The federal government could get much more for the dollars it spends to subsidize privately owned housing for low-income persons if it allowed tenants to negotiate their rents directly with landlords, a Rand Corp. study concludes.
The study, which compares two federal housing programs, found that low-housing renters with housing assistance payments in their pockets drive far shrewder bargains for housing than do government intermediaries acting in their behalf.
C. Peter Rydell, who directed the study and wrote it with John E. Mulford and Lawrence Helbers, added that this approach also insures that the housing subsidies accure to the tenants rather than to their landlords.
The Santa Monica, Calif.-based Rand Corp., a private think tank, compared two housing subsidy programs: an experimental allowance program that Rand conducted in two Midwestern counties and the Section 8 federal subsidy program created in 1974.
The study found that the experimental housing allowance programs in Brown County (Green Bay), Wis., and St. Joseph County (South Bend), Ind., resulted in a 1.2 per cent increase in the price contrasts pay for housing. This contrasts with a 26 percent increase in rents brought about by Section 8 assistance.
Rydell aid that if the Section 8 programs worked like housing allowances, about $210 million a year -- money that is currently finding its way into the pockets of landlord -- could be recaptured.
"Given the new administration's interest in budget cutting, that money could be used to increase benefits to the truly needy -- especially the elderly and single-parent families -- without increased funding," he added.