oversight

Homelessness: Action Needed to Make Federal Surplus Property Program More Effective

Published by the Government Accountability Office on 1990-10-09.

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

        GAO

-.--_   --   .   .   .   --_..-_.l”ll_l__._~-l--.__-.-
                                                                     -1_1




                                                                            HOMELESSNESS
 Oc*toEwr                                                IWO
                                                          . .




                                                                            Action Needed to Make
                                                                            Federal Surplus
                                                                            Property Program
                                                                            More Effective


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                                                                RMTRI~--Not           to be released outside the
                                                                General Accounting Office unless specifically
                                                                approved by the Office of Congressional
                                                                Relations.
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                                                                                     ,   1
      United States
GAO   General Accounting Office
      Washiugtou, D.C. 20548

      Resources, Community, aud
      Economic Development Division

      B-236486

      October 9,lQOO
      The Honorable John Glenn
      Chairman, Committee on
        Governmental Affairs
      United States Senate
      The Honorable Cardiss Collins
      Chairwoman, Government Activities
        and Transportation Subcommittee,
      Committee on Government Operations
      House of Representatives
      This report respondsto your requests of March 23,1989, to review how surplus federal
      property is made available for use by the homelessunder title V of the McKinney Act.
      Specifically, the report addresses(1) barriers to making the program work and (2) actions
      taken or being taken to improve the process.
      As agreed with your offices, unless you publicly announceits contents earlier, we plan no
      further distribution of this report until 30 days from the date of this letter. At that time, we
      will send copiesto the Secretariesof Health and Human Services,Housing and Urban
      Development, and Defense;the Administrator of the General ServicesAdministration; the
      Executive Director of the Interagency Council on the Homeless;the Director, Office of
      Managementand Budget; and other interested parties. We will also make copies available to
      others upon request.

      Our work was conducted under the direction of John M. Ols, Jr,, Director, Housing and
      Community Development Issues,(202) 276-6626.Other major contributors are listed in
      appendix IV.




      Assistant Comptroller General
                                                                                         ,
Executive Summary


             The Congress,in title V of the Stewart B. McKinney HomelessAssistance
Purpose      Act, enacted on July 22, 1987, attempted to provide shelter and services
             to the homelessby allowing federal property to be leased for uses such
             as emergencyshelters and food kitchens. By September 1988 only a few
             properties had been made available to the homeless,and advocatesfor
             the homelesssued the responsible federal agenciesbecauseof their
             slownessin implementing title V. The U.S. District Court, District of
             Columbia, issued several court orders to force federal agenciesto begin
             the processof making federal properties available to the homeless.
             Becauseof their concern about the federal agency responseto making
             federal properties available, the Chairman of the SenateCommittee on
             Governmental Affairs and the Chairwoman of the Government Activi-
             ties and Transportation Subcommittee,HouseCommittee on Govern-
             ment Operations, asked GAO to evaluate (1) barriers to making title V
             work and (2) actions taken or being taken to improve the process.In
             addition, GAO reviewed federal leaseswith assistanceproviders to deter-
             mine whether the leasesexposethe government to liability and costs.

             To bring about compliance with the McKinney Act, the District Court set
Background   forth specific steps to be followed by all federal landholding agencies.
             All federal landholding agenciesmust provide the Department of
             Housing and Urban Development (HUD) with inventories of their surplus
             properties on a quarterly basis. HUD then determines whether any of
             those properties are suitable for use by the homeless.HUD publishes the
             results in the Federal Register and notifies the agencieswhich proper-
             ties were found suitable. Individuals or organizations providing assis-
             tance to the homelessmust express interest to the Department of Health
             and Human Services(HHS) on properties listed in the Federal Register
             within 30 days of the notice, and the agenciesmust report to HUD
             whether or not they will make the property available for application by
             providers within that same30 days. At the sametime, someproperties
             may still require screeningfor use by other federal agencies.Regardless,
             assistanceproviders must complete their application within 90 days of
             the Federal Register notice for someproperties, and HHS must decide on
             completed applications within 16 days of receipt.
             According to HUD officials, from January to June 1990 HUD reviewed
             7,666 buildings and parcels of land and found about half suitable for
             homelessuse. However, becauseof either their poor condition or remote
             location, many of these properties may not be usable. By June 16,1990,
             28 properties (valued by the General ServicesAdministration (GSA) at


             Page 2                         GAO/RCED-9142 Federal Property for the Homeleas
                           Executive Summary




                           about $49 million) had been leasedor had permits issued for their use,
                           and another 10 had leasespending for use as transitional housing
                           projects, emergencyshelters, multi-service centers, and facilities to feed
                           the homeless.In the future, more federal properties will be made avail-
                           able, including at least 10,000 Department of Defense(DOD) military
                           base closure properties.

                           Although progress has been made in making federal property available
Results in Brief           for use by the homeless,problems remain that hinder the effective
                           implementation of title V. Specifically, properties are identified in the
                           Federal Register as suitable for homelessuse before screeningfor fed-
                           eral need is completed. As a result, assistanceproviders are misled and
                           may be applying for properties that are not available. In addition, assis-
                           tance providers arenot satisfied with the current method of publicizing
                           federal properties becausemany providers do not have easy accessto
                           the Federal Register. In response,GSA and HUD have developed addi-
                           tional methods of publicizing federal properties, such as sending notices
                           directly to known interested assistanceproviders. .
                           Becausethe McKinney Act authorizes only the leasing of federal proper-
                           ties and not transfers of property title or donations, surplus federal
                           property may be of limited use to assistanceproviders. Someassistance
                           providers told GAO that they cannot afford to renovate these properties
                           or obtain loans to cover renovation costs becauseleasedproperty cannot
                           be used as loan collateral. These providers stated that allowing federal
                           agenciesto donate the properties in somecases,instead of leasing them,
                           would enable assistanceproviders to get loans.
                           Federal leasesused for facilities for the homelessmay exposethe gov-
                           ernment to liability. Also, local jurisdictions may seek compensation for
                           the additional costs incurred (such as emergencyservicesfor shelter
                           residents) associatedwith nongovernment use. Changesin the leases
                           could minimize these potential problems.


Principal Findings

Property Identification    The procedure for identifying federal properties as suitable for use by
ProcessCan Be Misleading   the homelesswas established by title V and subsequently interpreted by
                           the US, District Court. As a result, HUD lists properties as suitable in the


                           Page 8                            GAO/RCED-Bl93 Federal Property for the Homeless
                              llxemmw summary




                              Federal Register before the individual agenciesdeclare them to be avail-
                              able for nonfederal use. Thus, assistanceproviders may be applying for
                              federal property that is not available for public use. Agency officials
                              agreethat federal need should be determined before providers are noti-
                              fied that federal properties are suitable.


Assistance Providers          Another barrier to making federal properties available has been inade-
Dissatisfied with Publicity   quate program publicity. About 80 percent of the assistanceproviders
                              we surveyed suggestedthat other methods of publicizing federal surplus
for Properties                properties are needed.For example, someassistanceproviders told GAO
                              that locating federal property listed as suitable in the Federal Register
                              was difficult becausethe notices often contained inaccurate and incom-
                              plete addresses.In addition, someproviders said that they cannot afford
                              to subscribe to the Federal Register or that they are often unaware of
                              when to check for property listings. HUDofficials are taking steps to
                              improve the property information printed in the notices, such as
                              including complete addresses.In addition to Federal Register notices,
                              GSAand HUD are providing additional publicity for federal properties,
                              such as sending property notices directly to state and local authorities
                              for further distribution to assistanceproviders.


Providers Believe Leasing     Assistance providers told GAOthat the title V program limits their ability
Properties Limits             to arrange financing to renovate existing buildings or build new ones
                              becausethey are able only to leasefederal property. If the property
Program’s Potenti .a1         requires substantial investment, the provider has two problems: diffi-
                              culty in obtaining a loan on leasedproperty and the likely loss of the
                              investment when the leaseexpires and possessionof the property
                              reverts to the federal government.
                              To overcomethis problem, someproviders advocate a gift or donation of
                              the property by the federal government, as is done in someHHShealth
                              programs. However, donation of federal property needsto be balanced
                              against the monetary worth of the property to the federal government.
                              Also, donating property requires legislative change.


LeasesMay Expose the          GAOreviewed someof     the leasesnow in use for McKinney Act property
Government to Liability       and found that they exposethe federal government to potential liability
                              from, among other things, personsharmed by physical defects of the
and Costs *                   properties. In addition, local jurisdictions may seek compensation for
                              the additional costs incurred (such as for emergencyservices) associated


                              Page 4                           GAO/RCEDB1-33 Federal Property for the Homeless
   .


                       Executivesummary




                       with changing the federal property to nongovernment use becausethe
                       leasesdo not state that any chargesor fees required by state and local
                       governments are the sole responsibility of the tenant. The leasescould
                       be amendedto ensure that the federal government’s interests are as
                       fully protected as possible.

                       GAOrecommendsthat       the Congressamend title V, section 501, of the
Recommendationto       McKinney Act to require that properties suitable for use by the home-
the Congressand        less are publicized in the Federal Register only after they are determined
Matter for             to be available. Becauseof the difficulties assistanceproviders say they
                       have in financing the renovation or construction of facilities, the Con-
Congressional          gress also may wish to consider amending the McKinney Act to allow
Consideration          transferring ownership of somesurplus federal properties to assistance
                       providers for use by the homeless,However, the decision to donate fed-
                       eral property needsto be balanced against the monetary worth of the
                       property to the federal government.

                       GAOrecommendsthat     the Secretariesof Defenseand HHSand the Admin-
Recommendation to      istrator of GSAreview and amend as necessarytheir leasing or permit-
the Secretaries of     ting instruments for properties to be leasedunder title V of the
Defense and HHS and    McKinney Act to ensure that the federal government is protected, as
                       much as possible, from liability and costs associatedwith nongovern-
the Administrator of   ment use, GAOis making additional recommendationsin this report to
GSA                    improve the implementation of title V.


                       GAOdiscussedthe information in this report with officials from HUD,GSA,
Agency Comments        HHS,DOD,and the Interagency Council on the Homeless.These officials
                       generally agreed with the principal findings and conclusions.Their com-
                       ments have been incorporated throughout the report where appropriate.
                       However, as requested,GAOdid not obtain official agency commentson
                       this report.




                       Page 5                          GAO/RCED-91-33 Federal Property for the Homeless
                                                                                                        ,
Contents


Executive Summary                                                                                       2

Chapter 1                                                                                               8
Introduction              Background
                          Assistance Providers Sueto Force Implementation of
                                                                                                        8
                                                                                                        9
                              Title V
                          ProcessEstablished by Title V and Court Orders                              10
                          Court Orders Result in Properties for HomelessUse                           15
                          Many Federal Properties May Not Be Usable                                   16
                          Objectives,Scope,and Methodology                                            18

Chapter 2                                                                                             21
Barriers Still Exist to   Current ProceduresHave Hindered Program Success                             21
                          Assistance Providers Dissatisfied With Federal Property                     25
Making Federal                Publicity
hOped$   Available for    ComprehensiveGuidanceWould Help Implement Title V                           27
the Homeless              Leasing Limits the Program’s Potential                                      27
                          Conclusions                                                                 29
                          Recommendationto the Congress                                               30
                          Matters for Consideration by the Congress                                   36
                          Recommendationsto the Administrator of GSA                                  30
                          Recommendationto the Secretariesof HUD and HHS and                          31
                              the Administrator of GSA

Chapter 3                                                                                             32
LeasesMay Expose          Federal Government Could Be Exposed to Liability for
                             LeasedProperty
                                                                                                      32
the Government to         LeasesDo Not Specify Who Pays for Certain Costs                             34
Liability and Costs       Conclusions                                                                 36
                          Recommendationsto the Secretariesof HHS and Defense                         36
                              and the Administrator of GSA

Appendixes                Appendix I: Federal Landholding Agenciesand Number of                       38
                             Federal Properties Leasedor Permitted as of June 16,
                             1990
                          Appendix II: Federal Properties Applied for And/Or                          39
                             Leasedor Permitted for HomelessUse as of June 16,
                             1990
                          Appendix III: Other Federal Property Programs That Can                      42
                             Help the Homeless


                          Page 6                         GAO/RCED-D1-83 Federal Property for the Homeless
          Content8




          Appendix IV: Major Contributors to This Report                              44

Figures   Figure 1.1: The Processfor Converting ExcessFederal                         12
              Property to HomelessUse
          Figure 1.2: The Processfor Converting Under- And                            14
              Unutilized Federal Property to HomelessUse
          Figure 1.3: Converted Military Barracks Moved From Fort                     17
              Sill to Lawton, Oklahoma
          Figure 1.4: Interior View of Converted Military Barracks                    18
              in Lawton, Oklahoma




          Abbreviations

          COE        US. Army Corps of Engineers
          DOD        Department of Defense
          DOT        Department of Transportation
          FEhfA      Federal Emergency ManagementAgency
                     Federal Housing Administration
                     Farmers Home Administration
          GAO        General Accounting Office
          GSA        General ServicesAdministration
          HI-IS      Department of Health and Human Services
          HUD        Department of Housing and Urban Development
          RTC        Resolution Trust Corporation
          VA         Department of Veterans Affairs


          Page 7                         GAO/RCED-91-93 Federal Property for the Homeless
Chapter 1

Intmkction


               The Stewart B. McKinney HomelessAssistanceAct (P.L. 100-77,July
               1987), as amended,was enacted to respond to a crisis facing a growing
               number of individuals and families in the United States-the lack of
               shelter and other supportive services.A major purpose of the McKinney
               Act is to use public resourcesand programs to meet the needsof the
               nation’s homeless.Title V of the act addressesthis purpose by allowing
               organizations providing assistanceto the homelessan opportunity to
               leasesurplus federal property for servicessuch as emergencyshelters
               and facilities for feeding the homeless.

               The processof identifying and leasing federal properties to those who
Background     provide servicesto the homelessis set out in title V, section 601, of the
               McKinney Act. This processwas further defined by the U.S. District
               Court, District of Columbia, in a series of court orders.

               The properties available under title V are referred to generally as “sur-
               plus federal properties,” a phrase that covers four specific categoriesof
               federal properties: (1) excess,(2) surplus, (3) underutilized, and (4) unu-
               tilized. Generally, the excessand surplus properties are under the Gen-
               eral ServicesAdministration’s (GSA)jurisdiction and the under- and
               unutilized properties are under the jurisdiction of the landholding agen-
               cies (see app. I). Excessand surplus are defined by statute as follows:
             . Excessproperty is property that a federal agency no longer needsto
               carry out its responsibilities. Control of the property remains with the
               landholding agency while GSAdetermines if any other federal agency
               will use the property-this is called federal screening.Excessproperty
               can be declared surplus.
             . Surplus property is property that no federal agency claims under the
               federal screeningprocess.GSA'Sresponsibility is to disposeof it (1) by
               direct sale, lease,or donation or (2) through assignmentto another
               agency for leasing or donation.
               The terms under- and unutilized are defined as follows:
             . Underutilized property is property that is not being fully used
               (underused) but which is retained by the landholding agency for inter-
               mittent or future use.
             . Unutilized property is property that is not being used (unused) but
               which is retained by the agency for intermittent or future use.




               Page 8                           GAO/RCED-91-99 Federal Property for the Homeless
                       chapter 1
                       Introduction




Assistance Providers   Between the passageof the McKinney Act in July 1987 and September
                        1988, only a few properties had been made available to the homeless
Sue to Force           and little action had been taken by federal agenciesto implement the
Implementation of      program, As a result, organizations representing homelesspersons
                       brought suit against the agenciesresponsible for implementing title V
Title V                and two major landholding agencies.’The organizations claimed that the
                       responsible federal agencieshad failed to implement title V and that
                       organizations providing assistanceto the homelesswere unable to obtain
                       federal property under the statute. The district court found that the fed-
                       eral agencieshad failed to properly implement the act and issued a pre-
                       liminary injunction on September30, 1988, prohibiting the sale or
                       disposal of property eligible for use under section 601 of the McKinney
                       Act until the defendants complied with section 601’s terms.2

                       On December12,1988, the court issued a permanent injunction
                       requiring the landholding agenciesto produce by December23,1988,
                       lists of currently under- and unutilized property that they owned, con-
                       trolled, or managed.The court ordered detailed steps to be taken by HUD,
                       GSA,HHS,and the other federal landholding agenciesto comply with title
                       V before they disposedof any property. In a separate opinion, the court
                       noted that only 12 properties had been identified by the federal govern-
                       ment for possible use by the homelesssince passageof the McKinney
                       Act 17 months previously. On October 6,1989, GSAissued temporary
                       regulations that incorporate the court’s orders outlining procedures to
                       be followed for excessand surplus property under the act.

                       Between January 1, 1989, and May 22,1989, neither HHSnor the land-
                       holding agencieswould accept assistanceproviders’ applications for
                       under- and unutilized federal property. Agency officials could not agree
                       on which agency would be responsible for accepting and reviewing
                       applications for these properties. On May 22,1989, the court ordered
                       HHSto receive and processall applications for the title V program
                       regardlessof the category of the property.




                       ‘The defendants were GSA, and the Departments of Health and Human Services (HHS), Housing and
                       Urban Development (HUD), Veterans Affairs (VA), and Defense (DOD).
                       2National Coalition for the Homeless v. Veteran’s Administration, 696 F. Supp. 1226 (D.D.C. 1988).



                       Page 9                                      GAO/RCED-9133 Federal Property for the Homeless
                        Chapter1
                        Intraduction




                        Title V of the McKinney Act, as interpreted by the court and in subse-
ProcessEstablished by   quent agency regulations, assignsseparate administrative responsibili-
Title V and Court       ties to the Secretariesof HI-IS and HUD,the Administrator of GSA,and the
Orders                  heads of all federal landholding agencies.HUDmust canvas all federal
                        landholding agencies,on a quarterly basis, to obtain a list of properties
                        identified as under- and unutilized. In general, GSAdoesthe same for
                        surplus and excessproperties. HUDthen determines whether each prop-
                        erty is suitable for use in assisting homelesspeople and publishes the
                        results in the Federal Register.3At the sametime as the Federal Register
                        notice is published, HUD notifies the appropriate landholding agencies,
                        including GSA,which properties from their inventories have-beenlisted
                        as suitable in the Federal Register. Assistanceoroviders have 30 davs
                        from the publication date to notify HHSof their interest in the prope-&es.
                        Then, they must send their completed applications to HHS(not later than
                        90 days from the publication date for surplus property). HHSis respon-
                        sible for recording all expressionsof interest in publicized properties
                        and completing all action within 16 days of receipt of a completed appli-
                        cation. Additional time to file an application may be granted by the
                        landholding agency and HHS.


Excess and Surplus      Under the Federal Property and Administrative ServicesAct of 1949, as
Property                amended,if a federal agency no longer needsa property, it shall declare
                        the property excessand report it to GSAfor disposal. GSA,pursuant to
                        title V of the McKinney Act, then sendsHUD information on the property
                        so that HUDcan determine its suitability for the homeless.When HUD
                        determines a property suitable, GSA immediately sendsout notices that
                        the property may be applied for by assistanceproviders even though
                        federal screeningmay not have been completed. GSA screensfor other
                        federal agency needsat the sametime providers are applying to HHSfor
                        the property. If there is no federal need,GSA declaresthe property sur-
                        plus. This makes the property available for sale on the open market or
                        public benefit conveyance(which is either a leaseor transfer of title at
                        little or no cost, including leasing to assistanceproviders under the
                        McKinney Act).
                        Under title V, HHSis responsible for processingall assistanceproviders’
                        applications and for leasing surplus property to successfulapplicants. If

                        3HUD’s criteria for suitability, developed by the Secretary of HUD in consultation with the Secretary
                        of HHS and the Adminiitrator of GSA, are generally exclusionary, meaning that if the property is not
                        obviously unsafe and not in a restricted area, it is suitable. A property may be excluded because it is
                        (1) in an isolated area without access by road, (2) contaminated, (3) within 2,000 feet of flammable or
                        explosive materials, or (4) within an airport runway.



                        Page10                                       GAO/RCED-Bl-X3
                                                                                 FederalPropeztyfor the Homeleaa
Chapter 1
rntroductlon




HHSapproves an application    from an assistanceprovider for a property,
it requests an assignmentof the property from GSA.If there is more than
one applicant for public benefit conveyance,GSAdecidesthe highest and
best use of the property, giving priority consideration to assistance
providers for the homeless.If GSAassignsthe property requested, HHS
negotiates a leasewith the successfulapplicant. (Seefig. 1.1.) Surplus
property is more desirable than under- and unutilized property because
the leasescan be for lo-year terms with a renewal option of 10 years.




Page 11                         GAO/RCISD-91-99 Federal Property for the Homeless
                                                                                                                                 .



                                                   Chapter 1
                                                   Introduction




Flguro 1.l: The Procesr for Converting Excess Federal Property to Homeless Use
                                                                                                                                       *
           Landholding agency reports property excess to GSA                                    GSA performs federal screening
I                                                                                       I


                                                                          6
I       GSA reports property to HUD for suitabllily determination




               HUD determines suitabillty within 2 months




      HUD publishes lists of suitable property in Federal Reg&




     Assistance provkfers notify HHS of their intent to apply within 30
                   days of the Federal Regispkr notfce
                                                                                        I
                                                                                            Another federal agency wants property so
                                                                                                    property not available, or
                                                                                               GSA declares property surplus and
    Assistance provident apply not later than 90 days after the Federal                              available for public use
                             &gj&t     notice




     HHS accepts or rejects completed application within 15 days of
                               receipt


                                                                                        ,
                                                                                               For surplus property, GSA perfoms
            HHS requests assignment of the property from GSA                                        second screening among
                                                                          * -4                         public-benefit users




              HHS negotiates lease with successful applicant                  4               GSA approves of assignment to HHS




                                                    Page 12                       GAO/RCED91-33 Federal Property for the Homeless
                        chapter 1
                        In~uctlon




Under- And Unutilized   From the date that the landholding agenciesare notified of HUD’Ssuita-
Property                bility decisionson their under- and unutilized properties, each agency
                        has 30 days to notify HUDwhether any of the suitable properties will be
                        made available on an interim basis for use as facilities to assist the
                        homeless.After HUD finds the agency properties suitable, the agency
                        must declare whether they will be made available or state its reason for
                        not doing so. An agency’sdetermination on whether a property will be
                        made available is final.
                        From the time that the landholding agenciessubmit properties to HUD
                        for the suitability review until 30 days after the suitability notice is
                        published in the Federal Register, the agenciesmust withhold the prop-
                        erty from any other use or disposition. If HHS receivesan application or
                        a notice of intent to apply during that time, the property continues to be
                        withheld from sale or other disposition until HI-IS acts on the application.
                        If HHS approves an application and the agency determines that it will
                        make the property available, then the landholding agency negotiates a
                        leaseor permit with the successfulapplicant for a specified time period
                        (seefig. 1.2.), which is likely to be much shorter than in the caseof
                        surplus property.




                        Page15                           GAO/~91-88     FederalPropertyfor the Homele~
                                                              Chapter 1
                                                              lntroductton




Flgure 1.2: The Process for Converting Under- And Unutilized Federal Property to Homeless Ure


            Landholding agency reviews It0 properties annually to determine
                                     utilization




           Landholdlng agenoy rends HUD a list of all under- and unutilized
                   properties quarterfy for suitability determination
I                                                                               I



1   ...-   -...-_-...-   HUD
                          ,,. . determines
                                   . ..-   suitability
                                            .          within 2 month6




                   HUD publishes suitable                                                HUD   notifies   the landholding agency of the suitable
                                                                                                                 pKipWti66
                                                                                                                                        .




