Public and Subsidized Housing version 11.2The Urban Institute TRIM3 Reference Contact Us Version History Dictionary
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Public and Subsidized Housing version 11.2 The Urban Institute TRIM3 Reference Contact Us Version History Dictionary |
The PubOrSubsidizedHousing module simulates the operation of the Department of Housing and Urban Development's (HUD) federal housing subsidy programs for renters. The rental subsidy programs, most notably the Public Housing and Section 8 programs, aim to provide affordable housing meeting minimum quality standards to low income families. The Public Housing and Section 8 project-based assistance programs finance the construction of housing projects specifically for low income tenants. The Section 8 Housing Choice Voucher Program provides low income families with vouchers that reduce the rent on existing, privately-owned housing. These housing programs are not entitlement programs, and annual funding levels are determined by appropriation. Households that meet eligibility requirements may be placed on a waiting list until a public housing unit or housing voucher is available.
The PubOrSubsidizedHousing module uses CPS reported information to identify households residing in public housing or receiving government housing subsidies. For those households, PubOrSubsidizedHousing determines the size of the housing unit, based on household composition, and the Fair Market Rent (FMR) for that size unit, based on the state of residence. PubOrSubsidizedHousing then calculates the household's rental payment according to housing program rules. The housing subsidy is calculated as the difference between the FMR and the household's rental payment. The subsidy calculation most closely approximates the operation of the Housing Choice Voucher Program, in which the local Public Housing Authority (PHA) pays the owner of the housing unit the difference between the household’s required rental payment and the PHA’s “payment standard,” which is set at between 90 and 110 percent of the Fair Market Rent (or higher or lower with HUD approval). No such subsidy calculation is involved in the public housing and Section 8 project based housing programs, so the real-world subsidy value for these programs is less clear.
Although some rules of the housing programs are set on a federal level, the programs are generally very localized. The local PHA, which can cover an area as small as a section of a city, is given discretion over certain aspects of the programs, including reporting requirements and some aspects of the determination of the household's required rental payment. For simplification, the rules of the PubOrSubsidizedHousing module have been generalized to the state and federal level.
In addition to calulating rents and subsidies for households that live in public or subsidized houing, the PubOrSubsidizedHousing module also imputes housing expenses for non-subsidized units for use in simulating the excess shelter expense deduction in the Food Stamp Program. The non-subsidized household's rent is set equal to the FMR, capped at a percentage of household income.
Although the PubOrSubsidizedHousing baseline simulations typically use CPS reported information and HUD FMRs to identify assisted households and to calculate rents and subsidies (as described above), other types of simulations are possible. PubOrSubsidizedHousing can simulate income eligibility tests, select a percentage of non-reporter households to receive housing assistance, and calculate rental payments and subsidies using a variable specifying the actual rent for the housing unit (if such a variable is made available).
A more detailed discussion of the PubOrSubsidizedHousing module is outlined as follows:
The PubOrSubsidizedHousing module operates on a monthly accounting period as a generalization of local rules regarding the reporting of changes in income. All tenants are required by Federal regulations to have their income recertified at least annually. It is left to the discretion of the local PHA to decide when re-certification is required more frequently. The majority of PHAs require that a large change in income be reported immediately by the tenants. Therefore, the PubOrSubsidizedHousing module operates on a monthly rather than annual basis. Note that this generalization may overstate the speed with which changes in tenant income affect the subsidy benefit if, in practice, changes are only reported at the annual recertification.
In the housing programs, a household applies to a program and is determined to be eligible if it meets the income standard set by the PHA (within maximum limits established by the federal government). Once a household is determined to be eligible, it is placed on a waiting list until a unit (or the subsidy money) becomes available.
PubOrSubsidizedHousing simulations simplify eligibility and participation determination by starting from the information reported in the input data. A household is generally treated as both eligible for public or subsidized housing and residing in such housing if the household reports living in public or subsidized housing in the input data (if CPS variable PublicHousing = 1 or CPS variable GovernmentSubsidy = 1). Some reporter households have income that is high enough that they are simulated to pay the full FMR and do not receive a subsidy. Analysts may choose to exclude these households from the count of assisted households when analyzing the results.
