high-level findings presented

Neither the Abt Associates nor the GAO report

in CBPP’s 2011 report (Fischer, 2011) did not

attempted to estimate the effects of MTW

control for local differences that influence

status on total PHA expenditures per assisted

the cost of housing assistance. The studies

household or HUD funding per assisted

conducted by Abt Associates (Buron et al.,

household. CBPP compared MTW with

2017) and GAO (2018) used sophisticated

traditional PHAs on the number of assisted

methods to identify a comparison group

households in the public housing and voucher

of traditional PHAs. These studies did not,

programs per $100,000 of HUD funding. It

however, control for unobserved differences

found that, for every $100,000 of HUD funding

that existed before MTW agencies joined the

they received, MTW agencies assisted roughly

demonstration. They also did not examine how

9 households, while traditional PHAs assisted

cost effectiveness or spending at agencies

15 households (Fischer, 2011). This analysis,

changed after they joined the demonstration.

however, does not account for differences in

Additional y, these studies were unable

size, location, rental market characteristics, or

to account for shifts in spending between

other factors that affect costs and may differ

public housing and HCVs or to LNT housing

between MTW and traditional PHAs.

programs. The study described in this report

overcomes these limitations, as described in

Housing assistance may be more expensive

the next section.

in MTW agencies for reasons unrelated to the

MTW demonstration. MTW agencies tend to

be larger than traditional PHAs and are more

likely to be in areas with high housing and

labor costs (Galvez, Gourevitch, and Docter,

2020). Tighter housing markets and higher

local wages have been shown to increase

the costs per household in the HCV program

(Finkel and Buron, 2001; Turnham et al., 2015).

Additional y, many MTW agencies, such as

the Housing Authority of the City of Pittsburgh

and the Chicago Housing Authority, entered

the demonstration with a large stock of aging

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 12

Research Questions and Research Design

Research Questions

not affected if an MTW agency shifts funds

from one program to another. The analysis

and Research Design uses many more years of data than previous

studies, tracking changes in MTW agencies

and traditional PHAs from 2003 through

The existing research has shown that Moving

2017.22 With this additional data, the analysis

to Work (MTW) agencies spend more per

examines costs per household at MTW

household than traditional public housing

agencies before and after joining MTW. The

agencies (PHAs). The impact of MTW on the

analysis compares changes in costs that

agencies, however, had not been determined.

occur when agencies join MTW with changes

Our primary research question therefore

at traditional PHAs over the same years. It

asks: What is the effect of participating in the

separately examines trends in funding and in

MTW demonstration on the per household

the number of assisted households at PHAs

cost of providing housing assistance? In this

before and after they join MTW. The study also

study, the per household cost of assistance,

investigates whether changes in the mix of

or “cost per household” is defined as the

program types, housing quality, or affordability

amount of funding a PHA receives from HUD

explain changes in the average cost per

divided by the number of households served

assisted household.

by that PHA. Given the existing differences

in spending per household, our hypothesis

Research Design

was that MTW status leads to higher costs

The primary outcome measure in this analysis

per household. We tested this against the nul

is the cost per household to the Federal

hypothesis that there was no impact of MTW

government of providing housing assistance.

on costs per household.

The amount of funding received from HUD is

If MTW status leads to higher per household

calculated by summing amounts for the public

costs, we want to understand why. Based on

housing operating fund, the public housing

the prior research into MTW and the costs of

capital fund, and the Housing Choice Voucher

assistance more general y, potential reasons

(HCV) program. The funding amount is

for cost differences include the mix of types

divided by the sum of the households served

of housing assistance, the quality of public

in the public housing and HCV programs to

housing units, housing affordability, and the

determine the federal cost per household of

characteristics of households. Additional y,

providing housing assistance. Special purpose

we want to find out which type of spending

vouchers such as HUD-Veterans Affairs

changes when agencies join MTW. Fol owing

Supportive Housing (HUD-VASH) and the

the existing research, we examine changes

Family Unification Program (FUP) are funded

in per household spending on program

distinctly from the HCV program. This funding

administration, resident services, and

cannot be included as part of the MTW fund.

operating reserves.

Therefore, neither funding for special purpose

vouchers nor households assisted with special

This study is fundamental y different from

purpose vouchers are included in this analysis.

earlier studies. The primary outcome

We also include households assisted through

variable covers all households assisted with

LNT programs, which are the unique programs

MTW funds, including through local, non-

MTW agencies can create to better meet local

traditional (LNT) programs. It is therefore

needs.

22 GAO’s study covers only 2009 to 2015 (and treats the timespan as one time period) and the Abt Associates study (Buron et al., 2017) used only 1 year, 2014.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 13

Research Questions and Research Design

The cost per household measure was chosen

include a data point for each variable for each

because we believe this measure best

PHA (both MTW agencies and comparison

captures MTW’s statutory objective of “cost

traditional PHAs) for each fiscal year from

effectiveness in Federal expenditures,”23

2003 through 2017. Using 15 years of historical

and it al ows for a fair comparison of MTW

data, we can observe trends over time and

with traditional PHAs.24 Cost reporting

control statistical y for differences between

requirements differ between MTW and

MTW agencies and traditional PHAs that pre-

traditional PHAs and have changed over

date entry into MTW. The statistical models

time. For example, traditional PHAs can only

control for characteristics of individual PHAs,

use their Housing Assistance Payment (HAP)

such as size and location, and for national

budget to subsidize the rents of households in

trends, such as changes in the Federal budget

the HCV program, while MTW agencies can,

for the public housing and HCV programs.

and often do, use a portion of this funding

This allows us to quantify changes in variables

for other purposes, which include public

of interest, such as cost per household, that

housing operations or acquiring or rehabbing

occur after an agency enters or exits the MTW

affordable housing properties (Levy, Long and

demonstration while controlling for differences

Edmonds, 2020). A comparison of average

between agencies.

HAP costs per family in the HCV program wil

make MTW agencies appear less efficient,

We would ideally examine the ful history of

even if they are using HAP funding to increase

the MTW demonstration, but data limitations

the overall number of assisted households

precluded this possibility. After extensive

by preserving public housing. Furthermore,

research and col aboration with HUD, we

Financial Data Schedule (FDS) data on PHA

set 2003 as the initial year for analyzing

expenditures are less complete than revenue

administrative data. This was the first ful

data and more difficult to track, particularly for

calendar year for which HUD could provide

MTW agencies. To circumvent these problems,

voucher management data. This voucher

we define cost per household as the total

data was needed to differentiate between

amount of funding for public housing and HCV

HCV households and households assisted by

programs received from HUD divided by the

special purpose vouchers.

total number of households served in these

Our statistical models, therefore, include

programs.

the 15-year period from 2003 through 2017

The second improvement over previous

during which 17 new PHAs entered the

studies is that this study uses panel data to

demonstration, 2 PHAs left, and 1 PHA (the

observe trends over time, rather than simply

San Diego Housing Commission) exited and

comparing MTW agencies with traditional

re-entered (exhibit 4).25 Each agency’s date

PHAs at one point in time (or, as in the case

of entry into MTW is defined as the date that

of the GAO study, summed up over a 6-year

their first MTW agreement was executed.26

period). The data used for this analysis

Exits are defined based on the date on which

23 Omnibus Consolidated Rescissions and Appropriations Act of 1996. Pub. L. No. 104-134, tit. II, § 204, 110 Stat. 1321, 1321-281 (codified as amended at 42

U.S.C. § 1437f note).

24 We do not use HCV utilization rates as a key outcome metric as other studies have. Because MTW al ows agencies to apply fungibility to public housing and HCV dol ars, a metric designed for evaluation of HCVs is not ideal. More importantly, making comparisons between utilization rates at traditional and MTW agencies is problematic. To begin with, the baselines from which utilization is calculated are not equivalent. MTW agencies’

baselines are negotiated with HUD as part of their MTW agreement. In contrast, baselines at traditional PHAs are calculated by formula. Traditional PHAs can have their baselines reduced, which makes their utilization rates go up. MTW agencies do not have the same financial incentives to maximize their utilization rates. The demonstration is designed for them to shift funds in ways that meet local needs. If funds are shifted from HCVs, utilization rates will fall even if the quality or quantity of service increases.

25 Descriptive statistics for these PHAs appear in appendix exhibit C5. Housing Authority of the County of Santa Clara manages all housing programs for the Housing Authority of the City of San Jose; therefore, we treat them as a single agency in our analysis.

26 In the case of San Diego Housing Commission’s re-entry into MTW, we use the date that their 2008 MTW agreement was executed for re-entry.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 14

Research Questions and Research Design

MTW agreement was terminated. Because

Authority, the Cambridge Housing Authority,

our panel data begins with 2003, we do

Home Forward (Portland, OR), the Housing

not estimate how MTW status affects cost

Authority of the City of Pittsburgh, the

per household for PHAs that joined prior to

Minneapolis Public Housing Authority, and the

2003, which includes some of the largest

Seattle Housing Authority.

MTW agencies such as the Chicago Housing

Exhibit 4: Timeline of Moving to Work Agreements and Evaluation Period (Evaluation Sample in Bold) 1999

Cambridge

2004

Delaware

Oakland‡

2008

Greene

Greene and

Alaska*

High Point

High Point

Baltimore

Keene

left

San Bernardino*

Lawrence-Douglas County

demonstration

San Jose*‡

Lincoln

Santa Clara County*‡

Louisville

San Diego (reentered)

Massachusetts

2001

Portage

New Haven

Portland

Philadelphia

2010

San Antonio

Champaign County

2013

Tulare County

Tacoma‡

2003

Columbus

Vancouver

Atlanta

Fairfax

Washington, DC

2011

Holyoke

1998

2000

King County

Boulder

Reno

Minneapolis

Chicago*

Lexington-

San Diego

Pittsburgh*

San Diego left

2007

Charlotte*

Fayette

Seattle

San Mateo

demonstration

Orlando

Evaluation Period

* PHAs selected by Congress, not through a competitive process.

‡Impact analyses do not include Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, or Housing Authority of the City of San Jose because of incomplete data on households in public housing. The 18 public housing agencies included in the impact analyses are Alaska, Atlanta, Baltimore City, Boulder, Champaign, Charlotte, District of Columbia, Columbus (GA), Fairfax County, Greene, High Point (NC), Holyoke, King County, Lexington-Fayette Urban County, Orlando, Reno, San Bernardino, and San Diego. The event study discussed in appendix B includes only 12 public housing agencies due to data limitations (see exhibit B5).

Note: The graphic shows the evaluation period and the year that agencies signed their Moving to Work (MTW) agreement.

Source: Documents retrieved from HUD’s MTW portal (https://www.hud.gov/mtw)

Research Questions

HUD cost per assisted household?

This study poses three research questions

The first research question asks what effect

and eight associated sub-questions which are

participating in the MTW demonstration

explained here and summarized in exhibit 5.

has on the per household cost of housing

The data and statistical models employed to

assistance. The answer quantifies the impact

answer these questions are described in the

of MTW status on the number of dol ars

sections that fol ow.

spent by HUD per household assisted by a

PHA (1a). We then separately determine the

Research Question 1: What is the

impact of MTW status on HUD funding levels

effect of Moving to Work status on

(1b), and the number of assisted households

PHAs serve (1c), to understand why MTW

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 15

Research Questions and Research Design

status is having its observed effect on

Research Question 3: Does Moving

the cost per assisted household. Our nul

to Work status affect agencies’ total

hypothesis is that MTW has no impact on cost

per household operating and housing

per household, HUD funding levels, and the

assistance spending, or per

number of assisted households.

household spending on program

Research Question 2: Do changes

administration, tenant services, or

in program mix, housing quality and

operating reserves?

affordability, or the characteristics

Research question 3 examines how MTW

of assisted households explain the

status affects PHA spending per household

effect of Moving to Work status on

on different components of providing housing

HUD costs per assisted household?

assistance. This contrasts with research

questions 1 and 2 which focus on HUD

Research question 2 tests whether the

revenue per assisted household. Focusing on

estimated impact of MTW status on HUD

revenue from HUD provides a more holistic

funding, households served, and cost per

measure of cost effectiveness than examining

household changes after control ing for

expenditures. Differences in expenditure

differences between MTW and traditional

levels between MTW and traditional PHAs,

PHAs in the mix of public housing, tenant-

however, have been wel documented.

based, and project-based vouchers in their

Because this is the first study to examine how

portfolio (2a); housing affordability and quality

cost effectiveness changes when an agency

(2b); and targeting of assistance to households

joins the MTW demonstration, it also offers the

that may be costlier to serve (2c).27 Each of

opportunity to provide context to the spending

the three models tests a different mechanism

differences described in prior research.

through which cost per household could

change. Each of these factors—housing

Total per household operating and housing

mix, affordability and quality, and household

assistance spending is calculated by adding

type—are accounted for in separate models

total operating expenditures associated with

to avoid overlap. For example, PHAs with a

public housing, the HCV program, or the MTW

greater proportion of public housing units

fund to total housing assistance payments

may also serve a higher percentage of large

associated with the HCV program or the MTW

households, increasing the costs of rental

fund and dividing by the number of assisted

assistance.

households (3a). It includes all reported

public housing operations, maintenance and

administration spending, and al reported

spending on the administration of HCVs and

LNT vouchers and units. It does not include

capital expenditures, transfers, depreciation,

or accounting costs such as bad debts. The

measure was defined to provide a point

of comparison with prior studies that have

examined the impact of MTW status on cost

effectiveness.

27 Research question 1, in contrast, treats all housing assistance as equal and does not account for differences in the level of assistance PHAs provide or the types of households they serve.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 16

Research Questions and Research Design

We also estimate how MTW status affects

conversations with PHA and HUD officials, and

spending on administration, tenant services,

available data as areas where MTW status could

and operating reserves per household (3b).

produce measurable differences in PHA spending

These three categories of expenditures were

or saving.

identified based on a review of existing literature,

Exhibit 5: Research Questions

Research Question 1: What is the effect of Moving to Work status on cost per assisted household?

1a. How does MTW status affect the average cost per assisted household?

1b. How does MTW status affect the annual amount of funding PHAs receive from HUD?

1c. How does MTW status affect the annual number of households receiving housing assistance?

Research Question 2: Do changes in program mix, housing quality and affordability, or the characteristics of assisted households explain the effect of Moving to Work status on HUD costs per assisted household?

2a. Do changes in the mix of public housing, tenant-based vouchers, and project-based vouchers in public housing agencies’ portfolios explain the relationship between MTW status and cost per assisted household?

2b. Do changes in housing affordability and housing quality explain the relationship between MTW status and cost per assisted household?

2c. Do changes in the proportion of assisted households that may be costlier to serve explain the relationship between MTW status and cost per assisted household?

Research Question 3: Does Moving to Work status affect agencies’ total per household operating and housing assistance spending, or per household spending on program administration, tenant services, or operating reserves?

3a. How does MTW status affect PHAs’ per household agency expenditures?

3b. How does MTW status affect PHAs’ annual per household spending on program administration, tenant services, and operating reserves?

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 17

Data Collection and Assembly

Data Collection and

with vouchers. Data from the Decennial

Census (Census), American Community

Assembly

Surveys (ACS), and the Bureau of Labor

Statistics (BLS) provide information such as

local wages and housing and utility costs. The

This study relies on three HUD administrative

Public Housing Assessment System (PHAS)

datasets: (1) the Financial Data Schedule (FDS)

provides data on public housing quality.

to track HUD funding and public housing

We also include HUD data on the number

agency (PHA) costs, (2) the Office of Public

of households assisted by Moving to Work

and Indian Housing Information Center (PIC)

(MTW) agencies through local, non-traditional

to track the number of households in public

(LNT) programs that are not captured in PIC

housing, and the characteristics of households

data (a summary of these datasets can be

in public housing and the voucher program,

found in exhibit C1 in appendix C). Exhibit 6

and (3) the Voucher Management System

summarizes the datasets and variables used in

(VMS) data to track the number of households

this study.

Exhibit 6: Variables for Analysis and Data Sources

Variable Description

Data Source

Definition / Notes

Outcome Measures

HUD PHA operating grants and capital grants for public capital

HUD Funding

FDS

funds, plus HUD PHA operating grants for public housing oper-

ating funds, plus HUD PHA operating grants for the HCV fund

Assisted Households

PIC, VMS, LNT data

Total households assisted through public housing, the HCV pro-

gram (excluding special purpose vouchers), and LNT programs

Cost per Assisted Household

FDS, PIC, VMS, LNT data HUD funding/assisted households

Treatment Variable

The treatment variable is equal to one for agencies for years in

which they are a part of the MTW demonstration and zero for

years in which they are not. If an agency has MTW status for part

of a year, the value is a fraction based on the number of months

MTW Status

Annual Reports, MTW

agreements

remaining in the calendar year when the agency’s MTW agree-

ment is executed. For example, if an agency signs the MTW

agreement in September, then MTW status = .25 in the year

the agreement was signed because 3 months, or .25 of a year,

remain in the calendar year.

