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Housing Affordability Crisis Evident as Americans Use Cash Transfers for Rent

Amid the growing housing crisis in the United States, low-income Americans are increasingly using cash transfers, including those from experimental basic income programs and government assistance, to cover housing expenses. The rising homelessness rates and the shortage of an estimated four million homes in the country underscore the urgent need for solutions to address affordable housing.

Cash Transfers Allocated to Housing

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A significant portion of cash received through programs such as basic income and pandemic relief is being directed toward housing, including rent and utilities. Various studies and pilot programs have revealed the critical role of these cash transfers in maintaining housing stability.

Cash Aid in Washington, DC

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In Washington, DC, over half of the recipients of pandemic cash aid, specifically the THRIVE East of the River program, allocated a substantial portion of the assistance toward housing expenses, as reported by the Urban Institute.

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Basic Income Program in San Francisco

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A universal basic income program in San Francisco, offering $500 monthly to people experiencing homelessness, found that more than a third of recipients used the funds to secure permanent housing.

Importance of Housing Stability

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The prioritization of housing expenses reflects the crucial role of maintaining a secure place to live. As sociologist Matt Desmond noted, “the rent eats first,” emphasizing the necessity of housing security.

Government Must Address Housing Crisis

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Real estate developers emphasize that solving the affordability crisis and housing shortage requires government intervention rather than relying solely on the private sector. Christian Ulbrich, CEO of JLL, underscores the role of the public sector in addressing affordability.

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Inadequate Government Housing Assistance

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Despite the increasing need, government housing assistance programs, mainly Housing Choice Vouchers and public housing, receive funding determined by Congress annually. This funding has not kept pace with rising rents and home prices, resulting in the lowest levels of housing support for the poorest renters in 25 years.

Underutilized Assistance Programs

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Existing assistance programs are underutilized, with only a quarter of those eligible for housing vouchers actually receiving them. Moreover, nearly 40% of voucher recipients struggle to find landlords willing to accept them.

HUD’s Cash Transfer Proposal

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Researchers at the Department of Housing and Urban Development (HUD) propose piloting a direct cash transfer program for rent as an alternative to traditional housing vouchers. Cash transfers for housing offer various benefits and reduce administrative burdens and landlord discrimination associated with vouchers.

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Philadelphia’s PHLHousing Plus Program

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Philadelphia’s PHLHousing Plus program, in partnership with the University of Pennsylvania, is implementing a guaranteed income program for households eligible for housing vouchers. This program aims to provide flexible cash support to recipients, emphasizing dignity and self-determination.

Stigma Surrounding Cash Transfers

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Supporters of basic income express concern about the stigma associated with various government benefits, including cash transfers. They worry that misconceptions about how recipients spend the money may hinder the expansion of such programs.

Building More Affordable Housing

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While addressing rent affordability is crucial, it is just one aspect of solving the affordable housing crisis. The United States also needs to increase the supply of affordable housing to meet the needs of low-income individuals and families.

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Balancing Demand-Side Subsidies and Supply

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Experts argue that fully funding rental assistance programs must be accompanied by efforts to expand the housing supply, as solely relying on demand-side subsidies may contribute to inflation and further exacerbate high rents.

Trusting Families with Cash Transfers

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Advocates for cash transfer programs emphasize the need to trust families to make spending decisions that best suit their needs, asserting that individuals and families are better equipped to manage their finances than researchers might presume.

The ongoing housing crisis in the United States highlights the importance of addressing both the affordability of rents and the supply of affordable housing to provide lasting solutions for those in need of stable housing.

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