If desired, the module can apply an income test to reported participants using program rule IncomeEligibilityLimits. The annual income limits in this rule vary by state and household size, and are compared to a reporting household's gross cash income. If the income exceeds the limit, then even though the household reports being in a housing program, PubOrSubsidizedHousing does not consider the household to be eligible or participating.
The PublicOrSubsidizedHousing module allows users to specify that additional households should be treated as reporter households. RateNonRepTreatedAsRep specifies the percentage of households that do not report being in public or subsidized housing that are to be treated as reporters. This percentage is only applied to households where the percent-of-poverty does not exceed the amount specified by MaxPovForNonRepTreatedAsRep, and which contain at least one elderly, disabled, or child member. If a percentage is specified for RateNonRepTreatedAsRep, then MaxPovForNonRepTreatedAsRep should also be specified to limit the households which will be treated as reporters to lower-income households. Furthermore, since the rule IncomeEligibilityLimits is also applied to these new reporter households, it is important that it also be specified to further limit eligibility to low-income households.
Fair Market Rents are calculated by HUD each year and reflect the 40th or 50th percentile for rents charged for standard rental housing. Although FMRs vary by locality, they are entered into TRIM3 at the state level. The PubOrSubsidizedHousing baseline uses population weighted state average FMRs, although analysts may enter alternative FMRs into TRIM3 as desired. FMRs vary by the number of bedrooms in the housing unit and are entered through the program rules FMROneBdmStateOneToFiftyFive through FMRNineBdmStateOneToFiftyFive. FMRNineBdmStateOneToFiftyFive is used for households requiring more than nine bedrooms.
PubOrSubsidizedHousing assigns the household the minimum number of bedrooms it is allowed under the program rules, as follows:
In the housing programs, a household's gross annual income equals most earned and unearned income for all household members. Allowable exclusions from income for the housing programs include: employment income of children less than 18, educational assistance, lump sum additions to assets (such as insurance payments, capital gains income, and workers compensation received in a lump sum), foster care payments, amounts received specifically for medical expenses, income of a live-in aide, Armed Forces "hostile fire" pay, amounts from HUD and other government training programs, nonrecurring gifts, and amounts disregarded for SSI as set asides for a Plan to Attain Self Sufficiency. Note that income includes cash payments from TANF, SSI, and general assistance.
PubOrSubsidizedHousing calculates the monthly gross household income by summing the unearned income items specified in the rule UnearnedIncome for each member of the household and earned income specified in the rule EarnedIncome for adult members. A person is considered an "adult" if he or she is an economic adult (with his/her own income information in the input data) and s/he is either the head of the household, the head's spouse, or at least as old as the age specified in the rule AdultAge. Both total earned income and total gross income are reset to zero when negative. PubOrSubsidizedHousing models the exclusions for employment income of children under 18 and educational assistance income but does not model the other exclusions. Annual gross income is calculated by summing the monthly amounts.
In the housing programs, the following items are deducted from annual gross income to determine annual adjusted income:
PubOrSubsidizedHousing simulates all of the above deductions except for the deductions for handicap assistance expenses and elderly medical expenses. When simulating the deductions, "elderly" is defined as being younger than the age specified through ElderlyAge. A person is considered disabled if he or she is considered disabled under the definition of disability used to determine eligibility for SSI. Prior to version 8_0, the disability definition was hardcoded within PubOrSubsidizedHousing. Beginning with version 8_0, disability status is obtained from the SSI variable AnnualPersonEligType, which is input to PubOrSubsidizedHousing through the rule SSIEligType.
PubOrSubsidizedHousing simulates each deduction as follows:
A household's housing subsidy is equal to the difference between the FMR of the housing unit and the household's required rental payment. However, if information about the actual rent is provided through the program rule ActualRent, then the calculation my differ (see section 9 for details).
PubOrSubsidizedHousing sets a household's required rent equal to the larger of: (1) the percent of gross income specified by PercentGrossIncomeForRent; and (2) the percent of adjusted income specified by PercentAdjustIncomeForRent. If this results in a required rental payment that is less than the amount specified by MinimumRent, then the rent is set equal to the lesser of MinimumRent and the percent of gross income specified by MaxPctIncomeOnMinRent. If the required rental payment is larger than the total rent for the housing unit, then the household's rent is set equal to the total rent. The household's annual rent is calculated by summing the monthly amounts.
