The rapid rise of housing costs and homelessness has prompted researchers, policymakers, and practitioners to explore the role of direct cash transfers in helping people access housing and afford other basic needs. Programs like the New Leaf Project in Vancouver, Canada; Miracle Money in California; and the Denver Basic Income Project in Denver, Colorado, are testing whether providing lump sums or monthly payments can stabilize people experiencing homelessness, while bypassing the usual bureaucratic barriers to providing emergency shelter, rapid rehousing, or most other interventions. The Housing Solutions Lab has now joined this effort. Through the Bay Area Thriving Families study, the Lab is assessing whether providing cash to formerly homeless families exiting housing assistance can make their transition smoother and improve their long-term stability.
At the same time, these efforts are increasingly intersecting with questions about the future of the federal government’s largest cash assistance program — the Housing Choice Voucher (HCV) program — and whether it would work better if payments went directly to renters instead of landlords. The HCV program, which serves more than 2.3 million households, currently pays landlords subsidies on behalf of participating renters. Research shows that the voucher program reduces rent burdens, crowding, and homelessness, but less than two-thirds of families offered a voucher are actually able to use it, in part because many landlords refuse to accept them, citing arbitrary housing quality inspections, delays in leasing, and bureaucratic inefficiency. Researchers and policymakers have hypothesized that paying rental subsidies directly to renters could help mitigate these and other issues.
This Policy Insight explores the role of direct cash transfers in increasing housing access, with the goals of clarifying the state of research and experimentation in this murky space, highlighting promising innovations, and identifying opportunities for future research. We divide the brief into two parts:
- In the first, we focus on defining cash transfers, comparing them with other forms of public assistance delivery, and exploring debates surrounding cash assistance in the context of housing.
- In the second part, we turn to key program design questions and emerging experimentation. We pay special attention to how cash is incorporated and distinguish between basic income models that assume recipients will spend a portion of the subsidy on housing and more restrictive models that attempt to require or ensure that recipients use their subsidy to pay for housing of a certain kind or quality.
Understanding cash transfers in housing
What are cash transfers?
When delivering social safety net assistance to households, policymakers must decide what form transfers will take. At one end of the spectrum, transfers can be in-kind, meaning the government provides a good (such as food, housing, or something else) to an individual or community. At the other extreme, the government can make direct cash transfers, placing few or no restrictions on how they are spent; an example is the stimulus checks sent to households during the COVID-19 pandemic. Other types of transfers fall somewhere between cash and in-kind benefits. For example, the Supplemental Nutrition Assistance Program (SNAP) — formerly known as “food stamps” — provides food benefits that work like a voucher, since they allow recipients to buy a specific amount of a restricted set of goods in the private market.
The form that social safety net transfers take has important implications. Policymakers sometimes prefer in-kind transfers or vouchers because they can exert more control over the goods that recipients consume, and therefore have more confidence that public funds are being used as intended. Another advantage of in-kind transfers is that they can help lower prices by boosting supply during shortages of specific goods. In the U.S., many social safety net programs provide in-kind transfers or vouchers. Examples include the Head Start program for early learning; Medicare and Medicaid; and SNAP and its sister program, the Women, Infants, and Children (WIC) Program, targeted to pregnant women, new mothers, and young children.
The U.S. safety net includes a few cash transfer programs, such as Temporary Assistance for Needy Families (TANF), which supports low-income families with children, and Supplemental Security Income (SSI), which assists low-income seniors and people with disabilities. The precursors of the SSI and TANF programs date back to the New Deal era. However, cash transfer programs have faced scrutiny based on fears that the funds could be misused, go to people who did not deserve assistance, or encourage welfare dependency. Lawmakers have responded by narrowing eligibility, increasing reporting requirements, and, in the case of TANF, making assistance temporary and combining it with work requirements. More recent cash transfer programs, such as the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), have taken the form of tax refunds.
Today, there is growing interest in whether cash transfer programs can deliver greater efficiency without leading to fraud or misuse. International studies directly comparing in-kind transfers with cash in the context of food assistance have found that not only does cash cost significantly less to administer, but it also results in similar or sometimes better nutrition and health outcomes. Research suggests that recipients tend not to increase their consumption of non-essential items or “temptation goods” like alcohol and tobacco. Proponents of basic income also argue that all people deserve and can benefit from the empowerment that comes with greater agency afforded by less restricted assistance.
The Supplemental Nutrition Assistance Program (SNAP) is the largest federal anti-poverty program in the United States and operates as a voucher program. Benefits are delivered monthly via an Electronic Benefit Transfer (EBT) card that can be used only for approved food purchases at authorized retailers, excluding non-food items, prepared meals, alcohol, and household goods. While SNAP increases household purchasing power for food and reduces food insecurity, its benefits are intentionally restricted to focus assistance on alleviating hunger and improving nutrition among low-income households. SNAP is not meant to function as general income support, though it may indirectly free up income for other expenses.
