Housing Preservation: Policies and Administrative Problems Increase Costs and Hinder Program Operations
RCED-97-169
Published: Jul 18, 1997. Publicly Released: Jul 18, 1997.
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Highlights
Pursuant to a legislative requirement, GAO reviewed the Department of Housing and Urban Development's (HUD) preservation program, focusing on the: (1) funding provided for preservation properties as compared with the properties' values; (2) levels of rehabilitation grants provided to properties compared with their physical needs; and (3) administrative and other problems that have arisen under the program.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Housing and Urban Development | To strengthen HUD's administration of the preservation program, the Secretary of Housing and Urban Development should undertake a systematic reassessment of the policies and internal controls governing the preservation program to ensure that they provide adequate assurance that the program's funds are being spent prudently and in accordance with legislative requirements. This assessment should focus, in particular, on policies and controls governing the types of improvements eligible for rehabilitation funding and HUD's reviews of requests for such funding, HUD's assessment of the effects of increases in rehabilitation funding on owner's equity, HUD's determination of funds needed for initial deposits to replacement reserves, HUD's oversight of field office activities, and HUD's monitoring of the owners' compliance with affordability restrictions placed on their properties. |
Closed – Implemented
In committee reports on HUD's fiscal year 1998 appropriation request, both the House and Senate Appropriations Committees specifically cited the report's findings as a basis for their decision to terminate funding for HUD's Low-Income Housing Preservation Program.
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| Department of Housing and Urban Development | The Secretary of Housing and Urban Development should no longer fund preservation properties that are already bound by use agreements preserving the properties' affordability for extended periods or use preservation funds to resolve enforcement actions against the owners of multifamily properties and reconsider HUD's policy allowing owners to retain replacement reserve account balances when transferring properties to new owners. |
Closed – Implemented
In committee reports on HUD's fiscal year 1998 appropriation request, both the House and Senate Appropriations Committees specifically cited the report's findings as a basis for their decision to terminate funding for HUD's Low-Income Housing Preservation Program.
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Topics
Comparative analysisFair market valueFederal aid for housingFormula grantsHousing programsHousing repairsInternal controlsLow income housingProgram abusesRental housing