Cost Components

Administrative Costs

FDS

Total operating administrative expenses

Tenant Services Spending

FDS

Total tenant services expenses

Operating Reserves

FDS

Following the formulaa outlined in PIH notice 2011-055

Total Operating and Housing

Total operating expenditures from the public housing, HCV, or

Assistance Spending

FDS

the MTW funds plus total housing assistance payments from the

HCV and MTW funds

Internal (Endogenous) Cost Drivers

Percent of Households Using

TBVs

VMS

Number of assisted households with TBVs/total assisted house-

holds

Percent of Households Using PBV VMS, PIC

Number of assisted households with PBVs/total assisted house-

holds

Percent of Households in Public

Housing

VMS, PIC

Number of assisted households in PH/total assisted households

(continued)

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 18

Data Collection and Assembly

Exhibit 6: Variables for Analysis and Data Sources (continued)

Variable Description

Data Source

Definition / Notes

Quality of Public Housing

PHAS

Physical Assessment Subsystem (PASS) score

Affordability (Median Rent Burden) PIC

Median of (total family contributionb x 12/total annual income) for

new households

Household Size

PIC

Average number of individuals in new households

Median Income

PIC

Median annual total income of new households

Percent of new, assisted households in which the household

High Need Households

PIC

head is 62 or older, the household head is disabled, or any

other member of the household is disabled

External Cost Drivers

PHA Fixed Effects

—

PHA dummy variables

Year Fixed Effects

—

Year dummy variables

Average Wage of Local Govern-

Average wage of local government employees in the county

ment Employees

BLS

with the most households assisted by a given MTW agency or

traditional PHA reported in PIC in 2003

Median Rent in Service Area

ACS

Population weighted median rent in each year based on the

census tracts of residents reported in PIC

ACS = American Community Survey. BLS = Bureau of Labor Statistics. FDS = Financial Data Schedule. LNT = local, non-traditional. MTW = Moving to Work. PBV =

project-based voucher. PH = public housing. PHA = public housing agency. PHAS = Public Housing Assessment System. PIC = Office of Public and Indian Housing Information Center. TBV = tenant-based voucher. VMS = Voucher Management System.

a The sum of FDS line items 111 Cash Unrestricted, 114 Cash Tenant Security Deposits, 120 Total Receivables, 131 Investments Unrestricted, 142 Prepaid Expenses and Other Assets, 144 Inter-program – due from, and 145 Assets Held for Sale, minus the difference between line 310 Total Current Liabilities and line 343 Current Portion of Long-term Debt-capital Projects.

b For MTW agencies, the family contribution toward rent variable is constructed by HUD and includes the family’s contribution toward utilities when applicable. This variable is not included in the standard PIC data and was provided by HUD for the purposes of this study. To calculate the annual family contribution toward rent for non-MTW agencies, we multiply the monthly contribution toward rent as reported in PIC by 12 and divide this by the total household adjusted income in PIC.

Sources: Administrative data from HUD include FDS, PIC, VMS, and PHAS; Public use data include the Decennial Census (Census), ACS, and BLS Quarterly Census of Employment and Wages; LNT data was provided by the HUD MTW office and calculated based on data reported by agencies on form 50900; New households are identified using action code flags in PIC

Variable Calculations

HUD Funding

Our measure of HUD funding

HUD Cost per Assisted Household

, therefore,

includes HUD PHA operating grants and

We calculate cost per assisted household

capital grants for public capital funds, HUD

by dividing HUD funding by the number of

PHA operating grants for public housing

assisted households. To focus on the impact

operating funds, and HUD PHA operating

of MTW, we identify funding sources that

grants for the Housing Choice Voucher (HCV)

are eligible for MTW fund flexibility and the

program. All funding data is col ected from

households assisted with those funds. These

the FDS, adjusted from fiscal year to calendar

funding sources and households go into

year, and converted from nominal dol ars to

the calculation of cost per household; other

2015 dol ars using the Consumer Price Index

funding sources, such as special purpose

for all Urban Consumers (CPI-U). (See exhibit

voucher funding, and the households

C2 for details on calculations using FDS data.)

supported by them, are excluded.

Number of Assisted Households

We count the number of assisted households

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 19

Data Collection and Assembly

as the sum of those served through public

of unit months leased by the number of

housing, HCVs, and, for MTW agencies,

months in the “Plan Year.” According to

LNT programs. To do so, we combine public

instructions on the 50900, the definition

housing data from PIC and voucher data

of MTW households served includes al

from VMS. Voucher-assisted households

households that receive housing assistance,

appear in PIC as wel , but it is not possible

directly or indirectly, using any amount of

to exclude households assisted by special

MTW funds. Further, the 50900 instructs

purpose vouchers using PIC data. We solved

MTW agencies to estimate the number of

this problem by using VMS data, which

households served in “instances when a local,

does al ow us to exclude special purpose

non-traditional program provides a certain

vouchers, to count the number of households

subsidy level but does not specify a number

assisted through the HCV program. We add

of units/households to be served.” We display

the number of households assisted in public

the number of households assisted by MTW

housing to the number in the HCV program

agencies, through public housing, tenant-

to get the total for traditional PHAs. As noted

based vouchers, project-based vouchers, and

below, for MTW agencies, we also include the

LNT assistance in exhibit C3.

households served in LNT programs in the

total.

In this way, we include households assisted

through LNT programs that are funded using

To count the number of households in public

MTW fund flexibility and exclude households

housing, we first classified each household

assisted through HUD special purpose

in the annual PIC based on their assistance

voucher programs (such as the Family

program and action code. We then removed

Unification Program or HUD-Department of

records that appear in multiple annual files but

Veterans Affairs [VA] Supportive Housing

have the same effective date for the action

[HUD-VASH]) that are not covered by MTW

code. Next, we weighted households by the

agreements and not funded through public

number of months in which they received

housing operating, public housing capital, or

assistance using the dates associated with

the traditional HCV funding streams.

new admissions and exits. To count the

number of households using VMS, we sum

Measures of the Type and Quality of

monthly voucher counts for voucher types

Housing Assistance

funded through the HCV funding stream and

then divide by 12 to get an annualized number

To find out whether changes in the mix of

of voucher households.

program types, housing affordability, and

housing quality explain the relationship

For MTW agencies, we add the number of

between MTW status and cost per assisted

households served through LNT programs.

household, we use data from PIC, VMS, and

These LNT data were aggregated by HUD

PHAS.

from MTW annual reports and HUD Form

50900. The data include households

Type of Housing Assistance

served through rental subsidies, housing

Type of housing assistance is measured as the

development programs, and homeownership

mix of program types, that is, the percent of

assistance. The data do not include

assisted households in (1) public housing, (2)

households receiving services only. Per the

tenant-based vouchers, and (3) project-based

instructions for HUD Form 50900, households

vouchers.

served are calculated by dividing the number

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 20

Data Collection and Assembly

Housing Affordability

cost-efficiency measure using expenditure

Housing affordability is measured as the

data.31 Nevertheless, important questions

percent of household income that the median

remain about whether and how MTW status is

assisted household spends on housing.

associated with agency spending.

We calculate this from PIC, using the total

contribution that a household puts toward

Total Expenditure

rent and utilities on an annual basis divided

We calculate total expenditure by summing

by its annual household income. This metric is

total operating expenditures from the public

calculated using both public housing residents

housing, HCV, or the MTW funds plus total

and HCV-assisted households.

housing assistance payments from the HCV

and MTW funds in FDS.

Housing Quality

Housing quality is measured by the most

Administrative Costs and Tenant

recent physical assessment subsystem (PASS)

Services Spending

score from PHAS. This score measures the

We calculate administrative costs and tenant

housing quality of all the public housing units

services by totaling these spending categories

that the PHA manages.28 We do not have a

from the funds associated with HCV and

comparable measure of housing quality in the

public housing operations for traditional

HCV program.

agencies, and for MTW agencies with the

MTW funds.

Costliness of Households Served

To assess whether MTW agencies are

Operating Reserves

assisting households that are costlier to serve,

Additional y, we calculate operating reserves

we use three metrics: (1) the median income,

based upon the guidance provided in PIH

as a percent of the area median income

notice 2011-055. The specific FDS line items

(AMI), of newly admitted households,29 (2) the

we use appear in appendix C (exhibit C2).

percent of newly admitted households with an

elderly head of household, disabled head of

External Cost Drivers

household, or disabled family member, and (3)

Several demographic and area characteristics

average household size.30 We calculate these

influence the costs of providing housing

variables directly from PIC data using all public

assistance. To control for variables that are

housing and voucher households that are

constant over time, such as where the PHA is

identified as new admissions based on their

located, our statistical models include PHA-

action code.

level dummy variables. To control for external

cost drivers that change over time and are

Measures of Public Housing Agency

likely to differ among PHAs, we include the

Spending

fol owing variables in our statistical models.

Given available data, we determined that

it is not advisable to construct a primary

28 The Real Estate Assessment Center (REAC) determines PASS scores for both individual developments and PHAs as a whole. Neither score is available every year. We use the most recent PHA-wide PASS score in our analysis.

29 For this metric, we divide the household income reported in PIC by the area median income reported in PIC and take the median value for newly admitted households.

30 We focus on newly admitted households so that households admitted prior to a PHA joining MTW do not bias our results because those could be endogenous to MTW status and other variables in our model.

31 Revenue data in FDS appear to be more complete than spending data; moreover, it is not possible to track expenditures transferred out of the MTW

fund to an MTW agency’s other lines of business but still spent to benefit assisted households.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 21

Data Collection and Assembly

• Median rent, as reported in the Census/ACS,

that year-over-year changes in total funding

to control for varying housing market trends

of more than 50 percent are evidence of

that affect the overall cost of assistance. We

bad data and we treat this data as missing,

retrieved Census and ACS data from the

increasing the number of observations with

National Historical Geographic Information

missing funding data to 14,589. Using the

System (NHGIS) at the census tract level for

same criteria for the household data from

the years 2000, 2010 (Census), and 2011–

PIC and VMS, there are 29,684 observations

2015 (ACS 5-year average).

with zero, “bad,” or missing household counts

• We control for differing trends in wages

in either PIC or VMS. In most cases, this is

across PHA service areas using the BLS-

because the PHA does not provide both

reported, county-level annual average pay

public housing and HCVs.

in local government (all industries). Counties

Our primary analysis focuses only on agencies

are mapped to PHAs based on household-

that served at least 750 households in 2003.

level county variables in the PIC. Each

This subset includes 756 agencies and 11,340

county in the United States is assigned to

observations. In this group, there were 1,376

the PHA that serves the most households

observations of missing or bad funding data

in the area. State-level data are used where

and 1,844 observations with zero, bad, or

county-level data are incomplete or missing.

missing household counts in either PIC or

VMS. Among the 21 PHAs that joined MTW

Sample Construction

during the analysis period, representing 315

We merged data from PIC, VMS, LNT, and FDS

observations, 50 observations had bad or

with regional wage data from BLS and regional

missing funding data and 96 observations had

demographic data from the census and ACS

bad” or missing PIC or VMS data.

to construct a balanced panel dataset—a

We fil ed in for missing, zero revenue, and

dataset with every PHA in every year—of

bad data points from PIC, VMS, and FDS

3,726 PHAs and 55,890 observations. PHAs

using nearest neighbor interpolation and

that do not appear at least once in PIC and at

extrapolation.33 Aside from the robustness

least once in FDS are excluded, as are PHAs

checks described in appendix C, no

for which either county wage or local rent data

adjustments were made to the LNT data. We

were unavailable.32

flagged 130 PHAs, including 6 MTW agencies,

After constructing this initial dataset, we made

for which only 1 year of either public housing,

several adjustments to account for missing or

voucher, or revenue data was available. We

incomplete data. Data issues were present in

assumed that if either public housing or

both MTW and traditional PHAs, particularly

voucher data are missing in every year, the

in the early years of our analysis and may

PHA does not provide that form of assistance.

represent early chal enges PHAs faced in

Because interpolation and extrapolation can

capturing administrative data and reporting

induce additional error to the statistical model,

it to HUD. There are 8,338 observations

we check the robustness of our results using

in which total reported funding is zero. We

multiple imputation (see appendix B for a

assume that all instances of missing or zero

detailed description of this method and the

reported funding are in error. We assume

results).

32 PHAs only appear in PIC or VMS when public housing or HCV households are reported. PHAs may appear in FDS to report funding streams other than those for public housing operations, public housing capital improvements, and HCVs.

33 Linear interpolation produced less plausible values including some negative values in the earlier part of the sample period.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 22

Data Collection and Assembly

After interpolating missing values from PIC,

Our analysis of agency-reported data in FDS

VMS, and FDS, we constructed the measures

shows the average level of HUD funding for

of number of assisted households, total HUD

traditional PHAs rose from $5.8 mil ion in

funding, and cost per assisted household as

2003 to a peak of $6.2 mil ion in 2010 before

described in exhibit 6. For consistency, we

declining to $5.6 mil ion in 2014. As of 2017,

converted the FDS data from fiscal to calendar

average annual funding for traditional PHAs

year by using a weighted average of the 2

was almost exactly the same as it was in

fiscal years that overlap each calendar year.

2003. Analysis of PIC and VMS data show

Because data from the 2018 fiscal year were

that the number of assisted households

not available for all agencies, we used 2017

generally increased over this time (exhibit 7),

fiscal year data for calendar year 2017.

with a slight decline in the number of assisted

households between 2011 and 2014.

Final y, we excluded the 19 PHAs that

entered the MTW demonstration before

2003 and remained in the program through

the observation period. The resulting

dataset includes 3,695 PHAs and 55,425

observations. For all our analyses, we

compare MTW agencies only with traditional

PHAs that had at least 750 assisted

households in 2003. Excluding smaller

agencies and those with only 1 year of reliable

public housing, voucher, or revenue data

reduces the sample to 727 PHAs—18 MTW

agencies and 709 traditional PHAs—and

10,905 observations.

Identifying the Comparison

Group

Our statistical model is based on a comparison

of trends between MTW and traditional

PHAs. In this section, we provide descriptive

analysis of trends in costs per household

among traditional PHAs and MTW agencies,

which provides context for the results from the

statistical models.

The analysis period for our study, 2003 to

2017, includes both the increases in annual

appropriations from the 2009 stimulus

package and the decreases in appropriations

from sequestration. During this period, MTW

agencies received an increasing proportion of

HUD funding and served a higher proportion

of assisted households relative to traditional

PHAs.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 23

Data Collection and Assembly

Exhibit 7: Average Levels of HUD Funding and Assisted Households at Traditional Public Housing Agencies (2003–2017) $6,200,000

$6,000,000

$5,800,000

$5,600,000

$5,400,000

HUD Funding $5,200,000

$5,000,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

840

820

800

780

760

Assisted Households

740

720

700

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Year

PHA = public housing agency.

Notes: Traditional PHAs include all 3,674 PHAs that never joined the Moving to Work demonstration. Values displayed are constant 2015 dollars adjusted using Bureau of Labor Statistics Consumer Price Index for all Urban Consumers.

Sources: Urban Institute analysis of HUD Financial Data Schedule and Public and Indian Housing Information Center datasets Comparing Moving to Work

for each household they served, compared

Agencies with Traditional

with $5,925 in HUD cost per assisted

Public Housing Agencies

household for PHAs that never became MTW

agencies. The smallest agency that would

This analysis assumes that MTW agencies

join MTW after 2003 assisted an average of

were similar to traditional agencies, or at least

938 households before joining. The average

fol owed similar trends, prior to joining the

traditional PHA, however, assisted only 772

demonstration. Even before joining, however,

households in 2003.

future MTW agencies tended to be larger

and have higher costs per household than

MTW agencies are more similar to large

other traditional PHAs (see exhibit 8). In 2003,

traditional PHAs—those with more than 750

these pre-MTW agencies were more than

assisted households—than to small traditional

10 times larger than the average traditional

PHAs (exhibit 8). Large traditional PHAs that

PHA and received $8,500 in HUD funding

never became MTW agencies served an

average of 3,020 assisted households in 2003

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 24

Data Collection and Assembly

and received $7,148 in HUD funding for each

to households also more closely aligns with

assisted household compared with $8,500

the larger traditional PHAs than with smal er

received by future MTW agencies. MTW

traditional PHAs, which can be seen in exhibit

agencies’ mix of housing assistance provided

C7 in appendix C.

