According to a Congressional report on the Department of Housing and Urban Development (HUD), the agency made an estimated $1.4 billion in improper payments in 2003, the last year for which financial records are available. The report found that $896 million was made in overpayments, and $519 million in underpayments, as a result of systematic errors at HUD. The overpayments could have subsidized housing for more than all the homeless in New York City. Although the Government Accountability Office (the bipartisan investigative unit of Congress) advised the Bush administration in 2001 that owing to “waste, fraud, and abuse…HUD’s rental assistance programs [are at] high risk,” the administration failed to take action. It appears that as the Bush administration focused increasingly on the war in Iraq, America’s homeless suffered.
Through HUD’s rental assistance programs housing is made available to five million people annually. HUD has three main programs: Housing Choice Voucher, public housing, and project-based Section 8. Payments under these programs in 2003 accounted for $28 billion, or approximately 75 percent of the agency’s total expenditures. HUD’s payments cover the difference between a housing unit’s monthly rental cost – or the operating cost for public housing – and a tenant’s payment, which is generally the equivalent of 30% of a tenant’s adjusted monthly income. Each year, the number of poor Americans eligible for assistance far exceeds the number of subsidized housing units or vouchers that are available.
The voucher program is the largest of HUD’s rental assistance programs. It provides vouchers that low-income individuals and families can use to rent houses or apartments in the private housing market. In 2003 vouchers helped approximately two million households and accounted for $13 billion. Only households earning less than 50 percent of the local average income can receive vouchers.
HUD also subsidizes the development and operation of government-owned properties. In 2003 HUD’s public assistance program helped 1.2 million households and accounted for $7 billion. To be eligible, households must earn less than 80 percent of the local average income. The agency also subsidizes rents at multifamily housing developments under the Section 8 program. In 2003 HUD helped 1.6 million households under this program, with expenditures of $8 billion.
According to the Congressional report HUD could have helped many more people in 2003, but failed to do so as a result of administrative errors. Agency administrators inaccurately determined rent subsidies and made calculation errors by misapplying various income exclusions and deductions. The report noted that HUD administrators provided poor instructions to tenants applying for the various programs, which resulted in the inaccurate reporting of incomes. Consequently, many were denied housing assistance that were actually eligible, while others received subsidies despite their incomes being above the programs caps.
An analysis of the Congressional data shows that HUD paid an estimated $1.4 billion in improper rent subsidies in 2003 as a result of the agency’s errors. Since the overpayments exceeded the underpayments, HUD was not able to use approximately $377 million to assist low-income households. An additional 56,000 families could have been provided housing assistance. Instead, many were left homeless.
Between 2002 and 2004 HUD field offices were directed to conduct local reviews of voucher and public housing programs. However, the report found that “officials from most of the HUD field offices…did not have enough staff to conduct all of their reviews. As a result… some field offices had to use staff with little or no experience.” Further, the Congressional report determined that the staff employed at many local HUD field offices were poorly paid, received little training, and were given too much responsibility. Consequently, this resulted in misapplying program policies and calculation errors in determining eligibility.
During President Bush’s first term, just as the reconstruction of Iraq was outsourced to Halliburton and other corporations, the administration began to outsource HUD’s supervision of Section 8 housing to independent contractors. The contractors are responsible for performing detailed annual reviews of local multifamily housing units and auditing the accuracy of housing subsidy calculations. However, the report found that HUD provided little oversight to the independent contractors, which resulted in additional program errors.
The Government Accountability Office strongly advised the Bush administration in 2001 that HUD needed to make significant improvements. Yet the administration ignored the agency’s problems. There can be little doubt that this was attributable to the administration’s exclusive focus on the war in Iraq. As a result, an increasing number of America’s poorest were left homeless.