Temporary Assistance for Needy Families (TANF), by contrast, is formally structured as a cash transfer program. However, in reality, it provides highly constrained assistance. TANF benefits are typically delivered as cash or cash-equivalent payments that can be used for a broad range of expenses, yet eligibility and continued receipt are tightly governed by work requirements, time limits, sanctions, and behavioral conditions that vary widely by state. Moreover, many states divert TANF funds away from direct cash assistance toward services such as workforce programs, child welfare, or administrative costs, resulting in very low cash benefit levels and limited access for eligible families.
Debates about cash in the context of housing
Housing assistance in the U.S. rarely takes the form of direct cash transfers. Instead, many programs – such as the public housing program, the Low Income Housing Tax Credit (LIHTC), and other project-based subsidy programs – focus on providing in-kind transfers to low-income households. Even as the government has shifted toward providing demand-side subsidies, beginning in the 1970s and 1980s, it has done so through vouchers rather than cash (see the table below). Yet there are longstanding debates about whether cash could reduce administrative costs associated with vouchers while still helping households access decent, stable housing.
As mentioned previously, one of the greatest challenges associated with non-cash forms of assistance is the high administrative costs they often impose. The rental assistance programs described above face a “double take-up challenge.” This means that not only do tenants need to successfully apply and qualify for assistance, but their landlords must also agree to participate and comply with program requirements. Rapid rehousing providers address this challenge by offering search assistance and conducting landlord outreach, but voucher holders are often themselves responsible for finding a landlord willing to accept their subsidy. Nationally, only 61 percent of households can use their housing voucher within 180 days, and even extending the search period to 240 days raises the success rate to only 63 percent.
Because of the challenges in finding landlords willing to participate, many public housing authorities (PHAs), like RRH providers, have invested time and resources into recruiting landlords and ensuring landlord satisfaction. These agencies bear other administrative burdens as well. In order to qualify for a voucher, for example, a rental unit must pass an initial and annual Housing Quality Standards inspection to ensure that federal dollars are not subsidizing unsafe housing conditions. PHA staff must also perform rent reasonableness determinations to make sure that the rent amount and any rent increases are reasonable compared to similar homes in the area. A decade-old study found that for every voucher under lease, PHAs spent an average of nearly 14 hours per voucher, per year on frontline activities like intake, lease-up, recertifying tenants’ eligibility, and inspections. This does not include overhead activities (such as I.T., payroll, finance, procurement, and other activities) associated with operating the housing authority itself. These costs have likely increased since the study was published.
Depending on their design, cash-based alternatives have the potential to reduce many of these administrative costs. If housing authorities and homeless service providers put cash directly into the hands of tenants, they would no longer need to enter a contractual relationship with the landlord. This could remove much of the paperwork and red tape that currently pushes landlords to turn down assisted tenants, especially in higher-cost markets where voucher tenants compete with market-rate tenants. This, in turn, could reduce the search challenges tenants face and the landlord recruitment costs borne by PHAs and rapid rehousing providers. “Cashifying” the subsidy even further — for example, by using a flat subsidy that does not fluctuate with income, streamlining eligibility requirements, or removing safeguards that require the subsidy to be used exclusively for housing costs or for homes of a certain quality — could dramatically reduce administrative costs.
At the same time, however, such streamlining could introduce risks. Firstly, landlords would face the risk that subsidized tenants would not pay their rent. Without the guarantee of payment from a PHA or RRH provider, landlords might be unwilling to rent to households with very low incomes or a previous history of homelessness or eviction, even if that household is receiving a direct cash transfer. Policymakers and voters may also be wary of investing public funds in a housing-focused cash transfer program without knowing whether those funds will be used as intended.
It is still unclear how great these risks may be. There is growing evidence that even very poor people use unrestricted cash to pay largely for basic necessities; for example, housing, transportation, and food were the largest expenditures among participants in a basic income experiment targeting unhoused residents in Los Angeles. We also know that paying rent is a top priority in low-income households, and evidence suggests that many cut back on food and medicine in order to afford their rent and utility bills. Proponents of cash also argue that, in the context of highly volatile earnings and work hours, cash transfers provide low-income households with the flexibility they need to manage income shocks and trade-offs between housing and other costs.
A related concern is that, without guardrails, low-income households will not consume enough housing and settle for or get stuck in poor-quality or even unsafe homes. A federal experiment found that when given cash with no strings attached, low-income tenants often ended up in substandard housing, whereas similar tenants required to meet minimum housing quality standards did not. This is a weighty finding, since most policymakers and their constituents would find it abhorrent to subsidize “slumlords.” Researchers point out, however, that housing quality has increased substantially since this experiment occurred in the 1970s, even for the lowest-income households. And the PHLHousing+ study has released early results showing that both voucher and cash recipients see statistically significant improvements in self-reported housing quality, with cash resulting in improved housing quality sooner than a voucher.
One other aspect of the debate relates to neighborhood outcomes. Researchers and policymakers had high hopes that moving toward demand-side housing assistance like vouchers could help assisted households escape the high-poverty neighborhoods where public housing was concentrated. Vouchers have had limited success in meeting these hopes. Voucher holders generally live in less disadvantaged neighborhoods than public housing households, but they rarely access low-poverty neighborhoods with good schools. Only with significant investment in mobility services have PHAs been able to improve these outcomes. It remains unclear whether direct cash assistance without similar mobility counseling would yield better results, and neighborhood outcomes should be a key focus of cash-based housing assistance experiments.
