Sharp Expansion of HUD’s “Moving-To-Work”Demonstration Raises Serious Concerns — Center on Budget and Policy Priorities

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By Will Fischer

A proposal before Congress would sharply expand HUD’s Moving-to-Work (MTW) demonstration. Unless important limitations are added, this expansion would reduce the number of families receiving housing assistance by shifting funds out of the Section 8 housing voucher program. It also would expose more low-income families to risky policies than is necessary to test innovative approaches, and allow local policies to diverge to a degree that could weaken housing assistance programs.

The proposal is part of the Section 8 Voucher Reform Act (SEVRA), which overall is an important, well-crafted measure containing significant improvements to the voucher program and other federal rental assistance programs; the House Financial Services Committee approved the bill in July 2009. SEVRA includes a provision that would allow up to 80 state and local housing agencies to participate in the Moving-to-Work demonstration program (compared to 30 today) and rename it the Housing Innovation Program (HIP).

Despite its name, MTW is not focused primarily on supporting employment. MTW allows HUD to grant sweeping waivers of a wide range of federal statutes and regulations to agencies that administer voucher and public housing programs in order to test experimental policies. It also allows HUD to establish special funding formulas for MTW agencies and to permit them to shift funds between the voucher program and public housing.

SEVRA’s MTW provision would constitute a fundamental and far reaching change to federal housing policy, as the expanded demonstration could affect close to 1 million vouchers and public housing units — about 30 percent of the total nationally.

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