Rental Housing
Housing Vouchers Cost More Than Certificates but Offer Added Benefits Gao ID: RCED-89-20 February 16, 1989Pursuant to a congressional request, GAO provided information on the: (1) costs of the Department of Housing and Urban Development's (HUD) section 8 existing certificate and housing voucher programs; and (2) adequacy of HUD fair-market rents and their impact on tenant rent burdens.
GAO found that: (1) although the voucher and certificate programs had the similar goal of subsidizing private rental housing, state and local public housing agencies computed rent subsidies differently for the programs, since vouchers provided incentives for finding the most suitable housing; (2) HUD use of inconsistent budgeting approaches resulted in its misleading contention that vouchers were less expensive than certificates and its proposal to replace certificates with vouchers; (3) vouchers were actually more costly than certificates, since they provided higher subsidies to families renting units for less than the fair-market rent; (4) the higher cost of vouchers would result in fewer families being assisted with vouchers than with certificates; (5) HUD planned to refinance 780,000 certificates scheduled to expire over the next 12 years with vouchers, at a cumulative cost of $9.6 billion more than if it refinanced them with certificates; and (6) fair-market rents did not always accurately reflect actual market rents, due to HUD use of outdated or regionally nonspecific data, resulting in oversubsidies, high rent burdens, or difficulty in locating affordable units.
RecommendationsOur 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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