The Moving to Work (MTW) demonstration program was created by Congress in 1996 to give the U.S. Department of Housing and Urban Development (HUD) and local Public Housing Authorities (PHAs) the flexibility to test alternative policies for providing housing assistance through the nation's two largest housing assistance programs: the Section 8 Housing Choice Voucher program and the public housing program. The alternative policies are meant to increase the cost-effectiveness of assisted housing programs, promote the self-sufficiency of assisted families, and increase housing choices for low-income families. Today, more than 30 PHAs are participating in MTW, and as of 2010, they managed approximately $2.7 billion in Section 8 Housing Choice Voucher funding and $1.1 billion in public housing funding, supporting 13% of all vouchers and 11% of all public housing units. More than a decade and a half since the inception of the demonstration, the future of MTW is uncertain. The current set of HUD-PHA agreements is set to expire in 2018, but calls for earlier changes to the program have emerged. Critics of the demonstration have argued that MTW agencies have been given unprecedented flexibilities, yet there is little understanding of the impacts those flexibilities have had on the lives of the low-income families PHAs are responsible for serving, and some concern that those impacts have been negative. Supporters of the demonstration have argued that the flexibility of the MTW demonstration program has allowed participating PHAs to serve more families in unique, improved, and cost-effective ways. These competing perceptions of the MTW demonstration program have translated to conflicting calls to end the program, change the program, or expand the program. Given the way the demonstration was designed and implemented, it is difficult to evaluate the effectiveness or efficiency of MTW agencies' specific policies, as measured against the program's statutory goals, and thus to assess the claims of critics or supporters. These conflicting views of the MTW demonstration program's success highlight a key point for understanding discussions around the program's future. The MTW demonstration was initially intended to serve as a testing ground for innovations in the provision of assisted housing; some have contended that it should be restructured to better serve that purpose. Others believe that MTW agencies have demonstrated that PHAs can successfully operate outside of the traditional regulatory structure, and thus some version of the program should be considered as the future of assisted housing. Despite the controversy around the future of the MTW demonstration program itself, the policies developed by MTW agencies have informed discussions about reforms to the mainstream assisted housing programs. For example, several of the program reforms being considered for the public housing and Section 8 Housing Choice Voucher programs have been implemented by MTW agencies. As Congress considers future reforms of federal housing assistance programs, policymakers may look to lessons from the MTW demonstration program for insight. This report provides an overview of the history and purpose of the MTW demonstration program, followed by a description of some of the policies adopted by participating PHAs. It concludes by providing some observations about the outcomes of the program and discussing policy options for the future. Congress authorized the Moving to Work Demonstration Program in the FY1996 omnibus appropriations law ( P.L. 104-134 ). The authorizing language directs the Secretary of HUD to conduct a demonstration program providing PHAs with the flexibility to design and test approaches for providing housing assistance to low-income families outside of the rules that govern HUD's primary assisted housing programs: the Section 8 Housing Choice Voucher program and the low-rent public housing program. The intent is to test ways to achieve three policy objectives: 1. reducing costs and increasing cost-effectiveness in the provision of assisted housing, 2. encouraging the self-sufficiency of assisted families, and 3. increasing the housing choices for low-income families. The law directs the Secretary to select up to 30 PHAs for participation through a competitive process, and to conduct detailed evaluations for up to 15 participating agencies in order to identify replicable program models. Legislative guidelines for the MTW demonstration program are broad. The law does not specify the approaches to assisted housing that MTW agencies are to develop and test. Instead, the law allows MTW agencies to develop their own policies to achieve the aforementioned objectives. Examples of the flexibilities provided under the law include allowing PHAs to combine their Section 8 voucher funding with public housing operating and capital funding, creating one funding stream for housing assistance and development, and allowing HUD to waive many of the statutory requirements for assisted housing programs as established by the U.S. Housing Act of 1937, as amended. The law explicitly permits PHAs to design a "reasonable" rent policy, designed to encourage employment and self-sufficiency by participating families. Further, the law directs that participating PHAs be held harmless in terms of funding. However, the legislation also places limits on the flexibility allowed to MTW