Housing Allowances

In response to a congressional request, GAO examined the available research on low-income housing assistance payment programs to determine the programs': (1) participation rates; (2) effects on the participants; and (3) effects on the low-income housing market.

GAO concentrated on two main allowance programs, the Experimental Housing Allowance Program (EHAP) and the Section 8 Existing Housing Program, which are similar in eligibility requirements, levels of assistance, and family contribution. GAO found that: (1) the elderly enrolled at lower rates than their representation in the eligible population but had greater success than the nonelderly in becoming payment recipients; (2) minorities enrolled at higher rates than their proportion in the eligible population but had less success in becoming payment recipients; (3) large families enrolled at slightly higher rates than their eligible proportion but had difficulty in becoming recipients; and (4) very poor households, households headed by women, and welfare households were overrepresented as enrollees and as recipients in relation to their representation in the target population. GAO also found that, of all the households that eventually became program recipients: (1) 40 percent qualified without making any housing improvements because their housing already met minimum standards; (2) 20 percent made only minor repairs; (3) 40 percent initially lived in substandard housing but moved to better housing; and (4) the proportion of total income spent on rent was considerably reduced. EHAP studies on the housing programs' effects on the low-income housing market showed no increases in rent and no changes in the supply of low-income housing.