Views on S. 2171

B-206888: Published: Apr 13, 1982. Publicly Released: Apr 13, 1982.

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Legislation has been proposed which would stimulate the development and rehabilitation of affordable multifamily rental housing. The purpose of the bill is to: (1) increase the Nation's stock of rental and cooperative housing; and (2) reduce housing costs by encouraging the construction and rehabilitation of multifamily rental housing projects and cooperative housing projects for families and individuals without other reasonable and affordable housing alternatives in the private market. The proposed program is intended to serve as a replacement for the rehabilitation and new construction components of the Section 8 Rental Assistance Program. GAO believes that the greatest potential for preserving an adequate multifamily rental housing stock is in the areas of moderate rehabilitation and carefully controlled new construction. Due to funding constraints, the proposed program would be capable of providing assistance to only a limited number of low- and moderate-income households. GAO believes that the bill, as currently drafted, has the potential to essentially exclude occupancy in assisted units by very low-income households unless some other source of rental subsidy is provided or unless targeting to such households is explicit. The bill does not specifically provide for an evaluation of the program by the Department of Housing and Urban Development. GAO views program evaluation as a fundamental part of effective program administration, for which responsibility should rest initially upon the agencies. Overall, the bill would make significant progress in overcoming the major criticisms of past and present production and rehabilitation programs. However, GAO believes that the proposed program could be made much more effective in achieving its stated goals by: (1) strengthening certain targeting provisions to insure that projects provide the maximum possible assistance to low- and moderate-income households while minimizing displacement of these households in favor of the more affluent; (2) enhancing cost-control provisions aimed at maximizing the number of units assisted while minimizing program costs; and (3) strengthening accountability and oversight by requiring adequate recordkeeping, program evaluation, and GAO access to records.

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