Past experimentation with cash housing assistance
The federal government has experimented with direct rental assistance in the past. In the 1970s, the U.S. Department of Housing and Urban Development (HUD) launched the Experimental Housing Allowance Program (EHAP) to test whether “providing purchasing power directly to the consumer” in the form of a housing allowance could allow the recipient to act more like any other tenant in the free market, thereby enhancing their freedom and sense of dignity while preserving market efficiencies. EHAP tested several different versions of a direct-to-tenant subsidy, varying how the subsidy was calculated and whether households needed to use the subsidy for a home that met certain quality standards. The experiment found that housing quality requirements resulted in higher-quality housing but substantially lower take-up. Meanwhile, households given more flexibility typically did not use it to consume more or better housing.
A natural experiment also occurred during the COVID-19 pandemic, when states and localities were tasked with rapidly delivering emergency rental assistance (ERA) to tenants amid a national economic shutdown. While most of the assistance was paid to landlords on tenants’ behalf, the urgent need to prevent evictions led some localities to design cash-based ERA programs or create a “direct-to-tenant” option in cases when landlords were hard to reach or enroll. However, little research has emerged comparing these direct-to-tenant payments with ERA payments directed to landlords in terms of either administrative costs or tenant outcomes.
Despite these exceptions, and even amid a surge of cash-based experiments in recent years, there is a need for more research that can help us understand the potential of cash to improve access to housing and to grapple with the unique concerns that drive housing assistance policy debates. In the second part of this Policy Insight, we turn to the emerging experimentation in this field.
Key program design questions and emerging experimentation
Key design questions and tradeoffs
Researchers and policymakers interested in designing cash-based housing assistance programs face a set of key questions: How should eligibility for the program be determined? What method should be used to calculate the benefit amount? Should there be restrictions on how recipients use the cash and, if so, how will these restrictions be monitored and enforced? Each of these design decisions is likely to have important effects on several factors, including the households most likely to benefit, the types of housing they can access, their sense of agency and empowerment, the cost of administering the program, and more. In this section, we highlight key design questions, their underlying conceptual frameworks, and their potential tradeoffs.
Eligibility
Who should be targeted to receive cash assistance for housing? The answer depends largely on the “theory of change” for how cash could improve housing outcomes for different groups, compared to, or in addition to, the social safety net programs they may currently access. For example, several cash transfer programs have targeted individuals or families who have recently experienced homelessness. In this case, cash is being compared to other homelessness response systems, such as emergency shelters and rapid rehousing. The Bay Area Thriving Families study intentionally targets families exiting rapid rehousing to understand whether cash can smooth the “cliff” that causes many people to reenter homelessness or to relocate to a lower-cost home far away from their social and economic networks once their subsidy ends. The choice to focus on families with children was driven by the rationale that these households have distinct housing and locational needs that may make the housing search more difficult and increase the relative impact of cash.
By contrast, the New Leaf Project in Vancouver, Canada, tested the benefits of cash in the context of emergency shelters. The randomized control trial targeted individuals residing in homeless shelters who also met specific criteria — they could not be elderly, homeless for longer than two years, or suffer from severe substance use or mental illness. The experiment tested whether a lump-sum payment to these individuals could help them exit shelter and reduce reliance on shelters and other supports going forward, while minimizing the risk of harm that a large, one-time infusion of cash could have for someone with poor mental health or addiction.
In the context of federal rental assistance, cash could also be targeted to a variety of different groups based on whether it is envisioned as an on-ramp, off-ramp, or an alternative to a housing voucher or other subsidy. The Housing Solutions Lab’s six-month Direct Rental Assistance cohort with five public housing authorities exploring cash-based rental assistance pilots helped elucidate this spectrum (see the table below). For on-ramp programs, it may make sense to target those who are waiting for a voucher, but who face the greatest challenges to maintaining their place on the waitlist and successfully using that voucher to rent a home if they are offered one. Research shows that waiting for a voucher is a long, opaque, and psychologically burdensome process. Applicants who are severely housing insecure, and therefore have frequent address changes, have the hardest time staying in touch with housing authorities to verify their continued interest in and eligibility for assistance. For those who are able to stay on the waitlist and receive a voucher, more than a third will be unable to use it, and households headed by someone who is over age 62 or Black will be least able to use their voucher. Receiving cash prior to a voucher could give the most vulnerable groups, including those experiencing homelessness, people of color, and seniors, the cushion they need to stay on the waitlist and successfully use a voucher.
Off-ramp programs are premised on the idea that cash can help currently assisted families gain financial independence and ultimately exit assistance, freeing up scarce resources for needier households. There are multiple ways that transitioning to cash housing assistance could foster financial independence. One theory is that receiving cash can help assisted families look and feel more like other tenants in the rental market, allowing them to make less constrained housing choices — such as moving to neighborhoods with better access to good schools and jobs — and cultivating a sense of agency and personal responsibility. Another possibility is that the flexibility of cash could allow families to better budget for costs associated with searching for and starting a new job or educational program. Finally, if the cash is structured to remove penalties for income gains, it could also promote employment and career advancement.
