oversight

Public Housing: Small and Larger Agencies Have Similar Views on Many Recent Housing Reforms

Published by the Government Accountability Office on 2003-10-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

               United States General Accounting Office

GAO            Report to the Ranking Minority Member,
               Subcommittee on Housing and
               Transportation, Committee on Banking,
               Housing, and Urban Affairs, U.S. Senate

October 2003
               PUBLIC HOUSING
               Small and Larger
               Agencies Have Similar
               Views on Many Recent
               Housing Reforms




GAO-04-19
               a
                                                October 2003


                                                PUBLIC HOUSING

                                                Small and Larger Agencies Have Similar
Highlights of GAO-04-19, a report to the        Views on Many Recent Housing Reforms
Ranking Minority Member, Subcommittee
on Housing and Transportation,
Committee on Banking, Housing and
Urban Affairs, U.S. Senate




In response to long-standing                    Of the 18 QHWRA reforms GAO asked about in its national survey, housing
concerns, HUD initiated efforts to              agencies of all sizes had similar views on 11 of them. However, when asked
improve the administration of its               to what extent these reforms affected their operations, agencies’ responses
programs in 1997, and Congress                  sometimes differed by size category. For example, the largest percentages
passed the Quality Housing and                  of agencies in all size categories viewed the annual plan reform—which
Work Responsibility Act (QHWRA)
in 1998. The act contains over 80
                                                requires agencies to provide certain information pertaining to their
reforms that affect two key rental              upcoming fiscal year—as helpful to them in managing and operating their
housing assistance programs: the                agencies. But small agencies indicated that this reform helped to a lesser
low-rent housing program (also                  extent than larger agencies.
referred to as public housing) and
the Housing Choice Voucher                      Other results of our survey:
program (formerly Section 8).                   •  All agencies reported spending more time on administering HUD
According to many housing                          programs since QHWRA was implemented.
agencies, implementing these                    •  Most agencies said they contracted out about the same amount of
reforms challenged their ability to                property management and services as before QHWRA.
address their core mission of                   •  About 75 percent of small agencies reported they believe the regulatory
providing safe, decent, and sanitary
rental units for low-income
                                                   changes HUD has issued to reduce administrative burden will help.
residents. In particular, some small
agencies that manage properties                 Performance ratings varied between small and larger housing agencies,
with relatively few rental units                according to HUD assessment data. The ratings, which assess the agencies’
have contended that some reforms                management of HUD housing programs, showed small agencies scoring
have little relevance to their                  better than larger ones in managing low-rent units. However, smaller
operations and pose a significant               agencies received lower scores than larger agencies for managing Housing
burden because of the agencies’                 Choice Voucher units, but this result may be due partly to HUD scoring
limited staff and financial                     method.
resources.
In response to the request of the               HUD uses its risk assessment and management performance assessment
Ranking Minority Member of the                  systems to target assistance based on its determination of those that need it
Subcommittee, GAO compared                      most. In addition, housing agencies also contact HUD directly to request
housing agencies by size in terms               assistance. However, according to HUD field office officials, small agencies
of (1) the impact of recent housing
reforms on their ability to
                                                are more likely to need assistance with day-to-day management issues than
administer HUD programs, (2) the                large agencies because small agencies tend to have few staff that specialize
agencies’ performance as measured               in key areas that are important to managing HUD’s programs.
by HUD, and (3) the differences in
the technical assistance that the               Amount of Time Agencies Spend Administering HUD Programs Since QHWRA
agencies require. To carry out its
work, GAO surveyed a statistical                                          Less or     About        More or                      Not applicable
sample of small and larger public                                         much less   the same     much more
housing agencies nationwide on the              Perceived time spent
                                                                          1%              24%                   63%               Small 12 %
impact of QHWRA reforms. The                    on HUD-subsidized
                                                program compared to       1                24                         70        Medium    4
response rate to the survey was                 before implementation
                                                                          1               21                               79     Large   0
about 69 percent.                               of QHWRA

www.gao.gov/cgi-bin/getrpt?GAO-04-19.
                                                         Small agencies               Medium agencies          Large agencies
To view the full product, including the scope   Source: GAO.
and methodology, click on the link above.
For more information, contact David G. Wood,
(202) 512-8678, or woodd@gao.gov.
Contents



Letter                                                                                                     1
                             Background                                                                    3
                             Results in Brief                                                              8
                             With Some Exceptions, Small Agencies’ Views of QHWRA Reforms
                               Were Similar to Those of Larger Agencies                                   10
                             Scores from HUD’s Performance Measurement and Risk Assessment
                               Systems Show That Small and Larger Agencies’ Performance
                               Varies                                                                     26
                             HUD’s Technical Assistance Is Based on Agency Needs, Which
                               Sometimes Vary by Agency Size                                              33
                             Agency Comments                                                              38


Appendixes
              Appendix I:    Scope and Methodology                                                        40
             Appendix II:    Methodology for GAO’s Survey of Local Housing Agencies on
                             QHWRA Housing Reforms and Initiatives                                        42
                             The Study Population                                                         42
                             The Sample Design                                                            42
                             Developing the Survey                                                        43
                             Administering the Survey                                                     44
                             Nonsampling Error and Data Quality                                           44
                             Response Rates                                                               45
                             Estimates                                                                    45
                             Sampling Error                                                               46
             Appendix III:   Survey Results of Housing Agencies                                           47
             Appendix IV:    Summary of 18 Reforms Contained in GAO’s Survey of Public
                             Housing Agencies                                                             63
              Appendix V:    GAO Contacts and Staff Acknowledgments                                       66
                             GAO Contacts                                                                 66
                             Staff Acknowledgments                                                        66


Tables                       Table 1: Small, Medium, and Large Public Housing Agencies and
                                      Their Inventory, Based on GAO’s Definition for Size, Fiscal
                                      Year 2002                                                            8
                             Table 2: Average SEMAP Scores for Seven Indicators for Which All
                                      Agencies Are Scored, by Agency Size
                                      (Fiscal Year 2002)                                                  31
                             Table 3: Survey Sample Size and Disposition                                  43



                             Page i                                   GAO-04-19 Small Public Housing Agencies
          Contents




Figures   Figure 1: Survey Estimates on Effects of Seven QHWRA Reforms
                     That Primarily Helped Agencies to Operate and Manage
                     HUD Programs                                                     12
          Figure 2: Survey Estimates on Four QHWRA Reforms That
                     Primarily Neither Helped Nor Hindered Agencies to
                     Operate and Manage HUD Programs                                  14
          Figure 3: Survey Estimates on Seven Reforms with Varied Impacts
                     on Agency Ability to Operate and Manage
                     HUD Programs                                                     16
          Figure 4: Survey Estimates of Time Agencies Spend Administering
                     HUD Programs Since QHWRA Reforms                                 17
          Figure 5: Survey Estimates of Extent to Which Agencies Reported
                     Increased Reporting Requirements and Changes in
                     Existing Requirements Contributed to Increased Time
                     Spent on HUD Programs                                            19
          Figure 6: Survey Estimates of Extent to Which Difficulty in
                     Submitting Data on the Low-Rent Program and Accessing
                     HUD’s Computer Systems Contributed to Increased Time
                     Spent on HUD Programs                                            21
          Figure 7: Survey Estimates of Extent to Which Late and Unclear
                     Guidance and Changes in Regulations Contributed to
                     Increased Time Spent on HUD Programs                             23
          Figure 8: Survey Estimates of Extent to Which Lack of Resources
                     for Hiring and Training New Staff and the Need to Train
                     Staff Contributed to Increased Time Spent on HUD
                     Programs                                                         24
          Figure 9: Survey Estimates of Extent to Which Agencies Report
                     Contracting Out for Property Management and Services
                     Since QHWRA                                                      25
          Figure 10: Survey Estimates of Extent to Which Agencies Believe
                     HUD’s Regulatory Relief Will Help                                26
          Figure 11: Overall PHAS Scores, by Agency Size (Fiscal Year
                     2002)                                                            28
          Figure 12: Overall SEMAP Scores, by Agency Size (Fiscal Year
                     2002)                                                            30
          Figure 13: Overall PIC Risk Assessment Scores, by Agency Size
                     (Fiscal Year 2002)                                               33




          Page ii                                 GAO-04-19 Small Public Housing Agencies
Contents




Abbreviations

HUD          Department of Housing and Urban Development
NAHRO        National Association of Housing and Redevelopment Officials
PHADA        Public Housing Authorities Directors Association
PHA          public housing agency
PHAS         Public Housing Assessment System
PIC          Public and Indian Housing Information Center
QHWRA        Quality Housing and Work Responsibility Act
REAC         Real Estate Assessment Center
SEMAP        Section Eight Management Assessment Program
TARC         Troubled Agency Recovery Center


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Page iii                                         GAO-04-19 Small Public Housing Agencies
A
United States General Accounting Office
Washington, D.C. 20548



                                    October 30, 2003                                                                             Leter




                                    The Honorable Jack Reed
                                    Ranking Minority Member
                                    Subcommittee on Housing and Transportation
                                    Committee on Banking, Housing, and Urban Affairs
                                    United States Senate

                                    Dear Senator Reed:

                                    Over 4,100 state, county, and municipal housing agencies administer
                                    federal housing programs—which were funded at nearly $24 billion in
                                    fiscal year 2003—on behalf of the Department of Housing and Urban
                                    Development (HUD). In response to long-standing concerns, HUD
                                    initiated efforts to improve the administration of its programs in 1997, and
                                    Congress passed the Quality Housing and Work Responsibility Act
                                    (QHWRA)1 in 1998. QHWRA contains over 80 reforms that affect two key
                                    rental housing assistance programs: the Low-Rent Public Housing
                                    Assistance Program (also referred to as low-rent or public housing) and the
                                    Housing Choice Voucher program (formerly referred to as Section 8).2
                                    According to many housing agencies, implementing these reforms has
                                    challenged their ability to address their core mission of providing safe,
                                    decent, and sanitary rental units for low-income residents. In particular,
                                    some small agencies that manage properties with relatively few rental units
                                    have contended that some reforms have little relevance to their operations
                                    and pose a significant burden because of the agencies’ limited staff and
                                    financial resources.

                                    HUD annually assesses the operating performance of the housing agencies
                                    that administer the two programs, using performance measurement
                                    systems that assign agencies a score for each program. HUD uses these
                                    scores and ratings from its risk assessment system to identify housing
                                    agencies that may be in need of monitoring and technical assistance.
                                    HUD’s technical assistance—sometimes called capacity building—involves


                                    1
                                     Also known as the Public Housing Reform Act.
                                    2
                                     Throughout this report, we refer to the Low-Rent Public Housing Assistance program as the
                                    low-rent program. Under the low-rent program, local housing agencies own and manage
                                    buildings with rental units for low-income families. Under the Housing Choice Voucher
                                    program, local housing authorities make subsidy payments on behalf of assisted households
                                    living in privately owned rental units.




                                    Page 1                                           GAO-04-19 Small Public Housing Agencies
activities such as training staff at local housing agencies on how to use
HUD systems or comply with HUD’s reporting requirements.

As agreed with your office, we (1) compared how small and larger housing
agencies view the impact of recent housing reforms on their ability to
administer HUD programs, (2) compared small and larger agencies’
performance, as measured by HUD, in administering the low-rent housing
and Housing Choice Voucher programs, and (3) described the differences
in the technical assistance that small and larger public housing agencies
require.

For the purposes of this report, we classified agencies based on the number
of low-rent and Housing Choice Voucher units they administered. Small
agencies administered fewer than 250 units; medium agencies administered
between 250 and 1,249 units; and large agencies administered 1,250 units or
more. To compare how small and larger housing agencies view the impact
of recent housing reforms on their ability to administer HUD programs, we
developed a survey that we mailed to a statistical sample of public housing
agencies nationwide. Of the more than 80 QHWRA reforms, our survey
focused on the 18 reforms that public housing industry associations
consider to have had the most impact on agencies’ operations. Based on
the sample, we produced national estimates of housing agency directors’
perceptions about the impact of QHWRA reforms and related issues and
tested for size-response differences.3 We analyzed respondents’ most
frequently occurring answers to our survey questions to identify
similarities and differences between small, medium, and large agencies. To
compare small and larger agencies’ performance in managing HUD’s low-
income housing programs, we analyzed data from HUD’s performance
measurement assessment systems. To determine differences in the
technical assistance that small and larger agencies require, we analyzed
data from HUD’s performance measurement and risk assessment systems
and interviewed HUD headquarters and field office officials. Appendix I
contains additional information on our scope and methodology. Appendix
II contains details on our survey methodology, and appendix III contains
our survey results.




3
 Estimates based on our sample are subject to sampling error. Except where noted, all
percentage estimates have 95 percent confidence intervals within +/- 7 percentage points.
See appendix II for more information.




Page 2                                            GAO-04-19 Small Public Housing Agencies
Background                 Under the United States Housing Act of 1937, as amended, Congress
                           created the federal public housing program to assist communities in
                           providing decent, safe, and sanitary dwellings for low-income families.
                           Today, more than 4,100 public housing agencies, typically local agencies
                           created under state law, develop and manage public housing units for low-
                           income families. Over 3,100 agencies operate low-rent or a combination of
                           low-rent and Housing Choice Voucher programs, and about 1,000 provide
                           housing through the voucher program only. Agencies that participate in the
                           low-rent program contract with HUD to provide housing to eligible low-
                           income households; in return, the agencies receive both capital and
                           operating fund grants. Under the Housing Choice Voucher program,
                           eligible households live in rental units they locate in the private housing
                           market. Participating housing agencies that administer such units contract
                           with HUD to receive funds for rent subsidies for the participating
                           households.



Congress and HUD Have      During the 1990s, the nation’s public housing agencies gained broader
Initiated Public Housing   latitude from HUD and Congress to establish their own policies in areas
                           such as selecting tenants and setting rent levels. In 1996, Congress enacted
Reforms                    legislative reforms that allowed public housing agencies to set minimum
                           rents and to drop all mandatory federal preferences for admission on the
                           basis of hardships such as homelessness. These reforms gave housing
                           agencies greater control over their social and fiscal environment, enabling
                           them to tailor their policies to local needs and conditions. In 1998,
                           Congress enacted the Quality Housing and Work Responsibility Act of 1998
                           (QHWRA).4 This act, which extensively amended the United States
                           Housing Act of 1937, embodied many of the 1996 reforms, allowing public
                           housing agencies to exercise still more discretion over rents and
                           admissions. For example, QHWRA increased managerial flexibility by,
                           among other things, making HUD-provided capital and operating funds
                           more fungible; allowing housing authorities to sell some units to residents;
                           converting some public housing buildings to the voucher system; and
                           developing mixed-income housing units in order to bring more working and
                           upwardly mobile families into public housing. QHWRA also imposed new
                           requirements on housing agencies, including, for example, mandatory



                           4
                            Some of QHWRA’s provisions went into effect when the act was enacted on October 21,
                           1998, while other provisions took effect later.




                           Page 3                                         GAO-04-19 Small Public Housing Agencies
                                  reporting requirements in the form of a 5-year plan and annual operating
                                  plans.

                                  This report focuses on the 18 QHWRA reforms public housing industry
                                  groups believe have had the greatest impact on housing agencies’
                                  operations. These reforms are described more fully in appendix IV.

Reforms concerning agencies’      • Fungibility of capital and operating funds: gives agencies greater
operations                          flexibility to use HUD-provided capital and operating grants
                                    interchangeably, within certain limits.

                                  • Certificate/voucher merger: requires agencies to adjust administrative
                                    operations, where needed, in response to the merger of two former
                                    federal housing assistance programs.

                                  • Five-year plans: requires agencies to prepare comprehensive 5-year
                                    plans with goals and objectives that serve needs of low-income
                                    households.

                                  • Annual plans: requires agencies to prepare 1-year plans that include
                                    information on the agency’s low-rent and Housing Choice Voucher
                                    programs and policies.

                                  • Physical inspections: requires agencies to annually inspect their low-
                                    rent housing units.

