New Trump Rule Puts Millions at Risk of Losing Rental Assistance

The Trump administration is proposing a rule that would upend the way federal rental assistance is administered. By allowing new work requirements for the low-income Americans who receive aid, and more stringent time limits on beneficiaries’ periods of eligibility, some experts believe this move could put millions at risk of losing their housing.

The change to Department of Housing and Urban Development regulations would bestow the decision about whether to implement these requirements upon local housing authorities and private property owners. These authorities and owners could institute term limits for as short a period of time as two years, as well as new work requirements mandating a 40-hour workweek. The proposal would be applicable to “work-eligible” individuals between the ages of 18 and 61 with some exemptions, including recipients with disabilities, caretakers of those with disabilities, and parents of children under 6 years old.

President Donald Trump included a two-year limit on assistance in his budget last year—along with a 40 percent cut to rental aid—but Congress did not pass any such legislation. This rule would bypass Congress, which could open it up to legal challenges. HUD argues that instituting these restrictions would encourage low-income households receiving rental assistance to find a more permanent home, and increase turnover in public housing such that more people currently on the waiting list are able to be served.

Critics counter that rather than encourage upward mobility, the proposed rule would simply make it more difficult for low-income households to maintain stable housing.

Renee Williams, senior policy adviser at the National Low Income Housing Coalition, argued that the proposed rule is predicated on the “false idea” that Americans reliant on rental assistance are not employed. For those recipients who already work but do not necessarily meet the 40-hour threshold, this proposal could add significant complications to their daily lives.

“What is trying to be accomplished here is not actually getting at the root causes of housing instability and poverty,” said Williams. In areas with higher rents, if a household is unable to meet those work requirements or find affordable housing within the time limit, they could lose their subsidies and be forced to reapply to the program.

“Even if you are able to get 40 hours a week—which is not a given in a lot of variable, low-wage jobs—the rent is still unaffordable, and so a lot of folks are going to need and rely on rental assistance to be able to stay housed, even if they are working,” said Williams. The work requirements could also add a significant administrative burden both on those who are mandated to meet them and on those who need to verify the paperwork.

Erik Gartland, research analyst on housing and income security at the left-leaning Center on Budget and Policy Priorities, or CBPP, also worried that even those who may be exempt from the requirements would struggle with the additional hurdle of verification—for example, proving that they have a disability.

“Even if they’re technically exempt, they could lose their rental assistance anyway, for all the additional red tape that it would require to verify compliance and exemptions,” said Gartland. “It’s quite possible, especially for people with lower incomes, that it’s difficult to get all that paperwork to prove that exemption.”

According to recent research authored by Gartland, nearly 3.7 million people—including roughly 1.9 million children—could be at risk of losing their housing assistance. These projections would occur under the most extreme-case scenario, if this rule was applied universally by every local housing authority and private owner, and with the most stringent possible requirements.

Howard Husock, senior fellow in domestic policy studies at the American Enterprise Institute, noted that most people relying on rental assistance have lived in public housing for several years, and many jurisdictions have sizable waitlists—in theory, the increase in turnover helps address the backlog. Husock also argued that the price of rents varies across the country, and said that local housing authorities can decide what requirements to impose based on specific circumstances.

“Maybe some are going to say, ‘Well, we have such a high vacancy rate here that I think we think a two-year limit is fine.’ Another may say, ‘Well, no, we need a seven-year limit so they may adapt to local housing conditions,’” he said.

To demonstrate the potential benefits of such a program, the Trump administration has cited a program instituted by the local housing authority of San Bernardino, California, which has a five-year time limit on public housing. The authority has found an increase in earnings and full-time employment since this policy has been in effect.

There are ways to ensure the rule is most effective; for example, Husock believes that the rule should not be applied to people currently living in public housing. He also argues that such policies should be accompanied by fixed rents and the creation of automatic savings accounts that would allow renters to accrue interest and create a “nest egg” while they are living in public housing. These accompanying policies are not included in the proposed HUD rule, however—and depending on the decision of the local authorities, the rule could apply to those currently living in public housing.