Exhibit 8: Number of Assisted Households, HUD Funding, and HUD Cost per Household by Public Housing Agencies’ Future Moving to Work Status, 2003

Future MTW

All Traditional PHAs

Large Traditional

Agencies

PHAs

12 PHAs

3,547 PHAs

709 PHAs

Average Number of Assisted Households

7,168

772

3,020

Average HUD Funding

$47,639,566

$5,968,952

$25,046,414

Average HUD Cost per Assisted Household

$8,500

$5,925

$7,148

MTW = Moving to Work. PHA = public housing agency.

Notes: Dollar values are constant 2015 dollars adjusted using Bureau of Labor Statistics Consumer Price Index for all Urban Consumers. Traditional PHAs include 3,547 PHAs that never joined the MTW demonstration. Large traditional PHAs include only traditional PHAs that had more than 750 assisted households in 2003.

Analysis excludes agencies that joined MTW before 2003. Analysis also excludes Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, and Housing Authority of the City of San Jose because of incomplete data on households in public housing. Future MTW agencies further exclude Atlanta Housing Authority, District of Columbia Housing Authority, and King County Housing Authority who joined MTW in 2003 and therefore do not have a full year of pre-MTW data.

Sources: Urban Institute analysis of HUD Public and Indian Housing Information Center dataset; HUD Financial Data Schedule dataset; U.S. Census Bureau Data MTW agencies are also more like large

traditional PHAs than small ones in terms of

trends in cost per assisted household (exhibit

9). During the analysis period, there was a

large divergence in trends between large

and small traditional PHAs. For traditional

PHAs assisting at least 750 households in

2003, HUD cost per assisted household was

mostly flat, decreasing slightly from $7,148 to

$6,906 or 3.4 percent. For traditional PHAs

assisting fewer than 750 households in 2003,

cost per assisted household decreased much

more drastical y, from $5,619 to $4,436, a

21-percent decline. It appears that smaller

traditional PHAs received less funding during

this period, but still served the same number

of households.34

34 The decline in cost per assisted household among small PHAs is a noteworthy trend that is outside the scope of our research questions. A HUD study on administrative fees in the HCV program suggests that many of these smaller agencies are receiving additional subsidies from local government that al owed them to keep serving a similar number of assisted households despite cuts in funding from HUD (Turnham et al., 2015).

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 25

Data Collection and Assembly

Exhibit 9: HUD Cost per Assisted Household in 2003 and 2017, by Public Housing Agency Size $8,000

$7,148

$6,906

$7,000

$5,619

$6,000

$5,000

$4,436

$4,000

$3,000

$2,000

HUD funding per assisted household

$1,000

$0 Traditional PHAs with fewer than 750 assisted Traditional PHAs with at least 750 assisted households

households

2003

2017

PHA = public housing agency.

Notes: Traditional PHAs include 3,547 PHAs that never joined the Moving to Work demonstration. PHAs are classified as having over or under 750 assisted households based on the number of households served in 2003. Values displayed are constant 2015 dollars adjusted using Bureau of Labor Statistics Consumer Price Index for all Urban Consumers.

Sources: Urban Institute analysis of HUD Financial Data Schedule and Public and Indian Housing Information Center datasets The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 26

Estimation Methods

Estimation Methods

were chosen because prior research has

shown that an area’s median rent and local

public sector wages impact per household

To show the impact of participating in the

costs of providing housing assistance (Finkel

Moving to Work (MTW) demonstration on cost

and Buron, 2001; Turnham et al., 2015).

per household and other outcomes, we used a

Because MTW agencies are more similar to

statistical model that accounted for differences

large traditional PHAs than to small ones, as

between agencies at baseline.35 This model

shown in the previous section “Comparing

captures how receiving MTW status changed

MTW Agencies with Traditional PHAs,” we

each outcome measure relative to what would

included in the sample only those traditional

have happened if the public housing agency

PHAs that had at least 750 assisted

(PHA) had not joined the MTW demonstration.

households in 2003.36

The models use a PHA’s fixed effects to

control for urbanity, rurality, and other time-

invariant characteristics of the PHA, including

Estimation Method for

factors that may make a PHA more or less

Research Question 1:

likely to join the MTW demonstration. These

What is the effect of

fixed effects also control for the average mix

of tenant-based vouchers, project-based

Moving to Work status on

vouchers, and public housing administered by

cost per assisted household?

the PHA.

To determine the impact of the MTW

The models also include year fixed effects to

demonstration on cost per household, we

control for national-level trends that may affect

estimate the fol owing fixed effects panel

how much funding PHAs get from HUD and

regression including MTW agencies and

how much it costs to provide rental assistance.

traditional PHAs with 750 households or more

Because the period of study includes times

in 2003:

of economic expansion and contraction as

Outcome

well as periods of more and less generous

it= β* MTWit+γ*

ExternalCostDrivers

government funding, it is important that the

it+λ t+α i+ϵ it (1)

regression model does not assume that

That is, each of our outcome variables for PHA

national trends are static, smooth, or linear.

i in year t (the natural log of HUD funding,

the natural log of assisted households, the

In addition to control ing for national trends,

natural log of cost per assisted household)

the models include two control variables to

is a function of MTW status, external drivers

capture factors that change over time that

of cost—median rent and local public sector

may affect the costs of providing housing

wages ( ExternalCostDrivers ), year fixed

assistance: (1) median rent, and (2) the local

it

effects (λ ), PHA fixed effects (α ), and an

public sector wages in each PHA’s service

t

i

idiosyncratic residual (ϵ ), clustered at the

area. Including these variables al owed us to

it

PHA level and robust to arbitrary forms of

control for whether MTW agencies operated in

misspecification. MTW equals 1 for PHA i

areas where external cost drivers (such as the

it

in year t if the agency is an MTW agency

price of housing) were rising or fal ing faster

in that year as defined by having a signed

than at the average PHA. These variables

agreement; in the year that the agreement is

35 See appendix C (exhibit C4) for a list of the research questions and which regression model was used to answer it.

36 See appendix B for sensitivity analyses showing that the model estimates do not change when the comparison group includes PHAs with more than 150 units ; however, if the smal est PHAs (fewer than 150 units) are included in the comparison group, the results do change.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 27

Estimation Methods

signed, we set MTW equal to the fraction of

after entry into the demonstration. That is, it

it

the year remaining at the date of the second

estimates long term effects. Again, the model

(HUD or PHA) signature. Variables measured

includes external drivers of cost ( Controls ),

it

in dollars and households are log-transformed

year fixed effects (λ ), PHA fixed effects (α ),

t

i

before they enter the equation; this accounts

and an idiosyncratic residual (ϵ ) clustered at

it

for the skewness of their distributions and

the PHA level and robust to arbitrary forms of

produces estimates of the MTW effect in

misspecification.

percentage terms. The measure of cost per

household is also log-transformed before

entering the equation.

Estimation Method for

Research Question 2:

The coefficient β approximates the

Do changes in program

percentage change in average cost per

household associated with entering the MTW

mix, housing quality

demonstration (a coefficient of 0.1 indicates a

and affordability, or the

10-percent change). A positive and significant

characteristics of assisted

estimated value for β implies higher cost per

household. We also use equation 1 to estimate

households explain the

the impact of MTW status on the amount of

effect of Moving to Work

funding a PHA gets from HUD and on the

status on HUD costs per

number of assisted households it serves.

assisted household?

Understanding the Timing of Changes

To explore whether internal cost drivers,

in Cost per Household

including program mix, housing quality and

affordability, and the characteristics of assisted

To better understand the timing of MTW’s

households, explain the relationship between

impact on cost per assisted household, we

MTW status and per household cost, we add

use an event-study regression to isolate the

the fol owing variables for these measures to

impact of the MTW demonstration the year in

the main model shown previously:

which the MTW agreement was executed, 1

year after joining the demonstration, 2 years

Outcome = β'* MTW +δ * InternalCostDrive rs +

it

it

1

it

after, and then all other years after joining the

γ* ExternalCostDrivers +λ +α +ϵ (3)

it

t

i

it

demonstration. In this model, we also estimate

whether the trends at MTW agencies were

where the outcome measure is the natural

diverging from trends in traditional PHAs in the

log of cost per assisted household. Here,

years before they signed the MTW agreement.

the primary outcome measure is a function

The event study model takes the fol owing

of a set of PHA factors, external cost drivers,

form:

year fixed effects (λ ), PHA fixed effects (α ),

t

i

and an idiosyncratic residual (ϵ ) clustered

Outcome

+

+

+

it

it= δ D

+δ D

δ D δ D

δ

1

i( t+2)

2

i( t+1)

3

it

4

i( t-1)

5

at the PHA level and robust to arbitrary

D +

+

+ + +

i

δ MTW

γ* Controls λ α ϵ

( t-2)

6

i( t+3)

it

t

i

it (2)

forms of misspecification. Of interest here

Here, we replace the indicator for MTW status

is whether and how the coefficient on MTW

with a series of dummy variables D to

status changes once these endogenous

i( t+2)

D indicating 2 years before, 1 year before,

characteristics are included. If the effect

i( t-2)

the year of, the year after, and 2 years or

disappears, this suggests that changes in cost

more after a PHA’s first MTW agreement is

per household related to MTW status may

executed. The variable MTW is equal to 1

be due to changes in program mix, housing

i( t+3)

for MTW agencies beginning in the third year

quality and affordability, and household

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 28

Estimation Methods

characteristics rather than simply due to

The MTW effect (β’) estimated in this way

serving fewer or more of the same households

can be interpreted as the change in cost per

at the same quality level.

household beyond or that is not driven by

changes in the internal cost drivers included

Question 2a asks about the influence of

in the regression. We then test whether the

program mix on cost per household. To

estimated impact of MTW has changed when

answer this question, the PHA factors are

these factors are added to the model (whether

the percent of total households funded with

β’ = β). For example, if the value of coefficient

tenant-based vouchers and the percent of

β is not the same for research question 2a, as

total households funded with project-based

it is for our primary research question, 1a, we

vouchers (omitting the percent of households

can conclude that changes in program mix

in public housing as the reference group).

explain at least some of the differences, or the

Question 2b asks about housing affordability

lack of a difference between MTW agencies

and housing quality. We include the median

and traditional PHAs, in cost per household.

rent burden of households in the Office of

Public and Indian Housing Information Center

(PIC) as a measure of affordability, and public

Estimation Method for

housing physical inspection scores from the

Research Question 3: Does

Public Housing Assessment System (PHAS)

Moving to Work status

as a measure of housing quality. Final y, for

question 2c, we look at three factors related

affect agencies’ total per

to the ability of PHAs to reach households

household operating and

that may require more resources to serve:

housing assistance spending,

(1) the median income as a percent of the

area median income (AMI) of newly admitted

or per household spending

households (those entering the public

on program administration,

housing or voucher program each year), (2)

tenant services, or operating

average household size for newly admitted

reserves?

households, and (3) the percent of newly

admitted households with an elderly head of

To better understand how MTW status affects

household, disabled head of household, or

per household spending on specific spending

disabled family member. Each of these sets of

categories, we estimate equation 1 with four

cost drivers is associated with a mechanism

left-hand-side measures: (1) total expenditures

through which MTW could affect cost per

per assisted household, (2) spending on

household. At the same time, these measures

tenant services per assisted household, (3)

are interrelated. For example, the percent of

administrative costs per assisted household,

households with an elderly or disabled head

and (4) changes in operating reserves per

of household or a disabled family member

assisted household. We take the natural log

could affect the decisions an agency makes

of total per household operating and housing

about its mix of public housing and the

assistance and per household spending on

Housing Choice Voucher (HCV) program as

program administration before they enter

well as its spending on administration and

the model. Because tenant services are

tenant services, which would also have an

frequently zero, and reserve balances can be

impact on overall cost per household. To

negative, we do not take the natural log of

explore each mechanism separately, we

these measures and instead estimate a linear

isolate each set of cost drivers in a distinct

relationship on dol ars per household.

model.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 29

Estimation Methods

Robustness Checks

We undertook several robustness checks

where we altered our regression choices to

ensure that none of these choices is driving

our results. First, as an alternative to dropping

PHAs that serve fewer households, we used

propensity score matching to limit the size

of our comparison group. We estimated

effects using a five-to-one match and using

all large PHAs with propensity scores within

the range calculated for MTW PHAs (that is,

with common support). Second, we tested

the sensitivity of our results to an alternative

methodology for addressing the large amount

of missing data. We undertook multiple

imputation (rather than nearest-neighbor

interpolation and extrapolation) to be sure

that our interpolation assumptions were not

creating errors in our estimates. Third, we

tested whether removing or discounting

local, non-traditional units from our count of

assisted households impacts our estimates.

Fourth, we relaxed the model to al ow each

PHA to fol ow a unique linear time trend.

We also conducted a sensitivity analysis to

test whether our results change when using

different size cutoffs for defining the group

of comparison traditional PHAs. Results are

general y consistent with the primary models

and confirm the findings reported here. Details

on these methods and the results of these

analyses can be found in appendix B.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 30

Findings

Findings

Public Housing Agency

Trends Before and After

Joining Moving to Work

Moving to Work (MTW) status has no impact

on overall cost effectiveness, as agencies

The fol owing three exhibits show trends

receive more HUD funding but use that

within MTW agencies—before control ing

funding to assist more households. MTW

for baseline characteristics, national trends,

status is accompanied by increased reserve

or exogenous cost drivers—in HUD funding,

balances.

assisted households, and HUD costs per

assisted household before and after joining

MTW status is associated with a small increase

the MTW demonstration. The year before

in cost per assisted household that is not

each agency joined the demonstration is the

statistically significant, suggesting that there

baseline year and the trendline measures

is no overall impact of MTW status on cost

percent change from the prior year and over

effectiveness. MTW agencies experience

the 3 subsequent years. Exhibit 10 shows

an increase in HUD funding after joining the

that annual HUD funding begins to increase

demonstration, but also a commensurate

in the year prior to joining, then continues

increase in the number of assisted

to increase until 1 year after joining before

households. These results do not change

declining slightly 2 years after joining.

after control ing for program mix, housing

quality and affordability, or the characteristics

of assisted households. MTW status is not

associated with a statistical y significant

change in per household expenditures overall

or spending on administrative costs or tenant

services. MTW status is, however, associated

with a large, statistical y significant increase in

the amount per household held in reserves.

This section first displays descriptive statistics

for MTW and traditional public housing

agencies (PHAs) and then shows the results

from the statistical models that formal y test

our hypotheses.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 31

Findings

Exhibit 10: Moving to Work Agencies’ Average HUD Funding Before and After Joining Moving to Work 110%

TW M

105%

Joining

100%

1 Year Before

95%

of Funding

90%

Average Annual HUD Funding as a Percent

2 years before

1 year before

Joined MTW

1 year after

2 years after

MTW = Moving to Work.

Notes: Vertical dotted line and “year joined MTW’’ represent the year in which public housing agencies (PHAs) execute their first MTW contract. This figure includes only agencies with at least 750 households and excludes agencies that joined MTW before 2005 or after 2015, because they need to have 2 years of data before joining MTW and 2 years of data after joining MTW to enter this equation. Exhibit C5 in appendix C displays the average number of assisted households, HUD funding, and cost per household before and after MTW status for each of the 17 PHAs that joined MTW between 2003 and 2013.

Sources: Urban Institute Analysis of HUD Office of Public and Indian Housing Information Center, Financial Data Schedule, and Voucher Management System data The annual number of assisted households

also increases the year that an agency joins

MTW, then continues to increase 1 and 2 years

after (exhibit 11).

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 32

Findings

Exhibit 11: Moving to Work Agencies’ Average Number of Assisted Households Before and After Joining Moving to Work 110%

105%

as a Percent of

TW M

100%

Joining Assisted Households 95%

Average Number of Assisted Households 1 Year Before

90%

2 years before

1 year before

Year Joined MTW

1 year after

2 years after

MTW = Moving to Work.

Notes: Vertical dotted line and “year joined MTW’’ represent the year in which public housing agencies execute their first MTW contract. This figure includes only agencies with at least 750 households and excludes agencies that joined MTW before 2005 or after 2015, because they need to have 2 years of data before joining MTW and 2 years of data after joining MTW to enter this equation.