Reforms concerning rent setting   • Minimum rents: allows agencies to charge public housing residents a
                                    monthly minimum rent of not more than $50.

                                  • Flat rents: allows households to choose to pay either a flat rent based
                                    on market rates or rent based on a percentage of their household
                                    income.

                                  • Rent burden limitation: requires agencies to subsidize initial voucher
                                    recipients so that their rent does not exceed 40 percent of household
                                    income.

Reforms concerning resident       • Federal tenant preferences: repeals mandate that agencies give
selection/admission                 admissions preference to certain categories of prospective tenants and
                                    permits agencies to establish their own preferences within certain
                                    limits.




                                  Page 4                                   GAO-04-19 Small Public Housing Agencies
                               • Deconcentration: prohibits agencies from concentrating very low-
                                 income households in public housing projects or buildings within
                                 projects.

                               • Income targeting: requires agencies to have a mix of household income
                                 levels in both low-rent housing and Housing Choice Voucher units.

                               • Income disregard: requires agencies to exclude certain types of income
                                 when determining household eligibility for assistance.

                               • Site-based waiting lists: permits agencies to allow public housing
                                 applicants to designate specific projects in which they wish to reside,
                                 subject to certain limits.

Reforms concerning residents   • Pet policy: requires agencies to allow residents one or more common
                                 household pets.

                               • Community service: requires agencies to ensure that most adult public
                                 housing residents perform monthly community service.

                               • Resident board member: requires most agencies to have on their board
                                 of directors at least one member who is directly assisted by the agency.

                               • Resident advisory board: requires agencies to consult with the board of
                                 residents in preparing annual and 5-year plans.

                               • Resident surveys: requires HUD to obtain information on the
                                 involvement of public housing residents in the administration of public
                                 housing, including residents’ satisfaction with their living conditions and
                                 services.

                               In response to concerns that some QHWRA reforms are placing an undue
                               burden on small housing agencies, HUD recently issued regulations
                               designed to lessen their regulatory burden.5 The rule is designed to relieve
                               eligible small agencies from administrative burden in two areas—the
                               annual plan requirement and annual Public Housing Assessment System
                               (PHAS) and Section Eight Management Assessment Program (SEMAP)
                               assessments. For example, under the rule, agencies who operate fewer


                               5
                                24 CFR, Parts 902, 903, and 985, Final Rule: Deregulation for Small Housing Authorities,
                               June 24, 2003.




                               Page 5                                            GAO-04-19 Small Public Housing Agencies
                             than 250 low-rent units are allowed to submit streamlined annual plans for
                             their low-rent units. In addition, for small agencies that are assessed under
                             PHAS and SEMAP, the rule reduces the frequency of these assessments
                             from an annual basis to every other year.



HUD Assists Public Housing   To improve the administration of its low-income housing programs, HUD
Agencies and Evaluates       provides technical assistance either directly or indirectly to housing
                             agencies that request assistance or have been identified by HUD as needing
Their Performance
                             it. HUD sometimes uses the terms “technical assistance” and “capacity
                             building” interchangeably, and the definitions overlap.6 Technical
                             assistance programs can generally be defined as training designed to
                             improve the performance or management of program recipients, such as
                             one-on-one training in the use and implementation of HUD’s management
                             assessment systems. Capacity building can generally be defined as funding
                             to strengthen the capacity or capability of program recipients or
                             providers—typically housing or community development organizations.
                             The overall goal of both technical assistance and capacity building is to
                             enhance the delivery of HUD’s housing and community development
                             programs, and some assistance efforts incorporate elements of each. The
                             technical assistance is delivered by staff from HUD’s headquarters or one
                             of its 43 field offices or by contractors. According to HUD officials, most
                             technical assistance is delivered to agencies that request it directly from
                             one of HUD’s field offices. HUD also provides technical assistance through
                             several programs that are administered primarily by headquarters, such as
                             Hope VI and the Capital Fund.7

                             HUD assesses the performance of public housing agencies so that the
                             Secretary of Housing can evaluate agencies’ performance in all major areas
                             of management operations. To this end, HUD uses two systems to assess
                             the management performance of public housing agencies:




                             6
                              Throughout this report, we use the term technical assistance to encompass both technical
                             assistance and capacity building.
                             7
                              Under the Hope VI program, HUD provides assistance to help housing agencies replace and
                             revitalize severely distressed public housing with physical, management, and social and
                             community service improvements. Under the Capital Fund, HUD provides grants to housing
                             agencies for capital improvement and management activities, including modernization and
                             development of low-rent housing.




                             Page 6                                           GAO-04-19 Small Public Housing Agencies
                               • PHAS is designed to obtain an independent evaluation of housing
                                 agencies’ overall performance in managing low-rent units, including the
                                 physical condition of the units, the soundness of agencies’ financial
                                 operations, the effectiveness of their management operations, and the
                                 level of resident satisfaction with the services and living conditions.
                                 HUD’s Real Estate Assessment Center (REAC) arranges independent
                                 physical inspections of HUD’s low-rent properties, collects and analyzes
                                 data on the financial and physical condition of the agencies, and
                                 evaluates information from resident satisfaction surveys.8

                               • SEMAP measures the performance of the housing authorities that
                                 administer Housing Choice Voucher units. SEMAP uses 14 indicators
                                 that measure factors such as procedures for selecting tenants, income
                                 determinations, and inspections.

                               HUD uses the Public and Indian Housing Information Center (PIC) system
                               to generate a risk assessment of housing agencies. PIC risk assessment
                               scores take into account PHAS and SEMAP scores as well as funding and
                               compliance information and a number of qualitative factors—for example,
                               audit findings, court actions, and tenant claims against agencies.

                               HUD uses PHAS, SEMAP, and PIC scores to identify agencies that are
                               having performance problems and determine the kind of technical
                               assistance needed to correct deficiencies. As a result of these assessments,
                               HUD may determine that a housing authority is “troubled”—that is,
                               experiencing especially severe difficulties in managing its housing
                               programs. HUD’s Troubled Agency Recovery Centers (TARC), located in
                               Cleveland, Ohio, and Memphis, Tennessee, provide technical assistance to
                               troubled housing agencies.9



HUD Has Various Ways of        HUD has several ways of defining the size of small agencies. For example,
Defining the Size of a Small   in its recent small agency deregulation rule, HUD provided two definitions
                               for a small agency: one for submitting streamlined annual plans and less
Agency
                               frequent PHAS assessments, and another for receiving less frequent


                               8
                               These surveys are administered by the housing agencies.
                               9
                                During our review, a HUD official told us that effective October 1, 2003, HUD plans to
                               eliminate the Memphis TARC and rename the Cleveland TARC the Recovery and Prevention
                               Corps. The Corps will serve functions similar to those of the current TARCs.




                               Page 7                                          GAO-04-19 Small Public Housing Agencies
                                                      SEMAP assessments. In a 1999 report by the Office of Policy Development
                                                      and Research, HUD defined a small housing agency as one with fewer than
                                                      500 low-rent units.10 And in another report, HUD defined a small agency as
                                                      one with fewer than 1,000 Housing Choice Voucher units.11 However,
                                                      when HUD’s REAC assesses the financial performance of housing agencies
                                                      it classifies small agencies as those with less than 250 combined low-rent
                                                      and Housing Choice Voucher units. In carrying out our work, we classified
                                                      agencies by size based on the total number of low-rent and Housing Choice
                                                      Voucher units they administered.

                                                      Regardless of the criteria used to define a small agency, most housing
                                                      agencies are considered small. Table 1 shows the number and percentage
                                                      of small, medium, and large agencies according to the definition of size that
                                                      we used in this report. This table also indicates that while most agencies
                                                      are small, they operate a relatively small proportion of all units.



Table 1: Small, Medium, and Large Public Housing Agencies and Their Inventory, Based on GAO’s Definition for Size, Fiscal Year
2002

                                    Number of   Percentage                        Housing Choice
Size                                 agencies   of agencies Low-rent units          Voucher units     Number of units Percentage of units
Small                                   2,438         58.2         136,023                  86,271            222,294                    6.8
Medium                                  1,269         30.3         255,749                 442,945            698,694                  21.3
Large                                    482          11.5         858,528               1,499,580           2,358,108                 71.9
Total                                   4,189        100.0       1,250,300               2,028,796           3,279,096                100.0
Source: GAO analysis of HUD data.




Results in Brief                                      With some exceptions, small agencies’ views on the impact of QHWRA
                                                      reforms on their ability to administer HUD programs were similar to those
                                                      of their larger counterparts. Agencies in all size categories shared similar
                                                      views on 11 of the 18 reforms. For example, the largest percentages of
                                                      agencies in all size categories viewed the annual plan requirement as
                                                      helpful to them in managing and operating their agencies. But the

                                                      10
                                                       U.S. Department of Housing and Urban Development, The Uses of Discretionary
                                                      Authority in the Public Housing Program, July 1999.
                                                      11
                                                       U.S. Department of Housing and Urban Development, The Uses of Discretionary
                                                      Authority in the Tenant Based Section 8 Program, November 2000.




                                                      Page 8                                         GAO-04-19 Small Public Housing Agencies
percentage of small agencies sharing this view was smaller than the
percentages of medium and large agencies. For the remaining seven
QHWRA reforms, small, medium, and large agencies’ views varied. For
example, small and medium agencies viewed the requirement that each
housing agency have a resident member on the board of directors as
neither a help nor a hindrance to them in managing and operating their
agencies, while large agencies viewed the requirement as a help. Also,
agencies of all sizes had similar views on factors that account for additional
time spent working on HUD programs since the implementation of
QHWRA. For example, the largest percentage of agencies in all size
categories reported spending more time on HUD-subsidized programs after
QHWRA than before the reforms were enacted, in part because of
increased reporting requirements and difficulties in submitting data to
HUD. Also, the largest percentage of agencies in all size categories
reported contracting out about the same amount of property management
and services as before QHWRA was implemented. HUD has recently
issued rules to simplify and streamline regulatory requirement for small
agencies. About 75 percent of small agencies reported that they believe
HUD’s efforts will help their operations.

HUD measurement systems show mixed results for small and larger
housing agencies. Fiscal year 2002 data from the Public Housing
Assessment System (PHAS), HUD’s system for measuring the performance
of public housing agencies that manage low-rent units, show that small
agencies performed slightly better than their larger counterparts. But
scores for the same period from the Section Eight Management Assessment
Program (SEMAP), which measures how well agencies administer Housing
Choice Voucher units, indicate that small agencies did not perform as well
as larger agencies. Small agencies may have lower SEMAP scores both
because of the method that HUD uses to calculate scores and because
small agencies generally have less experience administering these units.
Fiscal year 2002 scores from HUD’s risk assessment system—the Public
and Indian Housing Information Center (PIC)—show that a larger
proportion of small agencies were designated as low risk than larger
agencies. According to HUD officials, small agencies are more likely to be
considered low risk because these agencies typically have a less
complicated funding structure than larger agencies and operate less
complex programs.

According to HUD officials, public housing agencies receive technical
assistance based on HUD’s determination of their individual needs and
agencies’ requests for specific types of assistance. HUD uses its



Page 9                                    GAO-04-19 Small Public Housing Agencies
                        performance measurement and risk assessment systems—PHAS, SEMAP,
                        and PIC—to determine housing agencies’ need for technical assistance.
                        These systems indicate that small agencies may need more assistance than
                        their larger counterparts in administering Housing Choice Voucher units.
                        HUD field office officials told us that the needs of small housing agencies
                        sometimes differ from those of larger agencies. They stated, for example,
                        that small agencies are more likely to require assistance with the day-to-day
                        management of HUD programs because small agencies often have few staff
                        who specialize in finance, accounting, management information systems,
                        or other areas that are important to managing these programs. Currently,
                        HUD does not maintain centralized, detailed information on the types of
                        assistance housing agencies require or request from them. According to
                        HUD, the agency is developing a tracking system that will allow it to collect
                        such information in the future.

                        The Acting Director of HUD’s Office of Policy, Program, and Legislative
                        Initiatives provided us with technical comments on our report, which we
                        have incorporated as appropriate.



With Some Exceptions,   Our national survey of directors of public housing agencies showed that
                        respondents from agencies in all size categories shared similar views on the
Small Agencies’ Views   effects of many QHWRA reforms on their ability to administer HUD
of QHWRA Reforms        programs and rental units.12 For example, we asked whether individual
                        reforms had helped or hindered directors’ ability to operate and manage
Were Similar to Those   their agencies. In response, directors of small, medium, and large housing
of Larger Agencies      agencies cited many of the same reforms as having helped them, although
                        for some reforms the proportions of those agreeing differed by size
                        category. Further, a large proportion of agency directors in each size
                        category said that their staffs spent more time on HUD-subsidized
                        programs as a result of the QHWRA reforms. Regardless of size, agencies
                        in all size categories had similar views on the extent to which 13 factors
                        had contributed to this increase in administrative time. These factors relate
                        to new reporting requirements, difficulty with HUD’s data systems, lack of
                        clear guidance from HUD, and lack of resources for hiring and training


                        12
                         For purposes of presenting results from the survey, we say responses are “similar” for a
                        reform if the largest proportion of estimates from all three agency size categories was for
                        the same response. This definition is for organizing the descriptive results of the survey for
                        presentation purposes. We conducted tests to determine the statistical significance of
                        responses by agency size.




                        Page 10                                            GAO-04-19 Small Public Housing Agencies
                                staff. Small agencies noted that proposed regulatory relief would relieve
                                some of their burden.



Agency Directors in All Size    Regardless of their agencies’ size, the largest proportion of directors
Categories Saw Many of the      tended to agree on the effects of 11 of the 18 QHWRA provisions we
                                included in our survey. We asked whether the 18 reforms had helped,
Same QHWRA Reforms as           hindered, or neither helped nor hindered the agencies in operating and
Helping or Neither Helping      managing their HUD programs. Overall, 7 reforms were generally seen as
Nor Hindering                   helping agencies to operate and manage their HUD programs, and 4
                                reforms were seen as neither helping nor hindering.

The Most Frequent Responses     As shown in figure 1, agencies indicated that 7 of the 18 reforms had helped
for All Agencies Viewed Seven   them. Two reforms were viewed as helpful by large percentages of
Reforms as Helping              agencies in all size categories. Fungibility of capital and operating funds,
                                which allows agencies to use up to 20 percent of their capital funds for
                                operating purposes, was seen as helping almost 70 percent of small, 82
                                percent of medium, and 84 percent of large agencies, respectively. The
                                repeal of federal preferences, which gives agencies more flexibility to
                                decide who will be admitted to their public housing units, was viewed as
                                helpful by 44, 63, and 69 percent, respectively, of small, medium, and large
                                agencies.




                                Page 11                                  GAO-04-19 Small Public Housing Agencies
Figure 1: Survey Estimates on Effects of Seven QHWRA Reforms That Primarily Helped Agencies to Operate and Manage HUD
Programs

                         Helped or greatly helped                  Neither helped nor hindered      Hindered or greatly hindered                No basis to judge

Flat rent requirement              45%                                         32%                          4%                                       Small 19 %
                                  39                                               35                7                                             Medium 19
                                   40                                              36                6                                               Large 17


Five-year plan                   36                                            30                                 30                                 Small   4
                                  39                                                37                           24                                Medium    0
                                           51                                      36                   13                                           Large   1


Annual plan                      36                                             31                                30                                 Small   4
                                   42                                              35                            24                                Medium    0
                                            55                                  31                          13                                       Large   1


Repeal of                             44                                                42               2                                           Small 12
federal preference
                                                 63                                33                    2                                         Medium    2
                                                  69                          26                        1                                            Large   3


Merger of Housing                      45                                 20                         1                                               Small 33
Choice (Section
8) certifcate and                                     74                 19                             2                                          Medium    5
voucher programs                                           82      10                               6                                                Large   2


Fungibility of capital                            69                      22                             2                                           Small   7
and operating funds
                                                           82        13                                  2                                         Medium    4
                                                           84       11                                   2                                           Large   3


Physical inspections              39                                               33                        21                                      Small   7
                                  38                                            31                           20                                    Medium 12
                                  38                                          26                                 24                                  Large 12



                                                                          Small agencies

                                                                          Medium agencies

                                                                          Large agencies

Source: GAO.


