Do Shallow Rental Subsidies Promote Housing Stability? Evidence on Costs and Effects from DC’s Flexible Program

Abstract

Residents of cities face housing instability due to high housing costs. We conduct a randomized experiment evaluating the impacts of a flexible “shallow subsidy” among 668 qualified renters with recent housing instability. This local subsidy provides $7,200 a year directly to families earning less than 30 percent of the median family income, who choose how much assistance to use each month. Using administrative data, we track outcomes for the first year of program administration. After one year, the program has no statistically significant effect on homelessness, cash benefit receipt, or emergency rental assistance utilization, demonstrating no harm when compared to alternatives. However, the program leads to a 29 percentage point decrease in participants’ use of other types of local government housing services, which they must weigh against the shallow subsidy. We show that the program can be administratively cost-saving, but is not always beneficial for a very low-income subset of applicants.