National Housing Law Project Housing Law Bulletin

Introduction

The National Housing Law Project recently surveyed officials of eight large housing authorities/1/ to find out their perceptions of the impact of recent welfare changes/2/ on their residents. We wanted to know how PHAs are modifying their programs and policies to ensure positive results for both tenants and PHAs.

While anecdotal, this article provides a glimpse into how, in the relatively early stages of the new welfare law’s implementation, a few housing authorities are trying to provide more concrete assistance to residents transitioning to work. In addition to seeking the PHAs’ general impressions of the effects of the welfare changes, we sought quantitative information in the following areas:

• Characteristics of each PHA’s welfare population (e.g., percentage of total population and of family units and other unique factors affecting their transition to work);
• Specific programs and policies contemplated or implemented to aid families moving to work (including needs assessments and collaboration with resources in the community);
• General information on admissions policies, goals and objectives and any revisions made to them in response to the new welfare law, particularly whether PHAs have changed their admissions policies relating to welfare recipients;
• Rent policies, including the impact of welfare sanctions, income disregards, and minimum and ceiling rents.

Most of the PHAs surveyed were forthcoming and cooperative in describing their current efforts./3/ However, we were unable to obtain responses to every inquiry from each PHA surveyed.

Percentage of residents receiving welfare. For all the rhetoric about transforming public housing to mixed-income communities, it still remains the houser of principally very low-income persons. Despite reportedly significant reductions in the welfare rolls where several of the responding PHAs operate, the public housing population continues to include a large proportion of welfare recipients.

All of the housing agencies surveyed are classified as large (managing more than 1,250 conventional public housing units)./4/ The percentage of welfare recipients in their tenant populations ranges from 13 percent in Oklahoma City (where the state’s overall welfare roll has been reduced by 32 percent) to over 90 percent in DC.

Variations in the percentage of welfare recipients existed before and after adoption of the welfare changes and may be attributable to locally driven factors, for example, a higher percentage of elderly units than family units and the relative health of local economies./7/

Elderly families on TANF. Despite the fact that a number of elderly families support themselves with Social Security or SSI payments, some households may also receive Temporary Assistance to Needy Families (TANF) income. This occurs typically when an elderly person receives welfare to support an eligible dependent grandchild. Baltimore estimated that as many as a quarter of its elderly households may have TANF income. Chicago reported that, of its 8,439 senior households, 593 receive welfare. DC did not provide exact figures, but has recognized the special needs of this population in its redevelopment programs, for example, its proposal to create a bungalow community with HOPE VI funds. DC’s approach could serve as an important model not only by fostering important opportunities for building community among a segment of the public housing population with similar needs, but also by permitting better targeting of limited resources.

Despite the fact that many welfare recipients are still housed in public housing, at least two of the responding PHAs reported fairly significant changes in income derived from residents’ wages. Although some of the income is from newly admitted families, more often the change reflected earnings increases for current families moving off welfare.

Two of the PHAs, Milwaukee and St. Paul, reported a notable shift over the past few years in the percentage of resident income derived from wages.

Milwaukee has had relatively longer experience than most PHAs with resident employment issues, in part, due to changes in Wisconsin’s welfare law in the mid-1990s./8/ Its positive net result, increased resident income, represents not only increased earned income as a percentage of all PHA residents’ income, but also increased income per household./9/

Milwaukee staff observed that resident wage increases vary by development. The HOPE VI site is a "wage leader" (presumably, in number of employed persons or households). For that development, the percentage of residents with income from wages increased from 17 percent of the total PHA population in 1994 to 51 percent of the total population in December 1997. Since some of this change reflects wage income generated by newly admitted families, Milwaukee also provided this data for families in which the head of household was the same in both reporting periods, 1996 and 1998 and found that their income had more than doubled as well./11/

Milwaukee’s experience, in which resident income from wages almost doubled in 32 months, is somewhat unique. For example, Wisconsin’s welfare program commenced -- and hence welfare time limits hit -- earlier than in a number of other jurisdictions. Compared to some other jurisdictions, its local economy is also strong. However, the work for which many welfare recipients are qualified may, by its nature, be dead-end and/or short-term, and often does not pay a living wage. Given Wisconsin’s "workfirst"/12/ philosophy, it remains to be seen whether residents’ long-term self sufficiency efforts can be sustained where job placement in any job is the focus, and education and career training are secondary.

Oklahoma City staff believe that among the most perceptible results over the past two years of the new welfare provisions is increased PHA rental income. This was attributed in large part to increased household incomes as a result of more people going to work, and not so much the result of incoming working families./13/ PHA staff also cite as among potential reasons for increased rental income the state’s low unemployment rate of 3 percent./14/ Fluctuating resident incomes have nevertheless been a recurring theme for Oklahoma City due to the nature of jobs that residents are able to get. The PHA appears to rely heavily upon its computer connection to the state welfare department to verify a tenant’s report of welfare benefit reductions.

St. Paul reported that, in 1997, wage income of approximately $6 million represented 32 percent of total family income of $19 million. By 1998, the percentage of income derived from wages had increased to 39 percent, $7.8 million of $20 million total family income.

By contrast, in DC for January 1997, 12 percent of resident household income came from wages. By May 1997 (admittedly only four months later, but the last date for which data was reported), earned income had risen up to 13 percent. Despite this increase, long-time DC personnel indicate a general overall decline in income.

As part of the survey, we wanted to learn what the PHAs perceived their residents’ supportive services needs to be, how they have identified and are addressing those needs, and what collaborations they rely on to meet their goals.

