A HUD-sponsored longitudinal evaluation of the Moving to Work demonstration program found no significant reduction in housing costs compared with similar traditional public housing authorities, according to a new analysis published by the Competitive Enterprise Institute. The report examines Section 505 of the 21st Century ROAD to Housing Act, which would allow the Department of Housing and Urban Development to add up to 25 additional public housing authorities to the MTW program. The analysis argues that while MTW offers administrative flexibility, it doesn't address the underlying barriers that limit housing supply.
The HUD evaluation found mixed results across multiple measures. A separate Urban Institute analysis identified some improvements in selected areas, including a higher share of new households served and a possible increase in the share of households whose incomes grew. However, MTW wasn't associated with improvements across all measures examined. Most notably, it didn't increase the share of voucher holders living in low-poverty neighborhoods, which indicates whether households are gaining access to lower-poverty areas. HUD's more recent evaluation of the first expansion cohort, consisting of smaller public housing authorities added to MTW in 2016, similarly found no statistically significant effects on cost-effectiveness, self-sufficiency, or housing choice during the early years of implementation.
The report states that "MTW's existence raises an obvious question. If housing authorities consistently need exemptions from HUD's standard rules to operate more effectively, what does that say about the rules themselves or the federal grant programs to which they are attached?" According to the analysis, many of HUD's rules are too rigid, and the experience of MTW demonstrates the limits of relying on federal funds to make housing more plentiful and affordable. The authors write that the broader lesson isn't that MTW's flexibility has no value, but rather that "flexibility solves a narrower problem." The report distinguishes between administrative reform, which focuses on how government programs can better serve households within the current system, and housing reform, which addresses what prevents the housing market from producing enough homes to meet demand.
The report explains that even the most efficiently administered programs must operate in a market where local housing regulations limit construction, increase costs, and restrict housing options. When housing supply is constrained, government programs are left addressing the consequences of scarcity instead of the root causes. The analysis identifies several major constraints that reduce supply and contribute to higher housing costs: minimum lot sizes prevent higher-density development, parking mandates increase construction costs, floor area ratio restrictions limit how efficiently land can be used, and permitting barriers delay projects and add uncertainty. Removing or lessening these regulations allows markets to respond to demand by producing more homes.
The report concludes that lasting affordability will depend largely on cutting the local regulations that restrict housing supply. It recommends that Congress continue looking for ways to reduce unnecessary federal rules while recognizing that a more limited federal role should focus on avoiding the expansion of programs that fail to address barriers preventing housing supply from meeting demand. The bottom line: MTW can change how housing assistance is administered, but better administration of a subsidy isn't a substitute for abundant housing.