Put yourself in the shoes of a landlord facing a tenant who, because of the cuts, cannot pay his rent. Will he really evict him when other likely tenants won’t be able to afford the rent either, because their housing benefit has been cut as well?
Perhaps not. Perhaps instead the landlord will simply cut his rent. If so, the burden of the cut will fall on landlords, not tenants.
The question, then, concerns the incidence of the cut. There’s a direct parallel here with taxes. Just as the pain of a tax rise doesn’t necessarily fall upon the direct payer of the tax, so the pain of a benefit cut doesn’t necessarily fall upon the recipient.
There is evidence here. Stephen Gibbons and Alan Manning looked at the effects of restrictions on HB in the mid-90s. They found that - depending on how the statistics are cut - between half and all of the cut in HB fell upon landlords, who had to cut their rent.
This is consistent with research in France (pdf):
We find that one additional euro of housing benefit leads to an increase of 78 cents in rents, leaving only 22 cents for low income households to reduce their net rent and increase their consumption.Now, I don’t say this to defend Osborne’s move. Gibbons and Machin find that it is only tenants who are in a position to negotiate lower rents - those who move - who did pass on the cut to landlords. In this sense, HB cuts do bear heavily upon the most vulnerable - those in a weak bargaining position. And you could argue that lower rents would be a bad thing, as they’d reduce the supply of property to let.
This large impact of housing benefits on rents seems to be caused by a very low housing supply elasticity.
All I’m saying is that the belief that a £1 cut in HB is a £1 loss to poor tenants might well be wrong. And I happen to think (sometimes, I fear, uniquely) that there’s no reason why the Left should subscribe to bad economics.