Most respondents consider targeted and ongoing resident services, ranging from job search assistance to more intensive training and supportive services, as indispensable groundwork to resident employment. These PHAs appear to recognize that they possess neither the expertise nor the resources to provide the services on their own. It appears that those with the most success have aggressively pursued new and collaborative approaches to providing services -- including initial needs assessments and ongoing case management -- for their residents. It is critical that PHAs share with each other replicable models for attracting targeted services.

Identification of resident needs and programs. The responding PHAs employ a variety of approaches to identify and meet residents’ needs. These range from resident surveys to intensive case management, including needs assessment, to direct and collaborative supportive services. All of the responding PHAs had in place programs to assist residents making the transition from welfare to work, although the scope of the efforts differed. The increased stature and visibility of resident services programs are fueled by the PHAs’ self-interest in coordinating non-housing activities to assist their residents in getting and keeping jobs. Clearly, PHAs are well aware that their own economic future is dependent upon resident employment.

If any universal public housing resident need emerges, it appears to be adequate child care, including care provided at times compatible with nontraditional work schedules. A number of responding PHAs also mentioned the importance of the PHA as initial employer in order to provide residents with training, skills and work experience that will enhance their marketability. But the identified long-term goal of residents is to move to jobs that will provide affordable long-term health coverage once their benefits under TANF end.

Not unexpectedly, several respondents reported the most ambitious supportive services activities at HOPE VI sites which are flush with funding for such purposes. The targeting of scarce resources to these developments is troubling, however, because far less than half of all units that become available under HOPE VI are reserved for very low-income families. Means must be devised to assure supportive services for the larger public housing population. In fairness, some PHAs without HOPE VI or other public housing resources have forged important relationships with government and private institutions to serve clients who fit the public housing resident profile.

Providing residents work experience and references as they transition to the workplace is perhaps one of the most concrete ways a housing authority can assist their moves to self-sufficiency. PHAs are often the initial employer for residents who are entering the workforce for the first time. Some housing authorities, such as Jersey City, have a long history of employing residents in positions ranging up to the highest levels of management.

DC is also using its own resources to set an example of how a PHA can assist its residents by creating training and employment opportunities. It has retained staff to assure that all contractors hired by the PHA employ residents and that contracts are rewritten to make resident employment a condition. The housing authority has recently begun to contract directly with a few residents who have their own landscaping and janitorial businesses. In cooperation with two local universities, the PHA is creating a business development program. DC staff believe the major advantage of contract work provided by the PHA for residents is to provide some work experience (though typically not long-term) and a job reference. In this way, residents become more marketable to other employers.

In addition to a dearth of employment opportunities, Chicago sees residents’ lack of knowledge of the "work culture" as an obstacle. The housing authority offers a two-week course on the "work environment and work ethics" in addition to basic skills testing in order to address these needs. More extensive assistance — including vocational assessments and personal development and family planning — can be arranged for those in need of additional help through the PHA’s family self-sufficiency program. Residents are also offered training through work experience programs within the housing authority. The training includes basic work skills and workforce etiquette in areas from clerical to basic maintenance and repairs.

To further assist residents seeking to enter the workforce, Chicago provides resident access to clothing banks and transportation stipends (usually supplied by the state welfare agency). Child care is also provided to assist parents needing coverage during their commute. Residents are either directed to available child care services in the community or space is made available at the public housing sites for service agencies to provide child care.

Harrisburg is using a $500 million, three-year Economic Development and Social Services (EDSS) grant to aid residents moving into the work world. With county assistance, the housing authority rehabilitated a full purpose family center where a comprehensive range of services is offered. The PHA’s major partner is the local community action agency which will use $430 million of the $500 million grant over five years to coordinate and administer resident programs. The PHA has forged relationships with additional providers who offer on-site services. Presumably the remaining $70 million will be used for a combination of administrative costs and additional services.

In Jersey City, information gathered as a result of PHA-wide case management identified transportation as less of a critical issue for its residents, perhaps because of the availability of bus tokens for welfare recipients and because of the superior regional access in the New York-New Jersey corridor. Similarly, child care, while still identified by some as a concern, was also reported as less problematic than might have been anticipated, primarily because of the extension of child care under TANF for two years following the end of monetary benefits. However, while child care vouchers may be available to TANF families, case workers do not always inform families of their eligibility. In addition, the lack of flexible hours for child care was identified as an obstacle for some residents, as was dissatisfaction with the child care that is available at any given time or site. In connection with its child care activities, Jersey City is exploring providing residents with child care certification training.

Jersey City did an additional assessment of resident needs through a HUD-ordered survey only at its HOPE VI site, to which 70 percent of the residents responded. Overall, 18 percent of respondents cited lack of training and education as the biggest impediments to employment. An additional 16 percent found the lack of transportation a barrier, and 17 percent cited the lack of adequate child care. The local board of education has agreed to open a pre-school/kindergarten at the HOPE VI site. Other important issues identified by the HOPE VI site residents included child and parent health issues, pre-skills training, and mental health services.

Oklahoma City has identified upgrading education, including literacy and English as a second language (ESL) programs, jobs with health benefits, and day care as among the most pressing needs of job-bound residents. Currently, the PHA relies upon other agencies to identify resident needs but is in the process of reevaluating the effectiveness of this strategy. Most supportive services provided by the PHA were in place prior to welfare reform, with the exception of its literacy center that began operations more recently. To fund its education and ESL programs, the housing authority relies upon modest funding from its Public Housing Drug Elimination Program and "Weed ‘n Seed" grants./15/ Eighty children receive tutoring services each week at one site. Services are provided in a 10,000-square-foot community center located at one development. The housing authority provides transportation to the site for children coming from other PHA developments. A little less than half the space is used for a Head Start program run by the local community action agency. The remaining space is for on-site service programs operated by the state university and the Salvation Army. In addition, the PHA operates a drug-free 50-unit development for persons transitioning from substance abuse rehabilitation programs.

