Cash Transfer Lab | MDRC Presentation on Direct Rental Assistance

Direct Rental Assistance (DRA) represents a bold idea for reforming federal tenant-based rental assistance, such as the Section 8 Housing Choice Voucher (HCV) program, and similar state and local programs. Recent experience with the Emergency Rental Assistance (ERA) program, learnings from basic income pilots, and a revisiting of HUD’s own experiment with this idea in the 1970s with the Experimental Housing Allowance Program (EHAP) has generated strong interest in the DRA model in recent months. The fundamental difference between DRA and HCV models is that DRA pays the rental subsidy directly to the household, rather than to the household’s landlord. (Unlike basic income, DRA subsidies must be used entirely for housing costs.) It gives households more agency over their housing choices and allows them to act more like private market tenants. The overarching goal of DRA is to make it easier for households to use their rental assistance (and therefore less likely to lose it) by streamlining the regulations and related procedures that impose a substantial burden on PHAs, landlords, and tenants, delay the lease-up process, and ultimately hinder the reach and effectiveness of the voucher program. In late 2024, MDRC, a nonpartisan social policy research organization, began collaborating with 11 public housing agencies across the country and several national housing experts to design a prototype of a DRA policy that those agencies could pilot. The collaborative converged on a model that is structured around a set of core features as well as identified policy options for local discretion, allowing for some adaptation across multiple contexts. This presentation will describe the DRA policy that is a result of this collaborative process and discuss key tradeoffs that were considered in its design.