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Highlights

Pursuant to a congressional request, GAO reviewed the Department of Housing and Urban Development's (HUD) Section 8 Moderate Rehabilitation Program for Single Room Occupancy (SRO) Dwellings for Homeless Individuals, focusing on: (1) whether the program is meeting its goals; (2) HUD oversight of projects in development; (3) financial review procedures for SRO projects; and (4) the use of public housing agencies' (PHA) waiting lists to fill SRO vacancies.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Housing and Urban Development 1. The Secretary of Housing and Urban Development should direct the Office of Special Needs Assistance Programs to reexamine the three unopened SRO projects to be funded with fiscal year 1989 appropriations and for which HUD does not have contracts executed with PHA. This review should determine whether shifting or cancelling the SRO project subsidies would be in the best interest of the homeless and the government.
Closed - Implemented
HUD's Office of Special Needs Assistance Programs reexamined these three projects and concluded that continuing to process them would be the most direct way to provide housing to the homeless in the shortest time period. The Special Needs Office thereafter monitored the projects. Problems on all three projects were ultimately resolved, and HUD signed a contract with the PHA on the last project in January 1994. Construction had begun on two projects by August 1994.
Department of Housing and Urban Development 2. The Secretary of Housing and Urban Development should direct the Office of Special Needs Assistance Programs, before committing subsidy funds, to expand the financial reviews of SRO projects to determine if projects are financially feasible and have adequate financial resources to cover all projected rehabilitation and operating costs. Such a review should provide greater assurance that approved projects open in a timely manner.
Closed - Implemented
HUD issued new regulations in March 1993 that require applicants to report all project costs and to provide evidence of sufficient funding cost not recoverable through rents.
Department of Housing and Urban Development 3. The Secretary of Housing and Urban Development should revise the current requirement for PHA-developed waiting lists for SRO projects so that local SRO operators have the option of filling vacancies from their own waiting lists. In conjunction with this action, the Secretary should instruct PHA to ensure that projects using their own lists fill vacancies fairly, giving priority to single homeless persons, and should incorporate this assessment into their routine monitoring visits to SRO projects.
Closed - Implemented
HUD issued revised regulations in March 1993 that eliminated the required use of PHA writing lists.

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