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Social Services: Housing Assistance

Examining the benefits and costs of housing programs and tax expenditures that address the same or similar populations or areas, and potentially consolidating them, could help mitigate overlap and fragmentation and decrease costs.

Action:

To optimize the federal role in rural housing, Congress may wish to consider requiring the Department of Agriculture (USDA) and Department of Housing and Urban Development (HUD) to examine the benefits and costs of merging those programs that serve similar markets and provide similar products. As a first step, Congress could consider requiring USDA and HUD to explore merging their single-family insured lending programs and multifamily portfolio management programs, taking advantage of the best practices of each and ensuring that targeted populations are not adversely affected.

Progress:

On July 24, 2013, the House Committee on Financial Services approved a bill entitled the Protecting American Taxpayers and Homeowners Act (PATH Act) which, among other things, coordinates federal housing policy among HUD’s Federal Housing Administration (FHA) and RHS, and requires the two agencies to synchronize their technology and risk management within similar programs, as GAO recommended in September 2000. Specifically, Section 216 of the act requires RHS to utilize FHA’s financial underwriting and operations systems for making, insuring, or guaranteeing the insurance products within RHS’s housing programs. However, as of February 2014, Congress had not enacted the legislation.

HUD, USDA, and the Department of the Treasury (Treasury), through their Rental Policy Working Group, have continued their efforts to better coordinate and align certain requirements among the agencies’ multifamily housing programs. For example, since January 2013, HUD has continued to work with USDA and Treasury to implement a series of multifamily alignment initiatives that help to improve coordinated governmental oversight and reduce the administrative burden on affordable housing owners and operators.The agencies have implemented a pilot in six states to test the feasibility of conducting a single physical inspection in a sample of jointly subsidized multifamily housing properties that would satisfy all agencies’ inspection requirements. Additionally, HUD told GAO that, by June 2014, the agency has plans to simplify and streamline its multifamily programs and regulations and update its strategic plan accordingly. In the single-family area, HUD, USDA, the Department of Veterans Affairs, the Consumer Financial Protection Bureau, and the Federal Housing Finance Agency, through their Joint Federal Housing Agencies task force, have been working to improve operations amongst federal housing agencies, according to two of its members. HUDalso told GAO that the agency is evaluating its programs and policies to identify those areas that could be addressed through interagency collaboration, and consulting with the other agencies and the Office of Management and Budget on any further efforts, also by June 2014. However, HUD pointed to a number of logistical challenges in combining its single-family program, including technology, rules for lenders and appraisers, and the limited staff resources available to undertake such an effort. In our prior report, we recognized these limitations and noted that, as an important first step, the agencies should evaluate the potential benefits and costs of consolidation, and that any evaluations of which programs, products, systems, and processes to retain, revise, consolidate, or eliminate would involve complex analyses, trade-offs, and difficult policy decisions. HUD is presently working to modernize its key systems, as part of its business transformation project, which can also help to enhance the efficiency of its housing programs. Nonetheless, the agencies have not yet reported on the specific opportunities for consolidating similar single-family and multifamily housing programs, including those that would require statutory changes and help inform Congress’s decision-making process, as GAO recommended in August 2012. Such actions could help mitigate overlap and fragmentation and decrease costs.

Action:

To help mitigate overlap and fragmentation and decrease costs, the Director of the Office of Management and Budget (OMB), in consultation with the Secretary of the Treasury should develop and implement a framework for conducting performance reviews of tax expenditures. This includes (1) outlining leadership responsibilities and coordination among agencies with related responsibilities; (2) setting a review schedule; (3) identifying review methods and ways to address the lack of credible tax expenditure information; and (4) identifying resources needed for tax expenditure reviews.

Progress:

GAO is not assessing this action as part of this area as it is already reflected inaction 2 in Area 17, Tax Expenditures, from GAO’s March 2011 report. GAO will continue to monitor OMB’s efforts to develop and implement a framework for conducting performance reviews of tax expenditures and report on its progress in addressing our suggested action in the Tax Expenditures area.

Action:

To help mitigate overlap and fragmentation and decrease costs, the Director of the Office of Management and Budget (OMB), in consultation with the Secretary of the Treasury should require that tax expenditures be included in executive branch budget and performance review processes.

Progress:

GAO is not assessing this action as part of this area as it is already reflected inaction 4 in Area 17, Tax Expenditures, from GAO’s March 2011 report. GAO will continue to monitor OMB’s efforts to develop and implement a framework for conducting performance reviews of tax expenditures and report on its progress in addressing our suggested action in the Tax Expenditures area.

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    • Mathew J. Scire
    • Director, Financial Markets and Community Investment
    • sciremj@gao.gov
    • (202) 512-8678
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    • James R. White
    • Director, Strategic Issues
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