Off-ramp programs must convince households to give up their current form of assistance in favor of cash, so they bear a special responsibility to identify households likely to benefit – not suffer – from fewer guardrails. The best candidates are those with stable employment and strong potential for income growth. Households headed by seniors or people with disabilities are less likely to increase their incomes even when given cash. Other households may be stuck in a cycle of precarious low-wage employment and rely on the protections that a traditional voucher provides against income loss and landlord exploitation. On the other hand, relatively high-income households that are very close to the income threshold at which they would lose their assistance may also not be good candidates for an off-ramp intervention, since converting the very small subsidy they receive into cash will have less of an impact on their pocketbooks.
Across all of these programs, it is important to consider whether cash may harm households by causing them to lose other social safety net benefits when their total income increases. For example, the Philadelphia Housing Development Corporation (PHDC) recommended that households receiving SSI or Child Care and Development Fund subsidies not enroll in its pilot program offering cash subsidies in the amount of a voucher, due to the high risk of losing those benefits. These risks may be smaller in programs where the cash benefit is limited to housing expenses and therefore not counted as income (see “Restrictions on the use of cash,” below).
Subsidy calculation
Another critical question – or set of questions – is how to calculate the subsidy, since subsidy calculations have implications both for participants and for administrative costs. Should it be deep, or relatively shallow? Should it be a flat amount, or should it fluctuate with recipients’ income or rent? If the latter, how often should it be recalculated to account for rent and income changes? Should the benefit be delivered as a lump sum, in monthly installments, or at some other cadence?
Concerning the depth of the subsidy, for it to function as housing assistance, it must be deep enough to significantly impact recipients’ ability to afford stable housing. Rents have risen rapidly in the last 20 years, consuming an ever-larger share of low-income households’ earnings. A shallow subsidy like the $333 given to low-income mothers in the Baby’s First Years trial appears to have had little impact on their experience of food insecurity and other forms of economic hardship. By comparison, the HCV program offers a deep subsidy, averaging $1,174 per household in 2024. Most recent and emerging cash-based programs aimed at improving housing stability offer subsidies of similar depth (see “Recent and Emerging Experiments,” below).
Not all of them, however, imitate the HCV’s complex subsidy formula, which covers the difference between 30 percent of the recipient household’s income and either the payment standard or their actual rent, whichever is lower. The subsidy calculation relies on initial and periodic recertifications of households’ income and rent, as well as continual adjustments to payment standards based on changes in “fair market rent.” This formula has the advantage of protecting low-income households against drops in their income and increasingly unaffordable housing markets. Nick Grasley, a PhD candidate in economics, argues that this creates a form of insurance that justifies federal investment in housing vouchers over cash. At the same time, however, the HCV formula imposes a penalty on households that increase their income, since their subsidy will decrease as soon as they recertify. It also comes with administrative costs, including the time needed to continuously recertify households, track rents, and set payment standards. Policymakers designing cash-based housing assistance must determine whether these costs are justifiable.
Another way policymakers may diverge from the HCV program is by creating a “shopping incentive.” As Paul Joice, Katherine O’Regan, and Ingrid Gould Ellen explained in their 2024 paper, “voucher holders have neither the luxury of shopping for a good deal nor the incentive to do so.” If they find a rental home that costs less than the payment standard for that area, their subsidy will decrease accordingly, and they will pay the same amount they would have otherwise. This may protect voucher recipients from the impetus to seek out a cheap and potentially low-quality home, but it also necessitates yet another onerous administrative process called “rent reasonableness,” whereby the housing authority must ensure that the participating landlord is not overcharging. Emerging cash-based housing assistance programs, like the HOC Bridge program discussed below, are designed to instead reward program participants (within certain bounds) for securing a less expensive home by allowing them to keep the savings.
Finally, designers of cash-based housing assistance programs must consider how frequently to deliver the subsidy. Because rent is usually due monthly, many housing subsidies, including HCV, also pay out on a monthly basis. Since cash subsidies go directly to tenants, program designers considering a monthly payment schedule should weigh how soon before rent is due the payment should be delivered to recipients. If it is delivered too early, it may increase the likelihood that tenants will use the subsidy for non-housing expenses and fall behind on rent. On the other hand, if it is paid out too soon before rent is due, it may not provide enough flexibility, one of the most important attributes of cash. Some cash programs have also experimented with lump sum payments, such as the Denver Basic Income Project, which provided one of its treatment groups with a large upfront payment of $6,500 followed by a smaller monthly payment of $500. Especially for programs targeting households currently experiencing homelessness, it may make sense to provide a larger initial sum that can cover move-in costs like security deposits and first and last months’ rent, and give recipients an extra cushion while they settle and seek employment.