agencies. MTW agencies are required to serve substantially the same number and size-mix of families, guarantee that at least 75% of assisted families are low-income, and ensure that their assisted housing stock meets HUD-established housing quality standards. Further, the law prohibits HUD from issuing waivers of certain provisions of the U.S. Housing Act, including requirements related to public housing demolition and disposition, labor standards, and public housing community service requirements. The legislation also requires that PHAs seek public input in the development of their MTW policies. The law requires a PHA to hold a public hearing on its proposed policies prior to submitting an application to become an MTW agency. The PHA must then take into account the public comments within its MTW application plan. That plan must spell out how the PHA intends to use its flexibilities under the MTW program. It must be approved by HUD in order for a PHA to participate in the MTW demonstration program and HUD must monitor MTW agencies' compliance with their plans. The law goes on to require that MTW agencies submit annual reports to HUD that describe their use of funds, activities during the prior year, and any data required by the Secretary of HUD to assess the demonstration program. Thus, the statutory authorization for the MTW demonstration program allows MTW agencies to implement a diverse set of policies and activities. To understand the structure of the MTW demonstration program, it is useful to understand the policy context that shaped its development. The administration of public housing was a controversial issue during the 1980s and 1990s, due to concerns about rising costs, a decaying public housing stock, and a perception that public housing developments were pervaded with social ills. Federal policymakers at the time, therefore, took interest in strategies that could reduce the cost of public housing while also improving its management. Major public and assisted housing reforms were debated throughout this period. Several policy debates influenced the consideration of public housing reform and the resulting development of the MTW demonstration program. First, at the time, the concept of "block granting" was being explored in many social programs. Housing practitioners and some federal policymakers wanted to explore the possibility of block granting or otherwise devolving assisted housing programs to the local level so that local officials would have greater autonomy to design programs and target funding to meet local community needs. This strategy was not universally supported, as some federal policymakers and tenant advocates believed that federal regulation of assisted housing programs was necessary to ensure the achievement of federal housing goals, such as desegregation. Second, the welfare reform debates of the 1990s focused the attention of federal policymakers on increasing family self-sufficiency across social welfare programs, including housing assistance programs. Third, federal policymakers and housing practitioners had increasingly come to believe that providing assisted housing through market-based approaches practiced by private industry would reduce assisted housing costs. The MTW demonstration program was a compromise that allowed for the pursuit of all of these varying policy goals while largely maintaining the existing models of assisted housing. HUD announced the demonstration program in December 1996 and received 43 applications for participation from PHAs. From that pool of applicants, HUD selected 30 PHAs for participation. The selected PHAs each entered into an individual negotiation process with various HUD offices to set the terms of their MTW agreements. That initial MTW negotiation process proved to be both complicated and lengthy as each statutory or regulatory waiver was individually approved. The first agreement was reached in February 1998 and the majority of MTW agreements were signed in 1998 or 1999. Perhaps due to the delays in implementation, or perhaps due to the passage of a public and assisted housing reform law in 1998 that provided all PHAs increased flexibility in the administration of assisted housing programs (such as in selecting tenants), six of the selected MTW agencies opted not to participate in the program. In 2000, HUD competitively allocated the remaining six open spaces to housing authorities with more than 2,500 units (see Table 1 ). Additional PHAs have become MTW agencies through acts of Congress and the program has grown beyond the original statutory cap of 30 PHAs (see Table 1 ). Congress specifically directed HUD to add the following PHAs to the MTW demonstration: Charlotte and Pittsburgh through P.L. 105-276 ; and Alaska, San Bernardino, CA, San Jose, CA, and Santa Clara, CA, through P.L. 110-161 . Congress directed HUD to competitively select another three PHAs for participation in MTW through P.L. 111-8 and another three each through P.L. 111-117 and P.L. 112-10 ; all nine of these competitive slots were only available to high-performing PHAs with fewer than 5,000 assisted housing units, and three of the six competitive slots were open only to HOPE VI sites. Several MTW agencies completed their participation in the demonstration program and chose not to renew their agreements. As a result, 35 PHAs are currently participating in the MTW demonstration program (see Table 1 ).