PubOrSubsidizedHousing computes the monthly housing subsidy by subtracting the participating household's monthly payment from the FMR. When a particular month's required rent equals the FMR, the subsidy is $0 for that month. The annual subsidy is calculated by summing the monthly amounts.
PubOrSubsidizedHousing does not capture the rules that pro-rate the subsidy received by households containing ineligible noncitizens or that require households receiving cash welfare payments earmarked for housing expenses to pay at least the earmarked amount in rent.
A secondary purpose of the PubOrSubsidizedHousing module is to impute housing expenses for households that do not live in public or subsidized housing, so that a shelter expense deduction can be calculated for these households in Food Stamp Program simulations. Housing expenses are imputed for all households that report that they are paying rent or that they own or are buying a house. If a household indicates in the CPS interview that it lives rent-free, its housing expense is set to zero. Otherwise, the household's housing expense is set equal to the lesser of: (1) the Fair Market Rent; and (2) the percentage of average monthly gross income specified by PercentGrossIncomeHouse. The Fair Market Rent is calculated using the same methodology as is used for households that live in public and subsidized housing. Average monthly gross income is calculated by adding the household's reported foods stamp benefits (CPS variable FoodStampsValue) to annual gross income and dividing by 12.
The expenses that are imputed for households that do not live in public or subsidized housing should be reasonable for most low-income renters served by the Food Stamp Program (where the expenses are used to calculate the excess shelter expense deduction). However, the estimated expenses probably understate the housing expenses of middle and upper-middle income households, because they are based on FMRs and assume that all households rent or purchase housing units similar to those rented by families receiving housing assistance.
The PubOrSubsidizedHousing module includes two alternative approaches to assigning housing expenses to households that do not report receipt of housing assistance: (1) the household’s rent from the baseline simulation may be used (in alternative simulations); and (2) the household’s actual rent (if available) may be used. See section 9 for a discussion of the use of actual rent and section 11 for a discussion of the use of baseline rent in alternative simulations.
The program rule ActualRent allows the user to specify a variable containing the actual rent of the household’s housing unit. This variable is not available on the CPS, so is not used in the PubOrSubsidizedHousing baseline simulations.
If a variable is specified for ActualRent, then PubOrSubsidizedHousing uses the following methodology to calculate rental payments and housing subsidies for households that report that they live in public housing or receiving housing assistance. First, a required rental payment for the household is calculated according to the methods described in section 7, and the subsidy is set equal to the difference between the required rental payment and the smaller of the actual rent and the FMR. If the actual rent is greater than the FMR for a subsidized household, then the household is required to pay the difference between the FMR and the actual rent as additional rent.
If a variable is specified for ActualRent and the household does not report living in public housing or receiving housing assistance, then the household’s rent is set equal to ActualRent.
PubOrSubsidizedHousing produces the following variables for households that report living in public housing or receiving housing assistance and stores the variables on the record of the household reference person. MonthlyRentPaid and AnnualRentPaid indicate the household’s monthly and annual required rental payment. MonthlySubsidyReceived and AnnualSubsidyReceived indicate the household’s monthly and annual subsidy. If a variable is specified for ActualRent then the additional rent required of the household is output through MonthlyExtraRent and AnnualExtraRent.
PubOrSubsidizedHousing also produces person level versions of the above variables. MonthlyRentPaidPerPerson, AnnualRentPaidPerPerson, MonthlySubsidyReceivedPerPerson, AnnualSubsidyReceivedPerPerson, MonthlyExtraRentPerPerson, and AnnualExtraRentPerPerson are stored with each person in the household and are calculated by dividing the household’s rent or subsidy by the number of people in the household.
The monthly housing expenses for households that do not report living in public housing or receiving housing assistance are output through MonthlyHousingExpenses. MonthlyHousingExpenses is an annual variable stored with the household reference person. It represents the household’s monthly housing expenses, which are assumed to remain constant throughout the year.
See the TRIM3 dictionary for information about other variables produced by the PubOrSubsidizedHousing module.
To run an alternate simulation do the following: