Section 8 Rental Housing

The Department of Housing and Urban Development (HUD) runs two similar rental housing subsidy programs for low-income households--the section 8 certificate and voucher programs. These two programs, which local and state housing agencies operate for HUD, enable 1.3 million poor families to live in decent, affordable, privately owned housing. Although these programs are in many ways similar, several statutory and administrative differences can affect the housing subsidy that households receive. Over the past several years, GAO, the Vice President's National Performance Review, and others have urged that the two programs be combined; legislation now before Congress would accomplish that goal. This report examines (1) the benefits of a merger, (2) the major program differences that would need to be reconciled, (3) the effect of a merger on HUD's budgeting and financial management, and (4) the effort needed to merge the two programs.

GAO found that: (1) the housing subsidy certificate and voucher programs should be merged to reduce administrative burdens and costs; (2) private owners would need to meet only one set of requirements, and assisted households would be treated similarly under a single combined program; (3) budgetary savings from the merger are not likely, since savings would be directed to other HUD activities; (4) program differences that need to be reconciled include the basis for calculating rental subsidies, the shopper's incentive, and budget authority for contract amendments; (5) a merger of the two programs would not by itself improve the accuracy of HUD budget estimates or the programs' financial management; (6) improvements are more likely to come from ongoing HUD efforts to improve its information systems and internal controls and streamline budgeting and reporting requirements for housing agencies; (7) merging the two programs depends on what legislation Congress enacts and how HUD implements the legislation, but substantial efforts will be needed to persuade participants to switch to the merged program; and (8) HUD may have to administer three programs during the transitional period after the merger and will need sufficient numbers of trained and organized staff in place to ensure a smooth merger.