Expanding Housing Choices For HUD-Assisted Families:

FIRST BIENNIAL REPORT TO CONGRESS ON THE MOVING TO OPPORTUNITY FOR FAIR HOUSING DEMONSTRATION
April 1996

FOREWORD

I am pleased to provide the first in a series of biennial reports to Congress on the status of the Moving to Opportunity (MTO) demonstration. MTO was authorized by Section 152 of the 1992 Housing and Community Development Act. The Department of Housing and Urban Development has implemented a carefully controlled experimental design for this demonstration in order to evaluate the impacts of helping low-income families move from public and assisted housing in high-poverty inner-city neighborhoods to better housing, education, and employment opportunities in low-poverty communities throughout a metropolitan area.

Two years into the MTO demonstration, the five sites have all made substantial progress in implementing the MTO demonstration, and are expected to reach their placement targets by the end of 1996. This success has been achieved through the close working relationships forged by public housing authorities and non-profit housing counseling agencies in Baltimore, Boston, Chicago, Los Angeles, and New York City

The Office of Policy Development and Research is committed to monitoring and evaluating the MTO demonstration over the long-term. Social, employment, and educational outcomes for demonstration participants will be systematically monitored and evaluated over a ten-year period, in order to definitively assess the impacts of housing mobility assistance. In addition, we have funded six university research teams to immediately examine changes in the lives of parents and children as they move to low-poverty communities. This ongoing research and information gathering will enable HUD to develop more sensible and effective mobility strategies for recipients of tenant-based housing assistance in metropolitan areas throughout the nation.

Expanding access for low-income families to housing opportunities throughout the metropolis is a priority for federal housing policy under the leadership of Secretary Henry G. Cisneros. The Moving to Opportunity demonstration is just one of several federal initiatives designed to ensure that poor people are not trapped and isolated in predominantly poor neighborhoods. Over the next ten years, this investment will yield a continuous stream of valuable evidence and insight about housing mobility and its impacts on families' self-sufficiency.

Michael A. Stegman
Assistant Secretary for Policy
Development and Research

EXECUTIVE SUMMARY

Inspired by the Gautreaux housing mobility program in Chicago, Moving to Opportunity (MTO) is an experimental demonstration and research project designed to evaluate the impacts of helping low-income families move from public and assisted housing in high-poverty inner-city neighborhoods to better housing, education, and employment opportunities in low-poverty communities throughout a metropolitan area. This is the first in a series of biennial reports to Congress on the status of the MTO demonstration.

The Moving to Opportunity demonstration was authorized by Section 152 of the 1992 Housing and Community Development Act. Section 152 provides tenant-based rental assistance and supportive counseling services to test and evaluate the effectiveness of metropolitan area-wide efforts to:

"assist very low-income families with children who reside in public housing or housing receiving project-based assistance under Section 8 of the Housing and Community Development Act of 1937 to move out of areas with high concentrations of persons living in poverty to areas with low concentrations of such persons."

Section 8 rental assistance for the MTO demonstration was appropriated at $20 million for Fiscal Year 1992 and $50 million for Fiscal Year 1993. In addition, up to $1 million was allocated to non-profit counseling agencies to provide partial support for their housing search and mobility counseling efforts. These funds are assisting approximately 1,300 low-income families at five HUD-selected demonstration sites -- Baltimore, Boston, Chicago, Los Angeles, and New York.

HUD has implemented a carefully controlled experimental design for MTO in order to definitively answer questions about the immediate effectiveness of mobility counseling, and about the long-term impacts for families who move to low-poverty communities. Eligible participants in the demonstration are randomly assigned to three groups: 1) an MTO experimental group, which receives Section 8 certificates or vouchers usable only in tracts with less than 10 percent poverty, along with counseling assistance in finding a unit; 2) a Section 8 comparison group, which receives regular Section 8 certificates or vouchers, with no special geographical restrictions or counseling; and 3) an in-place control group, which continues to receive their current project-based assistance. This random-assignment experimental design is essential to achieve the statutory goals of MTO. Outcomes for all three groups will be systematically monitored and evaluated over a ten-year period, in order to fully assess the impacts of housing mobility assistance on families and children.

