Federally Assisted Housing: Expanding HUD's Options for Dealing with Physically Distressed Properties

GAO discussed the effects of the Department of Housing and Urban Development's (HUD) Section 8 project-based assisted housing programs on two physically distressed properties in the District of Columbia and Chicago, focusing on the: (1) costs of rehabilitating the two properties compared with the costs of other alternatives for housing the tenants; (2) views of tenants and community leaders on these options; and (3) legislative and administrative factors limiting HUD discretion in dealing with physically distressed properties. GAO noted that: (1) rehabilitating the District of Columbia property could cost significantly more than providing the tenants with alternative housing in the community; (2) the costs of rehabilitating the Chicago property are comparable with the costs of providing alternative housing; (3) although tenants at both properties are very dissatisfied with the conditions, their views are mixed on whether they would prefer to remain in their current residences or be given the choice to move; (4) community leaders generally believe that both properties have been mismanaged and should be rehabilitated; (5) providing HUD with more authority would allow it to more effectively deal with physically distressed properties; and (6) HUD lacks a comprehensive strategy for focusing on physically distressed properties and is not systematically identifying and addressing unfavorable conditions in its most physically distressed properties.