           A~slstance provkfers notify HHS of their intent to apply within 30
                         day6 of the Federal Register notice
                                                                                               or to exce86 the properly to GSA (refer to



                             Asehitance provider6 apply to HHS




            HHS acceptsor rejects completed application within 15 days of




                 HHS notifies the landholding agency of it6 decision on the              If the landholding agency decide6 to make the
                                        appliition                                  ’   property available, it negotiate6 a lease or permit
L          ---
                                                                                                   with the 6UCC666ft.d applicant




                                                              Page 14                   GAO/RCFD-W-33 Federal Property for the Homeless
                         Chapter 1
                         Introduction




                         Sincethe December1988 permanent injunction, HUDhas reviewed and
Court Orders Result in   publicized properties and providers have applied for and are using a few
Properties for           of these properties. According to HUD officials, from January to June
HomelessUse              1990 HUDreviewed 7,666 properties for potential use by the homeless
                         and found about 62 percent suitable.4Twenty-eight applicants have
                         leased and another 10 are in processof leasing 38 properties, valued by
                         GSAat about $49 million, as transitional housing, emergencyshelters,
                         and multi-service centers. Of the 38 properties, 27 are excessor surplus
                         and the remainder are under- and unutilized. Twenty-four of the 27
                         excessor surplus properties were leasedor permitted as of June 16,
                         1990. Two providers successfully applied for surplus federal property
                         but did not sign the leasebecausethey were given an alternative prop-
                         erty or money to withdraw their applications6
                         Sixteen different groups representing the homelesshave applied for
                         underutilized properties; 12 of the 16 applied for part of a single federal
                         office building in New York City. An entire floor of this building was
                         divided into smaller parcels to be used by the various approved appli-
                         cants, mostly for office space.Sevenof the applicants either have per-
                         mits or pending permits. The estimated costsof fixing up these offices,
                         where information was available, ranged from $10,000 to $240,000.As
                         of June 16,1990, four applicants for underutilized properties had leases,
                         sevenhad leasespending, two had been disapproved, and three had
                         withdrawn. (Seeapp. II.)




                         4This is not a cumulative number because HUD reviews the suitability of federal properties on a
                         continuous basksand thus some properties may be double-counted.
                         %i Bardane, West Virginia, a local provider applied for a surplus federal property. The lease applica-
                         tion went to HHS where it was approved. However, the City of Bardane wanted to purchase the
                         property from GSA for an industrial park. Before HHS asked GSA to assign the property to it in order
                         to lease to the assistance provider, GSA entered Into negotiations with the provider and the city.
                         Because the city offered the provider sufficient money to expand its existing shelter, the provider
                         accepted the offer and withdrew ita application for the property. The city then negotiated with GSA
                         to pay for the property directly.
                                                                                                \
                         In the other case, the provider also was a successful applicant with\HHS for a building in Providence,
                         Rhode Island. The state wanted the property, and the provider was offered another property by the
                         city in exchange for withdrawing its application. The assistance provider accepted the offer and the
                         state has successfully negotiated a purchase of the buikling with GSA.



                         Page 16                                      GAO/RCED-91-33 Federal Property for the Homeless
                                chapt.er1
                                Introduction




                      According to,HUD and other agency officials, as well as someproviders
Many Federal          we spoke to, someavailable properties listed as suitable are not usable.
Properties May Not Be The reasonswe were given include that (1) the cost to improve or reno-
Usable                vate someproperties exceedsthe money that can be raised or (2) the
                                property is so far away from other urban servicesprovided to the home-
                                less that transportation back and forth is impractical.
                                An agency official told us that it is impossible for HUDto determine
                                which available properties will meet the needsof providers and, there-
                                fore, it cannot limit the list of properties found suitable for the home-
                                less. Thus, it is likely that many properties currently listed as suitable
                                by HUDwill not be applied for becauseproviders cannot make use of
                                them.
                                However, the Department of Defense’smilitary base closureswill
                                increasethe number of properties that could be applied for by assis-
                                tance providers. Baseclosure property will be reviewed by HUD for suit-
                                ability and becomeeligible for application by assistanceproviders under
                                title V. Specifically, by the end of fiscal year 1996, DOD will close86
                                bases,partially close 6, and realign 54 others nationwide. Many of these
                                are in or near urban areas and, possibly, near large homelesspopula-
                                tions. Military family housing units could be particularly useful to the
                                homeless,and thousands of these units are expected to becomesurplus.
                                As of January 1990, a US. Navy official estimated that about 64
                                housing units in three states (California, Pennsylvania, and New York)
                                will becomesurplus property; a U.S. Air Force official estimated that
                                over 6,000 units in three states (California, Illinois, and Maine) will be
                                surplus; a U.S. Army official estimated that almost 5,000 units in about
                                17 states will becomesurplus.~Other military buildings and open land
                                also could be useful to assistanceproviders. Figures 1.3 and 1.4 show
                                military property that has been converted for homelessuse.




                                6The 17 states are California, Connecticut, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Mis-
                                sourl, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, Utah, Virginia, Washiin,
                                and Wisconsin.



                                Page 16                                      GAO/RCED-91-99 Federal Property for the Homeleas
Figure 1.3: Converted Military Barrack8
Moved From Fort 8111to Lawton,
Oklahoma




                                          Page 17   GAO/WED-91-88   Federal PmpertY for the Homeless
Figure 1.4: Interior View of Converted
IMilItary Barrack8 In Lawton, Oklahoma




                                         The Chairman of the SenateCommittee on Governmental Affairs and
Objectives, Scope,and                    the Chairwoman of the Government Activities and Transportation Sub-
Methodology                              committee, HouseCommittee on Government Operations,jointly
                                         requested on March 23, 1989, that GAOexamine the implementation of
                                         the provisions of title V of the McKinney Act. The requesters noted that
                                         a lawsuit had forced HUDto take the initial step of reviewing federal
                                         properties for their suitability for homelessuse. They expressedconcern
                                         that few properties had actually been leasedor permitted through the
                                         program since passageof the McKinney Act.
                                         As agreed with the requesters’ offices, our objectives were to evaluate
                                         (1) barriers to making title V work and (2) actions taken or being taken
                                         to improve the process.In addition, we reviewed the leasessigned by
                                         federal landholding agenciesas of September30, 1989, to determine
                                         whether the leasesexposethe government to liability and costs.




                                         Page 18                         GAO/WED-91-33 Federal Property for the Homeless
chapter 1
Introduction




To determine how title V, section 501, of the McKinney Act was being
implemented, we reviewed applicable regulations; the proceedingsof the
US. District Court, District of Columbia, related to title V; agency files;
and the act’s legislative history. We interviewed representatives from
several federal agencies,including HUD, HHS, GSA, DOD and its related ser-
vices, and the Interagency Council on the Homeless.We also interviewed
representatives of the National Governors’ Association and the National
Coalition for the Homeless,as well as individuals who attempted to
obtain or who contacted federal agenciesabout federal surplus
properties.
We conducted our review primarily at HUD headquarters in Washington,
DC., and at the headquarters of other federal agenciesinvolved with
implementing title V. We reviewed all applications for surplus property
received by HHS as of September30, 1989. We interviewed eight assis-
tance providers who applied for federal properties, and we also
reviewed documents from organizations that had applied for or con-
tacted a federal agency about surplus federal property.
In order to determine the sourcesof information by which organizations
were made aware of surplus federal properties, we conducted a tele-
phone survey of organizations or individuals identified in HHS records as
having sought information on properties involved in the title V process
from March 1988 through September 1989. To conduct the survey, we
drew a random sample of 222 out of 535 separate contacts made with
HHS by organizations interested in obtaining specific surplus federal
propertys7Of the 222 groups or individuals we called, we were able to
complete interviews for 132, yielding a responserate of about 60 per-
cent. All sample surveys are subject to sampling error. Sampling errors
define the upper and lower bounds of the estimates made from the
survey. Sampling errors for the estimates in this report were calculated
at the 95-percent confidence level; this meansthat 19 out of 20 times,
the sample survey procedure used would produce an interval capturing
the true value. All sampling errors for the estimates in this report were
calculated at the g&percent confidence level and were between 5.1 per-
cent and 6.5 percent. The results of this survey are discussedin chapter
2.