Restrictions on the use of cash
Perhaps the most fundamental design question of all is whether and how to restrict the use of a cash subsidy that is intended to improve access to stable housing. The answer to this question is what distinguishes housing-focused guaranteed income (GI) programs from direct rental assistance (DRA) programs. GI programs may target people experiencing housing insecurity or calibrate the subsidy to housing costs, but the cash they provide is unconditional, meaning that there are no consequences for recipients if they fail to use the subsidy for housing costs. DRA programs, by contrast, do require recipients to use the subsidy for housing costs. They may verify this in a number of ways, such as requiring program participants to submit rent receipts (as the DC Flex program did; see more detail below). They may also impose consequences for participants who fall behind on rent or face eviction proceedings, such as ceasing their subsidy.
DRA program designers may also further restrict the use of cash by imposing a minimum level of housing consumption. Such restrictions may be motivated by a desire to encourage households to move to better-quality housing or resource-rich neighborhoods, or an unwillingness to subsidize negligent landlords. These restrictions and their enforcement can vary greatly in stringency; for example, DRA could emulate the HCV program by adopting detailed housing quality standards and ensuring that subsidized homes meet them through a series of inspections. A less stringent option would be to require participants to demonstrate that they have leased a home that is officially licensed and regularly inspected by a local code enforcement agency.
The tradeoffs inherent in these choices are weighty. Restricting the use of cash to housing costs can protect recipients from losing other safety-net benefits because the cash is no longer counted as new income. Restrictions can also reassure landlords, policymakers, and the public that the subsidy will be used as intended, thereby building political support for a cash subsidy. However, restrictions and the enforcement mechanisms that come with them also create administrative costs and can erode the flexibility and sense of empowerment that differentiates cash from other forms of transfers.
These tradeoffs come into sharpest focus when contemplating housing quality restrictions. Researchers trace many of the lease-up challenges associated with the HCV program to its housing quality standards. The inspections used to enforce the standards cause friction and delays for landlords, resulting in lost rental income, and are the chief reason landlords choose not to participate in the voucher program. Because DRA programs do not directly subsidize landlords and seek to avoid contractual relationships between the housing authority and landlords, they may face even greater challenges convincing landlords to comply with inspection requirements. Even a far simpler restriction, such as a requirement to furnish a lease for a licensed rental as described above, still limits participating households’ ability to participate in the rental market as an unsubsidized tenant would and could close off options, especially for multigenerational or otherwise unconventional households. Its impact also depends heavily on local housing conditions and the rigor of the local code enforcement regime.
In the following section, we investigate how recent and emerging experiments have tackled these design questions and tradeoffs. We pay special attention to restrictions on cash use and how they may affect program implementation and outcomes.
Recent and emerging experiments
There are two broad veins of experimentation with cash-based rental assistance, which roughly align with the degree of restriction placed on the use of the cash (see above). On the one hand, researchers are paying more attention to the housing outcomes of participants in GI experiments or designing unconditional cash transfer programs that target individuals experiencing homelessness. In these trials, the cash is unconditional – participants are not required to use it for housing expenses or to consume a certain type of housing – but the underlying theory of change assumes the cash will enable households to maintain or improve their housing. The Bay Area Thriving Families experiment and the Denver Basic Income Project, which target formerly homeless individuals and families and pay close attention to housing outcomes, are perhaps the most relevant examples and are described in greater detail below. But other experiments have also generated evidence about the impact of GI on housing outcomes, including pilots in Compton, CA; Durham, NC; Newark, NJ; and many more.
Bay Area Thriving Families (BATF), also known as It All Adds Up. The Housing Solutions Lab at the NYU Furman Center has partnered with rapid rehousing providers in the San Francisco, CA area to evaluate whether a GI subsidy can help formerly homeless families exiting assistance achieve long-term stability.
Who is eligible? The cash subsidy is paid to families with children who are leaving rapid rehousing programs. Rapid rehousing provides temporary housing subsidies for households experiencing homelessness, but research shows that after the subsidies end, families often cannot maintain their housing, and many move to housing far from their home community. They may have greater difficulty accessing employment, childcare, and social safety net services, or face long commutes. Targeting cash to this group will elucidate whether it can address the particular challenges that families exiting assistance face.
Subsidy calculation. The BATF is a randomized control trial that assigns participants to receive either $1,000 per month (the treatment group) or $50 per month (the comparison group) for one year after exiting rapid rehousing. The subsidy is a fixed amount that is easy to calculate and disburse. It is provided monthly, which aligns with rent payment schedules. The $1,000 cash payment is roughly two-thirds of the average monthly rapid rehousing program subsidy, intended to serve as a “soft landing” from housing assistance. While relatively deep compared to other GI experiments, the Bay Area’s housing costs are among the highest in the nation.
Restrictions on the use of cash. The BATF payments are unconditional. To mitigate the potential risk of loss of benefits, the study secured waivers from state social service agencies and housing authorities stating that they would not count BATF payments as income when calculating their benefits and offered benefits counseling to participants. Researchers are using administrative data and surveys to closely track how participants use the cash and their housing outcomes, but participants do not have to formally document how the cash is used or the extent to which it is used for housing.
Denver Basic Income Project is a pilot launched in Denver, Colorado, in 2021 to test whether unconditional cash transfers improve stability for people experiencing homelessness. The program has distributed more than $10 million to over 800 participants through monthly payments or lump sums. The randomized control trial is led by University of Denver’s Center for Housing and Homelessness Research.