Sources: Urban Institute analysis of HUD Office of Public and Indian Housing Information Center and Voucher Management System data Exhibit 12 shows changes in average cost per

assisted households before and after joining

the MTW demonstration. MTW agencies

experience an increase in cost per household

the year before they join the demonstration,

a slight dip the year that they join, a slight

increase the next year, and then a decrease to

below pre-MTW levels 2 years after joining the

demonstration.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 33

Findings

Exhibit 12: Moving to Work Agencies’ Average HUD Cost per Household Before and After Joining Moving to Work 110%

1 Year

Household

105%

100%

95%

as a Percent of Cost per Household

90%

Average Annual HUD Cost per Assisted Before Joining the MTW Demonstration

2 years before

1 year before

Year Joined MTW

1 year after

2 years after

MTW = Moving to Work.

Notes: Vertical dotted line and “year joined MTW’’ represent the year in which public housing agencies execute their first MTW contract. This figure includes only agencies with at least 750 households and excludes agencies that joined MTW before 2005 or after 2015, because they need to have 2 years of data before joining MTW and 2 years of data after joining MTW to enter this equation.

Sources: Urban Institute Analysis of HUD Office of Public and Indian Housing Information Center, Financial Data Schedule, and Voucher Management System data These findings suggest that MTW status

Effect of the Moving to Work

is correlated with increased funding levels

and number of assisted households. It also

Demonstration on HUD Cost

suggests there is a short adjustment period

per Assisted Household

where cost per household increases the first

Control ing for baseline characteristics,

year after joining MTW and then declines.

national trends, and exogenous cost drivers,

The extent to which these trends are driven

we find no statistically significant relationship

by MTW status, contemporaneous changes,

between MTW status and cost per assisted

or national trends and the timing of agency

household. Results from our statistical analysis

entry into the demonstration is less clear. The

show that MTW status is associated with a

statistical analyses shown in the fol owing

small and statistically insignificant increase

section disentangle the impact of the MTW

in cost per assisted household of 1.3 percent

demonstration from these other factors.

(exhibit 13).

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 34

Findings

Exhibit 13: The Effect of Moving to Work on HUD Cost per Assisted Household, HUD Funding, and Number of Assisted Households

Cost per Assisted

HUD Funding Assisted Households

Household

0.013

0.106***

0.092***

Impact of MTW

(0.030)

(0.024)

(0.028)

Control Variables

0.298***

0.144**

-0.154***

Area Median Rent

(0.071)

(0.060)

(0.047)

0.048*

0.023

-0.025

Government Wage

(0.026)

(0.026)

(0.020)

Number of PHAs

727

727

727

Adjusted Within R-Squared

0.096

0.083

0.039

Observations

10,905

10,905

10,905

* p<0.10, ** p<0.05, *** p<0.01.

MTW = Moving to Work. PHA = public housing agency.

Notes: Standard errors (listed in parentheses) are heteroskedastic robust and clustered at the PHA level. Data cover 2003–2017. Regressions include only agencies with at least 750 households and exclude agencies that joined MTW before 2003. Impact analyses do not include Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, and Housing Authority of the City of San Jose because of incomplete data on households in public housing. Regression includes year and PHA fixed effects. Cost per assisted household, HUD funding, assisted households, area median rent, and government wages enter the regression in logged form.

Sources: Urban Institute Analysis of HUD’s Office of Public and Indian Housing Information Center, Financial Data Schedule, and Voucher Management System data

This lack of impact on cost per household

• Instead of using all larger traditional

is a result of increases in both the level of

agencies for the comparison group, we

HUD funding and the number of assisted

used both propensity score matching and

households for agencies after they join MTW.

trimming to common propensity score

PHAs receive, on average, 11 percent more

support to create comparison groups.

funding from HUD after joining the MTW

• Instead of using linear interpolation to fil

demonstration and assist 10 percent more

in bad and missing data, we used multiple

households (exhibit 13).37 Because these

imputation.

effects are of similar size, they have offsetting

impacts on our primary outcome variable of

• Instead of including local, non-traditional

cost per assisted household.

(LNT) households as a full household, we

weighted them to 50 percent and removed

These findings are strong and robust. We

them altogether.

conducted several analyses to determine

• Instead of including controls for median rent

if different, but potential y defensible,

in the service area and government wages

methodological choices for the statistical

in the county, we used no control variables.

models would change the results. These

statistical analyses produced the same results

Two additional analyses supported the

even under the following conditions:

primary finding that there is no statistical y

37 Because outcome measures entered the regression in log form, percentage change is calculated by exponentiating the coefficient and subtracting 1.

For example, the coefficient for HUD funding is 0.106 and the estimated percentage change is (e^0.106)-1=0.112 or 11 percent.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 35

Findings

significant relationship between MTW status

and cost per household, but also found no

relationship between MTW status and either

HUD funding or the number of assisted

households:

• Instead of assuming that all agencies fol ow

paral el trends over time, we relaxed the

statistical model to al ow each agency its

own unique linear trend over time.

• Instead of including all years, we used a

smal er sample period, from 2009 to 2017.

All of these robustness checks confirm that

MTW status does not affect agencies’ cost

effectiveness. (See appendix B for all of these

results). That is, the estimated relationship

shown in exhibit 13 stays the same when the

data are analyzed in different ways.

We also used an event study framework

to estimate the effect of MTW status for

each year relative to when agencies joined

the demonstration. We find no significant

differences in cost effectiveness in any year

before or after joining the MTW demonstration

(exhibit 14). Exhibit 15 shows the effects of

MTW status, by year, on HUD revenue and

households assisted. Consistent with the

trends section (exhibits 9, 10, and 11), HUD

funding begins to rise the year before PHAs

official y enter the MTW demonstration

(although this effect is not statistical y

significant at α=0.1), and continues to rise

after the agency joins MTW, with the largest

increase 1 year after joining (exhibit 15). The

number of assisted households served by the

PHA also increases 1 year before joining the

demonstration (statistical y significant at α=0.1)

and continues to rise after joining but more

smoothly than funding, which peaks the year

after joining. Full results from this model can

be found in appendix B, exhibit B5.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 36

Findings

Exhibit 14: The Effect of Moving to Work on HUD Cost per Household Over Time, Using Public Housing Agencies With at Least 750 Assisted Households (2003) as a Comparison Group (Percent Change)

25%

20%

15%

10%

5%

HUD Funding per

0%

Asssited Household

-5%

-10%

-2

-1

Joined MTW

+1

+2

+3

Year Relative to Joining MTW

Estimated effect

90% confidence interval

MTW = Moving to Work. PHA = public housing agency.

Notes: Vertical dotted line and “Year joined MTW” represent the year in which PHAs execute their first MTW contract. The solid line represents the point estimate and the dashed lines on either side of this estimate represent the 90-percent confidence interval. Estimates are converted from log form to percent change.

Regressions include only agencies with at least 750 households and exclude agencies that joined MTW before 2005 or after 2015, because they need to have 2 years of data prior to joining MTW and 3 years of data after joining enter this equation. Impact analyses do not include Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, and Housing Authority of the City of San Jose because of incomplete data on households in public housing. All regressions include year and PHA fixed effects. Median rent and government wages are included as control variables. HUD cost per household, area median rent, and government wages enter the regression in logged form.

Sources: Urban Institute Analysis of HUD Office of Public and Indian Housing Information Center, Financial Data Schedule, and Voucher Management System data The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 37

Findings

Exhibit 15: The Effect of Moving to Work on HUD Funding and Number of Assisted Households (Percent Change) 30%

30%

25%

25%

20%

20%

15%

15%

HUD Funding 10%

10%

5%

Assisted Households 5%

0%

0%

-5%

-5%

-10%

-10%

-2

-1

Joined

+1

+2

+3

-2

-1

Joined

+1

+2

+3

MTW

MTW

Year Relative to Joining MTW

Year Relative to Joining MTW

Estimated Effect

90% Confidence Interval

MTW = Moving to Work.

Notes: Vertical dotted line and “Year joined MTW” represent the year in which public housing agencies execute their first MTW contract. The solid line represents the point estimate and the dashed lines on either side of this estimate represent the 90-percent confidence interval. Estimates are converted from log form to percent change. Regressions include only agencies with at least 750 households and exclude agencies that joined MTW before 2005 or after 2015, because they need to have 2 years of data prior to joining MTW and 3 years of data after joining enter this equation. Impact analyses do not include Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, and Housing Authority of the City of San Jose because of incomplete data on households in public housing. All regressions include year and PHA fixed effects. Median rent and government wages are included as control variables. HUD cost per household, area median rent, and government wages enter the regression in logged form.

Sources: Urban Institute Analysis of HUD Office of Public and Indian Housing Information Center, Financial Data Schedule, and Voucher Management System data The increase in the number of assisted

Effect of the Moving to Work

households the year before PHAs sign

their MTW agreement is both a surprising

Demonstration Controlling

empirical fact and a potential cause of bias

for Program Mix, Housing

to our main regression model. If the changes

Quality and Affordability, and

in HUD revenue and assisted households

Household Characteristics

are part of longer-term trends within future

MTW agencies that pre-date joining the

To better understand the mechanisms

demonstration, the alternative model in

through which MTW status may impact

which we al ow each agency its own unique

cost effectiveness, we ran three additional

linear trend over time would provide the

regression models, accounting for,

better approximation of the impact of MTW

respectively, (1) changes in program mix,

on agencies. As described above, this PHA-

(2) housing quality and affordability, and

specific time trend model also finds no

(3) household characteristics. Because our

relationship between MTW status and cost per

primary finding was of no impact, this analysis

assisted household (exhibit B4).

tests whether MTW agencies maintain their

cost effectiveness by altering their portfolio

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 38

Findings

of assisted units, the quality or affordability

the same model plus additional variables that

of the housing they provide, or the types of

control for:

households they assist. We determine that

accounting for these factors does not alter our

• the percent of households assisted through

primary finding of no significant relationship

tenant-based and project-based HCVs

between MTW status and cost per assisted

rather than through public housing

household. In other words, MTW agencies are

(column 2),

not maintaining their cost effectiveness by

• public housing Physical Assessment

shifting their portfolio to lower-cost assistance

Subsystem (PASS) inspection scores and

programs, offering lower quality or less

affordability (column 3), and

affordable housing assistance, or providing

• characteristics that define whether residents

assistance to lower need households.

may be more expensive to serve

Exhibit 16 displays the results of our main

(column 4).38

model from equation 1 (column 1), fol owed by

Exhibit 16: The Effect of Moving to Work on HUD Cost per Assisted Household Controlling for Program Mix, Quality and Affordability, and Household Characteristics

(1)

(2)

(3)

(4)

Main Regression

Controlling for Program Controlling for Housing

Controlling

Mix

Quality and Affordability

for Household

Characteristics

0.013

0.008

0.015

0.014

Impact of MTW

(0.030)

(0.025)

(0.031)

(0.029)

-

0.613***

-

-

Percent tenant-based HCV holder

(0.075)

-

0.643***

-

-

Percent project-based HCV holder

(0.107)

-

-

-0.001

-

Quality of public housing

(0.001)

-

-

-0.007**

-

Affordability (median rent burden)

(0.003)

-

-

-

-0.040***

Median income (new residents)

(0.011)

High need households (new

-

-

-

0.000

residents)

(0.000)

-

-

-

0.018**

Household size (new residents)

(0.008)

Observations

10,905

10,905

8,775

10,905

* p<0.10, ** p<0.05, *** p<0.01.

HCV = Housing Choice Voucher. MTV = Moving to Work.

Notes: There is no statistically significant difference between the four coefficients for the impact of MTW status on cost per household. Standard errors (listed in parentheses) are heteroskedastic robust and clustered at the public housing agency (PHA) level. Regressions include only agencies with at least 750 households and exclude agencies that joined MTW before 2003. Impact analyses do not include Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, and Housing Authority of the City of San Jose because of incomplete data on households in public housing. Regression includes year and PHA fixed effects. Median rent and government wages are included as control variables. Cost per assisted household, HUD funding, assisted households, area median rent, and government wages enter the regression in logged form. Regression (3) only includes PHAs with public housing units.

Sources: Urban Institute analysis of HUD Financial Data Schedule (FDS) and the Office of Public and Indian Housing Information Center (PIC) datasets 38 Coefficients on these control variables should not be interpreted as causal impacts. Additional research is needed to determine the true causal impact of each variable on costs per household.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 39

Findings

To understand the influence of each of these

statistical y significant. From this we conclude

additional variables on cost effectiveness,

that the relationship between MTW status

readers should compare the numbers in the

and cost effectiveness is not being driven

top row (Impact of MTW) in columns 2, 3, and

by changes that occur after they join the

4 with the number in column 1. For example,

demonstration to PHAs’ program mix, the

column 2 (Control ing for Program Mix), shows

quality or affordability of housing assistance,

that, control ing for changes in the percentage

or the types of households served.

of assisted households in tenant-based

vouchers, project-based vouchers, and public

housing, joining the MTW demonstration is

Effect of the Moving to

associated with a 0.8-percent increase in

Work Demonstration on per

costs per assisted household. This slightly

Household Spending by

decreases the impact of MTW on cost per

Public Housing Agencies

household from our original model (column

1), which shows an increase in costs per

Exhibit 17 shows descriptive statistics for

household of 1.3 percent. This indicates that

MTW and traditional PHAs of similar size in

accounting for shifts in agencies’ portfolio

total per household spending, spending on

of assisted units after joining MTW slightly

administrative costs, spending on tenant

reduces the estimated impact of MTW status

services, and operating reserves in 2003,

on costs per household. Conversely, columns

prior to when agencies in our sample joined

3 and 4 show that accounting for housing

the demonstration. It reveals that, compared

affordability and quality (column 3) and the

with traditional PHAs, MTW agencies spent

characteristics of assisted households (column

more per assisted household and stored

4) slightly increases the effect of MTW status

more dol ars in reserves before joining the

on costs per household. The differences in

demonstration.

all cases, however, are very small and are not

Exhibit 17: Per Household Total Expenditure, Administrative Costs, Tenant Services Spending, and Operating Reserves, 2003

Total Expenditure

Administrative

Tenant Services

Operating Reserves per

(Operating and Housing

Costs per Assisted

Spending per Assisted

Assisted Household

Assistance) per Assisted

Household

Household

Household

MTW PHAs Included in

Regression Analysis

$6,639

$1,337

$109

$473

Traditional PHAs That

Served at Least 750

$5,574

$985

$64

$396

Households in 2003

MTW = Moving to Work. PHA = public housing agency.

Notes: Values displayed are constant 2015 dollars adjusted using Bureau of Labor Statistics Consumer Price Index for all Urban Consumers. Regressions include only agencies with at least 750 households and exclude agencies that joined MTW before 2003. Analyses do not include Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, and Housing Authority of the City of San Jose because of incomplete data on households in public housing. Regression includes year and public housing agency fixed effects. Cost per assisted household, HUD funding, assisted households, area median rent, and government wages enter the regression in logged form.

Sources: Urban Institute analysis of HUD’s Office of Public and Indian Housing Information Center dataset; HUD Financial Data Schedule (FDS dataset); and U.S.

Census Bureau Data

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 40

Findings

Exhibit 18 shows estimates of the impact of

funding as they did before. It is unclear from

Moving to Work status on public housing

our analysis, however, what those efficiencies

authorities’ total operating and housing

are since they are not spending less on other

assistance spending per assisted household,

components of providing rental assistance.

administrative costs per household, tenant

services per household, and operating

reserves per household, accounting for the

baseline differences displayed in exhibit

17. The model uses the natural log of total

expenditures and administrative costs to

estimate the impact in terms of percentage

change. Because tenant services spending

is often zero and operating reserves can

be negative, the model estimates a linear

relationship for these variables.

Results of the model of MTW’s impact on total

expenditures per household are consistent

with findings of cost per household discussed

previously. MTW status is not associated

with an increase in PHAs’ total operating and

housing assistance spending per assisted

household. Statistical models are unable to

determine the relationship between MTW

status and either administrative costs per

household or tenant services spending per

household because the standard errors are

very large. The standard estimating error

for the tenant services model is about $25

per household, more than one-fourth of the

average spending level. This is probably

because most PHAs spend nothing on tenant

services and a small number of agencies

spend a lot on tenant services.

