Assisted Housing:

Evening Out the Growth of the Section 8 Program's Funding Needs

RCED-93-54: Published: Aug 5, 1993. Publicly Released: Aug 5, 1993.

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Pursuant to a congressional request, GAO provided information on the estimated costs of contract renewals for the Department of Housing and Urban Development's (HUD) section 8 rental assistance program, focusing on: (1) the additional budget authority needed to renew expiring contracts; (2) ways to even-out the growth in budget authority for contract renewals; and (3) the relationship between budget authority needs to fund contract amendments and budget authority needs to renew expiring contracts.

GAO found that: (1) although HUD could not accurately determine its budget authority requirements to fund section 8 contract renewals because of persistent inaccuracies in its information systems, contract renewal costs are expected to increase from $6 billion to over $15 billion in 1997 and 1998; (2) several approaches to offset the expected growth in contract renewal budget authority include reformulating contracts, renewing contracts rather than amending them, limiting ongoing assistance, and increasing the current budget authority so that future authority increases will not be needed; (3) increasing HUD budget authority will be difficult because of budget cutbacks and competing demands; (4) there is no clear relationship between budget authority needs for contract amendments and contract renewals, since HUD information systems do not estimate future budget authority needs for section 8 contract amendments; and (5) although HUD expects that future budget authority needs will decline because of the increasing proportion of short-term contracts, existing long-term contracts for other section 8 programs could have substantial amendment needs in the future.

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