‘For purposes of the sample, a “contact” is any inquiry by an organization to HHS concerning a
property. Any organization can make multiple contacts by inquiring about more than one property.
For purposes of counting the number of contacts, each organization making an inquiry about a prop
erty was counted as one contact.




Page19                                      GAO/RCED-91-39
                                                        FederalPropertyfor the Homeless
chapter 1
Introdutztion




To determine whether leasesexposethe federal government to liability
and costs, we reviewed someleasesin effect at the time of our review.
Our review was conducted from April 1989 through July 1990 in accor-
dance with generally acceptedgovernment auditing standards. We dis-
cussedthe information in this report with HUD,GSA,HHS,and DOD
officials and officials of the Interagency Council on the Homeless,and
incorporated their comments as appropriate. In general, these officials
agreed with our principal findings and conclusions.However, as
requested, we did not obtain official agency comments on this report.




Page 20                        GAO/WED-91-22 Federal Property for the Homeless
Barriers Still l3xist to Making Federti property
Available for the Homeless

                               Although court orders succeededin getting federal agenciesto make fed-
                               eral properties available for use by the homeless,problems remain, such
                               as (1) having assistanceproviders apply for suitable federal properties
                               before it is known whether the properties are available for public use;
                               (2) inadequate publicity of available properties to assistanceproviders;
                               and (3) the lack of comprehensiveguidance on how to obtain federal
                               properties.

                               In addition, assistanceproviders told us that title V limits their ability to
                               arrange financing to rehabilitate .existing structures or to build new
                               structures becausethey are able only to leasethe federal property. They
                               stated that transfer of the title, or donation from the federal govern-
                               ment, would give them a better opportunity to obtain loans and grants
                               that could be used for renovation purposes or to build new structures.

                               Proceduresnow in use, as a result of the court order, to publicize suit-
Current Procedures             able federal properties for the homelessallow assistanceproviders to
Have Hindered                  apply for federal property that may not be available to the public
Program Success                becauseof a federal need. Further, GSA'Stemporary regulation regarding
                               excessand surplus property doesnot state when this property will be
                               made available to providers.


Lists of Suitable Properties   The procedures established pursuant to title V of the McKinney Act (and
Are Published Before the       as subsequently interpreted by the US. District Court, District of
                               Columbia) to identify federal properties for use in assisting the homeless
Properties Are Available       do not assure assistanceproviders that the properties they apply for are
                               actually available for use. Suitable property listings are published by
                               HUD in the Federal Register before the landholding agencies,including
                               GSA,decide whether there is a federal need for the properties or if they
                               will be made available for use by the homeless.Therefore, assistance
                               providers may apply for properties that are not available for public use,
                               and HHSmust review these applications even though the properties may
                               not becomeavailable to assistanceproviders.

                               HUD, HHS,GSA,and Interagency Council on the Homelessofficials agree
                               that availability of the federal properties should be determined by land-
                               holding agenciesbefore the property is publicized in the Federal Reg-
                               ister as suitable for use by the homeless.However, title V would have to
                               be amendedto allow such a procedure. In addition, there is a time limit
                               for determining availability on certain classesof federal properties but



                               Page 21                           GAO/RCED-91-93 Federal Property for the Homeless
                                  Burierr Still Erirrt to Making Federal
                                  Property Avallable for the Homeleas




                                  not others. A reasonabletime limit should be established for all federal
                                  Property.


Property Required to Be           Currently, assistanceproviders have 30 days from the time that a prop-
Held From Other Uses              erty is published in the Federal Register to notify HHS of their interest in
                                  the property. They must complete their application not later than 20
Until Applications Are            days from the original publication date. HHShas 16 days to accept or
Acted Upon                        reject the application. This processwas established in large part as a
                                  result of the December12,1988, permanent injunction (seech. 1). The
                                  court also required that the property be held from other usesfor at least
                                  30 days from publication in the Federal Register or until HHShas com-
                                  pleted action on the application. Currently, the agenciesare following
                                  the 30day hold period required by the court order.
                                  It is important to hold from other usesthose federal properties that
                                  have been applied for under title V until the application has been acted
                                  upon by HI-IS; otherwise, the properties could be disposedof through sale
                                  or by other means.


GSA’s Regulation on        GSA issued a temporary regulation on October 6, 1989, modifying its poli-
                           ties and procedures for making federal public buildings and other real
Application for Excess and properties available for homelessassistanceunder the McKinney Act.1
Surplus Property Is        The regulation states that when an agency reports excessproperty to
Unclear                    GSA that has not previously been reviewed for suitability, GSA will notify
                                  HUD and request a suitability  review. Following the sameprocedure
                                  applicable to other suitability determinations, HUD has 60 days to pub-
                                  lish its determination in the Federal Register; the 30-day time frame for
                                  expressionsof interest begins on the date that the property is listed in
                                  the Federal Register.
                                  The temporary regulation also applies to under- and unutilized proper-
                                  ties that had been reviewed by HUD for suitability and have subse-
                                  quently been declared excessby the landholding agency. The temporary
                                  regulation specifies that when GSA becomesaware that a landholding
                                  agency will “excess” property, GSA will notify assistanceproviders that
                                  have been identified by GSA,HHS,and HUD; state and local governmental
                                  units; persons who previously expressedinterest in the property; and

                                  ‘GSA’s temporary regulation will be in effect until October 7,199l. It applies to federal agencies that
                                  report excess property to GSA pursuant to the Federal Property and Administrative Services Act of
                                  1949.



                                  Page 22                                       GAO/RCED-91-99
                                                                                            Federal Property for the Homeless
BnrriermiWlEdmttoMaMngFeded
Property AvaUable for the Homelew




other organizations, as appropriate. With the exception of assistance
providers, this follows GSA'Sstandard notification processfor surplus
properties. According to the temporary regulation, the 30-day period for
assistanceproviders to express interest in excessproperties begins
when GSAsendsout the notices. GSAdoes not plan to publish the list of
newly excessedproperty in the Federal Register. We identified several
weaknessesin this procedure.

First, GSA's mailing list may be incomplete or may contain errors that
prevent interested assistanceproviders from receiving the notice. Assis-
tance providers who may have thought it was not worth their time to
pursue a property when it was classified as under- and unutilized, might
wish to apply for it when it changesto excessbecauseof more favorable
leaseterms. In addition, new provider groups may have been formed
since the property was originally published in the Federal Register as
suitable under- and unutilized property.
Second,mailed notices may not be received timely, unduly restricting
the application period for the property. Using a mailing date unnecessa-
rily opens the door to controversy and possible court challenges-for
example, the question of when the 30-day holding period actually began.
Technically, the previous publication of HUD'Ssuitability determination
in the Federal Register (when the under- and unutilized property was
reviewed) meets the court-ordered requirement for public notice. That
publication requirement is linked to the mandatory 30-day holding
period during which suitable property is withheld from public sale or
other disposition so that assistanceproviders can apply to lease it. GSA
interpreted the injunction to require another 30-day application window
when the property becomesexcess.However, having a 30-day holding
period becomesa futile exercise if persons who are interested and might
apply do not know the property is “on the market.” For this reason,
republishing the information about suitable excessproperty in the Fed-
eral Register, along with mailing notices to potentially interested per-
sons,would be more in keeping with the spirit of the court’s notification
order.
GSAofficials said that using their mailing list in lieu of publishing suit-
able excessproperties in the Federal Register eliminates a secondpubli-
cation of the properties. However, republishing the list of properties
would clearly establish the beginning of the 30-day period. Further, in
our view, publishing a list of these properties might allow assistance
providers not previously knowledgeable or interested to apply for
excessand surplus properties.