In contrast, the analysis also shows that MTW

status increases the funds that agencies

hold in operating reserves by about $840

per assisted household. This increase is

statistical y significant at the .01 level. This

finding suggests that MTW agencies are

able to find some efficiencies that al ow

them to build up their operating reserves

while serving roughly the same number

of assisted households per dol ar of HUD

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 41

Findings

Exhibit 18: The Effect of Moving to Work on per Household Total Expenditures, Administrative Costs, Tenant Services Spending, and Operating Reserves

Total Expenditures (Operating Administrative Costs per

Tenant Services

Operating Reserves

and Housing Assistance) per

Assisted Household

Spending per

per Assisted

Assisted Household

Assisted Household

Household

0.003

0.137

22.4

839***

Impact of MTW

(0.048)

(0.098)

(25.0)

(197)

0.061

0.073

17.3

96.9

Median Rent

(0.146)

(0.091)

(24.7)

(170)

0.111

0.060

-21.5

114

Government Wage

(0.080)

(0.048)

(18.8)

(119)

Observations

10,905

10,905

10,905

10,905

* p<0.10, ** p<0.05, *** p<0.01.

MTW = Moving to Work.

Notes: Standard errors are heteroskedastic robust and clustered at the public housing agency (PHA) level and listed in parentheses. Regressions exclude agencies that joined MTW before 2003 and agencies that had fewer than 750 assisted households in 2003. Impact analyses do not include Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, or Housing Authority of the City of San Jose because of incomplete data on households in public housing. All regressions include year and PHA fixed effects. Total expenditures per assisted household, administrative costs per assisted household, median rent, and government wage enter our regression equation in natural log form, tenant services spending per assisted households and operating reserves enter our regression equation non-transformed. We turn all zero values to 0.0001 before taking the natural log. The natural logs of median rent and government wages are included as control variables.

Sources: Urban Institute Analysis of HUD’s Office of Public and Indian Housing Information Center, Financial Data Schedule, and Voucher Management System data

Discussion

households the year before they joined the

demonstration. This may be part of a longer-

This study provides new insights into the

term trend at agencies that would go on to join

relationship between MTW status and cost

the MTW demonstration. Or, agencies may

effectiveness and opens doors for other

have changed their behavior in anticipation

avenues of research. First, it shows that MTW

of MTW status. There is often a lag between

agencies had higher costs, as measured

when agencies are selected into MTW and

by HUD revenue per assisted household,

when they execute their agreements. During

than traditional PHAs before they joined

this time, agencies may have adjusted their

the demonstration. Thus, the higher costs

actions in response to the MTW funding

observed at MTW agencies in prior studies are

formula. Generally, MTW agencies are funded

probably because MTW agencies tend to be

in the HCV program based on the number of

located in large urban areas with higher labor

households they were assisting when they

and housing costs and not because of the

joined the demonstration, with an adjustment

regulatory or financial flexibility offered by the

for inflation and changes in housing costs.

demonstration.

Thus, agencies could increase the base

Second, although MTW status is not

funding in their MTW contracts by increasing

associated with a change in the per household

the number of assisted households they

costs of rental assistance, it is associated

served when they joined MTW. Additional

with both an increase in HUD revenue

qualitative data col ection with MTW agency

and an increase in assisted households.

staff would be useful to determine if they

Surprisingly, agencies began assisting more

were intentional y serving more households

in anticipation of their MTW contracts. In

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 42

Findings

addition, we find evidence of an adjustment

reducing their cost-effectiveness. Conversely,

period where cost per assisted household

traditional PHAs may be able to use other

increases slightly 1 year after PHAs join the

funding opportunities to pay for the enhanced

demonstration, although the trend is not

services or development activities that MTW

statistically significant.

agencies pay for with their funding flexibility.

Third, although MTW status did not affect

Finally, our findings may inform thinking about

the overall costs to HUD of providing rental

how to strike the right balance between

assistance, it has al owed agencies to

federal regulation and local control. The

significantly increase the amount of money

finding that MTW status does not significantly

held in reserves. The Financial Data Schedule

impact cost effectiveness could be taken as

(FDS) system is not set up to track how PHAs

evidence that strict regulation of PHAs is not

spend their reserves, so we were not able to

necessary to manage costs, at least among

track this spending for this study. Interviews

high performing agencies. Conversely, our

with a convenience sample of MTW agencies

finding of no impact of MTW may reflect a

suggest that these reserves can be useful

lack of contrast in the regulatory environment

in financing the construction or preservation

between MTW and traditional PHAs. During

of affordable housing. Furthermore, holding

our analysis period, HUD was establishing

additional reserves may al ow MTW agencies

more uniform standards and monitoring for

greater access to financing or lower interest

MTW agencies while also relaxing certain

rates when they seek to acquire or develop

regulatory requirements for traditional PHAs.

additional housing units. The increase in

reserves could be a sign that MTW agencies

are reducing their capital outlays in the short

Limitations

term and building reserves to fund larger

The analysis reported here is limited by the

capital projects in later years. Supporters of

non-experimental process through which

MTW may cite this as evidence that MTW

agencies join MTW, a lack of data on behavior

improves agencies’ financial position and

within each agency, and the exclusion of

thereby helps them to preserve or increase

agencies that entered MTW prior to 2003.

the community’s stock of affordable housing

It also does not address the relationship

while maintaining the same level of cost per

between cost-effectiveness and the MTW

household. Detractors may argue that the

demonstration’s other goals.

money MTW agencies hold in reserves would

be better spent assisting more households

Lack of random assignment to MTW status

through rental subsidies.

limits our ability to estimate the causal impact

of the demonstration. PHAs were chosen

It is important to note that we only examine

for MTW through selection processes that

MTW-eligible funding and therefore do not

shifted from year-to-year before becoming

assess whether MTW status affects how

more standardized in the later years of the

much funding PHAs receive from other

demonstration. In some years, PHAs self-

programs. For example, MTW status might

selected into the demonstration by applying

help PHAs receive more funding because they

to join. PHAs that applied for the MTW

can use their flexibility to hire grant writers

demonstration may be systematical y different

or because they can leverage funding to

in unobservable and unaccounted for ways

receive additional loans or grants from public

from agencies that did not try to join the

or private funders. This may be what al ows

demonstration. For instance, they may have

them to build their operating reserves without

leadership with high levels of motivation to

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 43

Findings

improve their agencies.

sufficiency, and (2) increasing housing choices

for low-income families. MTW agencies are not

Data availability constrains the analysis in

required to pursue cost effectiveness over and

three important ways. First, the analysis

above the other objectives.

only includes agencies that joined or exited

the MTW demonstration since 2003, and for

whom there are enough years of accurate

Conclusion

data. It therefore excludes the first agencies

The MTW agencies included in our analysis

to join MTW, some of which have been

received higher levels of HUD funding after

singled out by critics of the demonstration

joining the demonstration and also were

for not using enough of their budget on

able to increase the total number of assisted

housing assistance (Fischer, 2015). It also

households served, resulting in no significant

excludes some of the largest MTW agencies

change in overall cost per household. These

and agencies with the most ambitious MTW

agencies also experienced a large increase

activities, such as the Chicago Housing

in dollars per household held in reserves,

Authority, Home Forward (Portland, OR),

suggesting that they were able to increase

and the Cambridge Housing Authority. We

their savings while stil serving roughly the

do not know how including these agencies

same number of assisted households per

would affect our results. Second, inconsistent

dol ar of HUD funding as before joining the

data reduces the accuracy and precision of

demonstration.

our estimates. Reliance on imputing missing

and incomplete data adds uncertainty to

Future studies should examine cost

our estimates. Third, FDS data do not ful y

effectiveness in tandem with self-sufficiency

differentiate between spending on public

or housing choice to determine the overall

housing, vouchers, or local, non-traditional

effect of the MTW demonstration on its three

(LNT) assistance at MTW agencies and do

statutory objectives. Future studies should

not al ow us to track the flow of funds across

also estimate the relationship between MTW

accounts. It is not possible to examine shifts

status and the number of affordable units

in spending that could make agencies more

within the PHA’s service area to determine

or less cost-effective, the sources of funding

whether MTW agencies use their reserves

used to increase operating reserves, or the

to increase the supply of affordable housing

expenditures associated with the draw-down

more than other similar agencies.

of reserves.

The findings in this study do not contradict

Final y, the study focuses only on cost

prior studies showing that MTW agencies

effectiveness and defines cost effectiveness

spend more per household, but rather

based on number of households served. This

show that this higher level of cost per

measure is not the only possible measure of

household existed prior to entering the MTW

cost effectiveness, but we chose it because it

demonstration and that the demonstration

reflects federal costs and includes all funding

itself was not the cause.

sources and all households served with

this funding and allows for fair comparison

between MTW agencies and traditional PHAs.

A further limitation is that this measure of cost

effectiveness does not take into account the

other two statutory objectives, which are (1)

promoting employment and economic self-

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance 44

Appendix A: History of the Moving to Work Demonstration

Appendix A: History

Three MTW agencies left the original

demonstration in late 2003 and early

of the Moving to Work 2004—the Greene Metropolitan Housing

Authority; the High Point Housing Authority,

Demonstration

North Carolina; and the San Diego Housing

Commission. In 2008, the San Diego Housing

Commission returned to the demonstration.

Also, in 2008, the Housing Authority of

Most Moving to Work (MTW) public housing

Baltimore City transitioned from the Jobs

agencies (PHAs) entered the demonstration

Plus demonstration to be a full MTW agency.

through a competitive application process.

Nine PHAs were selected during the three

The initial 1996 applicant pool was scored

subsequent application periods—2009,

based on a number of characteristics,

2010, and 2012—and all were required to be

including the housing agency’s performance,

designated High Performing PHAs with no

capability, and proposed MTW plan. A cohort

more than 5,000 units (Office of Public and

of 24 PHAs was selected from that group

Indian Housing [PIH] Notices 2009-29 (HA),

to join the MTW demonstration, and 19

2010-29 (HA), PIH-2012-16).

PHAs ultimately signed agreements.39 That

process, however, involved some ambiguity;

In addition to the competitive selection

not all high-scoring PHAs were selected to

process, PHAs could be named by Congress

join and three PHAs were chosen based on

and invited to join the demonstration through

their proposed activities, despite not being

an Appropriations Act. This occurred with

amongst the highest performing applicants:

seven PHAs: the Charlotte Housing Authority

the San Diego Housing Commission, the

and the Housing Authority of the City of

Vancouver Housing Authority, and the

Pittsburgh in 1999; the Chicago Housing

Minneapolis Public Housing Authority (Cadik

Authority in 2000; and the Alaska Housing

and Nogic, 2010).

Finance Corporation, Housing Authority of

the County of San Bernardino, and Housing

In 2000, a second invitation to apply

Authority of the County of Santa Clara/

was issued to fill six open spots in the

Housing Authority of the City of San Jose in

demonstration.40 Most of the PHAs from the

2008.

initial cohort were smal - or medium-sized

PHAs; however, the second round targeted

When the demonstration began, each

applications from large PHAs with more

agency worked with HUD to create a unique

than 2,500 units “that [were] undertaking

MTW agreement that specified the tasks

or plan[ned] to undertake a substantial

and activities that the agency planned to

transformation of their public housing stock

implement and the waivers from regulations

and management systems” (2000-52 [HA]).41

and statutes that they needed to carry

This cohort was not scored based on the

out those activities. As the demonstration

housing agency’s performance.

progressed, however, HUD recognized the

need for standardization and developed and

executed the “MTW Standard Agreement”

39 See HUD’s “History of Moving to Work (MTW)” for more information: www.hud.gov/program_offices/public_indian_housing/programs/ph/mtw/history.

40 The original MTW demonstration included 24 spots for MTW agencies and 6 spots for Jobs-Plus agencies. Five of the selected MTW agencies and one selected Jobs-Plus agency did not ultimately join the demonstration: Birmingham, Cherokee Nation, Los Angeles County, Stevens Point, Tampa, and the Utah Consortium. The five Jobs Plus agencies were Housing Authority of Baltimore City, Chattanooga, Cuyahoga, Dayton, and the City of Los Angeles. See HUD’s “History of Moving to Work (MTW)” for more information: www.hud.gov/program_offices/public_indian_housing/programs/ph/

mtw/history. For more information on HUD’s Jobs-Plus initiative, see: https:/ www.hud.gov/program_offices/public_indian_housing/jpi.

41 The six PHAs chosen in 2000 were Atlanta Housing Authority, District of Columbia, King County Housing Authority, Housing Authority of the City of New Haven, Oakland Housing Authority, and Philadelphia Housing Authority.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance A-1

Appendix A: History of the Moving to Work Demonstration

in 2008. Starting that year, any agency

the Community-Specific Attachment D

that joined the demonstration signed this

amendments. A full list of MTW agencies, the

agreement, which al ows for waivers from

dates in which they joined the demonstration,

a common set of rules and regulations.

and the authorization information, appear in

Amendments to the standard agreement may

exhibit A1.

nevertheless vary across agencies, including

Exhibit A1: History of Moving to Work Agency Involvement

MTW Agency

Year Accepted

MTW Active Date

Date

Terminated

Authorization Information

Alaska Housing Finance Corporation

2008

6/24/2008

-

Appropriations Act (2008)

Atlanta Housing Authority

2000

9/25/2003

-

PIH Notice 2000-52

Housing Authority of Baltimore City

2008

12/24/2008

-

Appropriations Act (1996) Boulder Housing Partners

2010

11/10/2011

-

PIH Notice 2009-29

Cambridge Housing Authority

1996

4/9/1999

-

Appropriations Act (1996) Housing Authority of Champaign County

2009

10/17/2010

-

PIH Notice 2009-29

Charlotte Housing Authority

1999

12/21/2007

-

Appropriation Act (1999) Chicago Housing Authority

2000

2/6/2000

-

PIH Notice 2000-52

Housing Authority of Columbus, Georgia

2012

7/3/2013

-

PIH Notice 2012-16

Delaware State Housing Authority

1996

5/14/1999

-

Appropriations Act (1996) District of Columbia Housing Authority

2000

7/25/2003

-

PIH Notice 2000-52

Fairfax County Redevelopment and Housing

Authority

2012

11/7/2013

-

PIH Notice 2012-16

Greene Metropolitan Housing Authority

1996

3/3/1999

3/3/2004

Appropriations Act (1996) High Point Housing Authority

1996

3/29/1999

3/29/2004

Appropriations Act (1996) Holyoke Housing Authority

2012

9/6/2013

-

PIH Notice 2012-16

Keene Housing

1996

4/21/1999

-

Appropriations Act (1996) King County Housing Authority

2000

9/8/2003

-

PIH Notice 2000-52

Lawrence-Douglas County Housing Authority

1996

3/30/1999

-

Appropriations Act (1996) Lexington-Fayette Urban County Housing

Authority

2010

11/10/2011

-

PIH Notice 2009-29

Lincoln Housing Authority

1996

5/21/1999

-

Appropriations Act (1996) Louisville Metropolitan Housing Authority

1996

8/2/1999

-

Appropriations Act (1996) Massachusetts Department of Housing and

Community Development

1996

4/21/1999

-

Appropriations Act (1996) Minneapolis Public Housing Authority

1996

8/27/1998

-

Appropriations Act (1996) Housing Authority of the City of New Haven

2000

9/28/2001

-

PIH Notice 2000-52

Oakland Housing Authority

2000

3/31/2004

-

PIH Notice 2000-52

Orlando Housing Authority

2009

1/7/2011

-

PIH Notice 2009-29

Philadelphia Housing Authority

2000

2/14/2001

-

PIH Notice 2000-52

Housing Authority of the City of Pittsburgh

1999

11/17/2000

-

Appropriation Act (1999)

Portage Metropolitan Housing Authority

1996

3/15/1999

-

Appropriations Act (1996) Home Forward (formerly Housing Authority of

Portland)

1996

1/13/1999

-

Appropriations Act (1996)

(continued)

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance A-2

Appendix A: History of the Moving to Work Demonstration

Exhibit A1: History of Moving to Work Agency Involvement (continued)

MTW Agency

Year Accepted

MTW Active Date

Date

Terminated

Authorization Information

Reno Housing Authority

2012

6/27/2013

-

PIH Notice 2012-16

San Antonio Housing Authority

1996

8/25/1999

-

Appropriations Act (1996) Housing Authority of the County of San

Bernardino

2008

3/14/2008

-

Appropriations Act (2008)

Appropriations Act (1996); San Diego Housing Commission

1996

12/8/1998;

1/14/2009

12/8/2003

Appropriations Act (2008)

Housing Authority of the City of San Jose

2008

2/26/2008

-

Appropriations Act (2008)

Housing Authority of the County of San Mateo

1996

5/1/2000

-

Appropriations Act (1996) Housing Authority of the County of Santa Clara

2008

2/26/2008

-

Appropriations Act (2008)

Seattle Housing Authority

1996

12/30/1998

-

Appropriations Act (1996) Tacoma Housing Authority

2009

8/23/2010

-

PIH Notice 2009-29

Tulare County Housing Authority

1996

4/5/1999

-

Appropriations Act (1996) Vancouver Housing Authority

1996

4/21/1999

-

Appropriations Act (1996) MTW = Moving to Work. PIH = Office of Public and Indian Housing.

