Chapter 4 - The Effect of Minimum Standards Housing Allowances on Housing Consumption

Abstract

This chapter focuses on the effect of housing allowances with Minimum Standards requirement on the probability of meeting those standards and on housing consumption as measured by housing expenditures. A household's response to a housing gap allowance offer is likely to depend in a critical way on whether they meet the Minimum Standards requirement when they enrolled in the program. Households that already met the requirement at enrollment were not required to alter their normal housing consumption pattern and could treat the allowance payment essentially like any other additional income. The chapter presents the estimated impact on expenditures of a constrained income transfer—a housing gap allowance payment conditional on meeting a housing requirement. In contrast, the unconstrained group received housing allowance payments without having to meet any housing requirements. The procedure used to estimate the impact of the housing allowance on the unconstrained households was the same as that used to estimate the impact of the housing allowances on the housing gap households. The two alternative measures of housing adequacy discussed in the chapter and which are closely related to the Minimum Standards failed to indicate significant differences in housing improvement between Minimum Standards and unconstrained households.