St. Paul has identified 12 specific resident needs to be addressed, including:

• Coordinated case management;
• Customized training;
• Easily accessible, affordable child care;
• Stable rents;
• Finding employers willing to work with social service providers and the public sector, and willing to pay a living wage, provide training and assist with removing barriers such as child care and transportation;
• Training for residents in problem solving and juggling work and family responsibilities;
• Counseling/mentoring/support groups;
• Job advancement opportunities; and
• Transportation.

Job competition is currently less of a barrier for St. Paul residents because of the strong local economy. St. Paul has determined that a longer term need exists to equip residents with the skills and support they will need not only in order to become employed, but also to retain and advance in their jobs. It has not yet begun to formally address job advancement opportunities since many residents are just entering the workforce.

Despite its implementation of a workfirst policy, DC staff report that local regulations require welfare recipients to wait to be contacted by their caseworker rather than to initiate contact. This procedure has apparently slowed down the pace of change for residents and has contributed to "less of a sense of urgency" because residents have not observed their neighbors cut off of benefits./16/

Staff note that this slow pace has contributed to a continuing climate of uncertainty among residents about welfare requirements. Soon after adoption of the new federal welfare law, in an effort to address some of the confusion, DC sponsored educational programs to explain TANF and its work-related requirements.

DC has apparently decided to target its initial efforts on those residents most likely to secure employment. It established comprehensive case management for residents who are not working and who may need limited assistance in order to become employable. Particularly due to DC’s high TANF-recipient population (90 percent), the housing authority’s motivation, of course, is not only to assist residents transitioning off welfare, but also to see stable and even increased PHA revenues over time.

Because of statutory limitations on the percentage of TANF recipients that may be engaged in activities that do not constitute actual employment -- e.g., getting a GED -- there are insufficient funds available for comprehensive case management services. The PHA projects an annual cost of $5,000-$7,000 per person for case management services for just those residents who are relatively better prepared to enter the workforce.

DC staff suggested that the HOPE VI sites offer the most flexibility to provide "soft side" support services. At one such site, people from the surrounding community, including PHA residents, were hired for construction work on PHA projects. Literacy and substance abuse counseling as well as construction training were provided. At a second HOPE VI site, a local community development corporation is providing similar services.

Collaborative efforts. Some of the respondents are financially constrained in their ability to provide supportive services and rely heavily upon case management services provided by other private and public entities with expertise in and responsibility for serving the same population. PHA personnel often function as coordinators to assist residents in accessing services available elsewhere in the community rather than as direct providers of those services. Sometimes assisting the PHA population can aid the outside agency in meeting is own service goals.

Baltimore staff recognize that the PHA and the wider community are being forced into more extensive collaboration to develop job skills and provide supportive services to residents. Harrisburg similarly sees an altered role for PHAs in affirmatively "seeking out social partners"and the enhanced importance of resident services divisions within housing authority operations.

Chicago works with outside public and private agencies that provide training linked to specific jobs. One focus has been technology, and the PHA’s Family Investment Centers offer hands-on computer and computer repair training for job opportunities in this area. Chicago is also working with the city colleges network to provide expanded academic and vocational education opportunities for residents. Where educational deficiencies are identified, the PHA works with residents to develop a "Personal Instruction Curriculum" and to help residents compete for and secure tuition assistance and scholarships.

In addition to collaborations designed to increase resident educational opportunities, Chicago works with other entities. Goals are established with the primary building contractor on PHA rehabilitation and redevelopment projects to provide training and job placements for residents. Chicago partners with city agencies responsible for providing both direct and indirect services to residents. Nonprofit agencies are offered space in exchange for on-site resident services. Chicago is also instituting a peer counselor program in some developments, where residents run seminars and provide guidance to other residents with a focus on family self-sufficiency.

Chicago staff see the lack of knowledge of the job market and employment opportunities as the biggest impediment to resident employment. Its staff reports maintaining a relationship with companies and fostering job partnership programs as well as job referral services. The housing authority partners with the City of Chicago’s workforce development (employment) department to link residents to employers.

Jersey City provides referrals to community resources for residents needing substance abuse and mental health counseling. Currently, the PHA is negotiating with community agencies to obtain special priorities for its residents. Such efforts have been hampered in the past, however, partly due to the inability or unwillingness of local service providers to target services to public housing residents.

Milwaukee described the ambitious social service activities it is providing in its five family developments. Each development has an employment agency representative on site as a result of a PHA contract with the state under W2, Wisconsin’s welfare reform program. In addition, a major nonprofit lead agency or youth organization such as the Boys and Girls Club and the YMCA is based at each family site. Two of the sites have a vocational education or technical school representative and computer labs. Child care providers and after school programs operate in each family development. Three of the five developments have a food pantry for emergency services. Each family site also has either a health clinic or medical providers. The HOPE VI site makes a nurse practitioner or physician available to residents on a weekly basis.

Milwaukee tracks services provided to each individual resident, and residents have a right of first refusal for services offered by the nonprofit that operates on site. Although the service providers pay rent for the space they use, the PHA has devised a formula under which the rent is reduced as increased numbers of public housing households are served.

St. Paul is also exemplary for its aggressive and collaborative efforts with a range of agencies to provide services to residents at its various housing sites. These activities include seeking funding, developing program goals and preparing contracts for the providers’ use of space in the PHA’s community centers, including the operation of several employment support programs.