                                                                Note: All percentage estimates in this table have 95% confidence intervals ±5.8 percentage points or
                                                                better.


                                                                The popularity of these two reforms—the fungibility of capital and
                                                                operating funds and the repeal of federal preferences—may be directly




                                                                Page 12                                                GAO-04-19 Small Public Housing Agencies
related to the funding shortfalls that have historically affected public
housing agencies. As we noted in our 1998 report on HUD’s Performance
Funding System,13 the operating subsidies that HUD has traditionally
provided to public housing agencies have not covered all operating
expenses. However, the reforms appear to have helped greater
proportions of medium and especially large agencies, which tend to
manage more programs and to have more funding sources and a larger pool
of potential tenants.

More than a third of agencies may see QHWRA’s flat rent reform, which
allows housing agencies to charge rents based on the market value of the
unit, as an important opportunity to increase their revenues and counter
some shortfalls. Approximately 40 percent of agencies saw the flat rent
reform as helpful. This reform may appeal more to small agencies with
limited revenue sources—which may explain the slightly higher percentage
of small agencies reporting this reform as helpful. Similarly, as shown in
figure 1, the largest proportion of agencies of all sizes—about a third or
more—saw the 5-year and annual plan reforms as helpful. However, the
larger the agency, the greater the percentage that reported being helped,
and nearly a third of respondents from small agencies saw these plans as a
hindrance. This response is consistent with comments we received from
HUD field staff we interviewed, who generally agreed that housing
agencies needed some type of planning process but pointed out that small
agencies did not have staff to undertake the level of effort involved in
developing annual and 5-year plans.

Small agencies were much less likely to view the Housing Choice Voucher
program merger reform as helpful than were large agencies (45 percent
compared with 82 percent, respectively.) These responses are consistent
with other information from our survey, which indicated that
approximately 58 percent of small agencies do not have Housing Choice
Voucher units, while an estimated 90 percent of medium and large agencies
do.




13
   U.S. General Accounting Office, Public Housing Subsidies: Revisions to HUD’s
Performance Funding System Could Improve Adequacy of Funding, GAO/RCED-98-174
(Washington, D.C.: June 1998).




Page 13                                     GAO-04-19 Small Public Housing Agencies
The Most Frequent Responses                      Based on the most frequent responses in each size category, the largest
for All Agencies Viewed Four                     proportions of housing agencies in all size categories viewed the
Reforms as Neither Helping Nor                   deconcentration, income targeting, site-based waiting list, and rent burden
Hindering                                        limits for the voucher program reforms as generally neither helping nor
                                                 hindering their ability to manage and operate their agencies (fig. 2).



Figure 2: Survey Estimates on Four QHWRA Reforms That Primarily Neither Helped Nor Hindered Agencies to Operate and
Manage HUD Programs

                      Helped or greatly helped      Neither helped nor hindered        Hindered or greatly hindered              No basis to judge

Deconcentration       8%                                              45%                   4%                                        Small 43 %
                      6                                                          60     12                                          Medium 23
                          9                                                       64    9                                             Large 18


Income targeting              15                                            52              13                                        Small 20
                       11                                                   52                    28                                Medium    9
                       10                                                   52                     32                                 Large   7


Site-based                    17                                      42                1                                             Small 40
waiting lists
                          12                                     34                     2                                           Medium 52
                               18                                33                     1                                             Large 47


Rent burden limits        14                                    32                           18                                       Small 37
program for voucher
program                       15                                      42                          30                                Medium 13
                               22                               37                                     35                             Large   6



                                                           Small agencies

                                                           Medium agencies

                                                           Large agencies

Source: GAO.


                                                 Note: All percentage estimates in this table have 95% confidence intervals ±5.9 percentage points or
                                                 less.


                                                 Of these four reforms, the predominate percentage of agencies in each size
                                                 category viewed deconcentration and income targeting as neither a help
                                                 nor a hindrance. However, a smaller percentage of small agencies viewed
                                                 deconcentration as neither a help nor a hindrance than medium and large
                                                 agencies. Also, about 29 percent of medium and large agencies view
                                                 income targeting as a hindrance, whereas only 13 percent of small agencies
                                                 see it as a hindrance.



                                                 Page 14                                                    GAO-04-19 Small Public Housing Agencies
Agencies in Each Size      As shown in figure 3, for the remaining seven QHWRA reforms that we
Category Varied Somewhat   asked about—the pet policy, community service requirement, income
                           disregard, resident surveys, resident advisory board, resident member on
in Their Views on Seven    agency board, and minimum rents--views varied among agencies of
QHWRA Reforms              different sizes. For example, a larger percentage of medium and large
                           agencies viewed the pet policy rule as a hindrance, while the largest
                           percentage of small agencies viewed it as neither a help nor a hindrance.




                           Page 15                                  GAO-04-19 Small Public Housing Agencies
Figure 3: Survey Estimates on Seven Reforms with Varied Impacts on Agency Ability to Operate and Manage HUD Programs

                      Helped or greatly helped                 Neither helped nor hindered       Hindered or greatly hindered                      No basis to judge

Pet policy rule                    26%                                      33%                               27%                                      Small 14 %
                              17                                            29                                      35                               Medium 19
                          9                                                      35                                     38                             Large 18


Community                 9                                                 30                                     30                                  Small 31
service requirement
                      7                                               21                                                 42                          Medium 29
                      6                                                23                                                43                            Large 28


Income disregard               20                                                 38                          22                                       Small 19
                               21                                                37                                30                                Medium 12
                                   25                                            35                                 35                                 Large   5


Resident surveys                   23                                             38                               30                                  Small   9
                                   25                                             40                           27                                    Medium    8
                                         33                                  32                               23                                       Large 12


Resident                            27                                                 45                16                                            Small 11
advisory board
                                        29                                                  50           16                                          Medium    4
                                                   48                             40             7                                                     Large   5


Resident member                              35                                   39                 12                                                Small 15
on LHA board
                                         32                                           41             13                                              Medium 14
                                              40                                  38                 8                                                 Large 14


Minimum rents                                          50                        36              5                                                     Small   9
                                                  44                                   44        7                                                   Medium    6
                                             37                                            48        11                                                Large   4



                                                                      Small agencies

                                                                      Medium agencies

                                                                      Large agencies

Source: GAO.


                                                            Note: All percentage estimates in this table have 95% confidence intervals ±5.8 percentage points or
                                                            less.


                                                            In contrast, small and medium agencies most frequently viewed the
                                                            resident advisory board, the resident member of agency board, and the
                                                            resident survey reforms as neither helping nor hindering, while large



                                                            Page 16                                                           GAO-04-19 Small Public Housing Agencies
                                           agencies most frequently responded that these reforms were helpful. This
                                           response is consistent with earlier GAO findings. As reported in our May
                                           2002 report on housing agencies’ experiences preparing their fiscal year
                                           2000 plans,14 HUD officials told us that agencies overall often had difficulty
                                           encouraging resident participation, even when it was actively solicited.
                                           Further, the officials pointed out that smaller agencies do not have the
                                           same pool of potential residents to draw on that large agencies have,
                                           making it more difficult to establish resident advisory boards and find
                                           residents willing to serve as member representatives on agencies’ boards.



Agencies of All Sizes                      We asked agencies to compare the amount of time they were spending on
Reported Spending More                     HUD-subsidized programs following the implementation of the reforms
                                           with the amount of time they devoted to these programs before the
Time on HUD-Subsidized                     implementation of QHWRA. At least 60 percent or more of all agencies,
Programs                                   regardless of size, believed that they were spending more or much more
                                           time on HUD programs since the implementation of QHWRA. However, as
                                           shown in figure 4, a smaller percentage of small agencies (63 percent) than
                                           of large agencies (79 percent) reported spending more time administering
                                           their HUD programs.



Figure 4: Survey Estimates of Time Agencies Spend Administering HUD Programs Since QHWRA Reforms

                       Less or much less        About the same                 More or much more                           Not applicable
Perceived time spent
on HUD-subsidized       1%                         24%                                          63%                             Small 12 %
program compared to
                        1                            24                                             70                        Medium    4
time spent before
implementation of       1                          21                                                    79                     Large   0
QHWRA


                                                     Small agencies

                                                     Medium agencies

                                                     Large agencies

Source: GAO.


                                           Note: All percentage estimates in this table have 95% confidence intervals ±4.8 percentage points or
                                           less.


                                           14
                                            U.S. General Accounting Office, Public Housing: HUD and Public Housing Agency
                                           Experiences with Fiscal Year 2000 Plan Requirements, GAO-02-572 (Washington, D.C.:
                                           May 2002).




                                           Page 17                                                GAO-04-19 Small Public Housing Agencies
                             These responses may reflect the fact that medium and large agencies
                             generally have more HUD programs and thus more complex administrative
                             responsibilities. Based on our survey, we estimate that only 10 percent of
                             small agencies--compared with 19 percent of medium agencies and 58
                             percent of large agencies--had HUD programs other than the low-rent and
                             voucher programs.

                             We asked agencies that reported spending more time on HUD programs
                             following QHWRA to indicate the extent to which each of 17 factors added
                             to their administrative time. In general, we found more similarities than
                             differences in the responses of agencies in all size categories. The factors
                             most frequently cited as accounting for the increased time on HUD
                             programs were increased reporting requirements, problems submitting
                             data to HUD, and insufficient guidance from HUD. Smaller proportions of
                             agencies of all sizes noted that other factors added to their administrative
                             time, though the proportions differed somewhat.

New Reporting Requirements   While agencies in all size categories cited increased reporting requirements
and Changes in Existing      and changes in reporting requirements as adding to the time they spent
Requirements                 administering HUD programs, the proportions differed according to the
                             type of program (see fig. 5). The largest proportions of agencies indicated
                             that these items had increased the time spent administering the low-rent
                             program to some or a great extent. However, small agencies cited these
                             factors in larger proportions than medium or large agencies.




                             Page 18                                  GAO-04-19 Small Public Housing Agencies
Figure 5: Survey Estimates of Extent to Which Agencies Reported Increased Reporting Requirements and Changes in Existing
Requirements Contributed to Increased Time Spent on HUD Programs

                        Little or no extent      Some or moderate extent          Great or very great extent                     Not applicable

Increased reporting      1%                                        40%                              47%                              Small 12 %
requirements for
low-rent program             4                                     36                              40                              Medium 20
                         7                                              42                   32                                      Large 19


Changes in HUD's            2                                           42                         42                                Small 14
reporting requirement
for low-rent program         4                                     36                             39                               Medium 21
                         10                                        38                        32                                      Large 20


Increased reporting          4                          20                             17                                            Small 58
requirements for
Housing Choice          5                                                47                    37                                  Medium 11
voucher program             9                                                48                    42                                Large   1


Changes in HUD's             4                           22                           15                                             Small 59
reporting requirement
for Housing Choice      5                                                    49               34                                   Medium 11
voucher program          8                                               47                            45                            Large   0


Difficulty submitting   6                           15                                  20                                           Small 59
data to HUD for
Housing Choice           7                                    31                                            51                     Medium 11
voucher program          10                                   30                                                 60                  Large   0



                                                        Small agencies

                                                        Medium agencies

                                                        Large agencies

Source: GAO.


                                              Note: All percentage estimates in this table have 95% confidence intervals ±6.6 percentage points or
                                              less.


                                              However, questions about time spent administering the Housing Choice
                                              Voucher program elicited the opposite pattern of responses, with over 40
                                              percent of all large agencies but only 15–20 percent of small agencies citing
                                              the requirements as increasing administrative time to a great or very great
                                              extent. About 60 percent of small agencies indicated that these questions
                                              were not applicable to them, reflecting the fact that most small agencies
                                              operate primarily low-rent housing programs, while larger agencies tend to
                                              operate both.




                                              Page 19                                                       GAO-04-19 Small Public Housing Agencies
                                 Most agency directors whom we interviewed while preparing our
                                 questionnaire said that the increased reporting requirements associated
                                 with QHWRA were causing them to spend more time on paperwork than on
                                 their primary mission of providing safe, decent, and affordable housing to
                                 low-income residents. One respondent noted, “It takes more man-hours
                                 for processing and compiling statistical data for reporting and tracking
                                 purposes,” taking up time the agency needed to address other functions.
                                 Housing agency directors we spoke with early in our review acknowledged
                                 the need for reporting to ensure accountability, but they reiterated that the
                                 level of reporting HUD requires is burdensome to performing their core
                                 mission.

Difficulty Submitting Data and   Almost half or more of respondents, regardless of size, responded that
Accessing HUD’s Computer         accessing HUD’s computer systems and submitting data to HUD on the
System                           low-rent program accounted for increased administrative time to a great or
                                 very great extent.15 As shown in figure 6, higher percentages of large
                                 agencies reported having difficulty accessing HUD’s computer system (59
                                 percent) than small agencies (49 percent), but the difference in
                                 percentages was more modest on the issue of submitting data on the low-
                                 rent program.




                                 15
                                  Housing agencies are required to submit information to HUD through automated systems
                                 such as the Public Housing Assessment System, the Tenant Rental Assistance Certification
                                 System, and the Multifamily Tenant Characteristics Tracking System.




                                 Page 20                                         GAO-04-19 Small Public Housing Agencies
Figure 6: Survey Estimates of Extent to Which Difficulty in Submitting Data on the Low-Rent Program and Accessing HUD’s
Computer Systems Contributed to Increased Time Spent on HUD Programs

                         Little or no extent        Some or moderate extent        Great or very great extent                  Not applicable

Difficulty submitting         6%                                 35%                              46%                               Small 13 %
data to HUD for
low-rent program          3                                 26                                       50                           Medium 21
                          7                               23                                          51                            Large 19


Difficulty accessing      11                                       39                                49                             Small   0
HUD's computer
systems electronically    7                                        39                                   54                        Medium    0
                          7                                      34                                        59                       Large   0



                                                         Small agencies

                                                         Medium agencies

                                                         Large agencies

Source: GAO.


                                               Note: All percentage estimates in this table have 95% confidence intervals ±6.5 percentage points or
                                               less.


                                               These responses are consistent with prior GAO and other reports, which
                                               have identified weaknesses in HUD’s information systems. For example,
                                               both GAO and HUD’s Inspector General have cited the public housing and
                                               Housing Choice Voucher information systems as management challenges.16
                                               Also, during our review of HUD and housing agency experiences in
                                               preparing the fiscal year 2000 plans required by QHWRA,17 over 50 percent
                                               of HUD field location respondents said that the electronic submission of
                                               plans and the conversion of plans into a readable format at HUD had a
                                               negative effect on their ability to review and approve plans. HUD officials
                                               added that some housing agencies were required to make multiple
                                               submissions and that the agencies sometimes submitted hard copies to
                                               HUD field locations as a backup to submitting the plans electronically to
                                               HUD.




                                               16
                                                See U.S. General Accounting Office, Major Management Challenges and Program Risks:
                                               Department of Housing and Urban Development, GAO-03-103 (Washington, D.C.: January
                                               2003).
                                               17
                                                GAO-02-572, May 2002.




                                               Page 21                                                GAO-04-19 Small Public Housing Agencies
Late or Unclear HUD Guidance   As shown in figure 7, between 45 and 53 percent of agencies, regardless of
and Changes in Policies        size, responded that late and unclear guidance or changes in HUD policies
                               and regulations added to the time they spent administering HUD programs
                               to a great or very great extent. These responses are consistent with the
                               results of our earlier review of HUD and its housing agency experiences in
                               preparing the fiscal year 2000 plans the QHWRA reforms require.18 In our
                               prior review, more than 70 percent of respondents said that the guidance
                               HUD provided on the process of developing agency plans was less than
                               adequate. At that time, HUD field office directors told us that because of
                               late and unclear guidance, they were unable to tell housing agencies how to
                               complete agency plans. One official commented that guidance from HUD
                               headquarters at the beginning of the planning process had not been very
                               good and was late in getting to field locations. Another official reported at
                               that same time that changing rules made it difficult to know what housing
                               agencies should do in preparing the plans and what field offices should
                               look for in reviewing them.




