What works

What doesn't work

Delivering affordability

Cheap rents with a clear bargain element

High rent (which require support through income supplement)

Income mixing

Diverse range including many working families

Income concentration below the jobs line (except elderly, who have retired)

Compliance

Outcome – measure results

Process – measure procedures

Federal involvement

Wholesale – block-granted subject to state-by-state allocations, clear program goals and performance measures.

Retail – details of individual properties prescribed within centralized legislative or regulatory rules.

Resource allocation

Closed-ended – resources awarded competitively

Open-ended – no competition for resources

Rent structures

Formulas that self-adjust using external criteria (e.g. change in median income)

Property-by-property calculations that require regulators to review annual budgets

Debt service coverage

125% or higher, so properties have cushions

110% or lower, because properties have no cushions

Cash flow limitations

No caps, provided rents are affordable and property is in physical/ operational compliance

Small distributions that eliminate cushions and create perverse incentives

Ownership structures

Private sector (for-profit or non-profit) with both profit motive and affordability mission

Direct government ownership or disengaged ownership with neither experience nor exposure

Assistance basing

Property basing with strong compliance.

Vouchers where there is ample supply.

Property-based with no linkage to service quality.

Vouchers with no reliable places to use them.