Welfare Reform

The Department of Housing and Urban Development (HUD) has a smaller role in welfare reform than the states or some other federal agencies, such as the departments of Health and Human Services and Labor. However, HUD reports it is committed to making welfare reform work. Its role is driven, in part, by the large numbers of tenants now receiving welfare benefits whose income will decline if they do not find jobs or other sources of income. It is too early to be certain what effect welfare reform will have on the revenue of the 18 housing agencies surveyed by GAO, the employment status of their tenants, and the roles of these housing agencies. Most of the agencies had not attempted to estimate welfare reform's impact on their revenue for several reasons, including a lack of resources to undertake detail analyses of the impact of their state's welfare reform plans.

GAO noted that: (1) it is too early to be certain what impact welfare reform will have on the revenue of the housing agencies that GAO selected, the employment status of their tenants, and the roles of these housing agencies; (2) most of the agencies had not attempted to estimate welfare reform's impact on their revenue for multiple reasons, including a lack of resources to undertake detailed analyses of the impact of their state's welfare reform plan; (3) welfare rolls had declined in the states that GAO visited, and state officials described services being provided to help Temporary Assistance for Needy Families (TANF) recipients overcome obstacles to employment; (4) housing agency officials, residents, and others believed that tenants would face significant challenges in moving from welfare to work; (5) their concerns are supported by research, based on past behavior, which shows that welfare recipients with housing assistance tend to have longer stays on welfare than those without housing assistance; (6) executive directors recognized that the role of housing agencies increasingly includes providing social services as well as housing; (7) however, agencies' social service activities were generally operated separately from states' welfare reform efforts; (8) the agencies that GAO visited had limited involvement in their state's welfare reform efforts; (9) state and local government offices with welfare reform responsibilities rarely targeted funds and programs to public housing developments; however, TANF recipients with housing assistance are eligible for the same services as other TANF recipients; (10) HUD has a smaller role in welfare reform than the states or some other federal agencies; however, HUD said that it is committed to making welfare reform work; (11) HUD's role is driven, in part, by the large numbers of tenants who currently receive welfare benefits whose incomes will decline if they do not find jobs or other sources of income within the time limits; (12) HUD's own financial status depends, to some extent, on these tenants' success in replacing welfare benefits with earnings; (13) to date, HUD has emphasized the importance of welfare reform in at least two strategic planning documents, issued guidance on welfare reform, redirected some programs to focus on welfare reform, and begun to coordinate its welfare reform activities internally and externally; and (14) HUD's strategic plans do not include a comprehensive strategy for bringing together HUD's resources for welfare reform and the funds and programs available from the states and other federal agencies.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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