Many of the residents’ needs at one St. Paul development, the 298-unit Mt. Airy, are addressed through programs coordinated by the Jobs Plus program./17/ For case management services, Jobs Plus employment counselors, working in concert with the residents and state and county welfare workers, develop residents’ goals statements and plans. Residents participating in these kinds of activities can receive credit toward welfare work-related requirements. The housing agency coordinates with education providers and private sector employers to provide short-term training opportunities and job placement assistance at the conclusion of training. In order to identify willing employers, Jobs Plus works with the county in several efforts, including the Community Employment Partnership and the Employment HUB centers.

Although available slots are limited, Jobs Plus also provides on-site child care. However, the mandatory co-payment has been prohibitive for some residents, and the waiting list is long for child care with fees based on ability to pay.

To address the need for training in problem solving, Jobs Plus offers training and support groups, assists with the development of employment plans and provides regular counseling sessions. In addition, the housing agency has identified additional resources that provide problem-solving, parenting and budgeting skills training. Through Jobs Plus, the housing agency has provided access to mental health counselors and social service programs offering mentoring and specialized support groups, for example, to address gender-based issues as well as problems faced by particular ethnic groups. St. Paul staff described the desperate fear of the future among some residents with cultural and language barriers compounded by work and life skills deficiencies./18/

HUD’s Step-up program, which provides jobs and job training opportunities to public housing residents on HUD-assisted construction, as well as other more localized employment support programs, is also operating within the agency. For example, two of the four community centers located in family developments and operated by the PHA offer job search and training facilities along with computer labs.

In addition to the agencies noted above, St. Paul partners with the St. Paul Schools STEP (Support for Training and Employment) program (as distinct from the "Step up" program discussed earlier) to operate a computer lab and job center in its Family Investment Center which serves all sites. A local foundation provides child care at PHA family centers. Among the other agencies relied upon to provide services are Catholic Charities, ethnic-specific agencies, the WIC program, health centers, St. Paul Police family support services, the Boys and Girls Club, and the City Parks and Recreation Department. The HUD Tenant Opportunities Grant is also a resource for resident services.

Almost all the PHAs have as an objective the creation of mixed-income communities. Helping current residents move from welfare to work is a means to that end as well as an objective in itself. Most PHAs see admissions policy changes as critical to transforming PHA communities. Several have or plan to adopt local preferences for employed persons. Some of the responding housing authorities report altering and enhancing their screening criteria in ways that, in their view, will help stabilize public housing communities. Milwaukee seems to have by far the most stringent admission standards, with its startling 87-percent rejection rate.

Many PHAs nationwide deferred making significant changes to their admissions policies until final adoption of the public housing legislation./19/ Several of the responding PHAs have begun a process of revisiting their admissions policies, motivated by the greater flexibility afforded under the new law as well as by the need to generate additional rental income in the face of reduced or stagnant operating subsidies.

Baltimore’s Self Sufficiency Task Force considered an overhaul of the current admissions system. The task force chair reported that one objective is creation of a "middle class" in public housing through a continuum moving from shelter to transitional housing to public housing with homeownership as a goal./20/ At the time of the survey, applicants were chosen on a strictly chronological basis. Only the residency preference was used for Baltimore City families, most of whom have incomes below 50 percent of area median./21/ Although Baltimore may ultimately develop local preferences that favor working families, staff acknowledged that many such working families would still fall below 30 percent of area median. As a result, the housing authority expects to continue to serve households which, while not welfare recipients, nevertheless are in need of assistance despite the PHA’s acknowledged desire to create a public housing "middle class." Baltimore’s Step-up program director would like to move to a preference that makes participation in an approved self-sufficiency activity a condition of admission for any applicant receiving TANF.

Chicago’s short-term goal is to facilitate new admissions for working families and to help current residents make the transition from welfare to work. Its long-term goal is to see public housing move from being the housing of last resort to vital, mixed-income communities. Chicago eliminated federal preferences in 1996 when first authorized to do so by the appropriations act. However, as of the time of the survey in the fall of 1998, the housing authority had not replaced the federal preferences with locally established ones. The director of admissions has recommended adoption of an employment preference but at the time of the survey, applicants were still being selected from the waiting list on a first-come, first-served basis. Within a few months, Chicago may adopt a local preference reserving some percentage of units for employed persons. Staff pointed out that, as a result of several local court orders,/22/ the authority must move to mixed-income use for some developments, and up to half the units in some developments have been reserved for that purpose.

Harrisburg’s focus is getting and keeping creditworthy residents who can pay more rent, and encouraging people to work by bringing services to them that will help in that effort. It has instituted an employment preference as well as one for persons enrolled in job training.

Milwaukee is seeking to achieve income mix development by development as a way of creating healthier, sustainable communities. It states its commitment to achieve income mix first through assisting current residents, but appears also to have instituted the most significant changes to its admissions policies to achieve that goal. According to Milwaukee staff, the screening process has changed largely in response to resident concerns about the quality of their neighborhoods. The PHA now contracts with a private entity to perform background checks waiting list applicants. This has resulted in an astounding rejection of 87 percent of all applicants.

Unlike several other respondents, Milwaukee has not considered adoption of a preference for employed persons./23/ It is dedicated to achieving income mix from among current residents. Although it welcomes wage earners who otherwise qualify for assistance, it does not move people up on the waiting list because they are working.

Oklahoma City has a relatively high vacancy rate (currently about 8 percent), and for this reason its highest priority is to achieve 100-percent occupancy. It has not made changes to its admissions policies other than the elimination of federal preferences. Due to the soft real estate market in Oklahoma City, the PHA has no waiting list. Everyone — including welfare recipients — is accepted for housing assistance on a first-come, first-served basis. Plans at present include having one local preference for one specific elderly property. The high number of vacancies has shifted emphasis away from changing admissions policies for the present.

