VI. Conclusion

It may be concluded from this study that there is likely to be wide variation among housing authorities with respect to the impacts of welfare reform among housing authorities. But it is not so easy to provide a simple explanation for this. Besides geographic diversity, one reason for choosing the particular housing authorities for this study was the variation in State welfare program features, the assistance levels provided to mandated residents and such indicators of the strength of the local economy as unemployment rates. In addition, there was variation with respect to local policies such as the level of minimum rents charged. The fiscal impacts of welfare reform that are based upon the more conservative estimates of work participation do suggest that such factors play a role. Yet, multiple factors are at work in each housing authority making it difficult to pinpoint a particular explanatory factor.

For reasons having to do with the amount of wage income mandated residents could command to replace welfare assistance, some housing authorities are in the fortunate position of not needing many of their mandated residents to work in order to retain current rent levels. In four of the eight housing authorities, not many more than one-quarter of the mandated residents would have to find jobs, although in Los Angeles close to two-thirds would need to find work. Obviously, in housing authorities in which only a small minority of the mandated population needs to find work, the strength of the local economy will be less critical. This having been said, it does appear that the local unemployment rate proved to be a stronger indicator than state differences in assistance levels in explaining fiscal impacts based on the more conservative estimate of work participation.

For HAs within the same state there are large differences in rent revenues per mandated resident. In Virginia, RRHA is estimated to experience a very large increase, while NRHA is estimated to experience a decrease per mandated resident. There is a similar picture in Ohio. Even though both HAs in California are expected to suffer losses of rent revenue, there is great variation, with the estimated decrease in Los Angeles about five times larger than in San Francisco. Using a conservative job growth assumption, the three Housing Authorities for which welfare reform impacts are estimated to be positive, Richmond, Dallas and Columbus, are those with the lowest unemployment rates. The three housing authorities that are estimated to experience the largest drop in rent revenues as a result of welfare reform, Norfolk, Toledo and Los Angeles, have higher unemployment rates.

Because assistance income provided to residents of housing authorities within the same state is generally governed by a uniform payment standard, one expectation would be that the fiscal impacts of welfare reform at housing authorities within the same state should not be as varied as the fiscal impacts of reform at housing authorities located in different states. Yet, this does not seem to be borne out. Within state differences in fiscal impact are very great. Aside from the economy, minimum rent policy seems to play a substantial role. Though they are in different states, the two housing authorities in the study with minimum rents of $50, Richmond and Columbus, are both estimated to have increased rent revenues as a result of welfare reform. In considering appropriate minimum rent policies as a tool for mitigating losses in rent revenues, however, there is a major tradeoff to consider: many residents may have great difficulty in paying higher or any minimum rents, perhaps even having to give up their public housing assistance.

In addition to minimum rent policies, other housing authority policies covering such areas as evictions, preferences, and income incentives can also significantly affect rent revenues, even before the impacts of welfare reform begin to register. Recently, Richmond has been able to double its rent revenues just by selecting working and other higher rent paying families from its waiting list. When the impact of welfare reform begins to affect the ability of mandated residents to pay rent, those evicted for non-payment of rent will obviously be much worse off than residents who continue to be sheltered despite losing their assistance income. This could be an important issue since, assuming a more conservative work participation estimate, the study shows that in most of the housing authorities, the majority of tenants would be unable to replace their assistance income with income from wages.

Neighborhood level information gathered for the three Ohio housing authorities demonstrates that the outlook for mandated tenants can be affected not only by the metropolitan economies in which they will conduct their job search but by such local factors as the number of entry-level jobs within reasonable commuting distance and the extent of competition from other, nearby entry-level job seekers. There are some neighborhoods where mandated residents are estimated to have virtually no job prospects. In these neighborhoods, there could be a much larger loss of income. The fixed location of public housing residents leaves HAs and the public housing program with the challenge of deciding the extent to which they should offer assistance to overcome some of the extreme disadvantage some residents will have in competing for a paucity of entry-level jobs and against large numbers of better prepared job seekers. Special intervention in especially impacted neighborhoods could be useful, but may not be feasible. If it were possible to provide additional assistance of some kind the question arises of whether it would be preferable to improve competitiveness, or to extend the "safety net" of benefits for some residents likely to be unsuccessful in searching for jobs.