                               18
                                    GAO-02-572, May 2002.




                               Page 22                                   GAO-04-19 Small Public Housing Agencies
Figure 7: Survey Estimates of Extent to Which Late and Unclear Guidance and Changes in Regulations Contributed to Increased
Time Spent on HUD Programs

                       Little or no extent      Some or moderate extent          Great or very great extent                  Not applicable

Late guidance          10%                                      43%                             45%                               Small   2%
from HUD
                        10                                      41                                46                            Medium    2
                        9                                       41                                 50                             Large   1


Unclear guidance        10                                        44                             45                               Small   1
from HUD
                        10                                     39                                  49                           Medium    1
                        10                                      41                                 50                             Large   0


Changes in HUD          2                                              50                         47                              Small   1
policies/regulations
                         3                                       43                                    53                       Medium    0
                         4                                            49                          47                              Large   0



                                                       Small agencies

                                                       Medium agencies

                                                       Large agencies

Source: GAO.


                                             Note: All percentage estimates in this table have 95% confidence intervals ±6.5 percentage points or
                                             less.


Lack of Resources to Hire and                In addition, the largest percentage of agencies, regardless of size, reported
Train Staff                                  that the lack of resources for hiring and training staff and the need to train
                                             staff have contributed to the increased time spent on HUD programs to
                                             some extent or a great extent (see fig. 8).




                                             Page 23                                                   GAO-04-19 Small Public Housing Agencies
Figure 8: Survey Estimates of Extent to Which Lack of Resources for Hiring and Training New Staff and the Need to Train Staff
Contributed to Increased Time Spent on HUD Programs

                          Little or no extent      Some or moderate extent          Great or very great extent                  Not applicable

Lack of resources                   32%                19%                                  28%                                      Small 20 %
for hiring new
staff at your LHA                        34                   30                                28                                 Medium    7
                                     31                             38                          28                                   Large   2


Lack of resources                   27                         31                               28                                   Small 15
to train staff
                                     31                             38                     24                                      Medium    6
                                          37                        38                     22                                        Large   3


The need to train staff       17                                    37                               35                              Small 12
                             15                                          47                          35                            Medium    3
                               19                                        49                     30                                   Large   2



                                                          Small agencies

                                                          Medium agencies

                                                          Large agencies

Source: GAO.


                                                Note: All percentage estimates in this table have 95% confidence intervals ±6.5 percentage points or
                                                less.


                                                However, when we asked housing agency directors whether they were
                                                contracting out more, less, or about the same share of property
                                                management activities after the QHWRA reforms than before, the largest
                                                proportions said that either they were contracting out about the same
                                                amount or the question did not apply to them (fig. 9).




                                                Page 24                                                   GAO-04-19 Small Public Housing Agencies
Figure 9: Survey Estimates of Extent to Which Agencies Report Contracting Out for Property Management and Services Since
QHWRA

                       More                 Less                             About the same                              Not applicable

 LHA contracting out       6%                1%                                           41%                                 Small 52 %
 (property
 management)           6                      2                                           37                                Medium 56
                       6                     1                                            39                                  Large 53


 LHA contracting out       15                1                                                    55                          Small 28
 (services)
                           15                 2                                                    59                       Medium 24
                           13                    4                                                      69                    Large 14



                                                     Small agencies

                                                     Medium agencies

                                                     Large agencies

Source: GAO.


                                         Note: All percentage estimates in this table have 95% confidence intervals ±5.6 percentage points or
                                         less.




Small Agencies Believe                   HUD has recognized the burden QHWRA reforms have placed on small
Regulatory Relief Will Help              agencies and in August 2002 issued a proposed rule to simplify and
                                         streamline regulatory requirements for small housing agencies that
                                         administer the low-rent and voucher assistance programs. The rule was
                                         issued in final form in June 2003, after our survey was completed.
                                         According to HUD, the rule changes—including reducing the scope of
                                         annual plans and reducing the frequency of assessing the performance of
                                         small housing agencies under PHAS and SEMAP—will alleviate some of the
                                         administrative burden these agencies face. The rule indicates that to be
                                         eligible for the annual assessment relief, agencies need to be non-troubled
                                         and operate less than 250 low-rent units to receive reduced PHAS
                                         assessments, or operate less than 250 housing choice voucher units to
                                         receive reduced SEMAP assessments. Because the regulatory changes
                                         were in proposal form when we administered our survey, we asked
                                         respondents their views on the proposed relief. About three-quarters of the
                                         small agencies responding to our survey believed the proposed regulatory
                                         relief would help their operations to a moderate or great extent (see fig.
                                         10). We noted that the majority of medium and large agencies responded
                                         that the question was not applicable.




                                         Page 25                                                GAO-04-19 Small Public Housing Agencies
Figure 10: Survey Estimates of Extent to Which Agencies Believe HUD’s Regulatory Relief Will Help

                         Little or no extent      Moderate or some extent          Very great or great extent                  Not applicable

 Likelihood of HUD's     12%                                 26%                                    50%                             Small 12 %
 proposed rule helping
 operations                   14                        14                               17                                       Medium 54
                          8                         2                                2                                              Large 88



                                                         Small agencies

                                                         Medium agencies

                                                         Large agencies

Source: GAO.



                                               Note: All percentage estimates in this table have 95% confidence intervals ±3.8 percentage points or
                                               less.




Scores from HUD’s                              We analyzed fiscal year 2002 scores from HUD’s performance measurement
                                               systems and found that small agencies received higher scores than large
Performance                                    agencies for administering low-rent units but lower scores for
Measurement and Risk                           administering Housing Choice Voucher units. However, we also found
                                               that under SEMAP, which measures performance administering Housing
Assessment Systems                             Choice Voucher units, small agencies may have lower scores because of the
Show That Small and                            way HUD calculates the scores and because small agencies generally have
Larger Agencies’                               less experience managing these units. Further, data for the same year show
                                               that HUD’s risk assessment system, PIC, which the agency uses to help
Performance Varies                             target its monitoring and assistance efforts, typically assigns lower risk
                                               ratings to small agencies than to larger agencies. HUD officials stated that
                                               smaller agencies are more likely to receive lower risk ratings in part
                                               because these agencies generally operate less complex housing programs
                                               and have less complicated funding systems.



Fiscal Year 2002 PHAS                          PHAS assesses housing agencies’ performance in managing low-rent units
Scores Show That Many                          using four indicators: (1) the physical condition of the properties, (2) the
                                               soundness of agencies’ financial condition, (3) the effectiveness of
Small Agencies Performed
                                               management operations, and (4) the extent to which residents are satisfied
Slightly Better Than Large                     with their services and living conditions. Each of the four PHAS indicators
Agencies in Operating Low-                     is scored individually. Public housing agencies can receive a total of 100
Rent Units                                     points: 30 each for the physical, financial, and management indicators and



                                               Page 26                                                GAO-04-19 Small Public Housing Agencies
10 for the resident satisfaction indicator. In assigning performance ratings,
HUD uses a variety of weights:

• High performers must have an overall score of more than 90 points and
  scores for individual indicators of at least 60 percent of the possible
  points for each of the four indicators.

• Standard performers must have an overall score of 60 to 90 points and
  scores of at least 60 percent of the points for each of the physical,
  financial, and management indicators.

• Troubled agencies have scores of less than 60 points overall or less than
  60 percent of the points for more than one of the three indicators.

PHAS data for fiscal year 2002 showed that small and medium agencies
slightly outperformed large agencies in managing their low-rent units—that
is, larger percentages of small and medium agencies were high performers
under the PHAS scoring system (fig. 11).




Page 27                                   GAO-04-19 Small Public Housing Agencies
Figure 11: Overall PHAS Scores, by Agency Size (Fiscal Year 2002)
Percentage

100      4.2        3.4         4.2
        36.1        32.4        41.4


 80




 60                 64.2
        60.1
                                54.4

 40




 20




  0
       Small      Medium       Large


                Troubled

                Standard

                High

Source: GAO analysis of HUD data.



To identify potential differences based on size, we examined the scores for
the individual indicators. We found that the better performance of small
and medium agencies was largely attributable to slightly higher scores for
the physical condition of their units. For example, 62 percent of small and
56 percent of medium agencies were rated as high performers on the
physical condition indicator, compared with 45 percent of large agencies.
According to HUD officials, small and medium agencies tend to score
slightly higher on this indicator for two reasons. First, small agencies have
fewer properties with features such as elevators and complicated heating
and cooling systems that are difficult to maintain. Second, small housing
agencies can more often provide on-site property management and
maintenance than large agencies. HUD data show only slight differences
among agencies of different sizes in scores for management, financial
soundness, or resident satisfaction.




Page 28                                     GAO-04-19 Small Public Housing Agencies
Fiscal Year 2002 SEMAP        SEMAP is intended to help HUD measure public housing agencies’ ability
Scores for Operating          to operate Housing Choice Voucher units effectively and in compliance
                              with regulations. Like PHAS, SEMAP scores agencies as high, standard, or
Housing Choice Voucher        troubled performers. High performers must earn at least 90 percent of the
Units Were Lowest for Small   150 possible points, and standard performers must earn between 60 and 89
Agencies                      percent of the points. Agencies with scores of less than 60 percent of the
                              possible points are considered troubled. Scores are based on 14
                              performance areas, plus a deconcentration “bonus” indicator. The 14
                              SEMAP indicators measure how well agencies with Housing Choice
                              Voucher units are monitoring the processes, reporting the data, inspecting
                              the units, determining the rents, and using allocated vouchers. The
                              additional deconcentration bonus indicator can provide 5 of the total 150
                              possible points for agencies in metropolitan areas where at least half of all
                              Housing Choice Voucher units are in low poverty areas.

                              As figure 12 shows, small housing agencies did not score as well, on
                              average, as larger ones. Compared with their larger counterparts, a higher
                              proportion of small agencies were considered troubled, and fewer were
                              high performers.




                              Page 29                                   GAO-04-19 Small Public Housing Agencies
Figure 12: Overall SEMAP Scores, by Agency Size (Fiscal Year 2002)
Percentage
                    2.4
100
                                3.8
        14.4
                    42.1        42.5


 80     42.3




 60

                    55.5        53.7

 40     43.3




 20




  0
       Small      Medium       Large


                Troubled

                Standard

                High

Source: GAO analysis of HUD data.




According to HUD officials, small agencies tend to receive lower SEMAP
scores in part because these agencies lack economies of scale and may
have difficulty coping with the increasingly complex program rules and
data systems related to the Housing Choice Voucher program. However,
HUD officials also told us that small agencies’ scores may be lower because
HUD calculates scores for small and larger agencies differently. Small
housing agencies receiving less than $300,000 in federal funds are not rated
on 7 of the 14 indicators that together account for approximately 55
percent of the total SEMAP score. As a result, small agencies that receive
low scores on one indicator on which they are scored may find that their
scores are lowered precipitously, resulting in a troubled rating.

HUD officials have stated that the current method of SEMAP scoring
makes small agencies more susceptible to a troubled rating. Using HUD’s
fiscal year 2002 SEMAP data, we estimated that 62 percent of small
agencies were not rated on at least 1 of 7 indicators. Accordingly, we



Page 30                                     GAO-04-19 Small Public Housing Agencies
compared the scores for small, medium, and large agencies for the 7
indicators that all agencies were scored for. We found that small agencies
did not perform as well as medium and large agencies on these indicators
(table 2).



Table 2: Average SEMAP Scores for Seven Indicators for Which All Agencies Are
Scored, by Agency Size (Fiscal Year 2002)

                                                                  Average score
                                               a
Indicator                    Possible points                   Small      Medium               Large
Payment
standards                                   5                    3.6            4.1                4.4
Annual
reexaminations                            10                     4.7            5.8                5.7
Correct tenant
rents                                       5                    2.1            2.7                2.5
Precontract HQS
inspectionsb                                5                    1.9            2.5                2.7
Annual HQS
inspectionsc                              10                      0               0                  0
Lease-up                                  20                     5.8            6.6                8.6
Family self-
sufficiency                               10                     1.1            3.0                3.8
Total                                     65                    19.2           24.8              27.7
Source: GAO analysis of HUD’s data.
a
 In some cases, not all indicators may apply to agencies. For example, not all public housing agencies
participate in the Family Self Sufficiency program and thus may not be scored on that particular
indicator.
b
    HUD stopped scoring this indicator as of March 31, 2002.
c
 Presently, HUD is not scoring this indicator.


Of these 7 indicators, the most heavily weighted is the lease-up indicator,
which measures how well each agency does in meeting HUD’s goal of using
95 percent of all allocated vouchers. For small public housing agencies
receiving less than $300,000 in federal funds, the lease-up indicator
constitutes 20 out of the possible 65 points, or about 30 percent of the
score. According to housing industry groups, most public housing agencies
face barriers to making full use of Housing Choice Vouchers and thus to
maintaining a 95-percent leasing rate. According to industry groups, these
barriers may be financial (for example, cost of transportation, credit
checks, and security deposits) or may involve a lack of experience in the
private rental market. According to HUD officials, small housing agencies



Page 31                                                  GAO-04-19 Small Public Housing Agencies
                             face additional burdens in attempting to achieve a 95-percent leasing rate
                             because of the complexities of the program’s rules and regulations for
                             monitoring, reporting, inspecting, and leasing units in the private rental
                             market.



Fiscal Year 2002 PIC Risk    HUD developed the PIC risk assessment system during the mid-1990s to
Assessment Scores Show       measure housing agencies’ operating risk. PIC scores are based on three
                             factors: performance (PHAS or SEMAP scores), funding, and compliance
That Small Agencies Were
                             issues. Agencies’ scores on each of these factors determine their risk
the Most Likely to Receive   levels. Of 100 possible points, agencies must have fewer than 44 points to
Low-Risk Ratings             be considered low risk, while those with 45 to 64 points are considered
                             moderate risk and those with 65 to 100 points are considered high risk. The
                             performance factor is based on the overall PHAS or SEMAP score,
                             whichever is lower. The funding factor measures total authorized and
                             disbursed funds and the percentage of disbursed funds already expended.
                             The compliance factor measures open findings and audits from
                             independent public accountants and HUD’s Inspector General. As shown
                             by figure 13, a greater percentage of small agencies were considered to be
                             low risk, compared to medium and large agencies.




                             Page 32                                  GAO-04-19 Small Public Housing Agencies
                         Figure 13: Overall PIC Risk Assessment Scores, by Agency Size (Fiscal Year 2002)
                         Percentage

                         100
                                 14.0        14.2        16.9


                                 21.2        28.8
                          80                             39.4




                          60     64.9

                                             56.9


                          40                             43.7




                          20




                           0
                                Small      Medium       Large


                                         High risk

                                         Moderate risk

                                         Low risk

                         Source: GAO analysis of HUD data.




                         According to HUD officials, more small agencies are rated as low risk
                         because they operate less complex programs, have a less complicated
                         financial structure, and account for a smaller percentage of HUD funding.



HUD’s Technical          According to HUD officials, public housing agencies receive technical
                         assistance based on HUD’s determination of their needs and agencies’
Assistance Is Based on   requests for specific types of assistance. HUD has two ways of determining
Agency Needs, Which      the technical assistance needs of housing agencies: its risk assessment and
                         performance measurement systems—PIC, SEMAP, and PHAS—and direct
Sometimes Vary by        requests from agencies for specific types of assistance. Several HUD
Agency Size              officials told us that small housing agencies frequently need different kinds
                         of assistance than larger agencies. For example, they stated that small
                         agencies typically need more assistance with day-to-day management
                         issues than large agencies because small agencies tend to have few staff



                         Page 33                                     GAO-04-19 Small Public Housing Agencies
                          that specialize in finance, management information systems, and other
                          areas that are important to managing HUD’s programs. Currently, HUD
                          does not maintain centralized, detailed information on the types of
                          assistance housing agencies require or the kinds of assistance they request.
                          However, a HUD official told us that the agency is developing a system that
                          will allow it to collect such information in the future.