Notes: San Antonio Housing Authority originally implemented a small demonstration at one public housing site, and later expanded to the entire public housing agency. Housing Authority of Baltimore City was originally part of the Jobs Plus demonstration and transitioned to the MTW demonstration in 2008. San Diego completed their original demonstration in 2003 and rejoined in 2008.

Source: Documents retrieved from HUD’s MTW portal (www.hud.gov/program_offices/public_indian_housing/programs/ph/mtw)

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance A-3

Appendix B: Additional Analyses

Appendix B:

Alternate Size Thresholds for

Additional Analyses

Comparison Traditional Public

Housing Agencies

To better understand how the population of

This section describes additional analyses that

traditional PHAs in our sample impacts our

support or provide additional context to those

estimates, we performed a sensitivity analysis

included in the body of this report. We first

using alternative thresholds for the minimum

describe the analysis used to understand the

number of assisted households that we

ramifications of choosing a size threshold for

required of PHAs in our comparison group.

the comparison with traditional public housing

Specifical y, we re-estimated equation 1 with

agencies (PHAs). Next, we describe the

progressively smal er samples of traditional

analyses used to examine the robustness of

PHAs, dropping agencies with fewer than n

our results. We then provide the full results of

households in 2001 with n ranging from 0

the event study analysis. Final y, we show how

to 1,000 in increments of 50. As soon as the

results would differ if we had used a repeated

smal est agencies were removed from the

cross-section design that did not account for

sample, the relationship between Moving to

unobservable differences between PHAs.

Work (MTW) status and cost per household

became statistical y insignificant at the α=0.1

level. The results of this analysis are shown in

exhibits B1 and B2.

Exhibit B1: Sensitivity of Estimates to Alternative Comparison Groups

0.16

0.14

0.12

0.1

0.08

0.06

0.04

0.02

0

-0.02

-0.04

Estimated Effect of MTW Status on the Log of HUD Revenue per Assisted Household -0.06 0 501001502002503003504004505005506006507007508008509009501000105010015012001250

Minimum Number of Households (2001) in Comparison Group

Estimated effect

90% confidence interval

MTW = Moving to Work.

Notes: Standard errors are heteroskedastic robust and clustered at the public housing agency (PHA) level. The solid blue line represents the point estimate and the dotted lines on either side of this estimate represent the 90-percent confidence interval. Regressions exclude agencies that joined MTW before 2003.

Comparison groups were determined using the number of assisted households in 2003. Impact analyses do not include Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, or Housing Authority of the City of San Jose because of incomplete data on households in public housing. All regressions include year and PHA fixed effects. Median rent and government wages are included as control variables.

Sources: Urban Institute analysis of HUD Financial Data Schedule, and the Office of Public and Indian Housing Information Center datasets The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance B-1

Appendix B: Additional Analyses

Exhibit B2: Sensitivity of Estimates to Alternative Comparison Groups

Minimum Number Cost per Assisted Household

HUD Funding

Assisted Households

Observations

of Households

Coefficient

Std. Error

Coefficient

Std. Error

Coefficient Std. Error

No Minimum

0.084***

(0.031)

0.167***

(0.026)

0.083***

(0.027)

53,475

50

0.068**

(0.031)

0.161***

(0.025)

0.093***

(0.027)

44,085

100

0.052*

(0.030)

0.153***

(0.025)

0.101***

(0.027)

36,705

150

0.041

(0.030)

0.145***

(0.025)

0.104***

(0.027)

31,260

200

0.034

(0.030)

0.139***

(0.025)

0.105***

(0.027)

27,690

250

0.031

(0.030)

0.135***

(0.025)

0.104***

(0.027)

24,810

300

0.027

(0.030)

0.131***

(0.026)

0.104***

(0.027)

22,350

350

0.025

(0.030)

0.128***

(0.025)

0.103***

(0.027)

20,325

400

0.022

(0.030)

0.126***

(0.025)

0.104***

(0.027)

18,435

450

0.021

(0.030)

0.122***

(0.025)

0.101***

(0.028)

17,070

500

0.018

(0.030)

0.117***

(0.025)

0.099***

(0.028)

15,840

550

0.018

(0.030)

0.113***

(0.025)

0.095***

(0.028)

14,445

600

0.017

(0.030)

0.111***

(0.025)

0.094***

(0.028)

13,350

650

0.016

(0.030)

0.109***

(0.024)

0.093***

(0.028)

12,495

700

0.016

(0.030)

0.108***

(0.024)

0.092***

(0.028)

11,715

750

0.013

(0.030)

0.106***

(0.024)

0.093***

(0.028)

10,905

800

0.015

(0.030)

0.107***

(0.024)

0.092***

(0.028)

10,380

850

0.015

(0.030)

0.106***

(0.024)

0.092***

(0.028)

9,780

900

0.013

(0.030)

0.105***

(0.024)

0.091***

(0.028)

9,360

950

0

(0.030)

0.096***

(0.024)

0.096***

(0.030)

8,865

1000

0

(0.030)

0.095***

(0.024)

0.095***

(0.030)

8,445

* p<0.10, ** p<0.05, *** p<0.01.

Notes: Standard errors (listed in parentheses) are heteroskedastic robust and clustered at the public housing agency (PHA) level. Regressions include only agencies with at least 750 households and exclude agencies that joined Moving to Work before 2003. Impact analyses do not include Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, or Housing Authority of the City of San Jose because of incomplete data on households in public housing. Regression includes year and PHA fixed effects. Median rent and government wages are included as control variables and logged as well. Cost per assisted household, HUD funding, assisted households, area median rent, and government wages enter the regression in logged form.

Sources: Urban Institute analysis of HUD Financial Data Schedule, and the Office of Public and Indian Housing Information Center datasets Robustness Checks

may be the ones that choose to become

MTW PHAs. If we compare MTW PHAs with

Using Propensity Score Matching

traditional PHAs without correcting for this, the

Because MTW PHAs were not chosen at

former may appear to be more cost-effective

random, any analysis is at risk of selection

not because of MTW, but because those PHAs

bias. This difficulty is because characteristics

already were improving cost effectiveness.

that make an agency more likely to become

The fixed-effects model control ed for the

an MTW agency might be correlated with

possibility that MTW PHAs systematical y

outcomes of interest, such as cost per

were more or less efficient than the average

household. In other words, PHAs that already

PHA prior to joining the demonstration. It did

are making changes to increase effectiveness

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance B-2

Appendix B: Additional Analyses

not control for the possibility that some of the

service area. A full list of variables used to

MTW PHAs are fundamental y different from

determine the propensity score appear in

the traditional PHAs, however, and would

exhibit B3. We then assigned each agency a

not have been expected to fol ow paral el

propensity score representing the estimated

trends in the absence of MTW flexibility. This

probability that the agency might have

issue could arise not only if there is selection

been an MTW agency. To create a matched

bias, but also if some of the MTW PHAs (and

dataset, we assigned each MTW PHA the five

traditional PHAs) simply do not have good

traditional PHAs with the closest propensity

comparisons in the other group.

scores. We then limited the dataset to the

MTW PHAs and each PHA’s five “nearest

We used propensity scores in two ways to

neighbors.’’ We al owed traditional PHAs to

ensure that the MTW and traditional PHAs

appear more than once if they are the nearest

used in our robustness checking statistical

neighbor to more than one MTW PHA. To

models were similar. The propensity score

trim the dataset, we excluded PHAs from the

refers to the probability that a PHA is an

analysis if they are MTW agencies with higher

MTW agency. First, we created a matched

propensity scores than any traditional PHAs

comparison group and, second, we trimmed

or are traditional PHAs with lower propensity

the data to ensure common support. In both

scores than any MTW agency. Dropping these

instances, we estimate the probability of MTW

PHAs from the analysis limits the precision of

status using the Public Housing Assessment

estimates but better addresses the concern of

System (PHAS) public housing scores and

selection bias.

demographic characteristics of the PHA

Exhibit B3: Variables Used to Determine the Propensity Score

Data Source

Definition/Notes

Housing Quality

SEMAP and Average of FASS score and SEMAP scores 5, 6, 9, 11, and 12,

PHAS

weighted by assisted households in public housing and HCV

Average wage in the construction industry

BLS

Average across counties in the service area

Average wage of local government employees

BLS

Average across counties in the service area

Median income of service area

ACS

Population weighted based on residents in PIC

Median rent in service area

ACS

Population weighted based on residents in PIC

Poverty rate of service area

ACS

Population weighted based on residents in PIC

Percent of service area population over age 60

ACS

Population weighted based on residents in PIC

Population of service area

ACS

Average census tract population for census tracts served by

the PHA (census tracts served defined by PIC data)

Population density of service area

ACS

Average census tract population density for census tracts

served by the PHA

Rental vacancy rate of service area

ACS

Population weighted based on residents in PIC

ACS =American Community Survey. BLS = Bureau of Labor Statistics. FASS = Financial Assessment. HCV = Housing Choice Voucher. PHA = public housing agency.

PHAS = Public Housing Assessment System. PIC = Office of Public and Indian Housing Information Center. SEMAP = Section Eight Management Assessment Program.

Estimating equation 1 using these two,

MTW status and cost per household (exhibit

alternative comparison group, reaffirms

B4). MTW status is associated with an

the results shown in exhibit 12. There is no

increase in HUD funding and the number of

statistically significant relationship between

assisted households (exhibit B4). Increases in

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance B-3

Appendix B: Additional Analyses

funding and assisted households are around

the same size, leaving cost per assisted

household unaffected.

Exhibit B4: Robustness Check Results

Cost per Assisted

HUD Funding

Assisted Households

Number of

Household

Observations

-0.001

0.100***

0.101***

1,800

Pscore Matching

(0.031)

(0.024)

(0.030)

0.010

0.095***

0.085***

10,710

Pscore Trimming

(0.032)

(0.024)

(0.029)

0.021

0.106***

0.085***

10,965

Multiple Imputation

(0.031)

(0.024)

(0.029)

0.041

0.106***

0.065**

10,905

Excluding LNT Households

(0.027)

(0.024)

(0.026)

0.026

0.106***

0.080***

10,905

Weighting LNT Households at 50%

(0.028)

(0.024)

(0.026)

0.009

0.015

0.006

10,905

PHA-Specific Time Trends

(0.049)

(0.034)

(0.029)

Excluding Controls for Median Rent

0.019

0.108***

0.090***

10,905

and Government Wage

(0.031)

(0.026)

(0.027)

Excluding Observation of 2008 or

0.020

0.017

-0.003

6,543

Earlier

(0.051)

(0.053)

(0.026)

* p<0.10, ** p<0.05, *** p<0.01.

LNT = local, non-traditional. PHA = public housing agency.

Notes: Standard errors (listed in parentheses) are heteroskedastic robust and clustered at the PHA level. Regressions include only agencies with at least 750

households and exclude agencies that joined Moving to Work before 2003. Impact analyses do not include Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, or Housing Authority of the City of San Jose because of incomplete data on households in public housing.

Regressions include year and PHA fixed effects. Median rent and government wages are included as control variables. Cost per assisted household, HUD funding, assisted households, area median rent, and government wages enter the regression in logged form.

Source: Urban Institute analysis

Multiple Imputation

Multiple imputation iterates the imputation

The analysis described in this report

process to provide a more reliable estimate of

used nearest-neighbor interpolation and

a model’s precision (Raghunathan et al., 2001).

extrapolation to address the issue of missing

Multiple imputation involves threes steps.

data. In the estimates displayed in exhibit

First, where data are missing, multiple sets

12, we take these imputed values as given.

of potential values are imputed for each

This assumption may lead to underestimates

observation. Second, the analysis is repeated

of standard errors, however, therefore

over each set of potential values. Third,

overstating the precision of our results. As a

the estimates are pooled to create a single

robustness check, we use multiple imputation

estimate of coefficients and their standard

to re-estimate any results that are found to

errors. Because our estimates are based

be statistical y significant in the base model.

on panel data, we used chained equations

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance B-4

Appendix B: Additional Analyses

to impute missing values. We iterated our

statistical y significant impact on cost per

analysis, estimating each equation 10 times,

household associated with MTW, holds even

then employed a two-stage estimator (von

with LNT households excluded.

Hippel, 2018) to determine the minimum

number of imputations needed for replicable

Public Housing Agency-Specific Time

estimates of standard errors. Fol owing the

Trends

estimator, we then iterated the analysis 48

times.

We relaxed the assumption of paral el trends

for MTW and traditional PHAs and al owed

Estimating equation 1 using multiple

each PHA its own specific, long-term, linear

imputation, also reaffirms the results shown in

time trend. To do this we updated equation 1

exhibit 12. There is no statistical y significant

as fol ows:

relationship between MTW status and cost

per household (exhibit B4). MTW status is

Outcomeit= β* MTW +γ*

it

associated with an increase in HUD funding

Controlsit+λ t+(α i*( Yeart-2000))+ϵ it (1) and the number of assisted households

That is, we al owed each agency to fol ow a

(exhibit B4). Increases in funding and assisted

linear path through time and allow individual

households are around the same size, leaving

year effects to perturb this path. This al ows

cost per assisted household unaffected.

each agency its own long-term trajectory and

al ows us to control for national economic and

Weighting Counts of Local, Non-

policy changes.

Traditional Housing

Estimates from the model with PHA-specific

The data described in this report include

time trends reaffirm that MTW-status is not

families served through local, non-traditional

associated with cost per assisted household.

(LNT) rental subsidies, LNT development

The inclusion of PHA-specific time trends,

programs, and LNT homeownership

however, reduces the estimated relationships

assistance. Because these activities are

between MTW status and both funding and

funded with MTW funds, excluding them

the number of assisted households to near

from the analysis would make it appear that

zero (exhibit B4).

MTW PHAs used their HUD funding less

efficiently. It is also important to consider,

Excluding Controls for Median Rent

however, that LNT assistance may be

and Government Wage

shallower than traditional housing assistance.

It is possible that MTW PHAs that engage

To ful y understand the relationship

in many LNT activities could appear more

between MTW status and cost effectiveness

cost-effective, simply by providing a smal er

we want to control for any differences

subsidy or shorter-term housing assistance.

between agencies that could affect both

By performing robustness checks with LNT

per household costs and MTW status. We

households weighted at 50 percent and

do not want to control for factors that could

excluded entirely, we confirm that these issues

affect per household costs, however, and

do not affect our results. These robustness

are, themselves, affected by MTW status.

checks show that MTW status corresponds

Our approach was to use fixed effects to

to an increase in the number of assisted

control for differences between agencies

households even before counting households

that do not change over time and also

assisted through LNT programs (exhibit B4).

to control for changes in local rents and

Moreover, our main finding, that there is no

wages that change each year and affect

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance B-5

Appendix B: Additional Analyses

per household costs. These variables are

Data Schedule (FDS) datasets, described in

appropriate controls under the assumption

the data col ection and assembly section,

that PHAs do not have enough influence to

revealed many instances in which agencies

affect the median price of rent in their service

did not report some household, voucher, or

area or the average wage of a public-sector

financial data which led to missing or bad

employee in their county. To ensure that the

observations in our analytic dataset. This was

results in this report were not reliant on this

particularly an issue for data in PIC and FDS

assumption, we also estimated an alternative

prior to 2009. We, therefore, repeated the

version of equation 1 without these two

analysis described in the body of this report

control variables.

using only data from 2009 onward.

The estimates from the model without these

Results of this analysis reaffirm that MTW-

controls are very similar to those shown in

status is not associated with cost per assisted

exhibit 12. That is, they reaffirm the finding

household. Using this shorter time period,

that MTW status is not associated with per

however, reduces the estimated relationships

household costs and the findings that MTW

between MTW status and both funding and

status is associated with an increase in both

the number of assisted households to near

revenue from HUD and households assisted

zero (exhibit B4).