St. Paul seems to have one of the more systematic approaches to studying the potential effects of admissions changes. It held open meetings with advocacy groups, legal aid staff and its own board of commissioners before arriving at the policy decision to revise its admissions policy.

St. Paul’s current admission policies were initiated prior to the recent changes in public housing and welfare laws. It has eliminated the federal preferences in favor of a local residency preference within the city, and preferences for veterans and single students with no dependents. In addition to checking the creditworthiness of applicants, the PHA reviews and seriously considers five years of housing history for each applicant. The PHA also performs a complete criminal background check on each applicant. No admission preferences are awarded to employed applicants and no special treatment is accorded to applicants who are participating in job training or in a welfare work activity.

St. Paul’s objective is to maintain a 99-percent occupancy rate with diligent but fair and consistent screening leading to an improved housing environment and more stable and self-sufficient residents. It views the Minnesota welfare reform model and existing HUD regulations on training and employment income disregards as increasing the number of working families in the PHA community, whether they be current households or new admittees. It expects the trend of more working families to continue and that, over the long term, more families in public housing will reflect the economic mix of the community at large — comprised of more working families.

DC adopted new admissions policies that became effective in July 1998./24/ For family developments, applicants are taken in chronological order in each of the following two categories: half of the new admissions annually are working families and 40 percent of represent all other families. Up to 10 percent of the new admissions, but no more than 100 units per year, are reserved for emergency applicants who generally are living in substandard housing, paying more than half their income for rent, or are involuntarily displaced as a result of domestic violence, hate crimes or physical inaccessibility of the housing unit due to a mobility or other impairment of the applicant or family member. For mixed-population (formerly elderly) properties, applicants are taken chronologically, with preference for elderly and for disabled applicants, followed by near-elderly and, finally, all other families. The admissions policy provides that, within the bounds of the law, a demonstration of modification of criminal or other antisocial behavior may avoid an applicant’s exclusion from housing assistance.

As families make the transition from welfare to work, their incomes often fluctuate. This is due in part to the transitory nature of the jobs relied on by employees new to the workforce.

The impact of "workfirst" policies on rents. According to responding PHAs, income fluctuations as a result of workfirst are not much different than those which existed under welfare. While some report no increased administrative burden in responding to the demand for added income recertifications, others have established systems to restrict recertifications to once a year -- unless a rent decrease is due. This has the dual benefit of reducing any administrative burden on the PHA and providing the resident with the opportunity to find and adjust to steady employment.

Baltimore reports increases in the number of families requesting rent adjustments due to fluctuating income. Baltimore reports no discernable administrative impact caused by workfirst welfare policies, and states that its workload remains manageable.

Although Chicago reports increased resident-reported instances of fluctuating income resulting in more interim rent recertifications, the impact on the PHA’s rent stream has been insignificant because of federal and state income disregard policies. As an example, residents participating in certain employment training and supportive services programs have no additional rent burden.

Milwaukee noted income fluctuations as a potential problem. Workfirst may force welfare clients to take jobs they do not like and for which they are ill suited and which unavoidably are short-term. Milwaukee states it make an effort first to work out rent problems caused by a household’s fluctuating income. In order to avoid eviction for nonpayment, a staff person sometimes prepares written agreements with tenants to repay back rent, but more often there is an informal, unwritten agreement.

St. Paul relies upon the welfare department to verify resident reports of decreases in TANF or sanctions. Its policy of not counting increases of less than $400 a month between annual rent reviews has reduced some of the potential administrative burden of frequent rent adjustments. Such income increases are counted in full at the next annual review, and therefore deferral of the rent increases provides, at best, only temporary relief for the tenant.

Earned income disregards. Although most responding PHAs reported compliance with current federal law requiring the temporary disregard of certain earnings from the rent calculation,/25/ several report they do not use the federally mandated 18-month income disregard for incremental income earned from a job following participation in a training program,/26/ and none appears to be offering discretionary disregards permitted under current law. Such rent incentives would provide the most concrete direct and immediate assistance to residents transitioning to work by allowing them to divert income from increased rents to pay for expenses related to joining and remaining in the workforce, such as clothing, transportation, child care and health care.

Baltimore includes earned income in calculating tenants’ rent, after making federally mandated adjustments. Significantly, however, it does not provide the 18-month disregard required by law.

Chicago disregards incremental earnings and benefits resulting from participation in qualifying state or local employment training programs and training of a household member as resident management staff. Pursuant to Illinois state law, it also disregards any income earned during the first 18 months of employment following a period of unemployment of six or more consecutive months.

Despite federal mandates, Milwaukee reports that it does not employ rent delays or disregards, but uses ceiling rents as an incentive for working families.

Oklahoma City applies the mandatory disregards but, like most of the other respondents, does not have discretionary offsets from income.

St. Paul similarly applies the mandatory disregards, as well as significant disregards for earned income from participation in the Jobs Plus demonstration program at its Mt. Airy Homes development.

DC applies the disregard for training income and 18 months of income from any job a person enters after leaving training. However, PHA staff believed that disregard to be at the discretion of the PHA rather than federally mandated.

Rent increases and rent increase delays. Most of the respondents reported adhering closely to federal law in providing rent adjustments or delayed increases. Yet, as indicated above, more detailed answers from some of the PHAs revealed that they were not complying with the federally mandated 18-month disregard. Most also said they do not employ any special outreach with residents to inform them of the availability of rent adjustments.

