Housing benefits

Appendix D: Housing Benefits: Implications of a Publicly Funded Guaranteed Income

For the three largest housing programs—Housing Choice Vouchers (Section 8), Project Based Rental Assistance, and Public Housing129—income determinations not only affect income eligibility for program entrance but may affect the amount of a recipient’s subsidy and, by extension, the amount of rent they pay. HUD has provided pathways to exclude from consideration some guaranteed income payments that are part of privately funded demonstrations that provide monthly payments for research related purposes, but a publicly funded guaranteed income may face challenges regardless of implementation strategy.130

Generally speaking, the major three housing programs rely on the same federal regulations for determining what counts as “income.” For housing benefits, the frequency or “reliability” of income are relevant factors; as such, guaranteed income models funded by private or public dollars could impact eligibility and subsidy amount depending on the frequency of payments. HUD regulations state that annual income in the form of lump-sum additions to family assets (such inheritances) are not included, nor is temporary, nonrecurring or sporadic income (including gifts). 24 CFR 5.609(c)(3); 24 CFR 5.609(c)(9). However, HUD guidance defines temporary, non-recurring, or sporadic income (including gifts) as income that is neither reliable nor periodic. A common factor in determining if income is truly sporadic or temporary is whether the family expects to receive income from the same source again in the coming year – even if at a different time in the following year. As such, recurring payments from guaranteed income programs would likely impact eligibility, and even payments received via an annual lump sum could be counted if the payments are “expected” or “reliable” in the following year. Additionally, federal law excludes federal tax refunds and refundable credits from consideration in HUD housing programs, but HUD regulations do not specifically exempt state refunds or state tax credits unless they are derived from property taxes paid on the subject property. Accordingly, implementing a guaranteed income as part of an expanded state EITC could impact eligibility and subsidy amount for HUD housing programs.

However, where some programs may require a change in federal statute to prevent publicly funded guaranteed income models from impacting eligibility, 42 U.S.C. § 1437a(b)(4) states that when the term “income” is used in Chapter 8 of 42 U.S. Code (which governs the three main types of housing assistance), it means “income from all sources of each member of the household, as determined in accordance with criteria prescribed by the Secretary…” Therefore, federal statutes would not prevent guaranteed income from being subject to an exclusion in determining eligibility, but a change in HUD regulations that further defined income would be required.

For the public housing program, HUD has suggested that public housing authorities (PHAs) could adopt a permissive deduction for certain cash payments from a household’s income in the public housing program. HUD imposes certain mandatory deductions, such as for expenses related to child care and disability assistance. Federal law also gives PHAs the option to adopt additional deductions, provided that the PHA includes these deductions as part of its written policy, otherwise known as the PHA’s admission and continued occupancy policy (ACOP).131 The San Francisco Housing Authority, for example, amended its ACOP “to establish a deduction for the research-related cash payments received by selected public housing families” participating in the city’s Abundant Birth program, which provided a year-long $1,000 monthly supplement.132 Beginning in November of 2021, the City of Providence used the same flexibility to adopt a permissive deduction of up to $500 a month for people participating in the City of Providence’s Guaranteed Income Program.133 Optional deductions like these may appeal to other PHAs looking to keep similar cash payments from impacting the rent of recipients, and to advocates looking for an avenue of policy change short of amending legislation or rulemaking. However, it is unclear whether HUD would approve deduction for a permanent state guaranteed income program as opposed to pilots or research-based payments. A potential downside of this approach for a statewide guaranteed income program, however, is the need to secure optional deductions from the dozens of PHAs within a given state.134

Lastly, PHAs participating in the Moving to Work (MTW) demonstration program may also have flexibility for additional income exemptions.135 MTW exempts participating PHAs from many public housing and voucher rules allowing them to change income and eligibility requirements – especially if the changes might positively impact employment or “self-sufficiency.” However, the MTW demonstration is predicated on the same troubling and racist narratives that permeate other parts of the social safety net, empowers PHAs to take actions that harm those seeking housing assistance, and changes PHA funding formulas to remove some incentives for PHAs to provide as many vouchers as possible. For example, a 2017 Center on Budget and Policy Priorities report analyzed the original 39 MTW agencies and found that MTW agencies used a smaller percentage of available voucher funds, effectively denying housing assistance to 68,000 families.136 As such, advocates should think carefully before encouraging their local PHA to participate in MTW, even if for the purpose of exploring available flexibility to limit the potential negative consequences of receipt of a guaranteed income on eligibility for housing benefits. However, there are currently 70 MTW PHAs nationwide,137 so exploring this flexibility could be an especially viable strategy for agencies already participating in MTW. Similar to the flexibility provided by HUD under 24 CFR 5.611(b)(1), this strategy would require engagement with numerous local PHAs within a state, making it a challenging strategy to apply consistently for statewide guaranteed income programs.