The Urban Development Action Grant Application Selection System:

Basis, Criticisms, and Alternatives

RCED-85-77: Published: Mar 11, 1985. Publicly Released: Mar 11, 1985.

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Pursuant to a congressional request, GAO reported on the Department of Housing and Urban Development's (HUD) Urban Development Action Grant (UDAG) application selection system. Specifically, GAO was asked to review the selection system's effect on metropolitan communities' participation in the program and to analyze the funding system.

GAO found that recent selection system changes in UDAG funding patterns have affected every HUD subregion in the country, giving rise to criticisms of the system because of the questionable relevance of certain data and the limited weight assigned to project factors. Many officials believe that more weight should be given to project factors, such as permanent jobs. GAO studied three alternatives to the current point allocation system and found that award recipients would have been different. GAO also found that, under the current system, housing applications are not as competitive as are other types of projects. Further, poverty pocket applications do not compete directly against other applications in the selection system.

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