The five sites have all made substantial progress in implementing the MTO demonstration. As of February 28, 1996, almost half (47.9 percent) of the MTO experimental families and over one fourth (28.9 percent) of the comparison group families had located and leased housing. The MTO non-profits are consistently achieving success rates that are as high or significantly higher than the 25 percent average success rates typical of the Gautreaux demonstration. And all five sites are expected to reach their lease-up targets by the end of 1996.

The families who apply to participate in MTO are very much like their public and assisted housing neighbors in terms of demographic and socio-economic attributes. The average MTO applicant is an African American or Hispanic woman, 37 years old, with two or three children. Almost one in five of these women work, and two thirds receive Aid to Families with Dependent Children (AFDC).

The strongest factor motivating families to participate in the MTO demonstration appears to be fear of crime. Nearly half of MTO applicants (47.8 percent) reported being victims of crime within the last six months, compared to only 5.4 percent of all residents in the nation's largest public housing authorities. Moreover, when asked why they wanted to move away from the projects in which they live, more than half of MTO applicants (54.8 percent) listed crime as their primary reason, and another 30.8 percent listed it as their secondary reason. Better housing conditions and better schools are also important reasons why families choose to participate in the MTO demonstration, but only 6.5 percent of MTO applicants said that a job-related concern was their primary or secondary reason for moving.

The MTO demonstration has already begun to return benefits as a source of reliable data and policy insights on assisted housing mobility. During the next two years HUD expects to publish findings from ongoing research on the content and costs of MTO mobility counseling programs, on differences between successful and unsuccessful MTO recipients, and on the characteristics of neighborhoods in which MTO families locate. This ongoing research and information gathering will enable HUD to develop more sensible and effective mobility strategies for recipients of tenant-based housing assistance in metropolitan areas throughout the nation.

"Highly concentrated minority poverty is urban America's toughest challenge...Our goal is to give all public housing residents a genuine market choice to stay where they are or to move to private rental apartments throughout the region."

HUD Secretary Henry G. Cisneros

Expanding access for low-income families to housing opportunities throughout the metropolis is a priority for federal housing policy under the leadership of Secretary Henry G. Cisneros. The Moving to Opportunity for Fair Housing demonstration (MTO) is just one of several federal initiatives aimed at "ensuring that people are not trapped and isolated in predominantly poor neighborhoods for lack of options."

The Moving to Opportunity demonstration was authorized by Section 152 of the 1992 Housing and Community Development Act. Section 152 provides tenant-based rental assistance and supportive counseling services to test and evaluate the effectiveness of metropolitan area-wide efforts to:

"assist very low-income families with children who reside in public housing or housing receiving project-based assistance under Section 8 of the Housing and Community Development Act of 1937 to move out of areas with high concentrations of persons living in poverty to areas with low concentrations of such persons."

Section 8 rental assistance for the MTO demonstration was appropriated at $20 million for Fiscal Year 1992 and $50 million for Fiscal Year 1993. In addition, up to $1 million was allocated to non-profit counseling agencies to provide partial support for their housing search and mobility counseling efforts. These funds are assisting approximately 1,300 low-income families at five HUD-selected demonstration sites.

Section 152(d)(2) requires the Secretary of the Department of Housing and Urban Development (HUD) to make biennial reports to Congress, describing the progress and effectiveness of MTO. This report, therefore, is the first in a series of regular reports to Congress on the status of the MTO demonstration.

The remainder of this report consists of five sections. The first section outlines the origins and design of the MTO demonstration, and the second describes the implementation process. The third section describes the characteristics of families who have applied to participate in MTO, and explores factors that motivated them to participate. The fourth section presents more detail on the progress of MTO implementation in each of the five demonstration sites, including the most recent data available on the services provided and the costs of these services. Finally, the report concludes with perspectives on MTO as the demonstration enters its third year.