HUD May Impose New Work Requirements for Public Housing Residents

According to a draft budget document obtained by CityLab, HUD may institute work requirements for public housing residents and raise rents for about 4 million recipients of federal housing assistance. According to CityLab, HUD would not confirm or deny the draft amendment. The document sets forth line-by-line text changes to the U.S. Housing Act of 1937, the law that first established federal housing aid, plus adjustments to subsequent acts in 1959 and 1990.

The proposed changes to longstanding federal law on rental assistance would allow public housing agencies to introduce minimum employment requirements for eligibility for families, according to the draft rent reforms. In order to qualify for public housing or maintain their residence, beneficiaries may be asked to demonstrate proof of employment.

The new draft language caps the work requirement at 32 hours per week on average per adult, excluding elderly or disabled families. Both active employment and vocational training would qualify. The new legislation would give states the option to make these work requirements mandatory, introducing administrative burdens such as monitoring and enforcement for agencies that might not set such requirements on their own.

Also, the draft would alter the formula for determining the rent that residents of federally subsidized housing should pay. With some exceptions, a family would need to pay 35 percent of its gross income, up from 30 percent. Or a family might pay 35 percent of the amount earned by working 15 hours a week at federal minimum wage. This provision works out to an effective minimum rent of $152.25 for low-income residents.

HUD has introduced pilot programs that do allow owners to raise rents for low-income families. Under a pilot program called Moving To Work, which is currently still in trial, some housing agencies can set guidelines that gradually raise rents for families who receive assistance. However, when Moving To Work agencies increase rents, the extra income goes back into the program, which is meant to help families achieve self-sufficiency. The new draft reform would allow owners to pocket the difference.

The draft amendment also includes smaller changes. It determines rent by gross income, not net income, meaning it eliminates any deductions for expenses; so high costs related to healthcare or childcare would no longer count as factors. The HUD proposal also requires all households to pay, at minimum, $50 toward the rent including the elderly and disabled.