Policies Can Create Employment Incentives, Boost Self-Sufficiency
PHADA President David A. Northern, Sr.
PHADA worked diligently to help secure the expansion of the Moving to Work (MTW) program in 2016. HUD has been implementing the expansion in a few stages and topical areas or “cohorts.” PHADA was disappointed to learn recently that HUD was rescinding cohort number 3, which was focused on incentivizing residents to seek employment and move up the ladder of self-sufficiency.
HUD justified its decision based on the effects of the pandemic and the inability of residents to find work, but the Department indicated up to 18 months from selection for implementation of the policy, with selection unlikely until late this year. HUD’s position seems to ignore the USA’s improving employment picture and the fact that work policies will not commence for about two more years.
A Missed Opportunity
PHADA feels HUD’s action will result in a missed opportunity to test whether work incentive strategies can be successful across the board. The association’s letter to Secretary Marcia Fudge is included available here. We requested that HUD reconsider its position.
Work “requirements” are deemed controversial in some quarters because they may sound punitive and are often misunderstood. It is important to note, though, that they can help reward self-sufficiency and incentivize employment when coupled with attractive rent and escrow policies that let workers keep more of their earnings. In addition, the programs usually provide valuable education and training opportunities for residents.
I am particularly disappointed that HUD suspended the work incentive cohort because I have seen firsthand the benefits associated with these kinds of policies. My agency in Birmingham, Alabama was planning to apply for participation in cohort 3.
The work cohort is not something that all HAs want to engage in and that is just fine. One of the best aspects of the MTW program is that it is based on the premise that various policies should reflect local needs, priorities, and objectives. PHADA totally respects the fact that many agencies have other priorities they may want to pursue.
On the other hand, some communities do at least want to experiment with work requirements and incentives. I previously administered the Housing Authority of Champaign County (IL), which is an MTW agency. We had work incentives and time limits in place that we felt were quite fair and successful. The policies applied to all residents aged 18–54 years of age and were designed to encourage individuals to work towards higher-paying jobs or entrepreneurial endeavors, or to attend school to help them advance economically in the future.
The housing authority helped provide training and education for its clients and we even offered cash incentives to further encourage participation. We were very fortunate to have the cooperation and support of the residents, community leaders, the local university, and a YouthBuild apprenticeship program, which helped us immensely. Just as important, the agency’s work policy helped build more public and political support for our broader efforts to assist low-income families.
The agency, of course, provided waivers and opt-outs to the elderly and those who were unable to comply for health and other valid reasons. The programs have been in place for a few years now, and to date, no person has been negatively impacted. Some other MTW agencies across the country have also instituted similar work and rent policies that are designed to encourage employment. Those programs, which include hardship exceptions and other resident protections, have also proven effective in meeting their objectives.
Demonstration Provides Valuable Research Opportunity
Some advocates have argued that MTW work policies are unfair and may stigmatize residents. Advocates have also argued that such policies should only be instituted after they are thoroughly researched and vetted to ensure that families are not negatively impacted. This is the very reason why it so important to move forward with cohort 3. It would give the Department, the industry and resident advocates the opportunity to better assess which strategies work and which do not.
HUD should also be mindful that incentivizing work is one of the key statutory elements of MTW. “The original statute requires HUD and HAs to test and evaluate various strategies. Work requirements and work incentives potentially advance two of the three statutory requirements,” we wrote in our letter.
More of our specific concerns and the fuller rationale behind the request are spelled out in the correspondence. In sum, PHADA feels HUD is missing a real opportunity to test this important initiative and hopes the Department will reconsider its decision. I welcome the input of all members on this or any other issue. Please feel free to contact me or our Washington staff.