Baltimore reported that information about rent adjustments is provided to residents at the time of initial lease-up, during annual or interim rent reviews, with rent statements and through direct mailings. The PHA requires family income changes to be reported within 30 days. If earnings increases come to the attention of the PHA prior to annual recertification, Baltimore staff conduct an extensive interview to determine any expenses related to generating the earned income. These expenses are adjusted out before the new rent is set at the next regular annual recertification. They report that they apply federally mandated income exclusions in the rent calculations, for example, child care for children under 13, and, for residents enrolled in a training program but not yet employed, they exclude expenses and certain wages./27/

In contrast to deferred rent increases, rent decreases to which residents may be entitled are granted on the first day of the month following the month in which the income change occurred.

Chicago requires that residents report within 10 business days any income changes equal to or more than 10 percent. Its staff first review whether the income qualifies for any applicable allowances and adjustments. If not, an interim recertification is required. Residents required to pay additional rent would be provided with a minimum 30-day notice of the increase.

Oklahoma City indicated that its own need to generate income has motivated interim rent recertifications, although it has considered eliminating them due to the administrative burdens that might offset any gains.

St. Paul performs interim rent certifications only if total monthly gross household income increases by $400 or more between annual recertifications. Any increase less than that is not included in the rent calculation until the next annual review. Rent increases attributable to earnings increases greater than $400 are imposed at the beginning of the second month after the change in earnings.

Rents and welfare-related sanctions. Many of the responding PHAs had incomplete information about residents who have been sanctioned for failure to comply with welfare work requirements. While welfare sanctions may be a problem, it appears the PHAs are not systematically collecting and analyzing information on their effects. However, any widespread downturn in the residents’ rent contribution because of welfare sanctions -- as could potentially happen in PHAs with high welfare rates whose residents have trouble finding work -- would ultimately affect the PHA’s own financial condition.

Such information about welfare sanctions as is available typically comes to the attention of the PHA when the resident seeks a rent reduction. Some PHAs have the capacity to verify online a welfare payment cut through connections to state or local human resources offices. All PHAs responding on this issue reported that, as required by prior law, they decrease the rent once the reduced welfare benefit has been verified. If the welfare department is discovered to have made an error in sanctioning a resident and the resident ultimately receives the money back, no respondents reported an effort to count the recouped funds in the rent calculation.

With rapid changes to state and local welfare systems, some housing authorities concede the potential for widespread administrative error. Given such an acknowledgment, the model of the housing authority that helps residents obtain legal or other assistance to promptly challenge a sanction should be the norm. Yet only one respondent, Milwaukee, appears to provide systematic assistance to residents claiming sanction errors.

The imposition of a sanction for practical purposes may mean eviction. A modicum of protection is afforded residents since, under the new public housing legislation, the PHA may not raise withhold the rent reduction unless it receives written notice that the sanction is applied for failure to comply with work requirements and the resident has had a grievance hearing. Nevertheless, PHAs have an interest in prompt identification and resolution of sanction challenges -- among other reasons, to avoid the administrative burdens and costs of eviction.

Although Chicago does not track resident compliance with welfare requirements, the effect of a welfare sanction may come to the authority’s attention as the resident seeks a rent adjustment. Chicago’s lease agreement requires that the resident inform the housing authority within 10 business days of any change in income of 10 percent or more. Like other respondents, Chicago has the capacity to verify grant amounts electronically through the state welfare department database.

At least one PHA, Milwaukee, described special efforts to assist residents with the welfare agency where the resident believes an error has been made in applying a sanction. A minimum rent likely reflects a welfare sanction. This is because most people have either moved to work or have enough income to pay a Brooke Amendment rent (30 percent of adjusted-income). Milwaukee staff think the number of people paying minimum rents offers some indication of the number of households who have lost income as a result of sanctions./28/ However, their statistics indicate no direct correlation: at least 120 households currently pay minimum rent, of which 70 reside in elderly or disabled units and 50 reside in family units. Of the 70 elderly households, half of the residents are too disabled to work and the others have unusual circumstances or barriers (e.g., recent Russian immigrants).

Most sanction issues are resolved by the residents contacting employment agencies operating in each family development. Some respondents refer residents out to legal aid or other resources if the residents raise questions about the validity of their sanction. In addition, the executive director requires that all assistance -- both external and within the housing authority -- be declined by the resident in order to trigger an eviction. The point is that the commitment is not to hastily evict people, even those who are sanctioned, but rather to help people comply. Milwaukee acknowledges that a considerable number of mistakes have been made by the welfare agency in imposing sanctions. Its staff make determined efforts to reach and meet with residents who refuse to participate in required supportive services.

Minimum rents. We wanted to know if minimum rents helped keep PHAs financially afloat. They do not seem to have been implemented to generate income and apparently have little or no effect on PHA overall income. PHAs seem to be applying them for philosophical reasons of "personal responsibility" and, except for Chicago, they do not report tenants having had problems in paying them. According to Milwaukee, about half of the families that have actually been charged minimum rents were in that position because they had failed to comply with the new welfare regulations.

Baltimore charges a $25 monthly minimum rent for Section 8 residents but no minimum rent for public housing residents. Its task force on tenant selection will recommend that its board implement a $25 minimum rent on all its units./31/

Chicago currently does not charge minimum rents. From September 1996 to April 1997, it employed a minimum rent of $25 which proved a "heavy financial burden" for residents with little or no income. During this period, Chicago experienced a substantial increase in uncollected rents and higher vacancies. Some staff indicated that in the situation where a resident was unable to pay minimum rent, general eviction procedures would have applied; however, to avoid an eviction Chicago would have worked with the resident to establish a payment plan.

Harrisburg has a $25 minimum rent and, as reported by other PHAs, the minimum rent has had negligible impact on the rent stream. Its staff reports that PHA income has actually risen since institution of the minimum rent.

Milwaukee has recently increased its minimum rent from $25 to $50. The change was made because the lower minimum rent "was not taken seriously" by some residents, presumably meaning the PHA wanted residents to assume more responsibility for their shelter costs. The impact of the minimum rent on its rent stream is negligible at present. However the PHA raised concerns that, over time, the loss of rental income may pose a problem if too many residents are assessed the minimum rent rather than income-based or flat rents, as will be allowed under the new public housing legislation. Under current law, HUD makes up the difference in public housing operating subsidies between what residents pay and operating costs.

Although there are some identifiable "no income" residents who are genuinely unable to pay the minimum rent, Milwaukee works with individuals to address problems that may thwart employment. Unlike most of its developments, the new HOPE VI site Hillside, will not employ a minimum rent.

Oklahoma City uses a $25 minimum rent which has not had much effect on the rent stream. Evictions among current no-income or very low-income households are typically not related to minimum rent burdens.

Similarly, St. Paul employs a $25 minimum rent which has no significant impact on the rent stream. The welfare grant level for a three-person family in Minnesota is $763 per month, including TANF and food stamps. Typically, persons who face a minimum rent have lost welfare assistance as a result of failure to complete or update forms. The housing authority helps households that have lost welfare due to these administrative problems to get back on assistance. Inability to pay the minimum rent has not posed a problem for households, all of whom have some source of income, usually wages or public assistance.

DC uses a $25 minimum rent, according to staff, for the "psychological value" of demanding that residents assume responsibility for some of their shelter costs.

Ceiling rents. Ceiling rents are sometimes utilized by PHAs as an incentive to working households to remain in, or (depending on the outside market) move into public housing. In terms of total PHA population, it is unclear whether ceiling rents will encourage people to work and to stay in public housing.

Ceiling rents are not widely used among our respondents even though their avowed purpose is the retention of higher income households. Though most surveyed PHAs have ceiling rents on the books, a relatively small number of their residents are actually charged them.

Baltimore employs a ceiling rent which staff characterized as "too high." The amount is the Section 8 fair market rent for a two-bedroom unit, i.e., $628. For most families, the Brooke Amendment rent (30 percent of adjusted income) is likely to be more affordable. Ceiling rents have affected a fairly small number of families. Its task force has recommended awaiting adoption of the new public housing legislation before expanding ceiling rents.

Chicago views ceiling rents as an important mechanism for establishing mixed-income communities. It uses a two-tiered ceiling rent schedule, based on bedroom size and housing stock. Chicago staff believe that an increase in the number of working families remaining in public housing is a direct result of ceiling rents. The additional disposable income available to residents paying the ceiling rent is also seen as a means of spending in the community any money that formerly would have gone for rent.

Harrisburg sets its ceiling rents at the Fair Market Rent, for example, $479 for a three-bedroom unit.

Although Milwaukee does have a ceiling rent, its financial impact on PHA resources is unclear. Originally started in its HOPE VI site, ceiling rents are now available to residents of all developments. Milwaukee staff believe that ceiling rents at the HOPE VI are having the desired effect of retaining working families because Milwaukee’s private market units are slightly higher./32/

Oklahoma City ceiling rents are set at $304 for an efficiency (studio), $369 for a one-bedroom, $434 for a two-bedroom and $543 for a three-bedroom unit. Fewer than 15 families currently pay ceiling rents. Since they are all in elderly buildings, the apparent purposes of the ceiling rent -- to encourage people to go to work, stay employed and remain in public housing -- appear to be of marginal or no importance to the PHA.

St. Paul is one PHA, however, that utilizes ceiling rents as a means to reward resident moves toward work and training programs, and it reports that the number of residents paying ceiling rents has doubled over the past couple of years. The housing agency also provides rent incentives through a recently concluded Family Investment Center/Youth Development Initiative.

St. Paul's ceiling rents are slightly higher than those of Oklahoma City: $335 for an efficiency, $405 for a one-bedroom, $475 for a two-bedroom and $595 for a three-bedroom, up to $865 for a six-bedroom unit. Resident use of the ceiling rent has more than doubled from 96 households out of 4,230 units at its inception to 210 households currently. However, the impact of ceiling rents on PHA rent income has so far been minimal.

Currently, to further deal with the need for stable rents, it disregards all earned income from the rent calculation in the first year a family is working. The housing authority is considering flat rents for years two through five for Jobs Plus participants.

Most of the surveyed PHAs continue to serve large numbers of welfare recipients, and the changes in the percentage of residents who are welfare recipients compared to the total resident population do not yet appear to be very striking. However, with the ongoing implementation of workfirst policies -- and certainly by the time of individual cutoff dates -- more PHAs expect to house fewer welfare recipients and have a larger percentage of residents with income from wages. This increase in working families, these PHAs predict, will primarily result from current households becoming employed.

These PHAs recognize that their residents who are moving to work have the same needs and concerns as the general public, including the virtually universal concerns of the availability of adequate, quality child care and health coverage for their families. DC’s job creation initiative is an encouraging sign. Also encouraging is the realization by many PHAs that their own long-term viability is inextricably connected to the success of their residents’ economic self-sufficiency efforts.

The PHAs surveyed varied in their ability to respond to these needs. Of concern to very low-income housing advocates is that intensive case management and related services are often targeted to only a portion of the public housing population, for example, those most readily employable, or residents of HOPE VI sites. Some PHAs’ admissions policies, particularly the very restrictive ones used by Milwaukee, will deprive many other otherwise eligible households not only of education, job training and employment opportunities, but also of access to low-income housing itself.

