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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, the Congress may wish to consider requiring the Department of Agriculture (USDA) and the 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, the 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:

No legislation enacted.  No legislation has been enacted in the 115th Congress or was enacted in the 114th Congress that would require USDA and HUD to examine the benefits and costs of merging rural housing programs. In the 113th Congress, the House Committee on Financial Services approved the Protecting American Taxpayers and Homeowners Act (PATH Act) which, among other things, aimed to coordinate federal housing policy among HUD’s Federal Housing Administration (FHA) and USDA’s Rural Housing Service (RHS), and required 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 required RHS to utilize FHA’s financial underwriting and operations systems for making, insuring or guaranteeing the insurance products within RHS’s housing programs. However, this legislation was not enacted.    

HUD, USDA, and the Department of the Treasury (Treasury) have continued their efforts to improve operations and better coordinate and align certain requirements among the agencies’ multifamily and single-family housing programs. For example, the agencies have implemented a pilot in 31 states to test the feasibility of conducting a single physical inspection that would satisfy agencies’ inspection requirements. Additionally, HUD, USDA, and Treasury signed a memorandum of understanding in November 2016 to formalize interagency efforts on federal rental housing policy.  They are also developing a white paper to document the history and best practices of the rental policy working group. Further, RHS has entered into a shared service agreement with the Department of Veterans Affairs (VA) to manage the preservation and disposition of single-family, real estate-owned properties (that is, foreclosed properties) acquired through RHS’s direct loan program. RHS stated that it also meets with FHA and VA to discuss single-family housing issues and opportunities for collaboration. Additionally, the Office of Management and Budget has participated in interagency discussions regarding federal housing assistance, credit budgeting, and management of HUD, VA, and USDA 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 of March 1, 2017, the agencies were focused on sharing best practices but were limiting their consideration of potential consolidation to administrative changes within individual agencies, rather than statutory changes that would enable consolidation of programs within or across agencies. Statutory changes such as program consolidation could help mitigate overlap and fragmentation and decrease costs.

According to the Office of Management and Budget (OMB), the current administration may reevaluate ongoing collaborative efforts across the different agencies, which could have implications for housing program consolidation.

Implementing Entity:

Congress

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.

Implementing Entity:

Office of Management and Budget, Department of the Treasury

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.

Implementing Entity:

Office of Management and Budget, Department of the Treasury

Action:

The Secretary of the Department of Housing and Urban Development (HUD), in consultation with the Rental Policy Working Group, should work with states and localities to develop an approach for compiling and reporting on the collective performance of federal, state, and local rental assistance programs. Such an effort may begin with one or more pilots to test approaches before they are considered for wider application.

This action was identified in GAO’s September 2015 report, Affordable Rental Housing: Assistance Is Provided by Federal, State, and Local Programs, but There Is Incomplete Information on Collective Performance (GAO-15-645), and was added to the Action Tracker in April 2017.

Progress:

As of July 2017, HUD had taken preliminary steps to implement GAO’s September 2015 recommendation but had not completed implementing the recommendation. In July 2017, a HUD official said HUD is still working to respond to the GAO recommendation. The official said HUD is currently in the planning stages for updating the existing subsidized housing database to add the Low Income Housing Tax Credit and HOME Investment Partnerships (HOME) programs, and that including these programs should give a more complete picture of the performance of governmental assistance, since Low Income Housing Tax Credit and HOME funds are often used in conjunction with state housing trust funds or issued together with funding from state and local resources, including matching funds and direct and indirect subsidies for affordable housing. While GAO agrees this is a positive step in addressing the recommendation, it will continue to monitor HUD’s efforts and will assess the results as they become available. Without information on the government-wide performance of rental assistance programs, the Congress, decision makers, and stakeholders are hampered in their ability to evaluate the collective performance of federal, state, and local rental assistance programs.

Implementing Entity:

Department of Housing and Urban Development
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    • Daniel Garcia-Diaz
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