Rents are high and housing vouchers are hard to get. So Philly is giving renters cash

Angie Atkins has been on a waitlist for a federal housing voucher for the better part of a decade. During that time, her rent in northwest Philadelphia kept rising, year after year, until it was eating up three-quarters of her income.

"When I did my monthly budget, I had to live off $156 a month," she says. "It's crazy, and no public assistance or anything."

Atkins is 37, upbeat and quick to laugh. She manages an accountant's office. And as a single mom with two kids, providing food for her family has been a priority. She sold her car to save money. But in 2022, she fell behind on rent and faced possible eviction. Then, Atkins had a surreal moment.

"I literally was up at eviction court," she recalls, laughing, "and I got ... this email, and I'm like, this is fraud!" The email was not fraud — it was from the Philadelphia Housing Development Corp., offering to subsidize Atkins' rent for the next 2 1/2 years, no strings attached.

The PHDC runs a small pilot program called PHLHousing+. All 300 participants were chosen randomly from the city's waitlist for housing vouchers, a list so long that it was shut down completely for a decade. Their households must earn no more than 50% of the local median income and include a child at home under age 15.

The program works a bit like a housing subsidy. Renters pay 30% of their income toward housing, then get a debit card loaded with enough to cover the rest. And while it's meant for rent, people can spend that on whatever they choose. The program is funded with a mix of public money and philanthropy.

Atkins says having this subsidy has allowed her to fully celebrate Thanksgiving and Christmas, enroll her son in Cub Scouts this year and "just have a good night's sleep."

A record half of all renters nationally are now considered cost-burdened, meaning they pay more than 30% of their income for housing. And the idea of giving direct cash assistance has gained enormous traction since the pandemic, when stimulus checks and other payments helped keep people housed and briefly cut child poverty in half. Even the U.S. Department of Housing and Urban Development is paying close attention to Philadelphia's program and encouraging other cities to help develop this "new model" for subsidizing renters.

After years of waiting for a housing voucher, many find landlords won't accept them

Philadelphia had the idea of giving renters cash before the pandemic. In fact, a version of this program was set to launch just before the world shut down in early 2020.

"Here, there is a really big disconnect between housing costs and incomes," says Rachel Mulbry, a housing programs manager with the Philadelphia Housing Development Corp. She says a majority of renters in Philly struggle financially, and tens of thousands are evicted every year.

That "has huge impacts for the ability to keep a job. Kids have to change schools," she says. "The toll that eviction takes on households is enormous."

Part of the problem is that, nationally, only 1 in 4 people who qualify for a housing voucher can get it. Even when they finally do, many landlords won't accept it — they hate the cumbersome red tape and time-consuming mandatory inspections.

There's also outright discrimination against voucher holders, who are disproportionately Black and Hispanic. Philadelphia and other places have banned that, but it's hard to enforce. In Kentucky, lawmakers recently overrode the governor's veto to explicitly allow landlords to turn away someone using a housing voucher.

At a City Council hearing last year, Delores Bell with Renters United Philadelphia talked about how hard it was for her to use a voucher.

"I've called 10 to 20 places, and they've all told me they don't accept the vouchers," she told council members. "My apartment's in good condition. I've always paid my rent. But I don't even have the chance to prove I'm a good tenant when landlords refuse to accept voucher holders."

A 2018 study by the Urban Institute found the rejection rate for voucher holders in Philadelphia was 67%. Nationally, HUD says 40% are unable to sign a lease at all after months of trying.

Landlords might also accept vouchers in some neighborhoods but not others, says Madison Gray of The Public Interest Law Center in Philadelphia. The center reached a settlement with one landlord who took vouchers only in predominantly Black areas.

Gray says it's discouraging for tenants who are excited to finally get a voucher and "think that it could be the ticket to move out of slumlord housing and into high-quality housing, in a neighborhood that they've always wanted to live in. And that's not necessarily the case at all," she says.

HUD experimented with giving renters cash in the 1970s

Vincent Reina at the University of Pennsylvania helped brainstorm Philadelphia's push for a different way to help renters. "The reality is there's a fixed pool of resources towards housing," he says.

A new approach beyond vouchers was needed. And to find it, Reina actually looked back to the 1970s, when HUD carried out large pilot programs that gave renters cash. The thinking was that would be efficient and effective.

Before those experiments were evaluated, though, HUD went ahead and created the voucher program in 1974. Reina says the housing market was so different back then that it's impossible to say whether that was a mistake. But today's tight market is definitely tough for voucher holders.

"We're seeing extremely low vacancy rates and undersupply of housing, across markets, across the country," he says. It's hard enough to find a place, and using a rental subsidy that drags out the process only makes it worse.

For Reina, the pandemic proved that direct cash was a needed option for some renters. He calls Philadelphia's cash aid a "silent subsidy" that might let people avoid the widespread stigma around renting to voucher holders.

"It could allow them ... to maybe more easily lease a unit, even at the same rent level, in this other neighborhood," Reina says, "than they would have with a voucher."

For its part, HUD is all in. The agency also cites the success of COVID-19 payments directly to households and says it's "spearheading an effort to learn from these pandemic-era programs and simplify the administration of the [housing voucher] program."

To that end, it has called on others to join Philadelphia and help test "new models of direct rental assistance." Legally, the voucher program requires HUD to pay landlords, not renters, so it says pilots could be funded by philanthropy. But in a statement to NPR, HUD says that eventually, if there's enough promising evidence, it could ask Congress to fund a larger-scale demonstration and give HUD the authority to run it.

Sara Jaffee at the University of Pennsylvania will help analyze Philadelphia's program, including how renters with cash fare compared to those with vouchers.

"We're looking at the ease with which folks were able to lease up," she says. "Does the program prevent evictions, for example? Does it allow people to move to better-quality housing?"

To be clear, no one's calling for the end of federal housing vouchers. They do help more than 2 million people, and Reina says they may be the best choice for some. For a renter with bad credit, a voucher reassures a landlord that they'll get the money. Mandatory inspections could mean higher-quality housing. And unlike an apartment lease, federal housing vouchers don't expire.

But Philadelphia and HUD hope that direct cash for renters might become a lasting alternative, an extra option to help more people stay housed. Exactly how that would take shape isn't yet clear.

For Angie Atkins, the monthly rent subsidies run out next spring and she's bracing. "I'm going to say for me, my life has become dependent on it," she says. "It gave me a cushion. It gave me a sense of relief. But it is only 30 months."