Three-City Study: Housing Subsidies Aid Welfare to Work

Contact: Doug Gavel
Phone: 617-495-1115
Date: July 16, 2002

CAMBRIDGE, MA – A new study, co-authored by Kennedy School of Government researcher James Quane, concludes that housing subsidies can significantly lessen the financial strain on low-income families and assist in the transition from welfare to work. The report is based on data collected from low-income African American, Hispanic and non-Hispanic white families with children in poor and near-poor neighborhoods in Boston, Chicago, and San Antonio.
Since Congress enacted welfare reform legislation in 1996, the number of welfare re cipients has declined by more than 50 percent. According to the report, however, many families considered to be welfare reform “success stories” are still struggling to make ends meet because of high housing costs.
Among the major findings in the study:
Sixty-two percent of families without housing assistance who recently left the welfare rolls are severely cost burdened, meaning they spend more than 50 percent of their total household income on the cost of housing. In comparison, far fewer subsidized families, 24 percent, who recently left the welfare rolls, experience a severe housing cost burden.
The situation for families without housing assistance who remain on welfare is just as difficult. Fifty-two percent of these families indicate they spend more than 50 percent of their total household income on housing costs.
A third of those who recently left the welfare rolls and who do not receive housing assistance say they are unable to make ends meet from month to month compared to 19 percent of those who do receive a housing subsidy.
Although housing subsidies reduce financial burdens on low-income families, the data reveal that these families often live in the most disadvantaged neighborhoods where crime and related problems abound.
“Clearly, housing subsides such as public housing or housing vouchers help low-income families offset the high cost of rents in cities where affordable housing is fast disappearing,” says James Quane, associate director of the Joblessness and Urban Poverty Research Program at the Kennedy School’s Malcolm Wiener Center for Social Policy. “What is disconcerting are the tradeoffs many of these families have to make. Often subsidized housing is located in high poverty neighborhoods where parents are fearful for their children’s safety. Poor families without a subsidy appear to live in marginally better neighborhoods, although the financial costs for doing so are overwhelming.
“It’s difficult to imagine how people who recently left the welfare rolls without a housing subsidy can ever be financially stable when faced with such overwhelming housing costs,” he concludes.
The study makes several recommendations, including:
Increasing the investment by local housing authorities in the housing needs of low-income families, particularly by increasing the availability of decent public housing or portable housing vouchers.
Expanding the availability of federally supported housing programs among current welfare recipients who are preparing to leave the welfare rolls and those who recently left to help improve their chances of making a successful transition.
Expanding the availability of programs that assist subsidized movers to relocate to more stable, mixed-income neighborhoods.
The report was prepared in conjunction with Bruce H. Rankin, assistant professor, Koc University, Istanbul, Turkey; and Pamela Joshi, research associate at the Kennedy School’s Malcolm Wiener Center for Social Policy.
Welfare, Children, and Families: A Three-City Study is an ongoing research project designed to monitor the consequences of welfare reform for the well being of children and families. For more information on the study, access the project web site:http://www.jhu.edu/~welfare/

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