Page 28                             GAO/WED-91-99 Federal Property for the Homeless
                    Chapter 2
                    Radem Still Ex&t to Making Federal
                    PropertyAvailablefor the Homelees




Screening Federal   Federal and public-use screeningsare part of the ordinary property dis-
Property            position processunder the Federal Property and Administrative Ser-
                    vices Act of 1949 and its implementing regulations. When property is
                    classified as excess,it is usually made available to any other federal
                    entity having a need for the property. However, GSA can waive the
                    screeningprocessunder extenuating circumstances.If the screening
                    requirement is not waived,2GSA would balance any competing uses.This
                    meansthat a federal use may outweigh a homelessuse for any excess
                    property. Becausethe GSA screeningprocessoccurs concurrently with
                    the application process,an organization for the homelesscould apply to
                    lease a property only to discover well into the processthat it is not
                    available after all.3 In our view, the whole property program would
                    work more smoothly if assistanceproviders were invited to apply for
                    property only after it has been determined that no federal use exists.
                    In order to make such a suggestionwork, a reasonabletime period
                    would have to be established during which any immediate federal need
                    for the property would be identified; if no need exists, the property
                    would be held for 30 days for assistanceproviders to initiate applica-
                    tions. This action would require a changein GSA’S current federal
                    screening regulations, which do not limit the amount of time GSA may
                    take to determine whether the property ought to be transferred.

                    The temporary regulation also envisions a secondlevel of screening
                    during that same30-day holding period. This comesabout becausethe
                    regulation states that property transferred to HHS for leaseto assistance
                    providers will be declared surplus4 At the stage of property disposition
                    where excessfederal property becomessurplus, GSA regulations call for
                    a secondlevel of screening.In this secondstage, states, local govern-
                    ments, and public bodies are invited to apply to receive surplus property
                    for various public uses.These uses can include community centers, drug
                    treatment facilities, day care centers, or prisons, among others.


                    2GSAemploys screening because title V states that it is to he administered “in accordance with appli-
                    cable Federal law.” Although the court held that GSA would be authorized to waive either or both
                    levels of screening, it also held that a waiver is not mandatory.
                    3National Law Center on Homelessnessand Poverty v. Lkp’t. of Veterans Affairs, 736 F. Supp. 1148
                    @DC. . . 1990), The plaintiff had received HHS approval of its application to use a federal property for
                    the homeless, but GSA transferred the property to the U.S. Navy. The court ruled that as a result of
                    the screening process, GSA could transfer the property to the U.S. Navy.

                    4GSA officials told us that they are statutorily required to declare excess property to be surplus
                    under the Federal Property Act before HHS can lease property for the homeless. Under GSA’s normal
                    procedures, surplus property is subject to a second level of screening for public-benefit uses.



                    Page 24                                       GAO/RCED-91-33 Federal Property for the Homeless
                       Chapter 2
                       Bawler6 Still Hxbt to Making Federal
                       Property AvaIlable for the Horn&a




                       As with federal screening,GSAcan waive the second-levelscreening,but
                       is not required to do so. To help evaluate competing beneficial usesfor
                       surplus property, GSAhas issued guidelines for public-use screeningthat
                       suggestan assistanceprovider should have preference over other types
                       of public-use applicants, but the guidelines are not definite on that
                       point, and in any event, they are not binding.


                       Another barrier to making federal properties available under title V has
Assistance Providers   been inadequate program publicity. We conducted a telephone survey of
Dissatisfied With      organizations and people that had expressedinterest in federal proper-
Federal Property       ties to determine, among other things, how they found out about federal
                       surplus property.6 (Seventy-two of 132 contacts, or 54.6 percent, were
Publicity              local nonprofit organizations. Twenty-six, or 20 percent, of our contacts
                       were state or local governments.) We found that 31 (or about one-fourth
                       of our contacts) first learned about federal surplus properties from the
                       Federal Register. Another 32 (or about 24 percent) stated that they first
                       found out about properties from federal agenciessuch as GSAor the
                       Interagency Council on the Homeless.Twenty-six (or about 20 percent)
                       of those contacted first obtained their information from the National
                       Coalition for the Homeless.One city official (not a survey respondent)
                       told us that he learned about the property the city applied for from the
                       local newspaper.

                       About 80 percent of the respondentsto our telephone survey, as well as
                       other providers we interviewed, suggestedthat other methods of pub-
                       licizing federal surplus properties are needed.One suggestedthat lists of
                       properties be prepared by state and sent to the state coordinators of
                       programs for the homeless,who could then send them to providers.
                       Another suggestionwas that lists be publicized in local newspapers.
                       According to officials of the Interagency Council on the Homeless,HUD,
                       HHS, and GSA,providers also told them that the Federal Register notices
                       are not readily available. Unless they are on a mailing list or are sent
                       information by someonewho is, providers often do not find out about
                       the properties listed in the Federal Register. Someassistanceproviders
                       told us that although the Federal Register is available in public libraries
                       (when a subscription is too costly for them), they have no idea when to
                       check it for lists of properties. Further, someproviders we spoke to did


                       6All survey results are based on 132 completed surveys. Our survey results generalii only to those
                       organizations or persons who contacted HHS about information on federal property.



                       Page 26                                     GAO/RCED-9133 Federal Property for the Homeless
chapter 2
l&rrlem Still E&t to MakingFederal
property Availablefor the Homeless




not know that HUDpublished a list of properties in the Federal Register
every week.
Those same agency officials told us that the Federal Register alone is not
adequate notice for many providers. To improve this situation, separate
publicity efforts have been developed by HUD, GSA,and the Interagency
Council on the Homeless.HUD is providing additional publicity about
surplus federal properties using HUD field offices. GSAsendsindividual
publicity notices for each suitable excessand surplus property to a wide
range of interested persons, state and local officials, newspapers, and
local post offices.
The Interagency Council on the Homelesshas taken steps to increase
publicity of the title V program. The Council’s 1989 annual report states
that to improve the record of making federal real property available, the
Council is pursuing the goal of more widely disseminating information
about suitable and available properties. It has already published and
distributed program information on federal property.

In addition to the problem of inadequate program publicity, many of the
Federal Register notices contained erroneous or incomplete addresses.
When HUDbegan publicizing properties in the Federal Register, many of
the notices (1) contained incomplete location information, (2) listed the
properties as belonging to the wrong federal agency, and/or (3) incor-
rectly described the property as vacant land or buildings. These inaccu-
racies causedconfusion and delays among assistanceproviders in
locating these properties.
Several assistanceproviders we spoke with told us that time delays in
finding the property listed in the Federal Register were a problem
becausethe 30-day notification requirement begins with the listing in
the Federal Register. The longer it takes to find a specific property, the
less time is left to determine if the property will meet the provider’s
needs.In order to apply for a property, somenonprofit organizations
must get approval from a board of directors, and a city government may
need approval from a city council. Obtaining such approval can take
time. Thus, it was difficult for providers to meet the 30-day deadline for
notifying HHSof their intent to apply for a property becauseof the time
it took them to locate the properties listed in the notices.
According to one HUD official, insufficient information in the notices was
a result of incomplete information submitted by the landholding agen-
cies. HUDnow requires agenciesto submit complete and correct


Page26                               GAO/RCJSD-91-62
                                                 FederalPropertyfor the Homeless
                      chapter 2
                      BurlersBtlllBdrtto~Fedenl
                      Pmperty Available for the Homeless




                      paperwork on properties. For example, beginning with the last quarter
                      in calendar year 1989, HUD required each agency sending information to
                      identify (1) the property’s zip code,(2) a complete address,and/or (3)
                      adequate directions to the property site if no addressexists.