Who is eligible? Adults experiencing homelessness, including those staying in motels, campgrounds, cars, public spaces, couch surfing, or emergency shelters. Applicants must be 18 or older. Individuals may not have severe and unaddressed mental health or substance use needs (as determined by the BASIS-24 screening tool). Eligible participants are recruited through partner CBOs, selected by lottery, and then randomly assigned to a payment group.
Subsidy calculation. DBIP’s study design places participants into two treatment groups and one control group. Group A receives $1,000 per month for 12 months. Group B receives $6,500 upfront, followed by $500 per month for 11 months (the same total amount). Group C serves as the active comparison group and receives $50 per month for 12 months in compensation for participation. This design, based on the Canadian New Leaf initiative, was intended to test the impact of a lump-sum transfer on achieving housing stability quickly, particularly given the large upfront costs associated with moving.
Restrictions on the use of cash. DBIP’s cash transfers are low-barrier and unconditional. There are no restrictions on how the funds may be spent, no sobriety, work, or education requirements, and recipients do not lose payments if they increase their savings, access other supports, or experience changes in income. Researchers gather general spending data through surveys and interviews, as well as information on employment and well-being. They have found that participants use the money to cover groceries, transportation, clothing, hygiene products, rent, car repairs, and debt.
On the other hand, DRA pilots have emerged to test whether paying subsidies directly to renters could improve outcomes for participants in existing housing assistance programs like HCV and ERA. As described previously, all ERA programs funded by the American Rescue Plan Act ultimately had to provide a direct-to-tenant payment option, although the impact of these direct payments remains understudied. One jurisdiction that deliberately set up and studied a direct-to-tenant emergency rental assistance program was Washington, D.C., which created the DC Flex program described below. Initially piloted in 2017, the program received a new infusion of funding to serve households in 2025 and 2026.
DC Flex was launched in Washington, D.C. in 2017 to test whether shallow, flexible subsidies can help extremely low-income working families maintain housing stability. The program provides an annual subsidy through a checking account that can only be used to pay rent; however, families can decide how much to withdraw each month.
Who is eligible? Eligibility varies by cohort, but the program typically enrolls households earning at or below 30 percent of Area Median Income (AMI) with at least one employed adult. Families with children were the focus of the original pilot. Participants must reside in D.C., have a lease in their name, have applied for or be receiving other housing assistance, and be employed.
Subsidy calculation. Participants may remain in the program for four or five years, depending on cohort rules, and may roll over unused funds from year to year. For families, the annual subsidy ranges from $7,200 to $8,400. The pilot for single adults is capped at $7,200 per year.
Restrictions on the use of cash. Subsidies are deposited into a dedicated account, and participants choose how much of their annual allocation to spend each month, up to the amount needed for rent. Funds are restricted to rent payments only; participants may not use them for any other purpose.
Perhaps the oldest ongoing DRA experiment in the context of housing vouchers is in Keene, New Hampshire. Keene Housing established the linked Stepped Subsidy Program in 2000. It targets households headed by working-age, non-disabled adults for a subsidy that imitates a voucher but is paid directly into households’ bank accounts. Participating households receive an especially generous subsidy in years one and two (it is calculated as the difference between rent and 20 percent of household income). In year three, subsidy calculation is “disconnected from [household] earnings” and set at 65 percent of the payment standard for a given rental unit. Finally, in year four, the subsidy drops to 45 percent of the payment standard. Importantly, stepped subsidy families also participate in Keene Housing’s THRIVE Program, which provides supportive services and referrals meant to help participants set and measure progress toward their education and employment goals, and are eligible for Rent Credits (temporary reductions in rent) and Development Grants (subsidizing costs related to education or employment) to incentivize them to achieve their goals. Keene Housing Executive Director Joshua Meehan said the goal of this program is to promote self-sufficiency by replicating market conditions for tenants, not to reduce barriers to leasing up with a voucher. Still, he has rarely heard of landlords complaining that tenants did not pay their rent, and only a handful of families have ever been terminated from the program.
Keene’s program is small – fewer than 70 families currently participate – making it hard to draw conclusions about its effectiveness. Until recently, it was unclear whether other housing authorities could design similar programs. This changed in 2024, when the U.S. Department of Housing and Urban Development (HUD) announced that housing authorities with a Moving-to-Work designation had the flexibility to experiment with cash-based rental assistance, and issued a Request for Information seeking public input to “inform future policy development” on this topic. Several Moving-to-Work housing authorities have sought HUD approval to launch cash rental assistance programs. HUD has so far taken a conservative approach, pushing housing authorities to conduct inspections and verify that cash subsidies are used for rent as part of their proposed pilots.
To date, only one housing authority has received HUD approval since the 2024 announcement. Lewiston Housing, in Maine, plans to launch a five-year DRA pilot, for which both current voucher households and those on the voucher waitlist will be eligible. Participants will pay roughly 30 percent of their income toward rent, and the housing authority will provide the remainder via a debit card. Participants must select rental homes that meet safe and habitable conditions under Maine law and local code. They will complete a self-inspection checklist before they move in, followed by a formal inspection within 30 days (unless the home is new, has passed a formal inspection within the past 3 years, or is located in a very low-poverty neighborhood, in which case the inspection can be waived). Other housing authorities, including Santa Clara County Housing Authority, Winnebago County Housing Authority, and Reno Housing Authority (see below), have sought HUD approval for their proposed DRA pilots.
