Despite more than $60 billion in annual federal spending on rental assistance, only one in four eligible families actually receives it. Recipient families receive, on average, more than $1,000 in federal aid each month, and because there is no time limit they typically remain on the program for over a decade. That means a family can easily receive well over $100,000 in rental subsidies over the course of their program spell—even as other low-income families are turned away and get no housing assistance at all.
Federal rental assistance fails both groups of families. It fosters dependency among the quarter of eligible families who receive assistance. Because an increase in a family’s income can reduce or eliminate their housing subsidy, the program discourages work and marriage. But rental assistance also fails the three-quarters of eligible families who receive no assistance, who might need it to get a foothold in a new neighborhood or to weather a downturn brought on by job loss or the breakdown of family relationships.
A newly proposed rule from the Department of Housing and Urban Development (HUD) would help address both of these problems by allowing localities—if they choose—to establish time limits and work requirements for non-disabled working-age adults receiving rental assistance. If implemented, the rule would more effectively serve current recipients by encouraging them to work and move up the economic ladder. At the same time, it would free up resources to allow additional families to receive housing assistance by limiting the amount of time any given family can stay on the program.
The rule would apply to all major federal rental housing assistance programs, including public housing, project-based assistance, and the Section 8 Housing Choice Voucher program—currently the largest and serving 2.3 million families.
Under the status quo, the subsidies in these programs can be deep and long-lasting. In the voucher program, recipient families pay 30% of their monthly income toward rent, and the federal government pays the rest, up to a maximum rent level set by localities within general parameters determined by HUD.
In especially high-cost areas, subsides can be extremely large. In Washington, DC, a family qualifying for a three-bedroom unit can lease an apartment with a market rent as high as $5,301 per month. If their monthly income was $1,000, they would pay around $300 in rent, and the federal government would cover the remaining roughly $5,000 each month, or $60,000 annually. If the family hypothetically remained in the same unit for 17 years with the same income and rent, they would receive $1 million in total assistance. Stays of this duration are common: Nationwide, 59% of ongoing spells among non-disabled working-age adults in the voucher program are expected to last more than 15 years.
The maximum allowable rent is substantially lower in most parts of the country, and higher tenant incomes would reduce the amount covered by the federal government. Still, the average federal subsidy across all housing voucher recipients was $1,255 in 2025, or just over $15,000 on an annualized basis. For context, the average monthly benefit for the Supplemental Nutrition Assistance Program—the largest non-medical safety net program in the United States—was just $353 per household, or a little over $4,200 on an annualized basis.
Because families must pay 30% of their income in rent, every additional dollar they earn requires them to contribute an additional 30 cents toward housing costs, effectively reducing their housing subsidy by 30 cents. Starting a full-time job or marrying a working spouse could jeopardize their housing subsidy altogether. Since housing assistance has no time limit, taking steps to boost one’s income can put tens of thousands of dollars in future aid on the line. These work and marriage penalties come on top of penalties arising from the phase-out of other means tested programs and taxes, which in combination can, in some cases, make taking on more work financially harmful.
The depth and duration of housing subsidies also have harmful consequences for nonrecipient families: They cause limited funds to run out before all eligible families can be served. Families can linger on waiting lists for years, or they may have no realistic prospect of ever accessing assistance. Access to targeted, temporary rental assistance would benefit low-income Americans. Unfortunately, the current structure of housing assistance makes it difficult to provide a true housing safety net.
HUD’s newly proposed rule would allow localities to improve on these shortcomings of the existing rental assistance programs. Each local Public Housing Authority (PHA) could choose whether to establish time limits and/or work requirements for non-disabled working-age adults served by major subsidized housing programs. PHAs could also choose to make no changes whatsoever, ensuring that reforms are made only by PHAs willing and prepared to implement them. For the separately administered project-based rental assistance program, project owners would retain authority over this decision.
PHAs would be free to establish any time limit no shorter than two years. A federally imposed minimum of two years is reasonable, especially because landlords may be less willing to lease out apartments to tenants with a voucher covering only a year of rent. Some PHAs may experiment with time limits longer than two years in order to provide more stability to tenants while still preventing especially long spells. But establishing at least some time limit would improve on the status quo by reducing long-term dependency and freeing up assistance for families who have, up to this point, been left out of the program altogether.
Work requirements can work in tandem with time limits. While time limits mitigate work and marriage disincentives over the long run, in the short run families would still face the prospect of losing a portion of their current housing subsidy by earning more money. Work requirements can mitigate this disincentive by requiring at least some base level of work to maintain full assistance. In addition, encouraging sustained attachment to the labor market can help families transition to greater self-reliance when their time-limited housing subsidy expires.
Altogether, the proposed HUD rule would make rental housing assistance fairer, allow it to serve more families in the long-run, and encourage upward mobility. Critics of the rule focus on the existing recipients who could lose access to housing subsidies as a result of newly established time limits and work requirements. Such arguments fail to emphasize that churn in the program will free up assistance to new families who have received no benefits at all and may be needier than families that have already received housing subsidies for multiple years. Nor do the critiques emphasize improved incentives for upward mobility among current recipients.
To be sure, for these reforms to succeed, PHAs will need to implement them carefully. They should seek to limit instability caused by existing recipients eventually losing access to housing subsidies. This is why the rule’s requirement that changes be communicated to affected recipients prior to implementation is important, as is making the reforms voluntary for PHAs prepared to adopt them.
Federal rental housing assistance is badly in need of reform. It is expensive, unfair, and ineffective at promoting upward mobility. HUD’s proposed rule would go a long way toward empowering communities to address the program’s problems.