                      Three years after title V was enacted into law, there is no comprehen-
Comprehensive         sive federal guidance on how to obtain federal properties. As a result,
Guidance Would Help   assistanceproviders cannot go to one source to learn how this program
Implement Title V     works. Although HUD has issued guidance on how to obtain federal
                      properties for the homeless,HUD'Snotice doesnot cover the application
                      processfor federal properties, and HHShas not issued a separate regula-
                      tion covering that process.In addition, GSA'Stemporary regulation on
                      how it will handle excessand surplus property under title V provides a
                      30-day application period for properties that have been listed as suit-
                      able. The notification processdoesnot give all prospective applicants
                      the sameopportunity to apply and may not provide adequate notice.
                      The Interagency Council on the Homelessstated in its 1989 annual
                      report to the Congressand the President that to improve the implemen-
                      tation of title V, the Council’s goal is to have GSA,HHS,and HUDpublish a
                      joint regulation describing the current processthat is required by law
                      and to solicit comments on streamlining alternatives. In a July 13, 1990,
                      meeting, the Council’s Executive Director told us that a draft regulation
                      is currently being reviewed by HUD,GSA,and HHSofficials and efforts are
                      being made to finalize it as soon as possible. However, no time table had
                      been established for when this will be completed, according to the Exec-
                      utive Director.

                      Someassistanceproviders told us that the title V surplus property pro-
Leasing Limits the    gram limits their ability to arrange financing to rehabilitate existing
Program’s Potential   structures or to build new structures becausethey are able only to lease
                      federal property. If the property requires substantial investment, the
                      provider has two problems: difficulty in obtaining a loan and the likely
                      loss of the investment when the leaseexpires and the property reverts
                      to the federal government. Since assistanceproviders may lack financial
                      resourcesto fix up or build entirely with their own money, they may
                      need to turn to lending institutions for the required capital. Assistance
                      providers told us that loan requests are likely to be denied unless the
                      provider has adequate collateral not connectedto the leasedproperty.




                      Page 27                              GAO/RCED91-22 Federal Property for the Homeless
chapter 2
Hurlers Still H&t to MakingFederal
Roperty Availablefor the Homelees




Two providers told us that the currently allowable HHSlo-year lease
term with a lo-year option makes it difficult to obtain financing. For
example, one provider plans to renovate a federal building on the
National Register of Historic Places.Renovations will cost over $3.2 mil-
lion An outright gift of the property would allow the provider to obtain
funding quickly for this project through loans. However, under the cur-
rent leasing arrangement, the provider was unable to get a loan.

The short lease-termsavailable for under- and unutilized properties
require that the property be immediately useful to providers or they
will not apply. Agency officials and someproviders told us that many of
these properties may be leasedonly for very short terms (about 1 to 6
years) becausethe landholding agency may need to use these properties.
As of June 16, 1990, five underutilized properties, including one floor of
a New York office building, had been applied for by assistance
providers.
An outright gift of the property is advocated by some assistanceprov-
iders as a mechanismto obtain the necessaryrehabilitation financing.
According to providers, agency officials, and organizations assisting the
homelessthat we spoke to, transfer of title from the federal government
would give providers a better opportunity to obtain loans and grants
that could then be used to rehabilitate existing buildings or to build new
structures. Donating property for homelessuse would require legislative
changeto implement. The question of donating federal property, how-
ever, needsto be weighed against the monetary value of the property to
the federal government. HUD, GSA,and HHSofficials told us that they gen-
erally agree that providers would have an easier time getting loans if
providers held title to the property.
HHSissued a revision to its existing regulations for disposal of federal
property under the Federal Property and Administrative ServicesAct of
1949 on August 8,lOOO.~The regulatory revision would allow transfer
of property title to assistanceproviders for such homelessfacilities as
transitional housing and food kitchens, in addition to the public health
uses already specified. However, on the basis of our analysis of the
applicable laws, existing statutes do not allow deeding federal property
to assistanceproviders for the homelessunless such use was previously
authorized under the Federal Property Act. (Seeapp. III.)

6TheFederalPropertyendAdministrativeServices       Act of 1049allowsGSAto assignfederalprop
erty to HI-IS,whichin turn cantransfertitle of surplusfederalpropertyto stateendlocalgovem-
mentsor nonprofitmedicaloqanhationsfor publichealthuse.


Page28                                   GAO/RCEB91-22
                                                     FederalPropertyfor the Homekss
              chapter 2
              lht’tli~   Still Exist to Making   Feded
              Propem AvdIable for the Homelear,




              Although progress has been made in making federal properties available
Conclusions   to the homeless,problems remain that need correction. Until these
              problems are corrected, the true potential of this program to assist the
              homelesswill remain unknown.
              Specifically, the current procedure of identifying suitable federal
              properties for assisting the homelessdoesnot permit assistanceprov-
              iders to be certain that the properties they apply for are actually avail-
              able for use. Sincethe lists of suitable properties are publicized before it
              is determined if other federal agenciesneed the property or whether it
              will be made available for public use, time and money may be wasted by
              assistanceproviders who apply for unavailable properties and HHS
              which processessuch applications.
              We believe that the procedures established in GSA’stemporary regulation
              are not as clear as they could be about notifying interested persons,
              establishing the date on which a court-ordered 30-day holding period
              begins, or ensuring that excessproperty is not neededby another fed-
              eral agency before assistanceproviders apply for a lease.In addition, if
              the property applied for under title V is made available for application,
              no assuranceexists that the property will actually be available because
              screeningwill not have been completed at the time of application.

              Publication of all suitable properties in the Federal Register is important
              for establishing the 30-day notification period. However, providers and
              agency officials agreethat other publicity methods are neededto ensure
              that the broadest number of assistanceproviders are made aware of
              these properties. Agency efforts, such as using GSA’Sexisting excessand
              surplus property notification process,should help expand publicity of
              properties beyond the Federal Register.
              The Interagency Council on the Homelessconcluded in its 1989 annual
              report that overall federal guidance is neededto improve implementa-
              tion of title V, but this regulatory guidance had not been issued as of
              July 31,199O.
              In addition, assistanceproviders have told us that they face difficulties
              in obtaining financing to fix up or build on federal surplus properties.
              They said that their financing problems can be easedto someextent by
              giving them title to federal properties, similar to HHS' mental health pro-
              gram, which could enable them to get loans more readily to improve the
              properties or to build new structures. The question of donating federal



              Page29                                     GAO/RCED-9199   FederalPropertyfor the Homeless
                          BurbmBtUlExbttoMaklngFederd
                          Property Avallable for the Homelee




                          property, however, needsto be balanced against the monetary worth of
                          the property to the federal government.
                          HHs’regulations allow property title transfer for all homelessfacilities.
                          We believe that these regulations exceedHHS’ authority under title V of
                          the McKinney Act. In our opinion, title V must be amendedbefore the
                          federal government can transfer ownership of property to assistance
                          providers under title V.

                      -   We recommendthat the Congressamend section 601 of title V of the
          .uablulL   bd   McKinney Act to require that properties suitable for the homelessare
the congress              not publicized until properties are actually available or declared surplus
                          to the federal government.

                          The Congressmay wish to amend title V to codify the court’s require-
Matters for               ment that landholding agencieshold property available until HI-E3has
Consideration by the      acted on assistanceproviders’ applications. In addition, the Congress
Congress                  may wish to consider amending title V of the McKinney Act to allow
                          transferring ownership of somefederal surplus properties to assistance
                          providers for use as facilities for the homeless.This could give assis-
                          tance providers a better opportunity to obtain financing for constructing
                          or renovating these properties. However, the question of donating fed-
                          eral property needsto be balanced against the monetary worth of the
                          property to the federal government.

                          We recommendthat GSA finalize and issue its regulation on excessreal
Recommendationsto         property to include title V requirements. This regulation should include
the Administrator of      a requirement that federal screeningof excessproperty be completed in
GSA                       a reasonableperiod of time. We also recommendthat GSA ensure that
                          excessand surplus property is publicized in the Federal Register after
                          federal screeningis completed, whether or not the property has been
                          previously published in the Federal Register as suitable under- and unu-
                          tilized property. This action will ensure a well publicized date for the
                          beginning of the 30-day notification period.




