Public Housing: HUD's Takeover of the Chicago Housing Authority

GAO discussed: (1) the Department of Housing and Urban Development's (HUD) takeover of the Chicago Housing Authority (CHA); (2) HUD capacity to takeover other troubled public housing authorities (PHA); and (3) several administration proposals to enhance PHA ability to overcome their distressed housing inventory. GAO noted that: (1) CHA, the third largest PHA, has a long history of management and housing problems due, in part, to deficient management systems, aging, deteriorated, and poorly designed housing stock, and residents' very low income levels; (2) HUD has been reluctant to take over troubled PHA because of its limited resources and staff expertise; (3) recent additions of experienced housing management staff should make PHA takeovers more cost-effective; (4) the costs of supporting deteriorated, vacant buildings and lost rental revenues probably outweigh the costs of takeovers; (5) proposed legislative changes could result in better use of available federal funds for assisted housing; and (6) these legislative changes include repealing the one-for-one replacement requirement, reforming public housing rent rules so working families are not penalized, and relaxing low-income preference rules so that PHA can achieve a better income balance to enhance rent collections and social conditions.