It remains to be seen if public housing has a future as a very low-income housing resource for those who are either unable to make the transition to work or who are unable to earn a living wage, or if they will be displaced as public housing is transformed into mixed-income stock.

For more information about the survey, please contact Nancy Bernstine in our Washington office, Tel. (202) 463-9461.

Notes

1    The public housing agencies surveyed were Baltimore, MD (hereafter Baltimore); Chicago, IL (Chicago); Harrisburg, PA (Harrisburg); Jersey City, NJ (Jersey City); Milwaukee, WI (Milwaukee); Oklahoma City, OK (Oklahoma City); St. Paul, MN (St. Paul); and Washington, DC (DC).

2    The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. No. 104-193, 110 Stat. 2105 (Aug. 22, 1996).

3    Several PHAs provided documentation that will be maintained on file in NHLP’s D.C. office.

4    The sizes ranged from Harrisburg, with 1,720 units, to Chicago, with 26,849.

5    This includes 7 percent of all elderly units.

6    This figure refers to TANF only. The remaining 78 percent includes not only working families, but also households receiving SSI and Social Security income.

7    For example, Chicago: 18,410 family and 8,439 elderly units; DC: 8,445 family and 2,960 elderly units; Oklahoma City: 1,693 family and 1,330 occupied elderly units; St. Paul: 1,729 family units, including scattered sites, and 2,485 occupied elderly units. Milwaukee reports that 44 percent of its units are designated as housing for elderly persons.

8    Time limits were implemented in Wisconsin in October 1996 and began to expire in October 1998.

9    Residents’ income from wages rose dramatically from 30.41 percent of total PHA income in January 1996 to 57.64 percent of total income in October 1998. In 1996, Milwaukee residents reported income from wages of $6.7 million out of a total household income of $22 million. By October 1998, income from wages had more than doubled, with families reporting $14.5 million in wage income out of $25.5 million total income. Memo from Bobbi Marsells, Housing Authority of the City of Milwaukee, "Income Data from 1996 and 1998" (Nov. 5, 1998).

10    This actually represented a decline from 1993, when wage income represented 18 percent of total income.

11    These families reported wage income in 1996 of $4.1 million (29 percent) out of total household income of $14 million. In 1998, the same families reported wage income of $9.7 million (57 percent) out of total reported household income of $17.1 million.

12    "Workfirst" generally defines policies that require welfare recipients, as a condition of continued assistance, to engage in actual employment rather than in education and training or other supportive service-type activities.

13    Since Oklahoma City is a low-cost housing market, private market housing may be cheaper for working families than public housing.

14    Income figures for 1997 are unavailable.

15    Weed ‘n Seed is a multi-agency strategy led by the Department of Justice that focuses on violent crime, gang activity, drug use and drug trafficking in targeted neighborhoods, restoring those neighborhoods through social and economic revitalization.

16    Welfare time limits in the District of Columbia just recently expired in March of this year.

17    Jobs Plus is a three-to-five-year nationwide demonstration operating in seven PHAs to assist residents in getting and keeping jobs. It coordinates with other programs and service providers to address identified needs, and provides aids and incentives that include rent relief and working with employers and service providers with demonstrated success in employing people who are hard to place.

18    Not unlike many housing agencies, St. Paul houses a number of recent immigrants, in this case Laotian Hmong refugees.

19    Quality Housing and Work Responsibility Act, Title V of Pub. L. No. 105-276, Department of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1999 (Oct. 21, 1998).

20    According to Baltimore staff, Plesantview, the development that replaced Lafayette Courts in a HOPE VI revitalization, has fewer than 100 public housing units, with the remaining units dedicated to homeownership.

21    The average income on the waiting list for admission is, in fact, at 17 percent of median.

22    Gautreaux v. Chicago Hous. Auth., 523 F. Supp. 665 (N.D. Ill. 1981); No. 66C1459 (N.D.Ill. May 8, 1987) (receivership order). For each revitalization area, the PHA must submit a plan which might entail local court orders.

23    According to Milwaukee staff, state law prohibits an employment preference.

24    See 45 D.C. REG. 4,914-4,925 (July 24, 1998).

25    These include income from employment of children under the age of 18; payments received for foster children or foster adults; lump-sum additions to family assets such as insurance payments, inheritances, and certain income from training programs defined by HUD.

26    42 U.S.C. § 1437(a) (1998), as amended by Pub. L. No. 101-625, § 515(b), 104 Stat. 4199 (Nov. 28, 1990).

27    The forms are probably typical of those used by all PHAs: HABC [Baltimore] 50058 -- Rental Determination and Tenant Data Summary; HUD 50058 -- Family Report; Application/Tenant Certification; Federal Privacy Act Statement; HUD 9886 -- Authorization for Release of Information; Employment Inquiry Form; Child Care Form; Notarized Statement; and Medical Form.

28    Milwaukee, the only respondent able to provide the number of residents sanctioned, reports that fewer than 100 residents have been sanctioned.

29    This currently applies to Section 8 only. Baltimore’s task force on tenant selection is recommending a $25 minimum rent for all of its units.

30    Hillside, Milwaukee’s new HOPE VI site, does not have minimum rents, in order to encourage working families to live in the development.

31    It should be noted that the public housing legislation requires a minimum rent of up to $50. Quality Housing and Work Responsibility Act, note 17, supra, § 507.

32    In the past, a unit there had to be shown several times before a renter was found despite the fact that 12,000 families were on the waiting list. Currently, 65-70 families are in line for each unit. Although Milwaukee staff credit the ceiling rent with affecting the demand for units, the HOPE VI rehabilitation, along with its increased security, may in fact provide the more likely explanation for increased demand.

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