GAO Reviews of the Section 8 Lower Income Rental Assistance Program

GAO reviews have shown that the Section 8 program has provided safe, decent, and sanitary housing to many lower income persons. Given the high caliber of the housing being provided, development and operating costs are generally reasonable, and incentives for the production of this housing are high. However, significant savings are possible which could be used to extend housing assistance to a greater number of the needy. Section 8 housing subsidies are very costly and are rising rapidly, and the program serves only a fraction of the eligible households in need. Housing produced under the Section 8 program has primarily been serving elderly and small nonelderly families. Very little Section 8 housing is being built for large families. The inequity issue regarding the nonavailability of Section 8 housing benefits to many eligible households deserves serious attention. GAO has recommended that The Department of Housing and Urban Development (HUD) establish a task force to find solutions to this problem. To reduce the per unit cost of subsidized housing and enable the limited available funds to reach more eligible households, GAO has recommended that HUD: emphasize lower cost financing options, increase incentives for high-quality management and long-term ownership of Section 8 projects, build more modest size housing with fewer amenities, reduce occupancy by ineligible households, make better use of family housing units, evaluate the propriety of automatic annual rent increases, increase tenant contributions, and strengthen procedures used in verifying tenant income. The indirect subsidies associated with partially assisted new or substantially rehabilitated Section 8 projects greatly increase the cost of the program while providing larger rent reductions for middle income renters who are not in the program. Some mechanism for reducing or recapturing these indirect subsidies on nonassisted units should probably be developed. HUD makes no attempt to exclude illegal aliens from receiving federal housing subsidies. Legislation has been introduced to prohibit illegal aliens from receiving federal housing assistance.