HUD Uses Its Risk         HUD uses PIC, SEMAP, and PHAS scores to target technical assistance to
Assessment and            the agencies that, according to these systems, need it most. PIC scores
                          allow HUD to identify housing agencies that are having serious
Performance Measurement
                          performance, funding, and compliance problems and to devise monitoring
Systems to Determine      and technical assistance strategies to address such problems. For agencies
Agencies’ Technical       designated as high-risk based on their PIC scores, HUD generally provides
Assistance Needs          on-site monitoring to gain further information on their technical assistance
                          needs. Agencies that are at moderate risk receive remote assistance
                          mostly by telephone and e-mail. Agencies designated as low risk receive
                          routine assistance.

                          HUD field offices supplement their PIC analyses by assessing agencies on
                          15 “qualitative” factors— to help identify specific situations, events, and
                          conditions that are not reflected in the quantitative factor score. These
                          additional pieces of information help indicate problems as they emerge or
                          instances of deteriorating performance. Field office staff use their
                          “professional judgment” in applying the quality factors. For example, in
                          assessing agencies on the “local crime rate" (one of the factors), field office
                          staff may examine information from the local police and compare local
                          crime rates with those of similar communities. If the crime rate where the
                          agency is located is higher than the rates in similar communities, the
                          agency may be rated as having a risk factor associated with crime.
                          According to our analysis of fiscal year 2002 HUD data on the quality
                          factors, a larger percentage of small agencies than medium and large
                          agencies exhibited risk factors in several areas: staff turnover and training,
                          timeliness (for example, in submitting HUD reports) and board and
                          management issues (such as inadequate training for board members). A
                          higher percentage of large agencies than small or medium agencies
                          exhibited risk factors associated with operating major new programs,
                          problems identified in audits, unfavorable media reports, and litigation
                          issues (such as disputes with contractors).

                          SEMAP scores for fiscal year 2002 were lowest for small agencies and,
                          since SEMAP measures performance managing Housing Choice Voucher



                          Page 34                                    GAO-04-19 Small Public Housing Agencies
units, suggest that these agencies may need more technical assistance than
others in this area. As previously discussed, 14.4 percent of small agencies
were considered to be troubled under SEMAP, compared with 2.4 percent
of medium and 3.8 percent of large agencies. Under SEMAP, troubled
agencies must develop corrective action plans that address deficiencies
identified by the assessment. HUD field offices review these plans to
determine the type of technical assistance that is needed to correct the
deficiency.

We also found that troubled small and medium agencies did not perform as
well as troubled large agencies on one of SEMAP’s most important
indicators—the “lease-up” indicator, which reflects agencies’ performance
in leasing available units. Of a maximum of 20 points, small and medium
troubled agencies had an average score of 2.8 points, compared with 4.1
points for troubled large agencies. Most agencies that receive a low score
on this indicator are likely to need technical assistance to develop a
program to improve their leasing rate. According to a HUD official,
although most agencies have difficulty leasing Housing Choice Voucher
units, small agencies generally have greater difficulty than their larger
counterparts because they have less experience managing such units.

Finally, HUD uses PHAS scores to decide how to target assistance to
agencies that show weaknesses in administering their low-rent units.
Agencies designated as troubled under PHAS are referred to one of HUD’s
two Troubled Agency Recovery Centers (TARC) for follow-up. As
previously indicated, while our analysis of PHAS data showed that small
agencies were somewhat more likely than larger agencies to be considered
high performers, it did not show significant differences between the
percentages of small, medium, and large agencies that were designated as
troubled. Further, small troubled agencies did not perform as well as
troubled medium or large agencies on one of PHAS’ four major
indicators—management assessment. Specifically, out of a maximum 30
points, small troubled agencies had an average score of 14.8 compared to
21.4 for medium and 21.7 for large troubled agencies. According to HUD
officials, these scores suggest troubled small agencies may need more
assistance than larger agencies with managerial tasks such as completing
work orders and releasing vacant units.




Page 35                                  GAO-04-19 Small Public Housing Agencies
HUD Also Responds to          HUD field offices regularly receive telephone, e-mail, or other written
Requests from Individual      requests from housing agencies asking for help in a variety of areas, such as
                              accessing and submitting data through HUD’s computer systems,
Housing Agencies for          completing various HUD forms, and understanding HUD regulations. HUD
Specific Types of Technical   officials told us that the department also receives a large number of calls
Assistance                    from housing agencies, contractors, property owners, and others
                              requesting assistance regarding PIC and PHAS. Most of these calls are
                              made to HUD headquarters, which operates (1) a PIC help desk, which
                              receives calls from housing agencies and others requesting assistance on
                              matters such as how to log into the PIC system and how to interpret PIC
                              requirements, and (2) the REAC technical assistance center, which serves
                              as the primary point of contact for PHAS and other matters. According to a
                              HUD official, the PIC help desk received 6,932 calls between August 2002
                              and August 2003, and REAC’s technical assistance center receives between
                              9,000 and 10,000 calls monthly.

                              HUD currently does not maintain detailed, centralized information on the
                              types of assistance that it has determined housing agencies require or that
                              agencies who contact HUD field offices or headquarters request.
                              Accordingly, neither we nor HUD were able to determine this information
                              on a national basis or by size. However, according to a HUD official, HUD
                              is in the process of developing a tracking system that will allow it to collect
                              such information in the near future.




                              Page 36                                    GAO-04-19 Small Public Housing Agencies
According to HUD field office directors we contacted, small agencies need
more assistance with routine, day-to-day management of HUD housing
programs than medium and large agencies.19 The officials added that small
agencies need this assistance largely because they lack staff with
specialized knowledge of finance, accounting, and other disciplines that
are important to managing HUD’s housing programs.20 These officials
noted the following:

• Small agencies are more likely than their larger counterparts to need
  assistance with things such as occupancy regulations, lease
  enforcement, rent calculations, and HUD’s reporting requirements.
  Most of the calls that field offices receive from housing agencies
  requesting this type of assistance come from small agencies. Larger
  agencies typically do not need such assistance because they generally
  have in-house accountants, financial management specialists,
  information systems specialists, and others with detailed knowledge of
  HUD’s programs and policies. Larger agencies often operate more
  complex programs than smaller ones and tend to need assistance with
  more complicated matters, such as leveraging private funds, developing
  partnerships with nonprofits, converting public housing units into
  Housing Choice Voucher units, and using low-income housing tax
  credits.

• Because small agencies have fewer staff, they rely more heavily than
  larger agencies on contractors to carry out key functions in the
  administration of HUD’s programs, such as accounting, finance, and
  procurement. In comparison, larger agencies are likely to have in-house
  staff who specialize in these areas. Public housing agencies require a
  highly specialized type of accounting services that are difficult to obtain,
  so small agencies and their contractors frequently contact HUD for
  technical assistance. Ultimately, small agencies’ reliance on contractors


19
 We interviewed a total of nine HUD field office directors located in Jacksonville, Florida;
Chicago, Illinois; Boston, Massachusetts; Miami, Florida; Richmond, Virginia; Atlanta,
Georgia; New Orleans, Louisiana; Little Rock, Arkansas; and Newark, New Jersey.
20
 Our nationwide survey of public housing agency directors found that 48 percent of small
housing agencies had full-time staff working in financial management, compared to 90
percent for medium agencies and 99 percent for large agencies; 56 percent of small housing
agencies had full-time staff working in property management compared to 86 percent for
medium and 96 percent for large agencies; and 13 percent of small agencies had full-time
staff working in information technology compared to 31 percent for medium and 89 percent
for large agencies. (For additional information, see appendix III).




Page 37                                            GAO-04-19 Small Public Housing Agencies
                     to carry out functions such as accounting, finance, and the preparation
                     of planning documents limits the agencies’ own understanding of key
                     aspects of their operations and further contributes to requests for
                     technical assistance from HUD.

                  • Small agencies are more likely than larger ones to have problems related
                    to using HUD’s data systems. Unlike large agencies, most small
                    agencies do not have in-house information systems experts and are
                    more likely to hire consultants to assist them with HUD’s information
                    systems. One field office director we spoke with stated that many small
                    agencies also need assistance with HUD’s information systems because
                    either HUD’s systems are not compatible with the agencies’ systems or
                    the agencies do not have staff with the skills needed to operate HUD’s
                    systems.

                  We conducted our work between July 2002 and October 2003. Our work
                  was conducted in accordance with generally accepted government auditing
                  standards.



Agency Comments   We requested comments on a draft of this report from the Secretary of HUD
                  or his designee. On October 22, the Acting Director of HUD’s Office of
                  Policy, Program, and Legislative Initiatives provided us with technical
                  comments on our report, which we have incorporated as appropriate.


                  As agreed with your office, unless you publicly announce the contents of
                  this report earlier, we plan no further distribution of this report until 30
                  days from the report date. At that time, we will provide copies of this
                  report to the interested congressional committees and Members of
                  Congress; the Secretary of Housing and Urban Development; the Director
                  of the Office of Management and Budget; and other interested parties. In




                  Page 38                                   GAO-04-19 Small Public Housing Agencies
addition, the report will be available at no charge on GAO’s Web site at
http://www.gao.gov.

If you have any questions regarding this report, please contact me or
Charles E. Wilson, Jr., Assistant Director, at (202) 512-8678. Key
contributors to this report are listed in appendix V.

Sincerely yours,




David G. Wood
Director, Financial Markets and
 Community Investment




Page 39                                  GAO-04-19 Small Public Housing Agencies
Appendix I

Scope and Methodology                                                                       AA
                                                                                             ppp
                                                                                               ep
                                                                                                ned
                                                                                                  n
                                                                                                  x
                                                                                                  id
                                                                                                   e
                                                                                                   x
                                                                                                   Iis




             The objectives of this study were to (1) compare how small and larger
             housing agencies view the impact of recent housing reforms on their ability
             to administer HUD programs, (2) compare small and larger agencies'
             performance, as measured by HUD, in administering the low-rent housing
             and Housing Choice Voucher programs, and (3) describe the differences in
             the technical assistance that small and larger public housing agencies
             require.

             For this report, we defined size as the number of low-rent units and
             housing voucher units combined as follows: very large, more than 6,599
             units; large, 1,250 units to 6,599 units; medium, 250 units to 1,249 units;
             small, 100 units to 249 units; and very small, less than 100 units. To
             determine differences based on size and present the results of our analyses,
             throughout the report we collapsed the five categories into three: small,
             medium, and large housing agencies. Small agencies include very small
             and small, and large include large and very large.

             To compare how small and larger housing agencies view the impact of
             QHWRA reforms on their ability to manage their agencies, we used a mail
             questionnaire to survey a nationwide statistical sample of public housing
             agencies. Of the more than 80 QHWRA reforms, our survey focuses on 18
             reforms public housing industry associations consider to have had the most
             impact on agency operations. Based on our sample, we produced national
             estimates of the impact of QHWRA reforms as perceived by agency
             directors. We analyzed respondents’ most frequently occurring answers to
             our survey questions to identify similarities and differences between small,
             medium, and large agencies' perceptions about the impact of QHWRA
             reforms on their operations. Estimates based on our sample are subject to
             sampling error. All percentage estimates in this report have 95 percent
             confidence intervals of plus or minus 7 percentage points or less, unless
             otherwise noted. See appendix II for a more detailed discussion of the
             development of this survey and the sampling frame. A copy of the survey
             can be found in appendix III.

             To compare the assessed performance of small, medium, and large public
             housing agencies, we analyzed fiscal year 2002 PHAS data, fiscal year 2002
             SEMAP data, and fiscal year 2002 PIC data, which we obtained from HUD.
             We used HUD's criteria for designating housing agencies as troubled,
             standard, or high performers under PHAS and SEMAP, and low, medium or
             high risk under PIC. To understand how HUD applies its criteria for
             determining performance and risk levels, we reviewed HUD guidance and
             interviewed HUD officials.



             Page 40                                  GAO-04-19 Small Public Housing Agencies
Appendix I
Scope and Methodology




HUD collects data for PHAS, SEMAP, and PIC once a year on a rolling
quarterly basis. We requested and received the most current data available
from these systems. We assessed the reliability of these data by
(1) reviewing existing information about the systems and the data,
(2) interviewing agency officials knowledgeable about the data, and
(3) performing electronic testing of the data elements used in the report.
We determined that the data were reliable enough for purposes of this
report.

To determine differences in the technical assistance that HUD provides to
small, medium, and large housing agencies, we interviewed HUD
headquarters and field office officials within the Office of Public and Indian
Housing. To obtain information on the technical assistance that field
offices provide to housing agencies across the country, we randomly
selected a limited sample of nine field office directors. We also analyzed
fiscal year 2002 PHAS, SEMAP, and PIC data that HUD uses to target
technical assistance to those in need.




Page 41                                   GAO-04-19 Small Public Housing Agencies
Appendix II

Methodology for GAO’s Survey of Local
Housing Agencies on QHWRA Housing
Reforms and Initiatives                                                                                        Appendx
                                                                                                                     Ii




                       This study’s primary objective was to compare how small and larger
                       housing agencies view the impact of recent housing reforms on their ability
                       to administer HUD programs. To address this objective, we surveyed a
                       stratified random sample of public housing agency directors based on size.
                       We developed and administered a survey designed to obtain the directors’
                       views on issues associated with QHWRA’s effects on agency operations,
                       staffing and resources, and management. We received 1,119 completed,
                       usable surveys.



The Study Population   We used end of fiscal year 2002 data from HUD’s Office of Public and Indian
                       Housing databases to identify the number of agencies nationwide.1 Since
                       our primary interest was to compare responses based on size, we also
                       requested and received the various definitions HUD uses to classify
                       housing agencies by size. We assessed the quality of HUD’s electronic data
                       by testing for internal consistency; validating the data using other sources;
                       and, to the extent possible, reviewing the associated documentation. Based
                       on these tests, we determined that the data were sufficiently accurate for
                       our purposes.



The Sample Design      We used a single-stage stratified random sample of the directors of local
                       housing agencies nationwide. For the original stratification, we used
                       HUD’s criterion, which is the number of low-rent housing units. We
                       separated agencies into five strata: 100 low-rent units or less, 101 to 249
                       low-rent units, 250 to 1,250 low-rent units, 1,251 to 6,599 low-rent rent units,
                       and 6,600 or more low-rent units. We were also able to identify a sixth
                       stratum of agencies with an unknown number of low-rent units or with
                       voucher units only. Our total sample included 1,611 agency directors. Of
                       the 1,611 that were in our sample, we received a total of 1,119 valid and
                       usable surveys, for an overall response rate of 69 percent.




                       1
                        We made a minor adjustment to this database by removing two records that were no longer
                       PHAs at the time of the survey. This resulted in 4,214 agencies in our target population.




                       Page 42                                         GAO-04-19 Small Public Housing Agencies
                        Appendix II
                        Methodology for GAO’s Survey of Local
                        Housing Agencies on QHWRA Housing
                        Reforms and Initiatives




                        Table 3: Survey Sample Size and Disposition

                                                            Population    Sample                     Response
                        Stratum                                   size      size Respondents              rate
                        100 low-rent units or less               1,587        413             262          63%
                        101 to 249 low-rent units                 768         343             253          74%
                        250 to 1,250 low-rent units               673         326             257          79%
                        1,251 to 6,599 low-rent units             114         114              91          80%
                        6,600 or more low-rent units               44          44              32          73%
                        Other and Voucher Units                  1,028        371             224          60%
                        Total                                    4,214      1,611           1,119          69%
                        Source: GAO analysis of HUD data.




Developing the Survey   To identify specific reform issues that were areas of concern, we met with
                        officials from the public housing industry and held group discussions with
                        19 directors from small, medium, and large public housing agencies
                        throughout the country. We met with directors of housing agencies at
                        conferences of the Public Housing Authorities Directors Association
                        (PHADA) and the National Association of Housing and Redevelopment
                        Officials (NAHRO). During these discussion sessions, we explored (1) the
                        challenges directors face, (2) what is being done to meet the challenges,
                        and (3) how PHAS and QHWRA have impacted their agencies. We used a
                        nominal group technique to prioritize the most important challenges
                        directors of small housing agencies face.