Reno Housing Authority (RHA) has partnered with the Housing Solutions Lab at the NYU Furman Center to design and evaluate a two-year randomized control trial (RCT) comparing the receipt of DRA to the receipt of a traditional housing voucher in terms of lease-up success, tenants’ housing stability and mobility outcomes, landlord participation, and administrative cost.
Who is eligible? Households waitlisted for the HCV program in Reno, NV, excluding those whose primary source of income is fixed (such as SSI), will be given the opportunity to opt into the pilot program. Those who do so will be randomly assigned either to a traditional housing voucher or cash assistance. Enrollment will continue until there are 100 households in each group. The decision to target households with wage income, which are more likely to include working-age householders and children, was based on RHA’s interest in whether DRA can improve these households’ ability to use their vouchers and access neighborhoods with good jobs and schools.
Subsidy calculation. DRA payment amounts will largely mirror those in the HCV program ( monthly payments based on the difference between rent and 30 percent of a household’s income), but will incorporate a “shopping incentive” (see above). In other words, while DRA will be capped at a rental unit’s gross rent, unlike the HCV subsidy, it will not be reduced if a household chooses a unit with a gross rent lower than the payment standard. RHA wants to test whether this incentivizes households to “shop” for a cost-effective unit just as an unsubsidized renter would and ensure that both DRA-assisted households and RHA do not overpay for housing.
Restrictions on the use of cash. RHA will require that the DRA be used for rent. Participating households that fall behind on rent will be given a chance to apply for emergency rental assistance from the City of Reno and will be granted an informal hearing before any loss of assistance. RHA has also proposed several ways to reduce the burden inspections place on tenants and landlords, including an “audit” approach in which only a share of units leased with DRA would be inspected, with inspections targeted to buildings most likely to be out of compliance based on past data. HUD has pushed back on these proposals; RHA’s latest Moving to Work (MTW) plan submission proposes remote video inspections as an alternative to physical inspections.
Some experiments have married aspects of both GI and DRA. The City of Philadelphia’s PHLHousing+ pilot and the HOC Bridge program in Montgomery County, Maryland, for example, rely on non-federal funds and so have more flexibility to relax restrictions on the use of the cash, while still aiming to test cash in the context of existing housing assistance programs. In particular, PHLHousing+ tests housing vouchers and cash payments side by side. The pilot’s cash subsidy is calculated to mirror the depth of a voucher, and cash recipients are drawn from the city’s housing assistance waitlists. Although the research team is carefully studying the housing outcomes of the cash group, the pilot places no restrictions on the use of the cash or recipients’ housing consumption.
HOC Bridge is a locally funded, off-ramp DRA program launched in early 2026 by the Housing Opportunities Commission (HOC) of Montgomery County, MD. The Housing Solutions Lab is working closely with the HOC team to evaluate program take-up and implementation, and explore whether program participants are able to achieve income gains that will move them closer to exiting assistance.
Who is eligible? Current voucher holders who have relatively high incomes (equal to 50 percent or more of AMI), whose primary source of income is wage earnings, and whose subsidy payment in the HOC Bridge program would be more than $0 but less than $700 per month, were eligible for the initial cohort of 10 households. These criteria resulted in a pool of 84 eligible households. Among these, priority was given to households in which the head of household was the primary wage earner (as opposed to households headed by seniors with adult children, for example). By setting these criteria, HOC hopes to target households who have the best chance of achieving the financial stability needed to exit housing assistance, and for whom the greater flexibility of the HOC Bridge subsidy could provide the extra boost they need.
Subsidy calculation. Like the HCV subsidy, the HOC Bridge subsidy is meant to cover the difference between 30 percent of a household’s income and their rent, but it incorporates several tweaks. First, like Reno’s program, it incorporates a shopping incentive. Second, the cash subsidy will not decrease even if participating households’ income increases for a period of two years. This is called an “earned income disregard” and is meant to remove the disincentive to income growth built into the HCV program.
Restrictions on the use of cash. HOC Bridge subsidies must be used for rent and utilities, and participating households face termination from the program if they fall behind on rent and fail to recover within a certain timeframe. Because HOC Bridge is locally funded, HOC was able to choose to waive inspections entirely. Instead, it requires that participants select homes that are registered with and regularly inspected by Montgomery County.
PHLHousing+ is a randomized control trial launched in Philadelphia in 2022 to compare cash subsidies with traditional HCVs in terms of their impact on households’ housing access and stability. The 3.5-year program is being administered by the Philadelphia Housing Development Corporation (PHDC) and evaluated by the Housing Initiative at Penn (HIP).
Who is eligible? Households earning less than 50 percent of AMI with at least one child age 15 or younger are eligible. Participants are randomly selected from the Philadelphia Housing Authority’s HCV and public housing waitlists and then invited to join the program. Households that already receive a HCV or live in public housing are not eligible.
