Assisted Housing: Utility Allowances Often Fall Short of Actual Utility Expenses (Vol. I)

Highlights

Pursuant to a legislative requirement, GAO provided information on how utility allowances are provided to assisted households and the extent to which the allowances cover utility costs.

Recommendations

Matter for Congressional Consideration

Matter	Status	Comments
If Congress wishes to ensure a rent burden of exactly 30 percent for each assisted household, it will have to revise the United States Housing Act of 1937, as amended, to require that assisted households pay 30 percent of adjusted income for rent and utilities.	Closed – Not Implemented	No congressional action has been taken or is expected.

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Department of Housing and Urban Development	The Secretary of Housing and Urban Development should set performance expectations for PHA by better defining its reasonable consumption utility allowance standard. This action will provide public housing agencies with a clear understanding of the results that they are expected to achieve and will minimize rewarding or penalizing households unfairly. Because setting utility allowances is not an exact exercise, HUD may wish to specify: (1) an acceptable range for the rent burdens of households receiving utility allowances; and (2) the proportion of households that are expected to fall within that range. In doing so, however, it may also want to reaffirm that PHA should strive for average rent burdens of 30 percent. This affirmation would serve to preclude the possibility of rent burdens gravitating to the higher end of the range.	Closed – Not Implemented The agency response indicates that public housing agencies have the flexibility to accomplish the result intended.
Department of Housing and Urban Development	The Secretary of Housing and Urban Development should encourage PHA to: (1) use assisted households' experiences with the allowances as a mechanism for ensuring that allowances are reasonable; and (2) investigate the possibility of smoothing out monthly fluctuations between allowances and expenses. This could require PHA to: (1) evaluate the vulnerability of their assisted households to seasonal fluctuations; and (2) take actions, if practical, to minimize the impact of these fluctuations on assisted households, such as using budget plans and adjusting check-metered allowances monthly.	Closed – Not Implemented The agency response indicates that public housing agencies have the flexibility to accomplish the result intended.
Department of Housing and Urban Development	The Secretary of Housing and Urban Development should direct the six PHA to correct the income, allowance, and rent determination errors. HUD should also direct those PHA to reimburse those households whose rental contributions were too high because of PHA errors.	Closed – Implemented HUD decided not to perform corrective action for a portion of problems found because it let the errors age. It is likely that many of the affected families will have moved by now so errors become moot. Recommendation should be closed.
Department of Housing and Urban Development	The Secretary of Housing and Urban Development should ensure that PHA review the reasonableness of their allowances annually, as HUD requires.	Closed – Implemented Existing guidance, if followed, should be adequate. Additional action, as mentioned in GAO's recommendation, is not a high priority in the Department.
Department of Housing and Urban Development	The Secretary of Housing and Urban Development should determine whether HUD oversight of PHA utility allowance determinations is consistent with HUD policy. If this oversight is determined to be insufficient, the Secretary should require corrective action.	Closed – Implemented Existing guidance, if followed, should be adequate. Additional action, as mentioned in GAO's recommendation, is not a high priority in the Department.

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Topics

Housing

Housing programsLocal governmentsLow income housingAllowancesPublic assistance programsPublic housingRent subsidiesRental housingRental ratesSurveysUtility rates