Abstract: Paper No. 178

Do Housing Programs for Low-Income Households Improve Their Housing?

Amy D. Crews

April 1996 

The primary goals of the 1937 Housing Act were to provide safe and sanitary housing and to reduce crowding for low-income households. During the nearly 60 years since, the effective goals have expanded to include lowering housing costs, and by extension, to increasing nonhousing consumption. This paper examines the effect these programs have had on the overall consumption behavior of participants.

Using data from the 1987 American Housing Survey (AHS), the results indicate that federal housing programs have little effect on the housing consumption of participants (4.4 percent increase), but an enormous effect on their nonhousing consumption (141 percent increase). Furthermore, the assistance seems to lower the housing consumption of 42 percent of participating households. Finally, substituting cash subsidies for in-kind housing assistance will provide more housing consumption, but with smaller nonhousing consumption, than the current (primarily in-kind) system. 

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