(exhibit B4).

Excluding Observation of 2008 or

Event Study

Earlier

Exhibit B5 displays the coefficients for the

event study described in the findings section

Our analysis of the Office of Public and Indian

of this report and displayed graphically in

Housing Information Center (PIC), the Voucher

exhibits 13 and 14.

Management System (VMS), and the Financial

Exhibit B5: Event Study Results for RQ1 Using Public Housing Agencies With at Least 750 Assisted Households (2003) as a Comparison Group

Cost per Assisted

HUD Funding

Assisted Households

Households

-0.007

0.016

0.023

2 Years Before

(0.037)

(0.035)

(0.020)

0.031

0.088*

0.058**

1 Year Before

(0.040)

(0.050)

(0.026)

0.039

0.130***

0.092***

Year Joined MTW

(0.044)

(0.049)

(0.033)

0.05

0.149***

0.099**

1 Year After

(0.040)

(0.048)

(0.042)

2 Years After

0.021

0.121***

0.100**

(0.043)

(0.023)

(0.047)

3 Years and More After

0.009

0.138***

0.130***

(0.042)

(0.039)

(0.039)

Median Rent

0.292***

0.137**

-0.154***

(continued)

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance B-6

Appendix B: Additional Analyses

Exhibit B5: Event Study Results for RQ1 Using Public Housing Agencies With at Least 750 Assisted Households (2003) as a Comparison Group (continued)

Cost per Assisted

HUD Funding

Assisted Households

Households

(0.072)

(0.060)

(0.048)

Government Wage

0.043*

0.02

-0.023

(0.026)

(0.026)

(0.020)

Adjusted R-Squared

0.096

0.084

0.040

* p<0.10, ** p<0.05, *** p<0.01.

MTW = Moving to Work.

Notes: Standard errors (listed in parentheses) are heteroskedastic robust and clustered at the public housing agency (PHA) level. Regressions include only agencies with at least 750 households and exclude agencies that joined MTW before 2005 or after 2015, because they need to have 2 years of data prior to joining MTW and 3 years of data after joining enter this equation. Impact analyses do not include Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, or Housing Authority of the City of San Jose because of incomplete data on households in public housing. All regressions include year and PHA fixed effects. Median rent and government wages are included as control variables. HUD cost per household, area median rent, and government wages enter the regression in logged form.

Sources: Urban Institute Analysis of HUD’s Office of Public and Indian Housing Information Center, Financial Data Schedule, and Voucher Management System data Repeated Cross Sectional

25 percent higher at MTW agencies than at

Estimates

comparison traditional PHAs (exhibit B6). The

results align with prior research and highlight

The fixed-effects model presented in this

the importance of accounting for pre-existing,

report accounts for pre-existing differences

unobservable differences between MTW

between MTW and traditional PHAs in both

agencies and traditional PHAs.

internal and external factors affecting the

costs of providing housing assistance. This

is a primary contribution of this study and

differentiates it from the existing literature.

This approach is not the only difference

between this and prior studies, however. To

better understand why the findings in this

study differ from those in prior studies, we

estimated the relationship between MTW

status and cost per assisted household,

HUD funding, and the number of assisted

households in a repeated cross-section

model without fixed effects. We estimate this

cross-sectional model both with the sample

described in the body of this report and with

the propensity matched sample described

earlier in this appendix.

These results show that, on average, after

control ing for local rents and wages, the cost

to HUD of providing rental assistance is 20 to

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance B-7

Appendix B: Additional Analyses

Exhibit B6: Repeated Cross-Sectional Estimation

Cost per Assisted

Number of

Households

HUD Funding

Assisted Households

Observations

Cross-Sectional Estimate

0.197***

1.498***

1.301***

(No Fixed Effects)

10,905

(0.067)

(0.224)

(0.177)

0.233***

1.381***

1.148***

Pscore Cross-Sectional

1,800

(0.066)

(0.024)

(0.021)

* p<0.10, ** p<0.05, *** p<0.01

Notes: Standard errors (listed in parentheses) are heteroskedastic robust and clustered at the public housing agency level. Regressions include only on households in public housing. Median rent and government wages are included as control variables.

Cost per assisted household, HUD funding, assisted households, area median rent, and government wages enter the regression in logged form.

Source: Urban Institute analysis

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance B-8

Appendix C: Supplemental Exhibits

Appendix C: Supplemental Exhibits

Exhibit C1: Data Sources

Source

Years

Geographic Level of Aggregation

Description

FDS

2000–2017*

PHA

Financial data for all PHAs

Public housing household counts, char-

PIC

1995–2017

Household Level

acteristics of residents in HCV-assisted

housing and public housing

VMS

2003–2017

Household Level

HCV household counts

1990, 2000,

Decennial Census/ACS

2010, 2011–

Census Tract

Demographic and housing data

2016**

County (Wages)

Annual wages for employees in construc-

BLS

2000–2017

tion and local government

National (CPI)

CPI-U

PHAS

1999–2016

PHA

Public Housing Quality Measures

Number of households assisted through

local, non-traditional rental subsidy, home-

LNT Household Counts

2009–2017

PHA

ownership, and housing development

programs aggregated by the MTW office

from Form 50900

*FDS data was available through the 2016 fiscal year. We used weighted averages to adjust fiscal year data for 2001 to 2016 to calendar year data for 2003 to 2016. We used FY2017 as calendar year 2017.

**ACS data at the census tract level is only available until 2013 because these data come in the 5-year estimates and are most accurate for the middle year, for which 2011–2016 was the latest dataset available.

ACS = American Community Survey. BLS = Bureau of Labor Statistics. CPI = Consumer Price Index. CPI-U = CPI all urban consumers. FDS = Financial Data Schedule.

HCV = Housing Choice Voucher. LNT = local, non-traditional. MTV = Moving to Work. PHA = public housing agency. PHAS = Public Housing Assessment System.

PIC = Office of Public and Indian Housing Information Center. PIH = Office of Public and Indian Housing. VMS = Voucher Management System.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance C-1

Appendix C: Supplemental Exhibits

Exhibit C2: Variable Calculations From Financial Data Schedule Data

Variable Calculations

Form Item

Form Item Description

Program IDs

Number(s)

(MTW)

(Traditional)

Funding Received

70600

HUD PHA

14.OPS

14.850

from HUD

70610

Operating Grants

14.CFP

14.872

Capital Grants

14.HCV

14.871

14.OPS

Total Operating

14.850

14.850

Expenditures

96900

Total Operating Expenses

14.871

14.871

14.872

14.872

14.881

14.HCV

HAP Expenditures

97300

Housing

Assistance Payments

14.871

14.871

14.881

Administrative Costs

91000

Total

Operating - Administrative

14.850

14.850

14.871

14.871

14.881

Tenant Services

14.850

14.850

Spending

92500

Total Tenant Services

14.871

14.871

14.881

111

Cash – unrestricted

114

Cash – tenant

security deposits

Total receivables,

14.OPS

120

net of allowance for

14.CFP

14.850

doubtful accounts

Operating Reserves

14.HCV

14.871

security deposits

131

Investments - unrestricted

14.850

14.872

net of allowance for

14.871

doubtful accounts

142

Prepaid expenses and other assets

14.872

14.850

144

Inter-program - due from

145

Assets held for sale

-310

Total current liabilities

343

Current portion of long-term debt - capital

projects/mortgage revenue bonds

MTW = Moving to Work. HAP = housing assistance payments.

Notes: Form Items refer to cost and revenue line-items listed in the Financial Data Schedule Line Definition Guide. Each cost or revenue line-item is associated with a specific program. 14.OPS is the public housing operations fund for MTW agencies; 14.CFP is the public housing capital fund for MTW agencies; 14.HCV is the HCV fund for MTW agencies; 14.850 is the code for public housing funds associated with specific developments, at MTW agencies and traditional PHAs; 14.872 is the public housing capital fund, associated with specific developments, at MTW agencies and traditional PHAs; 14.871 is the HCV fund at traditional PHAs and a fund specifically for the HCV

program at MTW agencies; 14.881 is the MTW fund.

Source: Author Selections from Financial Assessment Subsystem – Public Housing; “Financial Data Schedule Line Definition Guide” Office of Public and Indian Housing, Real Estate Assessment Center: Washington, D.C.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance C-2

Appendix C: Supplemental Exhibits

Exhibit C3: Analysis of Assisted Households

Assisted

Definition

Included When Calculating

Included When

Household

Number of Assisted

Calculating

Subgroup

Households?

Characteristics?

New Households

Households with action codes identifying them as

Yes, weighted by months fol-

in Public Housing

“New Admission” or “Historical Adjustment” and pro-

lowing the effective date of the

Yes, unweighted

(PIC)

gram type is “Public Housing”

admission action

Households Exiting

Yes, weighted by the number of

from Public Hous-

Households with action codes identifying them as “End months preceding the effective No ing (PIC)

Participation” and program type is “Public Housing”

date of the exit action

Households in Pub- Households with any action codes except those that

lic Housing (PIC)

signify a new or existing household that have the pro-

Yes, unweighted

No

gram type “Public Housing”.

Households with action codes identifying them as

New Households in “New Admission” or “Historical Adjustment” and pro-

Voucher Programs gram type is “Project Based Vouchers”, “Tenant Based No

Yes, unweighted

(PIC)

Vouchers”, “Section 8 Certificates”, “Home Ownership

Vouchers”, or “Section 8 Vouchers”

Housing Choice

Sum of the following VMS fields: “fldAOV”, “fldLIT”,

Voucher House-

“fldHOV”, “fldPVP”, “fldH6S8”V, “fldRad1”, “fldRad2”0,

Yes, unit months leased divide

holds (VMS)

“fldTenPro”, and “fldThu2HcvLsd”. For MTW PHAs also by 12

No

include “fldMTW”.

Number of Local,

Non-Traditional

Unadjusted data from the MTW office

Yes

No

Households

MTW = Moving to Work. PHA = public housing agency. PIC = Office of Public and Indian Housing Information Center. VMS = Voucher Management System.

Note: Household characteristics include rent burden, household size, income, and an indicator for high needs households.

Exhibit C4: Research Question and Regression Specifications

Research Question

Specification

1a. How does Moving to Work (MTW) status affect the average cost per assisted household?

1

1b. How does MTW status affect the amount of funding PHAs receive from HUD?

1

1c. How does MTW status affect the number of households receiving housing assistance?

1

2a. Do changes in the mix of public housing, tenant-based HCVs, and project-based HCVs in PHAs’

2

portfolios explain the relationship between MTW status and cost per assisted household?

2b. Do changes in housing affordability and housing quality explain the relationship between MTW

2

status and cost per assisted household?

2c. Do changes in the proportion of assisted households that may be costlier to serve explain the 2

relationship between MTW status and cost per assisted household?

3a. How does MTW status affect per household spending of HUD funds?

1

3b. How does MTW status affect administrative costs, tenant services spending, and operating 1

reserves?

HCVs = Housing Choice Vouchers. MTW = Moving to Work. PHA = public housing agency.

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance C-3

Appendix C: Supplemental Exhibits

Exhibit C5: Number of Assisted Households, HUD Funding, HUD Cost per Assisted Household, Operating Reserves per Assisted Household, and Number of Local, Non-Traditional Units, by Moving to Work Agency (Agencies That Joined Moving to Work After 2003) Average Over Years Before or After Joining the Moving to Work Demonstration

Operating Reserves

Local, Non-

Assisted Households

HUD Funding

HUD Cost per Assisted Household

per Assisted

Traditional

MTW PHA

Household

Before

After

Before

After

Before

After

Before

After

Before

After

Alaska Housing Finance

Corporation

5,859

6,926

$45,768,704

$48,778,172

$7,829

$7,120

$27

$250

0

165

Boulder Housing Partners

(formerly Boulder Housing

938

973

$6,916,967

$8,746,265

$7,383

$9,020

$183

$1,039

0

2

Authority)

Reno Housing Authority

3,386

3,157

$21,089,224

$19,053,016

$6,233

$6,042

$295

$271

0

0

Fairfax County Redevelop-

ment & Housing Authority

4,217

4,466

$48,755,804

$55,649,592

$11,547

$12,465

$869

$929

0

0

Holyoke Housing Authority

1,910

2,253

$13,110,089

$14,631,226

$6,888

$6,496

$216

$481

0

0

Housing Authority of Balti-

more City

19,513

25,517

$219,493,120

$287,322,752

$11,247

$11,264

$947

$2,140

0

102

Housing Authority of Cham-

paign County

1,787

2,242

$16,447,823

$17,553,896

$9,103

$7,840

$792

$1,738

0

0

Lexington-Fayette Urban

County Housing Authority

3,321

4,063

$21,658,528

$22,267,436

$6,531

$5,566

$302

$448

0

371

Housing Authority of the

City of Charlotte

6,715

8,309

$58,935,520

$78,364,464

$8,799

$9,654

$786

$4,001

0

1,056

(continued)

The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance C-4

Appendix C: Supplemental Exhibits

Exhibit C5: Number of Assisted Households, HUD Funding, HUD Cost per Assisted Household, Operating Reserves per Assisted Household, and Number of Local, Non-Traditional Units, by Moving to Work Agency (Agencies That Joined Moving to Work After 2003) (continued)

Average Over Years Before or After Joining the Moving to Work Demonstration

Operating Reserves

Local, Non-

Assisted Households

HUD Funding

HUD Cost per Assisted Household

per Assisted

Traditional

MTW PHA

Household

Before

After

Before

After

Before

After

Before

After

Before

After

Housing Authority of the

City of Columbus

3,831

3,838

$24,018,726

$26,630,692

$6,271

$7,006

$70

$949

0

0

Housing Authority of the

County of San Bernardino

10,310

9,860

$77,639,200

$87,146,208

$7,540

$8,869

$161

$709

0

0

Orlando Housing Authority

4,174

5,084

$31,832,704

$32,149,234

$7,624

$6,777

$283

$836

0

638

San Diego Housing Com-

mission

14,494

15,635

$150,974,704

$163,972,448

$10,428

$10,489

$415

$1,159

0

285

MTW = Moving to Work. PHA = public housing agency.

Notes: Calculations are based on data from 2003 to 2017. This exhibit includes only MTW PHAs who joined the demonstration after 2003. Atlanta Housing Authority, District of Columbia Housing Authority, and King County Housing Authority joined MTW in 2003 and therefore do not have a full year of pre-MTW data. This exhibit does not include Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, or Housing Authority of the City of San Jose because of incomplete data on households in public housing. This exhibit only includes the San Diego Housing Commission’s second entrance into the MTW demonstration. See exhibit C6 for descriptives for PHAs who left the MTW demonstration after 2003.

Sources: Urban Institute analysis of HUD Office of Public and Indian Housing Information Center dataset; Urban Institute analysis of HUD Financial Data Schedule dataset The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance C-5

Appendix C: Supplemental Exhibits

Exhibit C6: Number of Assisted Households, HUD Funding, HUD Cost per Assisted Household, Operating Reserves per Assisted Household, and Number of Local, Non-Traditional Units, by Moving to Work Agency (Agencies That Left Moving to Work After 2003)

Average Over Years Before or After Leaving the Moving to Work Demonstration

MTW PHA

Assisted

HUD Funding

HUD Cost per

Operating

Local, Non-

Households

Assisted Household

Reserves

Traditional

per Assisted

Household

Before

After

Before

After

Before

After

Before

After

Before After

Greene Metro-

politan Housing

1,851

1,924

$10,532,833

$9,730,697

$5,692

$5,068

$154

$232

0

0

Authority

High Point Hous-

ing Authority

2,444

2,531

$14,599,260

$14,737,273

$5,973

$5,837

$742

$282

0

0

San Diego Hous-

ing Commission

13,540

14,815

$144,973,984

$152,892,864

$10,707

$10,329

$248

$457

0

0

MTW = Moving to Work. PHA = public housing agency.

Notes: This exhibit only includes the three PHAs that exited the MTW demonstration between 2003 and 2015. The San Diego Housing Commission later reentered the MTW demonstration, and the years after reentering the demonstration are excluded in the exhibit above.