                        We developed our survey, in part based on our meetings with directors and
                        officials of the public housing agencies. Specifically, the survey asked
                        about 18 reform issues that were identified as concerns in these group
                        discussions. About half of the 18 concerns dealt with admissions and
                        occupancy issues, such as tenant selection and income limits. The other
                        half included reporting requirements and resident-related issues, such as
                        having a resident member on the board of directors. We asked whether
                        these QHWRA reforms had helped or hindered directors’ ability to operate
                        and manage their agencies. We also asked about staffing, management,
                        and finances.

                        To verify the clarity, length of time of administration, and suitability of the
                        questions, we pretested the questionnaire with the directors of local
                        housing agencies. We also sought feedback from NAHRO and PHADA



                        Page 43                                          GAO-04-19 Small Public Housing Agencies
                        Appendix II
                        Methodology for GAO’s Survey of Local
                        Housing Agencies on QHWRA Housing
                        Reforms and Initiatives




                        staff. A copy of the Survey of Local Housing Agencies on Housing Reforms
                        and Initiatives can be found in appendix III.



Administering the       We conducted the survey between January 2003 and July 2003, using a self-
                        administered mail-out form. We sent a second questionnaire on March 28,
Survey                  2003, to all those who did not respond to our first survey in order to
                        encourage a higher response rate. We ended data collection on July 8,
                        2003.

                        We received 1,119 completed, usable surveys, for an overall response rate
                        of 69 percent. Two surveys were eliminated because they were returned
                        blank or indicated that they do not currently administer low-rent housing
                        or Housing Choice Voucher programs. We used a contractor to create a
                        database of survey responses. All data were double keyed during the data
                        entry process, and GAO staff verified a sample of the resulting data to
                        ensure accuracy.



Nonsampling Error and   The practical difficulties of conducting any survey can result in
                        nonsampling errors. For example, measurement errors can be introduced if
Data Quality            difficulties exist in interpreting a particular question or in the sources of
                        information available to respondents in answering a question, keying in
                        completed questionnaires, or preparing data files for analysis. We took
                        extensive steps to minimize such errors in developing the questionnaire,
                        collecting the data, and editing and analyzing the information.

                        To reduce measurement error, we conducted in-depth pretesting of the
                        questionnaire with public housing agency directors, as well as with
                        industry officials, to make sure questions and response categories were
                        interpreted in a consistent manner. GAO edited all surveys for consistency
                        before they were sent for keypunching. All questionnaire responses were
                        double key-entered into our database (that is, the entries were 100 percent
                        verified), and a random sample of the questionnaires was further verified
                        for completeness and accuracy. In addition to the steps taken during the
                        development of the survey and its administration, we performed computer
                        analyses to identify inconsistencies and other indicators of errors. When
                        edit checks revealed inconsistent responses or individual question
                        elements did not add correctly to the total provided, we established
                        parameters for either calling the respondent for clarification or treating the
                        data as missing. In addition, all computer syntax was peer reviewed and



                        Page 44                                   GAO-04-19 Small Public Housing Agencies
                 Appendix II
                 Methodology for GAO’s Survey of Local
                 Housing Agencies on QHWRA Housing
                 Reforms and Initiatives




                 verified by separate programmers to ensure that it was written and
                 executed correctly.



Response Rates   To maximize response rates, we sent one follow-up mailing with copies of
                 the survey on March 28, 2003, and one or two e-mail reminders to
                 nonrespondents with known e-mail addresses. Overall, 69 percent of the
                 sampled agencies responded to our survey, with minimal response
                 differentials by size (see table 3 for response rates).



Estimates        Estimates produced in this report are for a target population defined as
                 directors of public housing agencies in our study population. Since one of
                 our primary objectives involved comparing small and larger agencies, we
                 computed estimates for our three groups of agencies—small, medium, and
                 large. For the report itself, we collapsed the six strata into three,
                 combining small and very small into the small group and large and very
                 large into the large group. We then had three groups for analysis: (1) small
                 agencies that administered fewer than 250 low-rent and housing choice
                 voucher units, (2) medium agencies that administered between 250 and
                 1,250 units, and (3) large agencies that administered more than 1,250 units.
                 For presentation and statistical testing, we also collapsed responses. For
                 example, in question 16, which asked about specific reforms, we combined
                 the “greatly helped” category into the “helped” category and “greatly
                 hindered” into “hindered” in order to derive single response categories. In
                 question 21, we combined “moderate extent” with “some extent” and “very
                 great extent” with “great extent.” Also, because of the number of agencies
                 answering “not applicable,” “no basis to judge,” or in some cases nothing at
                 all, we chose to use this information in our analysis.

                 Estimates were formed by weighting the survey responses to account for
                 effective sampling rates in each stratum. These weights reflect both the
                 initial sampling rate and the response rate for each stratum. As with most
                 surveys, our estimation method assumes that nonrespondents would have
                 answered like the survey respondents.

                 We analyzed the response data on selected questions based on the most
                 frequently occurring responses in order to identify similarities and
                 differences in the responses across categories.




                 Page 45                                  GAO-04-19 Small Public Housing Agencies
                 Appendix II
                 Methodology for GAO’s Survey of Local
                 Housing Agencies on QHWRA Housing
                 Reforms and Initiatives




Sampling Error   The results of random samples like ours are subject to sampling errors that
                 reflect the differences between the results obtained from the samples and
                 the results that would have been obtained from a survey of the entire
                 population under consideration. Because we surveyed a sample of
                 directors of public housing agencies, our results are estimates of the
                 characteristics of public housing agencies and thus are subject to the
                 sampling errors associated with samples of this size and type.

                 Measurements of sampling errors are stated at a certain level of statistical
                 confidence. GAO used the weighted results to make estimates about the
                 entire population of local housing agencies. Our confidence in the
                 precision of the results from this sample is expressed in 95 percent
                 confidence intervals. The 95 percent confidence intervals are expected to
                 include the actual results for 95 percent of the samples of this type. We
                 calculated confidence intervals for our study results using methods that are
                 appropriate for a stratified probability sample. For the percentages
                 presented in this report, we are 95 percent confident that the results we
                 would have obtained had we studied the entire study population would
                 have been within +7 or fewer percentage points of our results, unless
                 otherwise noted. For example, our survey estimates that 63 percent of the
                 small agency directors believed they and their staff were spending “more or
                 much more time” on HUD-subsidized programs after the QHWRA reforms
                 (question 20). The 95 percent confidence interval for this estimate would
                 be no wider than +7 percent, or from 56 percent to 70 percent. For
                 estimates other than percentages, 95 percent confidence intervals are
                 presented with the estimate or otherwise noted. (A modified copy of the
                 questionnaire, showing aggregate response percentages by size, is included
                 as appendix III.)




                 Page 46                                  GAO-04-19 Small Public Housing Agencies
Appendix III

Survey Results of Housing Agencies                                                                                                 Appendx
                                                                                                                                         iI




               Note: Except where noted, all percentage estimates have 95% confidence intervals within + 7 percentage points.
                                                    United States General Accounting Office

                                                    Survey of Local Housing Agencies on
                                                    Housing Reforms and Initiatives

               Introduction                                               Directions for Completing this Questionnaire

               The U.S. General Accounting Office (GAO), an
               independent agency of Congress, has been asked by             This questionnaire should be completed
               the Senate Subcommittee on Housing and                        by the Executive Director only for the
               Transportation to review the challenges faced by              LHA to which it is addressed.
               local housing agencies (LHA) as a result of recent
               housing reforms. As part of this review we are
               surveying a random sample of all housing agencies          Please complete this questionnaire and return it
               to identify any challenges and their impacts on            within 2 weeks. A preaddressed, postage-paid
               housing agencies. Your LHA has been randomly               envelope is enclosed.
               selected to participate in this survey. Your input is
               important in understanding these challenges and will       If you have any questions about the survey, please
               be a vital part of our study and our report to             contact us toll free at 1-888-452-1699 or e-mail us at
               Congress.                                                  any of the addresses below:

               The major public housing reform initiative we are
               focusing on is the Quality Housing and Work                Johnnie E. Barnes, Analyst-in-Charge
               Responsibility Act (QHWRA). This Act aims to               E-mail: BarnesJ@gao.gov
               deregulate LHAs, increase accountability, reward
               effective management, allow housing agencies               Roberto Pinero, Analyst
               flexibility in the use of federal assistance, and          E-mail: PineroR@gao.gov
               remedy some of the problems of troubled housing
               agencies. GAO plans to compare the experiences of          Jobenia Odum, Analyst
               LHAs in order to provide Congress with information         E-mail: OdumJ@gao.gov
               about the impact of this initiative.

               The survey should take about 30 to 45 minutes to
               complete. Space has been provided at the end of the        You can also contact us by mail at :
               survey for any additional comments you may want
               to make. The results of the survey will be reported                U.S. General Accounting Office
               to Congress in aggregate. You will be able to obtain               Attention: Johnnie E. Barnes
               a copy of the report after it has been released.                   2635 Century Parkway
                                                                                  Suite 700
                                                                                  Atlanta, GA 30345




                      Page 47                                                          GAO-04-19 Small Public Housing Agencies
        Appendix III
        Survey Results of Housing Agencies




 SECTION A: LHA BACKGROUND

This section deals with your LHA’s background, inventory, and clients. The information will help us
understand your LHA and its unique characteristics.

1.    What year was your LHA established?

                                                         Mean Year Established

               Small                          Medium                        Large                            All

                1969                            1964                         1955                           1966


2.    How many low-rent public housing units, occupied and unoccupied, were in your HUD subsidized
      housing inventory on December 31, 2002? (If you have no low-rent units, enter ‘‘0’’)

                                                                         Mean Number of Units
                          Status
                                                            Small        Medium               Large                All
                                                                                                      a
                         Occupied:                           51            181                 1594                279a

                         Unoccupied                          4a            17a                  177a               29a


3. How many housing choice vouchers (formerly Section 8 vouchers) were allocated to your LHA as of
   December 31, 2002? How many of these were in use as of that date? (If you have no vouchers, enter ‘‘0’’
   and skip to Question 6)
                                                              Mean Number of Vouchers as of Dec 31, 2002
                         Vouchers
                                                            Small        Medium                Large               All

      Vouchers allocated                                     34a           337                 3610a               564a
                                                                  a                                    a
      Vouchers in use                                        34            315                 3763                549a


4.    How many of these allocated housing choice vouchers were used in another jurisdiction (that is, were
      outwardly portable) as of December 31, 2002?

                                     Mean Number of Vouchers Used in Another Jurisdiction

               Small                          Medium                        Large                            All
                                                     a                            a
                 2   a                           9                           81                              21a




 a
     The 95% confidence interval exceeds +/- 10% of the estimate.


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5.    How many housing choice vouchers did your LHA accept from another LHA that were not absorbed into
      your allocation (that is, were not inwardly portable) as of December 31, 2002?

                           Mean Number of Vouchers Accepted from another LHA but not absorbed

                Small                         Medium                          Large                            All
                                                    a                               a
                  3   a                        11                              37                              13a


6.    Please identify the geographic location of the majority of your low-rent and housing choice voucher
      units. (Mark only one response for each program you manage)

     Geographic                          Low Rent                                            Housing Vouchers
      Region               Small     Medium      Large              All       Small          Medium       Large             All
     Urban                  25%       47%           77%            38%        16%              45%         69%              40%
     Suburban               11%       23%           17%            15%        21%              24%         19%              22%
     Rural                  64%       30%               6%         46%        63%              32%         11%              39%


7.    Are there any other units besides low-rent and housing choice voucher that are part of your LHA’s HUD-
      subsidized housing inventory?

            Response                 Small                     Medium                     Large                      All

     Yes:                             10%                          19%                     58%                    19%

     No:                              90%                          81%                     42%                    81%


8.    If yes, please list program and number of units:
                                  <<OPEN-ENDED COMMENTS – NOT SHOWN >>

9.    Does your LHA manage any other housing programs for anyone other than HUD? (Mark only one
      response)

                                                                          Average Number of Units
                          Response
                                                         Small            Medium                 Large                All

      Yes:                                                   15%            28%                   44%                23%

      No Î (SKIP TO QUESTION #9)                             85%            72%                   56%                77%


10. If yes, please list each program and the number of units it covers:
                                  <<OPEN-ENDED COMMENTS – NOT SHOWN >>



 a
     The 95% confidence interval exceeds +/- 10% of the estimate.


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     11. For the low-rent, housing choice voucher, and other units your LHA manages, please estimate the
         percentage that are occupied by the following types of residents as of December 31, 2002:

                                                                    Mean Percent of Residents
      Residents                     Low-Rent Units             Housing Choice Voucher Units                      Other Units
                           Small Medium Large         All      Small Medium Large             All    Small Medium Large          All
Elderly persons (aged
                           47%       36%    30%       42%         19%     18%     15%       18%      59%         46%    32%      48%
62 and up)
Non elderly persons
with disabilities, with    15%       17%    18%       16%         23%     24%     23%       24%      16%         20%    24%      20%
or without children
Households with
                           32%       43%    47%       37%         53%     54%     59%       54%      20%         29%    34%      27%
children
All other                   6%       4%      5%       5%          5%       4%     4%          4%      5%          5%    10%      6%


     12. What is the estimated percentage of units in each program occupied by residents in the following area
         median income (AMI) categories?

                                                               Mean Percent of Residents
      Residents                  Low-Rent Units              Housing Choice Voucher Units                    Other Units
                          Small Medium Large         All      Small Medium Large           All      Small Medium Large          All

 Less than 30%            59%       68%    74%       64%      71%       73%      73%      73%       61%      66%       64%     63%

 31% to 50%               27%       26%    19%       25%      25%       23%      22%      23%       24%      27%       25%     25%

 Greater than 50%         14%       6%     7%        11%       4%        3%      5%        4%       15%          8%    10%     11%



     13. Is your LHA currently involved in any of the following arrangements with other local housing agencies?
         (Mark only one response in each row)

                                                                    Average Percent of LHAs Involved
                             Arrangements
                                                            Small       Medium         Large               All
                    Consortium                               8%           12%           16%               10%
                    Joint Venture                            3%           10%           15%                7%
                    Consolidation                            1%           2%             3%                2%
                    Other Management arrangement            15%           21%           31%               19%


     14. If yes, please identify the other LHAs involved in these arrangements:
                                 <<OPEN-ENDED COMMENTS – NOT SHOWN>>

     15. Please list the reasons why your LHA is or is not involved in any of these arrangements:
                                 <<OPEN-ENDED COMMENTS – NOT SHOWN>>



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      SECTION B: REFORM ISSUES
     This section addresses specific reform issues that have been identified as areas of concern during group
     discussions with LHA directors throughout the country. Your responses to these questions will help us
     identify the extent of their applicability to all housing agencies.

