Assisted Housing

The Housing and Community Development Act of 1992 allows the owners of federally assisted housing projects to establish occupancy policies that favor elderly tenants over nonelderly tenants with disabilities. These owners are not required to obtain approval from the Department of Housing and Urban Development (HUD) before imposing such a restriction, nor to notify HUD once the restrictions occurs. As a result, little information is available on the law's effect. However, concerns have been raised that the law may make it harder for nonelderly persons with disabilities to obtain affordable housing. Since fiscal year 1997, Congress has appropriated funds for new Section 8 rental housing certificates and vouchers for the exclusive use of nonelderly persons with disabilities. This report discusses (1) the extent to which the occupancy policies of eligible projects restrict occupancy to the elderly and the portion of units in eligible projects actually occupied by nonelderly persons with disabilities and (2) the use of Section 8 certificates and vouchers to help nonelderly persons with disabilities affected by the act.

GAO noted that: (1) the majority of housing projects designed for the elderly have not used the 1992 act to restrict the occupancy of nonelderly persons with disabilities; (2) almost three-quarters of the officials for the projects designed for the elderly reported that they had adopted their current policies before 1993, when the law went into effect; (3) a similar number of officials reported that their projects' occupancy composition has remained about the same over the last 5 years; (4) about 42 percent allow the elderly and persons with disabilities to apply for all units, while about 24 percent reserve some units for nonelderly persons with disabilities; (5) elderly tenants currently occupy about 90 percent of the available units, while nonelderly persons with disabilities occupy 8 percent; (6) advocates for the elderly believe that GAO's findings indicate that few projects have used the act to restrict the occupancy of persons with disabilities; (7) disability rights advocates believe that many projects were discriminating against persons with disabilities prior to the 1992 act and that the act merely legitimized those practices; (8) local housing authorities have made limited use of the funds for Section 8 certificates and vouchers that the Department of Housing and Urban Development (HUD) can award to assist nonelderly persons with disabilities who are not currently receiving housing assistance because owners restricted occupancy, as the 1992 act allows; (9) of the $45 million appropriated for this purpose in fiscal years 1997 and 1998, only $8.4 million had been awarded to 13 housing authorities as of September 30, 1998; (10) HUD officials told GAO that these funds were not in greater demand for several possible reasons; (11) the application process for these funds is more complicated than the process for funds in the mainstream housing opportunities program, which is another mechanism available for housing authorities to apply for certificates and vouchers for persons with disabilities; (12) GAO's survey found that very few owners of private projects were working with staff from their local housing authority to assist persons with disabilities affected by Sections 651 and 658; (13) housing authorities prefer to apply for funds from the mainstream program for persons with disabilities; (14) in September 1998, HUD transferred $78.3 million of unobligated Section 8 funds for nonelderly persons with disabilities, of which $36.6 million was from the $45 million set-aside, into the mainstream program; and (15) these transferred funds were fully obligated by the end of fiscal year 1998, according to HUD.