Designing a housing allowance program

Posted on March 11, 2016 in Social Security Debates – Publications
March 2016.   Michael Mendelson

This paper describes a series of design options for housing allowances and compares their advantages and disadvantages. The five options range from a rent supplement that provides extra funding for those with high rent, up to a housing allowance meant to pay as much as the full cost of a modest rental apartment for those with little or no income.

The alternatives are more expensive as they become more generous to recipients, with the ‘full cost’ housing allowance taking us about half way to a guaranteed annual income. The comparative advantages and disadvantages of the alternative designs for a housing allowance are assessed against seven criteria: fit with social assistance; potential replacement for ‘rent-geared-to-income’ in social housing; fairness, poverty and affordability; housing market impacts; portability and recipient autonomy; marginal tax rates; and relative cost of the options.

ISBN – 1-55382-663-9

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