Subsidy calculation. The cash subsidy calculation closely approximates the HCV formula. The 301 households in the cash treatment arm receive a monthly payment that equals the difference between their rent and 30 percent of their income.
Restrictions on the use of cash. Cash assistance is unconditional and is provided to households via a prepaid debit card. The goal of this design is to reduce the administrative burden associated with HCVs, avoid the barriers tenants face in finding a landlord willing to accept a voucher, give households flexibility in addressing housing costs (such as security deposits and application fees), and generally test whether greater autonomy improves outcomes. Researchers use surveys and interviews to understand how households are using the cash.
There have been few examples of on-ramp programs to date. The California Department of Social Services (CDSS) has partnered with GiveDirectly, a nonprofit focused on cash-based poverty relief, to design and implement an unconditional cash transfer program for older adults. Although the program is still in development, it will likely target seniors waitlisted for housing assistance in San Joaquin County, and could produce valuable evidence about whether cash can help stabilize this population and improve their outcomes once they are offered long-term assistance.
Emerging lessons and unanswered questions
Ongoing pilots are providing valuable new evidence about the role of cash transfers in housing assistance, and will produce more evidence in the years to come. Yet they also have limitations and may leave important questions unresolved.
For instance, one of the most promising aspects of cash-based housing assistance is its potential to reduce the administrative burdens associated with existing programs. In order to show whether cash-based programs fulfill this potential, and whether they can do so without compromising housing quality, pilots must directly compare cash with traditional forms of assistance, such as vouchers, at sufficient scale to generate statistically significant results. But many existing pilots are small and have short durations (1-3 years), either because of funding constraints or, in the case of pilots that will take advantage of the flexibility granted to MTW housing authorities by HUD, because of the slow turnover of existing housing vouchers. In addition, not all pilots will allow for direct comparisons between participants who receive cash or a different kind of transfer.
PHLHousing+ represents the first real opportunity to directly compare vouchers and cash. Preliminary findings have been rich, but the pilot has only enough funding to provide cash payments to 301 households and, over the enrollment period, only 170 households were offered a housing voucher. These sample sizes are not large enough to allow researchers to consistently detect statistically significant differences in outcomes between the two treatment groups. Other pilots proposing to directly compare cash and vouchers, like RHA’s, have even smaller sample sizes.
In addition to being small, pilots planned or launched to date have been highly idiosyncratic, varying widely with respect to eligibility criteria and subsidy calculation. Perhaps most important has been the variation in restrictions on the use of cash, with housing-focused GI pilots diverging from DRA models, and DRA models themselves taking very diverse approaches to inspections and compliance requirements. This idiosyncrasy makes it challenging to parse the impact of local context versus program design, and to understand which design choices are most effective. MDRC, a nonprofit focused on rigorous evaluation of social policy, has worked to assemble a group of five DRA pilots that would adopt common design features in order to overcome this challenge, but it remains unclear whether these pilots will be able to move forward amid slow voucher issuance and a drawn-out HUD approval process. HUD decision-making could also severely restrict participating housing authorities’ ability to implement MDRC’s proposed pilot design.
The limitations of existing pilots may make it difficult to answer other important questions, such as whether cash-based housing assistance can improve landlord participation, lease-up, and households’ access to high-opportunity neighborhoods. While some pilots are explicitly designed to test whether cash reduces barriers to leasing in lower-poverty communities, evidence remains limited, and it is still unclear whether cash alone can replicate the benefits of mobility counseling and other supportive services.
It is increasingly evident that, while philanthropy can support small and novel experiments, federal funds will be needed to rigorously test whether cash assistance can improve housing outcomes compared to existing homelessness response and federal rental assistance programs. This could take the form of granting a new group of housing authorities the ability to implement DRA, along with streamlined inspections and other flexibilities, as part of an MTW cohort and evaluation, or a federally funded multisite demonstration similar to the Moving to Opportunity Study or the Family Options Study.
Even as a larger-scale, federally funded study remains on the horizon, the ever-widening variety of cash-based housing assistance experiments offer important lessons about research design. First, cash pilots must be clear about the outcomes they seek to impact, and their theory of change for how cash can produce those impacts. Models that place severe restrictions on the use of cash, such as frequent verification of rent payment or burdensome inspections, may not see improvements in housing access or the cost of administration, compared to existing housing assistance systems. Off-ramp models that aim to help households exit assistance should be targeted to households most likely to be successful and have safety nets in place. And especially in this early phase, quantitative research must be complemented with qualitative research to understand the experiences of both tenants and landlords and help explain how outcomes are related to the specific aspects of program design and local context.
Acknowledgements
This Policy Insight was generously supported by Google.org and the Abdul Latif Jameel Poverty Action Lab (J-PAL). The author thanks Martha Galvez, Ingrid Gould Ellen, and Katherine O’Regan for their valuable comments; Claudia Zequeira for superb editorial support; Finlay Scanlon for research assistance; and all of the housing agency leaders and staff who informed this work.If you have questions about this research, please contact the author, Claudia Aiken, Director of New Research Partnerships, at claudia.aiken@nyu.edu.