Whenever government offers services or a subsidy to the poor, the underlying goal is to help those people leave poverty. Policymakers try to design the aid to last just long enough for people to get back on their feet. Too often, government data don't show what happens to clients once they leave a program. But new research from the Urban Institute illustrates the challenges that await former recipients of housing assistance, especially those who lose the benefits before increasing their earnings.

A report released Sept. 22 recommends that public officials watch for warning signs that a family is close to losing its assistance. Without that support, people are likely to lean on government in ways that will be more expensive, such as regular emergency room visits and homeless shelter stays. "It has big implications for local government," said Susan Popkin, a co-author of the report. "Once [clients are] off assisted housing, they're entirely dependent on whatever other local resources there are."

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To understand what happens to people once they leave housing assistance, Urban Institute researchers examined data from a 15-year federal demonstration project in five cities -- Baltimore, Boston, Chicago, Los Angeles and New York -- called Moving to Opportunity. They found that about half the participants who left the program left for "negative" reasons, such as being evicted or terminated from the program for violating rules. (The report cautions that the sample isn't representative of all households on housing assistance, but rather public housing residents in large urban areas.)

Perhaps not surprisingly, those individuals ended up in far worse shape than those that left for positive reasons, such as homeownership and increased income. Researchers found:

  • They had less than half as much median income.
  • Fewer perceived their current housing to be good or excellent.
  • Fewer rated their health as good or better.
  • A higher proportion said they had been homeless at some point.

People who left for negative reasons also reported that they had roughly the same median income as those on assistance ($13,950 vs. $13,153), yet paid more for gas, electricity and rent or mortgage payments. About half, or 52 percent, of negative leavers said they spent more than half their income on housing, compared with 41 percent for those on assistance. Negative leavers reported higher rates of homelessness or living in overcrowded housing than those still on assistance. "They're trying to subsist at the same income as before, but without the assistance," said Taz George, a co-author of the report.

George noted that even for those that left for positive reasons still struggled with the higher living costs. In fact, a larger number of positive leavers reported debt above $5,000 for medical bills and credit cards than negative leavers or those still on assistance. In follow-up qualitative interviews in two cities, Boston and Los Angeles, the report's authors also found that people who moved off assistance because of homeownership struggled to keep up with mortgage payments and saw the value of their properties plummet during the recession.

Ultimately, the report concludes, cities and states should work with the federal government to identify households with late rental payments and no regular earner because they are at the highest risk of losing their housing assistance. Officials could connect these at-risk households with financial counseling, budgeting assistance and links to other community services, Popkin said. The report's policy recommendations echo other municipal aid programs already underway, such as a National League of Cities pilot program that provides support to households that are late in paying water utility bills -- another sign of being in financial distress.