The research on the impact of such a proposal is relatively scant. Out of more than 3,000 public housing authorities, only 138 are permitted to test time limits and work requirements through HUD’s “Moving to Work” demonstration program, and only a small subset have actually tested these policies. Claudia Aiken, the director of new research partnerships at the Housing Solutions Lab at New York University, noted that the San Bernardino example had mixed results. The majority of families gained some income but exited public housing below the poverty line. In addition, the San Bernardino housing authority has not tracked the experiences of families after exiting the program. Several of the public housing authorities that have implemented this kind of program nationwide have ended their policies, making it difficult to appreciate the larger impact.

Research by the Housing Solutions Lab found that 69 percent of “work-able” households reliant on rental assistance have been in the program for longer than two years, meaning that if the rule was applicable to current participants, they would be at risk of losing their aid. Moreover, the average household receiving assistance in counties with higher rents tends to stay in public housing for longer periods of time than in counties with lower rents.

“This kind of assistance is very scarce. It’s not an entitlement at this point. Only a fraction of those who apply will ever receive it, even fewer will be able to effectively use it,” said Aiken about rental assistance. “It is a totally valid thing for housing authorities to be thinking about how they give more people a chance at this kind of assistance. That said … we just really don’t have a lot of evidence on what amount of time is going to be the most effective, much less for different kinds of households.”

Most of the research on the impact of work requirements and time limits is related to other social safety net programs, such as Medicaid and food stamps. Evidence suggests that work requirements and time limits for the Supplemental Nutrition Assistance Program, or SNAP, may result in decreased participation in the program without significant increases in employment or earnings. When Arkansas briefly implemented work requirements for Medicaid in 2018 and 2019, more than 18,000 adults were disenrolled from their benefits, and Harvard University researchers found there was no significant effect on employment.

Unlike in the Medicaid or SNAP cases, the small number of housing authorities that have voluntarily implemented these kinds of requirements have typically done so alongside supportive services; however, those kinds of policies come with a price tag. Aiken said that the few housing authorities that have implemented such time limits or work requirements have ended them in part because of the expense of the additional administrative burdens.

HUD has estimated that the aggregate cost for public housing authorities, private owners, and renters would have the dramatic range of $2.7 million to $55.3 million. The proposed rule does require housing authorities and owners to implement supportive services if they impose time limits or work requirements, although it “does not propose any specific or new monitoring requirement,” or a clear penalty if an audit or monitoring review finds that they are not in compliance. HUD has yet to release guidance on potential sources for funding these supportive systems.

“Unless you have housing providers who are going to, on their own, provide the funds to stand up these supportive services, I just don’t really see how that’s going to work, because the type and amount of investment you need is not really something that I feel like a lot of housing providers who are providing HUD-assisted housing can support,” said Williams.

Even with the voluntary nature of this rule, some advocates worry that states or the federal government could force their implementation. Arkansas and Wisconsin, for example, have “trigger” laws on the books that would mandate that public housing authorities institute a work reporting requirement if permitted on a federal level. Fischer described a potential future where more conservative states could pass measures through their legislatures to force housing authorities to impose either the time limits or the work requirements. The federal government could also, in theory, threaten federal funding to agencies that choose not to implement these requirements.

Implementation of this rule would likely face some legal challenges. Will Fischer, senior fellow and director of housing policy at CBPP, said that it has been “generally understood that HUD does not have authority to allow or require work requirements under current law.”

“HUD all of a sudden now is saying that they can just issue a regulation that allows work requirements and term limits, but that’s not what has been understood and what the law appears to show,” Fischer said.

It’s unclear when the new rule would go into effect, although the 60-day period for public input ended at the beginning of May, with more than 1,000 comments submitted. For now, the outcomes of proposing such a rule are simply unknown, given the uncertainty about when, where, and how these requirements could be implemented. But for those low-income households that are affected, the potential loss of rental assistance may also come at a time when their ability to access other benefits is uncertain, given pending cuts to Medicaid and SNAP.

“You’re having to readjust your budget, and figure out, ‘OK, well, if I’m not able to afford food this month, does that mean I’m not going to be able to afford the 30 percent of income that I’m supposed to pay in rent for my housing?” said Williams. “If one part of your life is particularly financially stressed, or you’re losing a particular source of income, then that’s going to affect all aspects of your life.”