Federal Housing Assistance: Comparing the Characteristics and Costs of Housing Programs

For more than 60 years, the federal government has sought to improve the condition and reduce the cost of rental housing for poor Americans. In fiscal year 1999, 5.2 million low-income households received $28.7 billion in federal housing assistance through more than a dozen programs. Despite this assistance, the Department of Housing and Urban Development (HUD) estimates that 9 million other very-low-income households still have serious unmet housing needs. The most widespread problem facing these households is a lack of affordable housing; many pay more than 30 percent of their income for rent. The housing provided under the six active federal programs varies by such characteristics as age, building type, unit size, location, and services. GAO estimates that, for units with the same number of bedrooms in the same general location, these production programs cost more than housing vouchers. Across the six active programs, the federal government and tenants pay most of the programs' total costs. Except for one program, the federal government pays the largest percentage of the average total per-unit costs. GAO's work raises several housing policy issues, including the relative costs and benefits of the voucher and production programs and whether opportunities exist to control costs and stretch federal housing dollars. The absence of comprehensive and consistent data is an impediment to monitoring and evaluating housing programs. Although production programs cost more than vouchers, all housing programs provide benefits in addition to housing the poor. For example, production programs seek to increase the supply of affordable housing, accommodate special needs, and revitalize distressed communities, while housing vouchers try to promote mobility and neighborhood choice. Accordingly, these benefits must be weighed against program costs.