The First Rung on the Ladder to Economic Opportunity Is Housing

Our homes and our neighborhoods set the stage for our lives. Yet, the data consistently show that wages for essential workers do not stretch far enough to afford modest housing in a decent neighborhood within a reasonable commute of work. This interconnected problem affects transportation systems, employers, regional economies, and households up and down the income spectrum. For families to access economic opportunities, housing matters.

Even the most basic low-income housing program is an economic program. Housing assistance allows households to have a stable home base, save for the future, and cover their basic needs. Researchers at the University of Wisconsin at Madison have found that households with a housing voucher do not use that voucher as a substitution for work. After having a voucher for five years, families have somewhat higher work hours than their unsubsidized peers.

Housing policies may be able to further boost economic opportunities through a focus on work supports. A study in North Carolina identified that work requirements, when paired with case management and flexibility, can boost work participation by public housing residents without a significant impact on housing stability.

Without imposing a work requirement, the Jobs Plus program of the U.S. Department of Housing and Urban Development (HUD) has yielded earnings increases through a comprehensive effort to support a culture of work. Participating public housing developments change the rent calculation to remove any perceived work disincentive, add an on-site job center, and create a peer support network to integrate the effort into daily life. An MDRC evaluation found that the program led to higher earnings in Jobs Plus sites during the four-year program period, and that earnings in these communities continued to outpace those seen in other public housing developments after the policies ended.

Another small but potentially powerful HUD program, the Family Self-Sufficiency (FSS) program, has mixed results depending on local implementation. High-achieving programs provide intensive supports and coaching to help build residents’ self-efficacy, while others have seen limited impacts.

Improved earnings and work effort rely on a solid base of affordable rental housing, but the ladder to economic success can stretch only so high without the asset-building power of homeownership.

Home equity provides Americans with the ability to send their children to college with less student loan debt and is the primary source of funds for retirement. Half of the assets of Americans over age 55 is in their home. If homeownership rates decline, as several experts predict in Cityscape, poverty rates among seniors and student loan debt among young adults can be expected to rise.

Without affordable rents, families are unable to save for homeownership. And without new homebuyers, current owners are unable to sell and access their home equity. The housing ecosystem only works when all of the pieces work.

The evidence is clear. Housing matters for individual economic opportunity. Rental affordability affects homeowners’ access to equity. The nation’s investment in housing programs matters for everyone.