Housing for the Elderly

HUD Policy Decisions Delay Section 202 Construction Starts Gao ID: RCED-91-4 January 14, 1991

Pursuant to a congressional request, GAO reviewed the Department of Housing and Urban Development's (HUD) processing of section 202 projects for constructing rental housing for the elderly and handicapped, focusing on: (1) increases in project processing time; (2) the need for additional sponsor contributions to cover project development costs; (3) field offices' interpretation of cost-containment requirements; and (4) field offices' program administration.

GAO found that: (1) the average processing time for section 202 projects, from reservation of funds to construction start, increased from 19.3 months in 1980 to 26.8 months in 1988; (2) processing time varied significantly among HUD field offices; (3) local rental market surveys frequently indicated that HUD fair-market-rent limits were too low, causing sponsors to perform time-consuming and costly project redesign or to contribute additional funds for projects; (4) field offices inconsistently interpreted cost containment requirements and increased project processing time when they inappropriately used the requirements to reduce project costs to fair-market-rent limits; and (5) while some field offices developed effective processing procedures and practices, others did not.

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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