Welfare Hotels:

Uses, Costs, and Alternatives

HRD-89-26BR: Published: Jan 31, 1989. Publicly Released: Mar 6, 1989.

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Pursuant to a congressional request, GAO provided information on the use of so-called welfare hotels as emergency and temporary housing for needy families.

GAO found that: (1) welfare hotel characteristics varied, but frequently included commercially owned hotels or motels which primarily provided shelter to homeless families receiving public assistance; (2) the media and housing experts have frequently characterized welfare hotels as providing inadequate conditions and services; (3) local governments or nonprofit organizations typically provided food, child and health care, and counseling services to welfare hotel residents; (4) urban, suburban, and rural localities used hotels and motels as emergency shelters; (5) Federal Emergency Management Agency (FEMA) local service providers used hotels for emergency shelters; (6) escalating family homelessness and statutory or court-mandated emergency shelter requirements may increase localities' use of hotels; (7) welfare hotel costs varied widely, with some equal to the local daily hotel rate; (8) local audits of hotel payments have disclosed possible fraud and local procurement law violations; (9) the Family Support Administration's (FSA) Aid to Families with Dependent Children (ADFC) and Emergency Assistance (EA) programs were the primary federal funding sources for reimbursing localities' welfare hotel expenses; (10) Congress has introduced several bills to encourage increased construction or renovation of affordable permanent housing to reduce reliance on temporary shelters; and (11) FSA proposed a rule to clarify appropriate use of EA and ADFC funds.

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