The effects of U.S. low-income housing programs on recipient consumption and wellbeing

This paper is the first to provide evidence on several key aspects of the comparative performance of the major types of housing assistance in the U.S. – HUD’s public housing and housing voucher programs, its largest programs that subsidize the operation of privately owned housing projects, and a set of other programs dominated by low-income housing tax credits. The aspects studied are the effects of the programs on the overall desirability of the housing and neighborhoods occupied by their participants, their aggregate consumption of non-housing goods and services, their net benefit to the decisionmakers in these households, the taxpayer cost incurred to provide these benefits, and the difference in mean benefits across recipients and eligible households with different demographic characteristics. The primary data is from the 2013 American Housing Survey national sample that identifies the type of housing assistance received by most households. The results provide important evidence on a broad set of short run costs and benefits of major housing programs. We find that all forms of housing assistance led to a much greater percentage increase in recipient consumption of non-housing goods than in their consumption of housing services. The difference is most pronounced for HUD’s public housing program. The benefit to the recipient household head per dollar of taxpayer cost is much larger for the housing voucher program than for HUD’s public housing program or its largest programs that subsidize the operation of privately owned projects. It is even smaller for households in tax credit units without HUD rental assistance. The results provide important evidence on a broad though not comprehensive set of short run costs and benefits of major housing programs. In doing so, we provide a rich basis for continued analysis of the effects of housing assistance.