Content Header Image

GAO Identifies Opportunities to Consolidate Federal Housing Assistance Programs

by Published On: Sep 15, 2011Updated On: Sep 21, 2012
Federal Rental Alignment - Administrative Proposals

According to "Housing Assistance: Opportunities Exist to Increase Collaboration and Consider Consolidation," fiscal realities raise questions about the efficiency of multiple housing programs and activities across federal agencies with similar goals, products, and sometimes parallel delivery systems.

The August 2012 Government Accountability Office (GAO) report assesses the following:

  1. Extent to which there is overlap or fragmentation in selected housing programs.
  2. Federal collaborative efforts.
  3. Implications of consolidating selected housing programs.

What the GAO Found

Among its findings:

  • Practices such as identifying goals and resources and defining strategies and outcomes will be important as the task force moves forward.

  • HUD, USDA, and the U.S. Treasury Department have been working to consolidate and align requirements in rental housing programs through the Rental Policy Working Group. Although efforts have been consistent with many key collaborative practices, the group has not taken full advantage of opportunities to reinforce agency accountability for collaborative efforts through the agencies’ annual and strategic plans, or expanded its guiding principles to evaluate areas requiring statutory action to generate savings and efficiencies.
  • Any evaluations of which programs, products, systems, and processes to retain, revise, consolidate, or eliminate would involve complex analyses, trade-offs, and difficult policy decisions.

Rental Alignment Opportunities Background

For owners, developers, tenants and local communities working to create and preserve affordable housing, Federal funds often make up a significant share of a property’s financing structure. 

However, owners and developers can be burdened by overlapping administrative requirements associated with those federal affordable housing programs. Having affordable housing programs supported and administered separately by different federal departments has generally been good for the rental housing field, as different programs respond to different needs. 

However, over time, developers and owners of affordable housing have become increasingly reliant on multi-layered finance and subsidy structures. But these programs have not always been designed well to work with each other.

Responding to this need for better coordinated Federal rental policy, the White House’s Domestic Policy Council established the interagency Rental Policy Working Group in 2010. As part of its coordinating efforts, the Rental Policy Working Group has engaged state, local, and private stakeholders to identify administrative changes that could increase overall programmatic efficiency and further enhance the ability of communities to create and preserve affordable housing. 

Through this process, recommendations have been developed to align administrative requirements in several critical administrative policy areas. Additionally, pilot implementations are being pursued in several states to test some of these administrative alignment activities on a small scale before national implementation.

In July 2011, we at LeadingAge had our first opportunity to read and comment on the preliminary Rental Policy Working Group: Alignment Activities. At that time, a website was set up, but has since been taken down, articulating much of what is included below.  

LeadingAge Comments on Alignment Activities

On January 10, 2012, LeadingAge was contacted by the U.S. Department of Housing and Urban Development (HUD) to thank us for submitting comments on the “Federal Rental Alignment Opportunities: Conceptual Proposals,” which was issued by the Rental Policy Working Group in July 2011.

HUD posted the final version of the proposal, titled “Federal Rental Alignment: Administrative Proposals," which includes many of the comments incorporated into the recommendations. The final version lays out a broad vision for improving the delivery and operation of affordable housing across the country.

The initiatives in this report – many of which are already being implemented - will streamline federal housing requirements to support more efficient delivery of affordable housing, and help state and federal agencies’ staff to better serve low-income families who rent their homes.

The administration's goal is to make government work better by reducing the unintended consequences associated with the reality of housing finance today – multiple overlapping public investments on a given rental property. .

As the departments of Agriculture, Treasury, and HUD now begin implementation of these proposals (and some members have the opportunity to participate in the alignment demonstrations), we will seek and continue to provide input to the lead agency contacts.

Activities to Better Align Affordable Rental Housing Policy and Compliance

Specific actions are now underway by state and local housing agencies that are pursuing alignment through state- or locally-driven partnerships or have joined with the Rental Policy Working Group’s efforts by participating in an Alignment Pilot. Agencies are working to align the often burdensome program requirements of different affordable rental housing government programs to maximize housing affordability. Their activities fall into the two broad categories below.

  • Rental Policy Working Group: Alignment Activities.
  • Aligning Affordable Rental Housing Policy and Compliance at the state and local Level.

Compliance and Monitoring Alignment

The following alignment activities are designed and to be implemented through the work of the interagency Rental Policy Working Group.

• Physical Inspections. 
• Subsidy Layering Review. 
• Reduction in State-to-State Variability for Income Definition. 
• Financial Reporting Requirements Standardized. 
• Compliance (Fair Housing MOUs).

Development and Funding Alignment

The following alignment activities are designed and to be implemented through the work of the interagency Rental Policy Working Group.

• Common Energy Efficiency Standards. 
• Appraisal Primer. 
• Market Study Standards Alignment.
• Capital Needs Assessment. 

Physical Inspections Alignment Pilot  

Alignment pilots have been launched to test the implementation of administrative alignments around two administrative policy areas – physical inspections and subsidy layering reviews.
 
Federally-assisted multifamily housing owners are subject to multiple physical inspections as a result of utilizing more than one federal funding stream for property acquisition, repair or rehabilitation, or rental income subsidy, when programs are combined on a property. 

State-level teams are testing whether solutions can be found to achieve one federally-sponsored physical inspection at each multifamily property financed with multiple federal funding sources where each aligned physical inspection would be completed using an agreed-upon protocol at an agreed-upon inspection frequency.

Information related to this alignment activity can be found in the Physical Inspections alignment report.

  • Michigan. 
  • Minnesota. 
  • Ohio. 
  • Oregon. 
  • Washington. 
  • Wisconsin. 

Any members having the opportunity to participate in the alignment demonstrations is encouraged to contact us here at LeadingAge to share your experiences.

Aligning Affordable Rental Housing Policy and Compliance at the State and Local Level

State and local housing agencies rely on a wide range of funds to support affordable rental housing. Many federal funding sources have unique administrative requirements that can make managing properties with combined federal funding burdensome. 

In response, state and local agencies and rental property owners have been forming partnerships and participating in initiatives designed to better align and simplify the administrative requirements for securing federal funds. For state and local agencies interested in forming or enhancing similar partnerships and initiatives, these pages will sketch out a number of approaches to help you better align existing funding programs in ways that:

  • Improve outcomes for residents.
  • Coordinate investments for maximum impact.
  • Reduce administrative and other governmental costs. 
  • Promote long-term preservation of the affordable housing stock.

Subsidy Layering Review Alignment Pilot 

Alignment pilots have been launched to test the implementation of administrative alignments around two administrative policy areas – physical inspections and subsidy layering reviews.
 
Almost all federal housing programs have statutory requirements requiring the administering agencies to confirm that, at the time of making a grant or subsidized loan, the total amount of subsidy being provided by public sources does not exceed eligible costs. 

When developers of affordable housing are awarded multiple sources of public funding, they consequently become subject to multiple subsidy layering reviews, which causes delays and adds costs to projects that are preparing to start construction. State-level teams are testing different strategies for standardizing, and aligning Subsidy Layering Review requirements across agencies.

Information related to this alignment activity can be found in the Subsidy Layering Review alignment report.

Any members having the opportunity to participate in the alignment demonstrations is encouraged to contact us here at LeadingAge to share your experiences.

 



comments powered by Disqus