Photo: Markus Spiering.

Increases in the credit lead to more stable housing and less crowding for single mothers, according to a new study.

The earned income tax credit started in 1975 as a temporary measure for low-income parents but has expanded over the years. Today, it is one of the largest cash transfer programs in the country, according to a new study that looked at how the credit impacts housing outcomes. Though not intended as a housing measure, the study found, expansions of the credit have been linked to improved housing outcomes for single mothers.

The study looked at whether the expansion of the credit, or EITC, over three decades affected homelessness, eviction, housing cost burdens and housing arrangements. The increased income should help alleviate housing cost burden and even reduce eviction, homelessness and overcrowding, hypothesized Natasha Pilkauskas at the University of Michigan and Katherine Michelmore of Syracuse University in the study published in the journal Demography.

Housing vouchers are promoted as offering flexibility to low-income households because the subsidy travels with the person. "Housing Choice Vouchers work effectively for all types of people and in all types of neighborhoods and housing," wrote Barbara Sard, vice president for housing policy at the Center for Budget and Policy Priorities. In Matthew Desmond's Pulitzer Prize-winning book "Evicted," the sociologist argued for significantly expanding the program, which only serves about one in four eligible families.

But finding affordable rental housing that also accepts vouchers can be a substantial challenge, particularly in states like Texas, which explicitly restricts jurisdictions from banning landlord discrimination against people using vouchers. Some families even have to return their vouchers when they're unable to find suitable housing. Programs to help low-income families with vouchers move to neighborhoods with better-ranked schools, access to jobs and other opportunities have seen success. One recent Seattle effort saw a 40 percent boost in families with vouchers moving to so-called "high opportunity" neighborhoods.

Here in Houston, the city's housing department partnered with NestQuest to help voucher-holding low-income households with school-aged children move to those high opportunity neighborhoods. The nonprofit serves as an intermediary, leasing the property from the landlord to then sublease it to the family. The effort shows just how difficult it can be to get landlords, particularly those in lower-poverty neighborhoods, to accept the voucher.

"Housing subsidies for low-income renters, such as housing choice vouchers, are effective at improving housing outcomes," write Pilkauskas and Michelmore, "but only 24 percent of the 19 million eligible households receive assistance, and waitlists for housing assistance are frequently two to three years long."

Understanding how other programs targeting poverty impact housing is critical for improving those outcomes. The earned income tax credit offers an average of more than $3,000 to families with children, according to the study. "This means that for a low-income family who makes about $20,000 a year, the EITC can increase take-home earnings by more than 15 [percent]," wrote Pilkauskas in The Conversation.

Over time, the benefit has grown as incremental adjustments were made. The researchers looked at single mothers with children under the age of 19 who responded to the annual Current Population Survey. Layering data from the American Community Survey and the Fragile Families and Child Wellbeing Study, the researchers found that the credit had "a significant effect on the housing and living arrangements of single mothers."

Though they did not find that the credit reduced homelessness or eviction—perhaps because, as the researchers note, the credit, while large, is not substantial enough to overcome larger shocks that lead to such outcomes—the study did find that the mothers were able to reduce their housing cost burden. "In other words, the EITC helped make housing more affordable," explained Pilkauskas. The credit was linked to other housing changes as well. "We also found that getting a larger EITC led mothers to move out of shared living arrangements where they were living with other adults who were not their partner," she wrote. "Better still, after getting a higher EITC, these mothers were more likely to move into a home with their name on the lease or mortgage."

Several current policy proposals look to expand the EITC. "These proposals aim to combat poverty and reduce economic inequality," noted Pilkauskas. "As our study suggests, the EITC just might also help families improve their housing too."