Sources: Urban Institute analysis of HUD Office of Public and Indian Housing Information Center dataset; Urban Institute analysis of HUD Financial Data Schedule dataset

Exhibit C7: Households Assisted by Moving to Work Agencies, by Program, 2003 to 2017

500,000

450,000

400,000

350,000

300,000

Households 250,000

200,000

150,000

100,000

50,000

02003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Year

Tenant-based Vouchers

Project-based Vouchers

Public Housing

Local, Non-Traditional

Notes: The number of Moving to Work (MTW) public housing agencies increased from 25 in 2003 to 39 in 2017, driving the increase in the total number of households assisted by MTW agencies. Nearest neighbor interpolation was used to impute household counts for voucher and public housing assistance for years in which data in the Public and Indian Housing Information Center (PIC) or the Voucher Management System (VMS) were missing or under-reported assistance.

Local, non-traditional (LNT) data, which were not adjusted, were available from 2009 to 2017.

Sources: Urban Institute analysis of HUD PIC dataset; HUD VMS dataset; HUD LNT data The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance C-6

Appendix C: Supplemental Exhibits

Exhibit C8: Moving to Work Agency Characteristics Compared with All Traditional Public Housing Agencies and Traditional Public Housing Agencies with More Than 750 Assisted Households, 2003

MTW Agencies

Traditional PHAs,

Traditional PHAs

Included in

2003

With More Than

Analysis, 2003

750 Assisted

Households, 2003

N=18

N=3,547

N=707

Average Number of Assisted households

6,843

772***

3,020***

Average HUD Revenue

$69,376,573

$5,968,952***

$25,046,414***

Average Cost per Assisted Household

$8,824

$5,925***

$7,148***

Average % in Public Housing

36%

62%***

34%

Average % in Housing Choice Vouchers

64%

38%***

66%

Average % in Tenant Based Vouchers

64%

38%***

66%

Average % in Project Based Vouchers

0%

0%

0%

Average Family Size

2.6

2.2***

2.4

Average Share of “Hard to Serve” Households

38%

45%

40%

Average Total Operating and Housing Assistance Spending per

Assisted Household

$6,639

$3,518***

$5,574

Average Tenant Services Expenditures per Household Served

$109

$63

$64*

Average Admin Expenses per Household Served

$1,337

$1,237

$985***

Average Reserves Balance per Household Served

$473

$307

$396

Average Population Density

5,999

2,237***

5,236

Average Median Rent Burden

28%

27%*

28%

Average Median Income of New Residents

14%

18%**

15%

Average PASS Score

25

27

26

* p<0.10, ** p<0.05, *** p<0.01

MTW = Moving to Work. PASS = Physical Assessment Subsystem. PHA = public housing agency.

Notes: Traditional PHAs include 3,547 PHAs that never joined the MTW demonstration. Large traditional PHAs include only traditional PHAs that had more than 750 assisted households in 2003. Analysis excludes agencies that joined MTW before 2003. Analysis also excludes Oakland Housing Authority, Tacoma Housing Authority, Housing Authority of the County of Santa Clara, or Housing Authority of the City of San Jose because of incomplete data on households in public housing. Not all of the PHAs are represented in the average median rent burden, average median income of new residents, and average Physical Assessment Subsystem, or PASS, score measures due to data availability. Dollar values are constant 2015 dollars adjusted using Bureau of Labor Statistics Consumer Price Index for all Urban Consumers. T-tests were performed on sample means, comparing traditional PHAs with MTW agencies. As in the regression analysis, T-tests were performed on the natural log of the following: number of assisted households, HUD revenue, cost per assisted household, total operating and housing assistance spending per assisted household, and administrative costs per assisted household.

Sources: Urban Institute analysis of HUD Public and Indian Housing Information Center dataset; HUD Financial Data Schedule dataset; U.S. Census Bureau data The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance C-7

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The Impact of the Moving to Work Demonstration on the Per Household Costs of Federal Housing Assistance D-1

U.S. Department of Housing and Urban Development

Office of Policy Development and Research

Washington, DC 20410-6000

June 2020

Document Outline

- ExecSummary

- Exhibit ES1: Moving to Work Funding Flexibility

- Exhibit ES2: The Effect of Moving to Work on HUD Cost per Assisted Household, HUD Funding, and Number of Assisted Households

- Exhibit ES3: The Effect of Moving to Work on HUD Funding and Number of Assisted Households (Percent Change)

- Exhibit ES4: The Effect of Moving to Work on HUD Cost per Household Over Time (Percent Change)

- Exhibit 1: The Moving to Work Retrospective Evaluation

- Exhibit 2: Timeline of Moving to Work Agreements

- Exhibit 3: Moving to Work Funding Flexibility

- Exhibit 4: Timeline of Moving to Work Agreements and Evaluation Period (Evaluation Sample in Bold)

- Exhibit 5: Research Questions

- Exhibit 6: Variables for Analysis and Data Sources

- Exhibit 7: Average Levels of HUD Funding and Assisted Households at Traditional Public Housing Agencies (2003–2017)

- Exhibit 8: Number of Assisted Households, HUD Funding, and HUD Cost per Household by Public Housing Agencies’ Future Moving to Work Status, 2003

- Exhibit 9: HUD Cost per Assisted Household in 2003 and 2017, by Public Housing Agency Size

- Exhibit 10: Moving to Work Agencies’ Average HUD Funding Before and After Joining Moving to Work

- Exhibit 11: Moving to Work Agencies’ Average Number of Assisted Households Before and After Joining Moving to Work

- Exhibit 12: Moving to Work Agencies’ Average HUD Cost per Household Before and After Joining Moving to Work

- Exhibit 13: The Effect of Moving to Work on HUD Cost per Assisted Household, HUD Funding, and Number of Assisted Households

- Exhibit 14: The Effect of Moving to Work on HUD Cost per Household Over Time, Using Public Housing Agencies With at Least 750 Assisted Households (2003) as a Comparison Group (Percent Change)

- Exhibit 15: The Effect of Moving to Work on HUD Funding and Number of Assisted Households (Percent Change)

- Exhibit 16: The Effect of Moving to Work on HUD Cost per Assisted Household Controlling for Program Mix, Quality and Affordability, and Household Characteristics

- Exhibit 17: Per Household Total Expenditure, Administrative Costs, Tenant Services Spending, and Operating Reserves, 2003

- Exhibit 18: The Effect of Moving to Work on per Household Total Expenditures, Administrative Costs, Tenant Services Spending, and Operating Reserves

- Exhibit A1: History of Moving to Work Agency Involvement

- Exhibit B1: Sensitivity of Estimates to Alternative Comparison Groups

- Exhibit B2: Sensitivity of Estimates to Alternative Comparison Groups

- Exhibit B3: Variables Used to Determine the Propensity Score

- Exhibit B4: Robustness Check Results

- Exhibit B5: Event Study Results for RQ1 Using Public Housing Agencies With at Least 750 Assisted Households (2003) as a Comparison Group

- Exhibit B6: Repeated Cross-Sectional Estimation

- Exhibit C1: Data Sources

- Exhibit C2: Variable Calculations From Financial Data Schedule Data

- Exhibit C3: Analysis of Assisted Households

- Exhibit C4 Research Question and Regression Specifications

- Exhibit C5: Number of Assisted Households, HUD Funding, HUD Cost per Assisted Household, Operating Reserves per Assisted Household, and Number of Local, Non-Traditional Units, by Moving to Work Agency (Agencies That Joined Moving to Work After 2003)

- Exhibit C6: Number of Assisted Households, HUD Funding, HUD Cost per Assisted Household, Operating Reserves per Assisted Household, and Number of Local, Non-Traditional Units, by Moving to Work Agency (Agencies That Left Moving to Work After 2003)

- Exhibit C7: Households Assisted by Moving to Work Agencies, by Program, 2003 to 2017

- Exhibit C8: Moving to Work Agency Characteristics Compared with All Traditional Public Housing Agencies and Traditional Public Housing Agencies with More Than 750 Assisted Households, 2003

- Executive Summary

- Introduction

- Background

- Moving to Work Funding and Fund Flexibility

- Prior Research on Moving to Work and the Cost of Housing Assistance

- Housing Choice Voucher Administrative Costs

- Housing Choice Voucher Rental Payment Subsidies

- Public Housing Operations

- HUD Funding Levels

- Reserves

- Total Costs per Assisted Household

- Limitations of Prior Research

- Research Questions and Research Design

- Research Design

- Research Questions

- Research Question 1: What is the effect of Moving to Work status on HUD cost per assisted household?

- Research Question 2: Do changes in program mix, housing quality and affordability, or the characteristics of assisted households explain the effect of Moving to Work status on HUD costs per assisted household?

- Research Question 3: Does Moving to Work status affect agencies’ total per household operating and housing assistance spending, or per household spending on program administration, tenant services, or operating reserves?

- Data Collection and Assembly

- Variable Calculations

- HUD Cost per Assisted Household

- Measures of the Type and Quality of Housing Assistance

- Measures of Public Housing Agency Spending

- External Cost Drivers

- Sample Construction

- Identifying the Comparison Group

- Comparing Moving to Work Agencies with Traditional Public Housing Agencies

- Estimation Methods

- Estimation Method for Research Question 1: What is the effect of Moving to Work status on cost per assisted household?

- Understanding the Timing of Changes in Cost per Household

- Estimation Method for Research Question 2: Do changes in program mix, housing quality and affordability, or the characteristics of assisted households explain the effect of Moving to Work status on HUD costs per assisted household?

- Estimation Method for Research Question 3: Does Moving to Work status affect agencies’ total per household operating and housing assistance spending, or per household spending on program administration, tenant services, or operating reserves?

- Robustness Checks

- Findings

- Public Housing Agency Trends Before and After Joining Moving to Work

- Effect of the Moving to Work Demonstration on HUD Cost per Assisted Household

- Effect of the Moving to Work Demonstration Controlling for Program Mix, Housing Quality and Affordability, and Household Characteristics

- Effect of the Moving to Work Demonstration on per Household Spending by Public Housing Agencies

- Discussion

- Limitations

- Conclusion

- Appendix A: History of the Moving to Work Demonstration

- Appendix B: Additional Analyses

- Alternate Size Thresholds for Comparison Traditional Public Housing Agencies

- Robustness Checks

- Using Propensity Score Matching

- Multiple Imputation

- Weighting Counts of Local, Non-Traditional Housing

- Public Housing Agency-Specific Time Trends

- Excluding Controls for Median Rent and Government Wage

- Event Study

- Repeated Cross Sectional Estimates

- Appendix C: Supplemental Exhibits

- Appendix D: References

Table of Contents

ExecSummary

Exhibit ES1: Moving to Work Funding Flexibility

Exhibit ES2: The Effect of Moving to Work on HUD Cost per Assisted Household, HUD Funding, and Number of Assisted Households

Exhibit ES3: The Effect of Moving to Work on HUD Funding and Number of Assisted Households (Percent Change)

Exhibit ES4: The Effect of Moving to Work on HUD Cost per Household Over Time (Percent Change)

Exhibit 1: The Moving to Work Retrospective Evaluation

Exhibit 2: Timeline of Moving to Work Agreements

Exhibit 3: Moving to Work Funding Flexibility

Exhibit 4: Timeline of Moving to Work Agreements and Evaluation Period (Evaluation Sample in Bold)

Exhibit 5: Research Questions

Exhibit 6: Variables for Analysis and Data Sources

Exhibit 7: Average Levels of HUD Funding and Assisted Households at Traditional Public Housing Agencies (2003–2017)

Exhibit 8: Number of Assisted Households, HUD Funding, and HUD Cost per Household by Public Housing Agencies’ Future Moving to Work Status, 2003

Exhibit 9: HUD Cost per Assisted Household in 2003 and 2017, by Public Housing Agency Size

Exhibit 10: Moving to Work Agencies’ Average HUD Funding Before and After Joining Moving to Work

Exhibit 11: Moving to Work Agencies’ Average Number of Assisted Households Before and After Joining Moving to Work

Exhibit 12: Moving to Work Agencies’ Average HUD Cost per Household Before and After Joining Moving to Work

Exhibit 13: The Effect of Moving to Work on HUD Cost per Assisted Household, HUD Funding, and Number of Assisted Households

Exhibit 14: The Effect of Moving to Work on HUD Cost per Household Over Time, Using Public Housing Agencies With at Least 750 Assisted Households (2003) as a Comparison Group (Percent Change)

Exhibit 15: The Effect of Moving to Work on HUD Funding and Number of Assisted Households (Percent Change)

Exhibit 16: The Effect of Moving to Work on HUD Cost per Assisted Household Controlling for Program Mix, Quality and Affordability, and Household Characteristics

Exhibit 17: Per Household Total Expenditure, Administrative Costs, Tenant Services Spending, and Operating Reserves, 2003

Exhibit 18: The Effect of Moving to Work on per Household Total Expenditures, Administrative Costs, Tenant Services Spending, and Operating Reserves

Exhibit A1: History of Moving to Work Agency Involvement

Exhibit B1: Sensitivity of Estimates to Alternative Comparison Groups

Exhibit B2: Sensitivity of Estimates to Alternative Comparison Groups

Exhibit B3: Variables Used to Determine the Propensity Score

Exhibit B4: Robustness Check Results

Exhibit B5: Event Study Results for RQ1 Using Public Housing Agencies With at Least 750 Assisted Households (2003) as a Comparison Group

Exhibit B6: Repeated Cross-Sectional Estimation

Exhibit C1: Data Sources

Exhibit C2: Variable Calculations From Financial Data Schedule Data

Exhibit C3: Analysis of Assisted Households

Exhibit C4 Research Question and Regression Specifications

Exhibit C5: Number of Assisted Households, HUD Funding, HUD Cost per Assisted Household, Operating Reserves per Assisted Household, and Number of Local, Non-Traditional Units, by Moving to Work Agency (Agencies That Joined Moving to Work After 2003)

Exhibit C6: Number of Assisted Households, HUD Funding, HUD Cost per Assisted Household, Operating Reserves per Assisted Household, and Number of Local, Non-Traditional Units, by Moving to Work Agency (Agencies That Left Moving to Work After 2003)

Exhibit C7: Households Assisted by Moving to Work Agencies, by Program, 2003 to 2017

Exhibit C8: Moving to Work Agency Characteristics Compared with All Traditional Public Housing Agencies and Traditional Public Housing Agencies with More Than 750 Assisted Households, 2003

Executive Summary

Introduction

Background

Moving to Work Funding and Fund Flexibility

Prior Research on Moving to Work and the Cost of Housing Assistance

Housing Choice Voucher Administrative Costs

Housing Choice Voucher Rental Payment Subsidies

Public Housing Operations

HUD Funding Levels

Reserves

Total Costs per Assisted Household

Limitations of Prior Research

Research Questions and Research Design

Research Design

Research Questions

Research Question 1: What is the effect of Moving to Work status on HUD cost per assisted household?

Research Question 2: Do changes in program mix, housing quality and affordability, or the characteristics of assisted households explain the effect of Moving to Work status on HUD costs per assisted household?

Research Question 3: Does Moving to Work status affect agencies’ total per household operating and housing assistance spending, or per household spending on program administration, tenant services, or operating reserves?

Data Collection and Assembly

Variable Calculations

HUD Cost per Assisted Household

Measures of the Type and Quality of Housing Assistance

Measures of Public Housing Agency Spending

External Cost Drivers

Sample Construction

Identifying the Comparison Group

Comparing Moving to Work Agencies with Traditional Public Housing Agencies

Estimation Methods

Estimation Method for Research Question 1: What is the effect of Moving to Work status on cost per assisted household?

Understanding the Timing of Changes in Cost per Household

Estimation Method for Research Question 2: Do changes in program mix, housing quality and affordability, or the characteristics of assisted households explain the effect of Moving to Work status on HUD costs per assisted household?

Estimation Method for Research Question 3: Does Moving to Work status affect agencies’ total per household operating and housing assistance spending, or per household spending on program administration, tenant services, or operating reserves?

Robustness Checks

Findings

Public Housing Agency Trends Before and After Joining Moving to Work

Effect of the Moving to Work Demonstration on HUD Cost per Assisted Household

Effect of the Moving to Work Demonstration Controlling for Program Mix, Housing Quality and Affordability, and Household Characteristics

Effect of the Moving to Work Demonstration on per Household Spending by Public Housing Agencies

Discussion

Limitations

Conclusion

Appendix A: History of the Moving to Work Demonstration

Appendix B: Additional Analyses

Alternate Size Thresholds for Comparison Traditional Public Housing Agencies

Robustness Checks

Using Propensity Score Matching

Multiple Imputation

Weighting Counts of Local, Non-Traditional Housing

Public Housing Agency-Specific Time Trends

Excluding Controls for Median Rent and Government Wage

Event Study

Repeated Cross Sectional Estimates

Appendix C: Supplemental Exhibits

Appendix D: References