     16. To what extent has your LHA’s implementation of the following QHWRA reforms helped or hindered
         your ability to operate and manage your agency? (Mark only one response in each row)
                             Greatly Helped or     Neither Helped nor     Hindered or Greatly      Not Applicable
     QHWRA Reform                 Helped                Hindered              Hindered
                           Small Med   Lrg   All Small Med    Lrg   All Small Med    Lrg   All Small Med    Lrg      All

1.     Deconcentration      8%    6%    9%   7% 45% 60% 64% 52%           4% 12%      9%    7% 43% 23% 18% 33%
2.     Pet policy rule     26% 17%      9% 21% 33% 29% 35% 32% 27% 35% 38% 31% 14% 19% 18% 16%
3.     Community service
                            9%    7%    6%   8% 30% 21% 23% 26% 30% 42% 43% 35% 31% 29% 28% 30%
       requirement
4.     Income targeting    15% 11% 10% 13% 52% 52% 52% 52% 13% 28% 32% 20% 20%                         9%       6% 15%
5.     Flat rent
                           45% 39% 40% 43% 32% 35% 36% 34%                4%    7%    6%    5% 19% 19% 17% 19%
       requirement
6.     Income disregard    20% 21% 25% 21% 38% 37% 35% 38% 22% 30% 35% 26% 19% 12%                              5% 15%
7.     Five-year plan      36% 39% 51% 39% 30% 37% 36% 33% 30% 24% 13% 26%                       4%    0%       1%   2%
8.     Annual plan         36% 42% 55% 40% 31% 35% 31% 32% 30% 24% 13% 26%                       4%    0%       1%   2%
9.     Repeal of federal
                           44% 63% 69% 53% 42% 33% 26% 37%                2%    2%    1%    2% 12%     2%       3%   8%
       preference
10. Resident surveys       23% 25% 33% 25% 38% 40% 32% 38% 30% 27% 23% 28%                       9%    8% 12%        9%
11. Resident advisory
                           27% 29% 48% 31% 45% 50% 40% 46% 16% 16%                    7% 15% 11%       4%       5%   8%
    board
12. Resident member
                           35% 32% 40% 35% 39% 41% 38% 39% 12% 13%                    8% 12% 15% 14% 14% 14%
    on LHA board
13. Merger of Housing
    Choice (Section 8)
                           45% 74% 82% 63% 20% 19% 10% 18%                1%    2%    6%    2% 33%     5%       2% 17%
    certificate and
    voucher programs
14. Fungibility of
    capital and            69% 82% 84% 75% 22% 13% 11% 18%                2%    2%    2%    2%   7%    4%       3%   6%
    operating funds
15. Physical
                           39% 38% 38% 38% 33% 31% 26% 32% 21% 20% 24% 21%                       7% 12% 12%          9%
    inspections
16. Minimum rents          50% 44% 37% 46% 36% 44% 48% 40%                5%    7% 11%      6%   9%    6%       4%   7%
17. Site-based waiting
                           17% 12% 18% 16% 42% 34% 33% 38%                1%    2%    1%    1% 40% 52% 47% 45%
    lists
18. Rent burden limits
    program for            14% 15% 22% 16% 32% 42% 37% 37% 18% 30% 35% 25% 37% 13%                              6% 22%
    voucher programs




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  17. If you answered ‘‘hindered’’ or ‘‘greatly hindered’’ to any of the QHWRA reforms in the previous question,
      please explain your response(s).
                           <<OPEN-ENDED COMMENTS – NOT SHOWN>>

  18. As a result of the QHWRA reforms, do you view the statutory reporting requirements for managing
      HUD’s low-rent units to be more challenging, the same, or less challenging than the reporting
      requirements before the implementation of QHWRA? (Mark only one response)

                                                                            Percent
                           Response
                                                          Small      Medium         Large             All
          “More” or “Much more” challenging                 64%          60%          66%             63%
          About the same                                    16%          20%          19%             18%
          “Less” or “Much less” challenging                  1%           2%           0%              1%
          Not applicable                                    19%          18%          15%             18%


  19. Please explain your answer to the previous question including what impact it has had on your agency.
                           <<OPEN-ENDED COMMENTS – NOT SHOWN>>

  20. Currently, how much time are you and your management staff spending on HUD-subsidized programs
      compared with the amount of time you spent on them before the implementation of QHWRA? (Mark
      only one response)
                                                                                            Percent
                             Response
                                                                         Small      Medium        Large       All
“More” or “Much more” time                                                 63%        70%             79%     67%
About the same (SKIP TO QUESTION #22)                                      24%        24%             21%     24%
“Less” or “Much less” time (SKIP TO QUESTION #22)                           1%          1%             1%      1%
Not applicable; No experience before 1998 (SKIP TO QUESTION #22)           12%          4%             0%      8%




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     21. To what extent, if any, do you believe that each of the following accounts for any additional time spent
         working on HUD programs? (Mark only one response in each row)

                                                          Some or Moderate      Great or Very Great       Not Applicable
                                    Little or No Extent
      QHWRA Reform                                             Extent                 Extent
                                   Small Med   Lrg   All Small Med   Lrg   All Small Med     Lrg   All Small Med   Lrg     All

a) Increased reporting
   requirements for low-rent        1%   4%    7%    3% 40% 36% 42% 39% 47% 40% 32% 43% 12% 20% 19% 16%
   program
b) Changes in HUD’s
   reporting requirement for        2%   4% 10%      4% 42% 36% 38% 39% 42% 39% 32% 40% 14% 21% 20% 17%
   low-rent program
c) Difficulty submitting data to
   HUD for low-rent program
                                    6%   3%    7%    5% 35% 26% 23% 31% 46% 50% 51% 48% 13% 21% 19% 16%

d) Increased reporting
   requirements for Housing         4%   5%    9%    5% 20% 47% 48% 34% 17% 37% 42% 28% 58% 11%                     1% 33%
   Choice voucher program
e) Changes in HUD’s
   reporting requirement for
   Housing Choice voucher
                                    4%   5%    8%    5% 22% 49% 47% 35% 15% 34% 45% 26% 59% 11%                     0% 34%
   program
f) Difficulty submitting data to
   HUD for Housing Choice           6%   7% 10%      7% 15% 31% 30% 23% 20% 51% 60% 37% 59% 11%                     0% 33%
   voucher program
g) Difficulty accessing HUD’s
   computer systems                11%   7%    7%    9% 39% 39% 34% 38% 49% 54% 59% 52%                 0%    0%    0%     0%
   electronically
h) Late guidance from HUD          10% 10%     9% 10% 43% 41% 41% 42% 45% 46% 50% 46%                   2%    2%    1%     2%
i) Unclear guidance from HUD 10% 10% 10% 10% 44% 39% 41% 42% 45% 49% 50% 47%                            1%    1%    0%     1%
j) Staff turnover at your LHA      48% 59% 51% 52% 13% 19% 34% 18%               7% 10% 10%        8% 33% 12%       4% 22%
k) Lack of resources for hiring
   new staff at your LHA
                                   32% 34% 31% 33% 19% 30% 38% 26% 28% 28% 28% 28% 20%                        7%    2% 13%

l) Lack of resources to train
   staff
                                   27% 31% 37% 30% 31% 38% 38% 34% 28% 24% 22% 26% 15%                        6%    3% 10%

m) The need to train staff         17% 15% 19% 17% 37% 47% 49% 42% 35% 35% 30% 34% 12%                        3%    2%     7%
n) Increased maintenance
   requirements
                                   14% 17% 12% 15% 45% 33% 44% 41% 29% 33% 29% 30% 12% 17% 15% 14%

o) Changes in HUD policies/
   regulations
                                    2%   3%    4%    3% 50% 43% 49% 47% 47% 53% 47% 49%                 1%    0%    0%     1%

p) Acquiring or adapting a
   software system needed for      21% 19% 12% 19% 40% 44% 37% 41% 32% 33% 49% 34%                      7%    4%    3%     5%
   QHWRA
q) Acquiring or adapting a
   hardware system needed for      29% 31% 33% 31% 38% 42% 34% 39% 23% 20% 27% 23%                      9%    7%    5%     8%
   QHWRA
r) Other (specify): ________                                         Percentages not shown




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     Survey Results of Housing Agencies




22. To what extent, if at all, do you believe your operations will be helped by HUD’s Proposed Rule:
    Deregulation for Small Public Housing Agencies (24 CFR Parts 902 et al). (Mark only one response)

                      Response                   Small         Medium           Large            All

       Very great extent                           25%             8%              1%            17%

       Great extent                                25%             9%              1%            17%

       Moderate extent                             14%             7%              1%            10%

       Some extent                                 12%             7%              1%             9%

       Little or no extent                         12%            14%              8%            12%

       Not Applicable                              12%            54%             88%            35%


23. Please explain how you think the proposed rule will affect your LHA.
                             <<OPEN-ENDED COMMENTS – NOT SHOWN>>

24. Has the transfer of some oversight obligations of HUD field offices to Independent Public Auditors
    improved your ability to operate HUD subsidized programs? (Mark only one response)

                      Response                   Small         Medium           Large            All

       Yes:                                       28%            29%             26%            28%

       No:                                        72%            71%             74%            72%



25. In what specific ways has the transfer of some oversight obligations of HUD field offices affected your
    ability to operate HUD-subsidized programs?
                             <<OPEN-ENDED COMMENTS – NOT SHOWN>>

26. Have you requested technical assistance from HUD in implementing requirements under the Quality
    Housing and Work Responsibility Act? (Mark only one response)

                      Response                   Small         Medium           Large            All

       Yes:                                       44%            50%             53%            47%

       No:                                        56%            50%             47%            53%




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27. Have you received technical assistance from HUD Headquarters in implementing requirements under
    the Quality Housing and Work Responsibility Act? (Mark only one response)

                      Response                 Small         Medium          Large            All

       Yes:                                      28%           33%            30%            30%

       No: Î (SKIP TO QUESTION #29)              72%           67%            70%            70%



28. How satisfied were you with the assistance HUD Headquarters provided to help you implement the
    Quality Housing and Work Responsibility Act? (Mark only one response)

                      Response                   Small         Medium          Large            All
     Satisfied (very or generally)                 65%           57%            55%            61%
     Neither satisfied nor dissatisfied            11%           18%            15%            14%
     Dissatisfied (very or generally)            24%           25%             30%           26%
    *Note. Percentage estimates exceed + 7 percentage points. For estimates in Question #28, confidence
    Intervals are as large as +10.7

29. Have you received technical assistance from HUD Field Office in implementing requirements under the
    Quality Housing and Work Responsibility Act? (Mark only one response)

                      Response                 Small         Medium          Large            All

       Yes:                                      55%           66%            64%            59%

       No: Î (SKIP TO QUESTION #31)              45%           34%            36%            41%




30. How satisfied were you with the assistance HUD Field Office provided to help you implement the
    Quality Housing and Work Responsibility Act? (Mark only one response)

                      Response                   Small         Medium          Large            All
     Satisfied (very or generally)                  82%           81%            78%            81%
     Neither satisfied nor dissatisfied                9%          6%             8%                8%
     Dissatisfied (very or generally)                  9%         13%            14%            11%



31. Please explain your level of satisfaction with assistance received from HUD Headquarters or HUD Field
    Office.
                          <<OPEN-ENDED COMMENTS – NOT SHOWN>>




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     SECTION C: MANAGEMENT SYSTEMS

     This section addresses your opinions of HUD’s management assessment systems and their perceived value
     to you in managing your LHA.

32. To what extent, if any, do you use any of the following HUD management systems in managing your
    LHA? (Mark only one response in each row)

                                              Some or Moderate       Great or Very Great
                        Little or No Extent                                                     Not Applicable
        System                                     Extent                  Extent
                      Small Med Lrg      All Small Med Lrg     All Small Med     Lrg   All Small Med     Lrg      All
a)     HUD Website     6%    6%    3%    5% 44% 42% 27% 41% 49% 51% 70% 52%                   2%    0%    0%      1%
b)     PHAS            8%    9%    6%    8% 41% 34% 28% 37% 39% 43% 48% 41% 12% 14% 17% 13%
c)    PIC (SEMAP
                     11% 10%       9% 11% 23% 37% 36% 29% 27% 44% 54% 36% 39%                       9%    0% 24%
     component only)
d)     PIC (Form
      50058 component 10% 12%      9% 10% 32% 29% 29% 31% 55% 59% 61% 57%                     2%    0%    0%      1%
      only)
e)    PIC (other
                      16% 13% 13% 15% 35% 39% 37% 36% 42% 43% 46% 43%                         8%    4%    4%      6%
     components)
f)     LOCCS          12%    9%    9% 11% 20% 17% 15% 18% 50% 50% 58% 51% 19% 24% 18% 20%
g)     ELOCCS          6%    5%    2%    5% 18% 14% 10% 16% 61% 59% 70% 61% 15% 23% 18% 18%
h)     Other:                                            Percentages not shown




33. If you answered ‘‘moderate,’’ ‘‘some’’ or ‘‘little or no extent’’ to any management systems in the previous
    question, please explain your response(s).
                          <<OPEN-ENDED COMMENTS – NOT SHOWN>>




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 34. To what extent, if any, have the PHAS components helped you administer your low-rent program?
     (Mark only one response in each row. If you have no low-rent units, skip to question #35.)

                                                Some or Moderate     Great or Very Great
                         Little or No Extent                                                    Not Applicable
 PHAS Component                                      Extent                Extent
                        Small Med Lrg     All Small Med Lrg    All Small Med     Lrg     All Small Med     Lrg    All
 1.    Physical
                        24% 23% 19% 23% 53% 46% 49% 50% 21% 30% 31% 25%                       2%     1%    0%     2%
       inspections
 2.    Financial
                        25% 26% 26% 26% 49% 48% 48% 49% 22% 25% 25% 23%                       3%     2%    1%     2%
       assessments
 3.    Management
                        22% 20% 21% 21% 53% 51% 47% 51% 22% 28% 32% 25%                       3%     1%    1%     2%
       assessments
 4.    Resident
                        37% 38% 31% 36% 44% 43% 47% 44% 16% 18% 21% 17%                       3%     1%    1%     2%
       surveys




 35. To what extent, if any, have the following SEMAP components helped you administer your Housing
     Choice voucher program? (Mark only one response in each row. If you have no housing choice
     vouchers, skip to Question #36.)
                                                 Some or Moderate     Great or Very Great
                          Little or No Extent                                                      Not Applicable
SEMAP Component                                       Extent                Extent
                        Small Med Lrg      All Small Med Lrg    All Small Med      Lrg    All Small Med     Lrg     All
1.    Monitoring         30% 23% 21% 25% 39% 49% 43% 44% 27% 26% 34% 28%                       5%     2%    2%      3%
2.    Reporting          31% 28% 24% 28% 40% 48% 43% 44% 25% 23% 31% 25%                       4%     0%    1%      2%
3.    Leasing process    34% 30% 28% 31% 39% 47% 40% 43% 23% 22% 31% 24%                       4%     1%    1%      2%




      SECTION D: STAFFING AND RESOURCES

 This section of the survey addresses resources your LHA uses to operate its housing programs. The
 information will help us understand your agency’s day-to-day operations.

 36. As Executive Director, is your position classified as full time or part time? (Mark only one response)

                        Response                   Small        Medium            Large            All
          Full-time                                 63%             96%            98%             78%
          Part-time                                 37%             4%             2%              22%




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             Appendix III
             Survey Results of Housing Agencies




     37. Besides yourself, how many in-house staff (excluding contractors) work full-time or part-time for your
         LHA?

                                                                                    Mean Number of Staff
               Type of Staff                          Full-Time                                                      Part-Time
                                       Small       Medium           Large               All             Small     Medium          Large     All
      Financial Management              0b            1a                7a               2                    b          b         1a           b
                                                                                                          0          0                      0
      Property Management                   b         2a             19a                 4a                   b          b         2a           b
                                        0                                                                 0          0                      0
                                                                            a                a                           a             a
      Maintenance                        2            5              58                 11                1          1             3        1a
                                                                            a                a                           a             a
      Administrative/Clerical            1            4              32                  6                1          1             2        1a
      Information Technology                b             b             3   a
                                                                                         1   a                b          b             b        b
                                        0             0                                                   0          0             0        0
      Other                                 b         1   a
                                                                     45     a
                                                                                         7   a                b      1   a
                                                                                                                                   5   a
                                                                                                                                             1
                                        0                                                                 0
                                                                                a            a                                          a
      Total Number of Staff              3            13            162                 30                2          3             13        3


     38. How many Executive Directors has your LHA had since January 1, 1998?

                                                Mean Number of Executive Directors
                               Small                 Medium                            Large                        All
                                 1                            1                              2                       1


     39. As Executive Director how many years have you served in the following roles?a

                                                                                                 Mean Number of Years
                      Response
                                                                  Small                          Medium              Large                  All
a)    Number of years as Executive Director of
                                                                   10                              11                        9              10
      this LHA
b) Number of years at this LHA (including
                                                                   12                              14                        13             13
   years as Executive Director)
c)    Number of years in public or assisted
      housing work (including your present                         14                             41a                        19             23a
      position)




      a
          The 95% confidence interval exceeds +/- 10% of the estimate.
      b
          Indicates value less than 0.5 FTE.


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             Page 58                                                                                     GAO-04-19 Small Public Housing Agencies
      Appendix III
      Survey Results of Housing Agencies




 40. How easy or difficult is it for you to manage the following functions or to obtain the following services?
     (Mark only one response in each row)

                         Very or Somewhat        Neither Easy nor      Very or somewhat
    Functions or                                                                                  Not An Issue
                               Easy                  difficult             difficult
      Services
                        Small Med   Lrg   All Small Med   Lrg    All Small Med    Lrg   All Small Med     Lrg     All
1) Finding and
   hiring qualified
                        15% 23% 24% 19% 18% 24% 30% 21% 37% 44% 45% 41% 30%                          9%   1% 19%
   staff for LHA
   positions
2) Keeping
   qualified staff on   28% 47% 44% 36% 20% 26% 30% 23% 21% 18% 22% 20% 31%                          9%   3% 20%
   board at the LHA
3) Acquiring
                        10% 17% 22% 14% 12% 13% 16% 13% 61% 64% 61% 62% 17%                          7%   1% 11%
   training locally
4) Sending staff to
   training that        23% 29% 26% 26% 17% 19% 22% 18% 45% 46% 50% 46% 15%                          5%   2% 10%
   requires travel
5) Finding
   contractors
                        20% 23% 34% 23% 17% 26% 29% 21% 40% 30% 24% 35% 22% 21% 13% 21%
   willing to do
   HUD work
6) Other, please
                                                          Percentages not shown
   specify: _____



 41. Please explain what makes these tasks easy or difficult:
                          <<OPEN-ENDED COMMENTS – NOT SHOWN>>




                                                                         GAO-04-19 Small Public Housing Agencies




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        Appendix III
        Survey Results of Housing Agencies




42. Please provide the actual dollar amount of funding your LHA received from the following sources for
    your fiscal year 2002:

                                                               Mean Allocated Dollar Amount
                       Response
                                                       Small             Medium              Large             All
      Low-rent operating subsidies                        90,908               351,591       6,237,980a        919,532a
      Low-rent capital funds                              99,676               341,945       3,923,298a        641,103a
                                                                                                         a
      Housing Choice voucher allocations                151,361    a
                                                                             1,589,487      21,896,749       3,250,096a
                                                                                        a                a
      Tenant rent payments                               105,738              459,968        5,011,944         814,535a
                                                                                        a                a
      All other HUD program funding                      18,385    a
                                                                              553,530        7,977,623       1,155,427a
                                                                                        a                a
      All other federal funding                            4,809   a
                                                                               48,674        1,075,964         148,694a
                                                                                        a                a
      State and local funding                            11,603    a
                                                                              129,239        2,013,183         292,047a
                                                                                        a                a
      All private funding                                  2,542   a
                                                                               56,420         591,169              91,274a
                                                                                        a                a
               TOTAL                                     483,891             3,563,700      48,664,972       7,351,817a


43. Of this total funding amount, please approximate the percentage used to purchase contracted out
    services?

                                      Mean Percent Contracted Out Service
                            Small           Medium              Large                        All
                            25%              16%                       14%                   21%


44. Does your LHA currently contract out more, less, or about the same share of property management for
    your units than it did before the Quality Housing and Work Responsibility Act? (Mark only one
    response)
            Response                Small            Medium                       Large                      All
     More                             6%                 6%                          6%                       6%
     Less                             1%                 2%                          1%                       1%
     About the same                  41%                37%                         39%                      40%
     Not Applicable                  52%                56%                         53%                      53%


45. Does your LHA currently contract out more, less, or about the same amount of services (other than
    property management) than it did before the Quality Housing and Work Responsibility Act? (Mark only
    one response)
            Response                Small            Medium                       Large                      All
     More                            15%                15%                         13%                      15%
     Less                             1%                 2%                          4%                       2%
     About the same                  55%                59%                         69%                      58%
     Not Applicable                  28%                24%                         14%                      25%

 a
     The 95% confidence interval exceeds +/- 10% of the estimate.


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           Appendix III
           Survey Results of Housing Agencies




     46. To what extent, if any, do the following financial challenges affect the operation of your LHA? (Mark
         only one response in each row)
                                                         Some or Moderate    Great or Very Great
                                   Little or No Extent                                                  Not Applicable
         Challenge                                            Extent               Extent
                                  Small Med Lrg     All Small Med Lrg   All Small Med     Lrg   All Small Med    Lrg     All
a)   Technical difficulty
     transmitting financial       28% 29% 27% 29% 46% 45% 47% 46% 21% 23% 23% 22%                     4%    3%    3%     3%
     data to HUD
b)   Inability to collect rents
     from tenants in a timely     51% 32% 34% 43% 30% 34% 41% 33%             4%    9%    8%    6% 14% 25% 17% 18%
     fashion
c)   Decreasing revenue from
     vacant units
                                  37% 34% 34% 35% 35% 30% 34% 34% 13% 13% 14% 13% 15% 24% 17% 18%
d)   Increasing energy costs       9%   7%    8%    8% 50% 44% 42% 47% 30% 31% 39% 31% 11% 19% 12% 13%
e) Increasing general
   maintenance expense
                                   9%   5%    8%    8% 53% 48% 42% 50% 23% 22% 34% 24% 15% 24% 15% 18%
f) Increasing use of capital
   funds as “contingency
   fund” for expenses other       35% 31% 22% 32% 29% 28% 38% 30%             7% 10% 20% 10% 28% 31% 20% 28%
   than those related to
   property
g) Inability to obligate
   capital funds for
   modernization within           55% 60% 69% 58% 17% 11% 10% 14%             5%    1%    3%    3% 23% 28% 19% 24%
   HUD’s 24-month
   timeframe
h) Inability to spend capital
   funds for modernization
   within HUD’s 48-month
                                  61% 64% 69% 63% 11%         8% 10% 10%      5%    1%    3%    4% 23% 27% 19% 24%
   timeframe
i) Inability to hire needed
   staff due to lack of           40% 37% 32% 38% 28% 36% 45% 32% 20% 20% 19% 20% 12%                       7%    4%     9%
   funding
j) Insufficient financial
   resources
                                  38% 23% 24% 32% 33% 45% 39% 38% 21% 26% 34% 24%                     8%    6%    3%     7%
k) Changes in operating
   subsidy
                                  23% 13% 10% 18% 39% 38% 27% 37% 26% 34% 49% 31% 13% 15% 13% 13%
l) Cost of consultants,
   accountants, and CPAs
                                  25% 34% 40% 30% 46% 42% 45% 45% 24% 20% 11% 21%                     4%    5%    4%     4%
m) Insurance premiums for
   developments
                                  11%   7%    9% 10% 34% 31% 28% 32% 39% 40% 48% 40% 16% 22% 15% 18%
n) Cost standards because of
   existing procurement and       24% 19% 19% 22% 41% 42% 41% 41% 17% 18% 24% 18% 18% 21% 16% 18%
   contracting rules
o) Supplies/services that
   must be procured rather
   than bought locally with
                                  33% 34% 31% 33% 32% 34% 42% 34% 15% 10% 14% 13% 19% 21% 13% 19%
   purchase orders
p) Lead-based paint and
   asbestos abatement
                                  48% 44% 33% 45% 22% 27% 40% 26% 10% 13% 18% 12% 21% 16%                         9% 18%
q) Costs of lawsuits and
   litigation
                                  56% 54% 38% 53% 11% 19% 37% 17%             4%    8% 15%      7% 29% 19%        9% 23%
r)   Other (specify): _____                                       Percentages not shown




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           Page 61                                                             GAO-04-19 Small Public Housing Agencies
     Appendix III
     Survey Results of Housing Agencies




47. Please use the space below to provide any additional comments.

                      <<OPEN-ENDED COMMENTS – NOT SHOWN >>




                                                                     GAO-04-19 Small Public Housing Agencies




     Page 62                                                          GAO-04-19 Small Public Housing Agencies
Appendix IV

Summary of 18 Reforms Contained in GAO’s
Survey of Public Housing Agencies                                                                                                      Appendx
                                                                                                                                             iIV




Reform                                 Effective Date                     Summary of reform
Fungibility of Capital and Operating   10/21/1998                         Effective upon the date of enactment, allows non-
Funds                                                                     troubled housing agencies with less than 250 public
                                                                          housing units the full flexibility of using capital and
                                                                          operating funds interchangeably. Effective 10/01/99,
                                                                          allows larger agencies to use 20 percent of the capital
                                                                          fund for eligible activities under the operating fund.
Minimum Rent Requirements              This reform was enacted on a       Provides that a public housing agency may establish a
                                       temporary basis in 1996 but made   minimum rental amount that residents must pay.
                                       permanent by QHWRA’s enactment     Housing agencies may set minimum monthly rental
                                       on 10/21/1998.                     amounts of not more than $50.
Repeal of Federal Preferences          This reform was enacted on a       Repeals the mandatory preferences for applicants
                                       temporary basis in 1996 but made   involuntarily displaced, living in substandard housing, or
                                       permanent by QHWRA’s enactment     paying more than 50 percent of family income for rent.
                                       on 10/21/1998.                     Agencies may now set working households as their
                                                                          highest priority.
Flat Rent Requirement                  Effective 10/1/1999                Gives public housing residents the choice of either
                                                                          paying rent based on their income (up to 30 percent of
                                                                          the adjusted income) or paying a flat rent based on the
                                                                          rental value of the unit. The previous system for setting
                                                                          public housing rent created a disincentive for
                                                                          households to add to their earnings because rent
                                                                          increases resulted from each additional dollar earned.
Five-Year Plan                         Effective 10/1/1999                Creates a public housing agency (PHA) plan
                                                                          requirement intended to serve as an operations,
                                                                          planning, and management tool for housing agencies.
                                                                          This reform requires a 5-year plan that includes a
                                                                          mission statement for serving the needs of low-income
                                                                          and very low-income families in the agency’s jurisdiction
                                                                          and a statement of goals and objectives to serve the
                                                                          needs of those families.
Annual Plan                            Effective 10/1/1999                In addition to a 5-year plan, agencies are required to
                                                                          prepare an annual plan. The annual plan must include
                                                                          information relating to the upcoming fiscal year, such as
                                                                          a statement of low-income and very low-income housing
                                                                          needs in the community; how the PHA intends to
                                                                          address these needs; a statement of financial resources
                                                                          and their planned uses; and the PHA’s general
                                                                          operating policies.
Physical Inspections                   Effective 10/1/1999                Requires agencies to annually inspect their public
                                                                          housing units. Public housing must be maintained in a
                                                                          condition that complies with standards that meet or
                                                                          exceed federally established housing quality standards.




                                             Page 63                                       GAO-04-19 Small Public Housing Agencies
                                       Appendix IV
                                       Summary of 18 Reforms Contained in GAO’s
                                       Survey of Public Housing Agencies




(Continued From Previous Page)

Reform                           Effective Date                      Summary of reform
Resident Member on Board         Effective 10/1/1999                 Requires that the board of directors of a PHA include at
                                                                     least one member who is directly assisted by the PHA
                                                                     and who may be elected by the residents, except for
                                                                     agencies (1) required by law to have a salaried, full-time
                                                                     board of directors or (2) that have less than 300 public
                                                                     housing units, where residents do not express an
                                                                     interest in serving.
Resident Advisory Board          Effective 10/1/1999                  Requires that agencies consult with a resident advisory
                                                                      board in developing their 5-year and annual plans.
                                                                      Agencies must ensure that the board is representative
                                                                      of residents served by the agency.
Resident Surveys                 Effective 1/11/2000                  Requires HUD to obtain information on the extent to
                                                                      which residents are involved in the administration of
                                                                      public housing.
Deconcentration                  Effective 10/21/1998                 Prohibits housing agencies from concentrating very
                                                                      low–income families in public housing development
                                                                      projects or certain buildings within a development. A
                                                                      PHA must submit with its annual plan an admissions
                                                                      policy to provide for deconcentration of poverty by
                                                                      bringing higher income tenants into lower income
                                                                      projects and lower income tenants into higher income
                                                                      projects.
Income Targeting                 Effective 10/1/1999                  Mandates that at least 40 percent of households in
                                                                      public housing have incomes at or below 30 percent of
                                                                      the area median income and that remaining
                                                                      households in public housing must be at or below 80
                                                                      percent of the area median income. For Housing
                                                                      Choice Voucher units, not less than 75 percent of new
                                                                      households must have incomes at or below 30 percent
                                                                      of the area median income.
Income Disregard                 Effective 10/1/1999                  Establishes mandatory exclusions in determining
                                                                      adjusted income. For public housing only, permits
                                                                      agencies to establish other income exclusions.
Site-Based Waiting Lists         Effective 10/1/1999                  Permits agencies to establish site-based waiting lists for
                                                                      admissions to public housing projects. Site-based
                                                                      waiting lists would allow applicants to apply directly at or
                                                                      otherwise designate the project or projects in which
                                                                      they seek to reside. Procedures must be in compliance
                                                                      with applicable civil rights laws. Also, agencies must
                                                                      fully disclose to each applicant any option available in
                                                                      the selection of the project in which to reside.
Pet Policy                       Effective 10/1/2000                  Allows residents to have one or more common
                                                                      household pets, subject to the reasonable requirements
                                                                      of the PHA. In particular, agencies may prohibit pets
                                                                      that are classified as dangerous and prohibit pets in
                                                                      certain kinds of buildings or developments. Also,
                                                                      residents must keep their pets responsibly.




                                       Page 64                                         GAO-04-19 Small Public Housing Agencies
                                                  Appendix IV
                                                  Summary of 18 Reforms Contained in GAO’s
                                                  Survey of Public Housing Agencies




(Continued From Previous Page)

Reform                                      Effective Date                        Summary of reform
Community Service Requirement               Effective 3/29/2000. This requirement Requires every adult resident of public housing to
                                            was suspended in fiscal year 2002 but perform 8 hours of community service each month or
                                            reinstated in fiscal year 2003.       participate in a self-sufficiency program for at least 8
                                                                                  hours every month. This requirement does not apply to
                                                                                  elderly persons, disabled persons, persons already
                                                                                  working, persons exempt from working under state
                                                                                  welfare-to-work programs, or persons receiving
                                                                                  assistance under state programs that have not been
                                                                                  found to be in noncompliance with such a program. A
                                                                                  PHA must determine compliance with the public
                                                                                  housing community service requirement once a year,
                                                                                  30 days before the expiration of a resident’s lease.
Merger of Housing Choice Certificate        Effective 10/1/1999                    Requires the merger of the Section 8 certificate and
and Voucher Programs                                                               voucher programs into a new program called the
                                                                                   Housing Choice Voucher program. The new vouchers
                                                                                   have features of the certificate and old voucher
                                                                                   programs, plus new requirements.
Rent Burden Limits for Voucher              Effective 10/1/1999                    Requires that a housing choice voucher household not
Program                                                                            pay more than 40 percent of its income for rent when
                                                                                   the family first receives the subsidy in a particular unit.
                                                                                   This limitation does not apply after the family has been
                                                                                   in the unit for a year.
Source: HUD Directives and QHWRA Notices.




                                                  Page 65                                           GAO-04-19 Small Public Housing Agencies
Appendix V

GAO Contacts and Staff Acknowledgments                                                           Append
                                                                                                      x
                                                                                                      i
                                                                                                      V




GAO Contacts      David G. Wood (202) 512-8678
                  Charles E. Wilson, Jr. (202) 512-6891



Staff             In addition to the individuals named above, the following individuals made
                  significant contributions to this report: Johnnie Barnes, Mark Braza, Emily
Acknowledgments   R. Chalmers, Rudy Chatlos, Mark Egger, Gloria Hernandez-Saunders,
                  Jamila L. Jones, Beth Koviach, John McGrail, Marc Molino, Jobenia Odum,
                  Roberto Piñero, Mark Ramage, Terry Richardson, and Caroline Villanueva.




(541022)          Page 66                                  GAO-04-19 Small Public Housing Agencies
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