                          Page 80                              GAO/RCED91-99 Federal Property for the Homeleee
                                chapter 2
                                Badem Still Exist to Making Federal
                                aOperty Avnilable for the Homelew




                       We recommendthat the Secretariesof HUD and HHS and the Adminis-
Recommendationto       trator of GSA finalize and issue their joint, comprehensivetitle V pro-
the Secretaries of HUD gram regulation. This will provide the necessaryguidance to applicants
and HHS and the        for federal property.
Administrator of GSA




                                Page 31                               GAO/ltCED-9143 Federal Property for the Homelew
                                                                                                                       ,
                                                                                                                           ,
Chapter 3

LeasesMay Exposethe Governmentto Liability
and Costs

                       The McKinney Act allows providers of assistanceto the homelessto
                       lease federal property. These leasesset forth the government’s rights
                       and responsibilities as a landlord to the assistanceproviders who are its
                       tenants. The leasesnow in use exposethe government to potential lia-
                       bility from, among other things, litigation by persons harmed by phys-
                       ical defects of the properties. In addition, local jurisdictions may seek
                       compensation for coststhey could incur (such as for emergencyser-
                       vices) associatedwith changing the property from federal agency use to
                       a facility for the homeless.Becausethe leasesdo not state that any
                       chargesor fees required by state and local governments are the sole
                       responsibility of the tenant, the federal government, as landlord, could
                       incur additional expenses.

                       The federal government and nonprofit assistanceprovider organiza-
Federal Government     tions, as of June 16, 1990, had agreedto and signed 18 leasesand 10
Could Be Exposed to    permits for federal property to be used as facilities to assist the home-
Liability for Leased   less. Other applications were in various stagesof review prior to leasing
                       or permitting. (Seeapp. II.) We reviewed nine of the signed leasesand
Property               found that they do not adequately protect the government’s interests
                       from liability arising from such occurrencesas accidental injury and
                       related problems.

                       Under the Federal Tort Claims Act, as amended,the government
                       assumeslegal responsibility for injuries or damagescausedas a result of
                       its negligenceor misconduct on the samebasis as a private party. In
                       private leasetransactions in most states, a landlord has a duty to point
                       out any dangerousconditions and hidden defects that exist on the prop-
                       erty when the leaseis signed.’ Even if the tenant is not paying rent, the
                       landlord must discloseany dangerousconditions and hidden defects that
                       are known or that could be discovered in the exercise of reasonabledili-
                       gence.Failure to disclosecan result in the landlord being legally respon-
                       sible for lossesor injuries that occur becauseof the defect.
                       Also, in most states the law places an extra duty of burden on landlords
                       renting to tenants who intend to open the premises to the general public.
                       This is known as the public purpose doctrine. Under this doctrine, a
                       landlord will be liable for injuries to public users of the property caused
                       by hidden defects if a tenant allows public entry onto the property


                       lTypically included are such conditions as weak floorboards, loose stair railings, faulty wiring, and
                       the like.



                       Page 32                                       GAO/RCED-91-33 Federal Property for the Homeless
Chapter 3
Leaem May Rxpoee the Government          to
Lhhfflty   and Costa




before any such defects are found and repaired. The landlord can dis-
charge his or her responsibility to the public by warning the tenant of
any defects and ensuring their complete repair before the public is
allowed on the property. Alternatively, the landlord can make the repair
or warn the public personally. Taken together, these rules on hidden
defects protect the tenant, its employees,and especially public users-
the residents of shelters, the patrons of soup kitchens and food banks,
community volunteers, etc- from injuries causedby dangerouscondi-
tions in existence at the time the leaseis signed.
Although the legal rationale for holding the landlord liable is the land-
lord’s superior knowledge of the leasedproperty’s physical characteris-
tics and state of repair, a McKinney Act property owner may not have
the information on which to base appropriate disclosures.This occurs
becauseHUD'Ssuitability review of property under the McKinney Act is
perfunctory and doesnot involve physical inspection of the property.
The government’s liability should be minimized by the “hold harmless”
clause in the government lease.Under this clause the tenant agreesto
obtain commercial liability insurance and to indemnify the United States
against any and all liability directly or indirectly arising out of the prop-
erty’s condition or state of repair.2 DOD’S hold harmless clause is a little
stronger than that of other federal agencieswe reviewed becauseit also
includes a statement that the government makes no warranty as to the
condition of the property.
Despite the indemnification agreementand insurance, we foresee sev-
eral potential problems. The most obvious would occur if the tenant did
not procure insurance or allowed its policy to lapse. Second,somecom-
mercial insurance policies may not cover liability causedby undisclosed
hidden defects because,under the rules described above,that is the
landlord’s legal responsibility, not the insured tenant’s3 Third, even if
2The hold harmless clause in the government’s lease states that the tenant will

   indemnify and save and keep harmless, the United States of America, ... against any and all
   loss, cost, damage, claim, expense or liability whatsoever due to personal hjury or death or
   damage to property of others directly or indirectly arising out of the condition, state of repair,
   or the use or operation of the property....
The same clause obligates the tenant to obtain commercial liability insurance in amounts of at least
$200,000 per individual and $600,000 per incident.
3Thls ls particularly true in the case of the public purpose doctrine, because the landlord has a duty
to the public at large. In that case, the hold harmless clause in the lease might not insulate the govern-
ment from liability if a member of the public lnjured by an undisclosed unrepaired defect were to sue
the government directly.



Page 33                                        GAO/WED-91-33 Federal Property for the Homelesa
                       Chapter3
                       Leases May Expose the Govemment        to
                       Ltabillty andCoata




                       the policy fully covered damagesfor undisclosedhidden defects, the
                       government might still be held liable for damagesthat exceedboth the
                       policy limits and the tenant’s ability to satisfy a judgment.

                       While there may be no guaranteed way of completely avoiding liability
                       for injuries causedby the condition of the property at the time of lease,
                       the possibility of such injuries occurring could be minimized by inserting
                       a clause in the leaserequiring the tenant to engagethe servicesof a
                       certified architect, engineer, or building inspector to perform a thorough
                       building inspection at the tenant’s own expense.4The leasecould further
                       require the inspection to be completed either within 30 days of signing
                       the leaseor before allowing the public to use the property, whichever is
                       earlier. The tenant could be required to provide a written report of the
                       inspector’s findings to the federal landlord. Further, if defects or haz-
                       ardous conditions are disclosedby the inspection, the tenant could be
                       required by the leaseto make all repairs in a safe manner and document
                       their completion to the landlord before permitting the public to use the
                       premises. If the alterations or repairs neededto ensure safety are too
                       extensive or costly, the tenant could be permitted to terminate the lease.
                       Finally, the leasecould require the tenant to furnish periodic evidence
                       of current insurance.

                       In addition to the liability issues,none of the leasesin use at the time of
LeasesDo Not Specify   our review contain any statement on taxes or local service charges.
Who Pays for Certain   Local jurisdictions may seek compensation for costs they could incur
costs                  (such as for emergencyservices)when the property is changed from
                       federal agency use to a facility for the homeless.Becausethe leasesdo
                       not state that any chargesor fees required by state and local govern-
                       ments are the sole responsibility of the tenant, the government (as prop-
                       erty owner) would have to respond to such requests, creating expense
                       and inconvenienceto the federal landholding agency that could be
                       avoided.
                       The federal government is exempt from paying property or other taxes
                       to state and local governments.As a result, local authorities sometimes
                       do not want to provide governmental services(fire, police, ambulance,
                       trash, etc.) on federal property. In someinstances,local governments
                       have tried to collect revenue to offset the cost of governmental services

                       4The requirement could stipulate that the term “hidden defect” or hazardous condition need not
                       include the mere failure of the structure to comply with local building codes unless the defect or
                       condition is patently hazardous or poses an imminent threat to life or property.



                       Page34                                        GAO/RCED-91-33
                                                                                 FederalPropertyfor the Homeless
Chapter 3
Leases May Expose the Government to
Liability and Costs




by calling the collections “service charges” or “special assessments”and
the like. Unless a service charge is for a measurable service (a number of
gallons of water through the sewers,for example), and unless taxpayers
in the jurisdiction are assessedon the samebasis for the service, the
government equates such fees with taxes and will not pay them.
As long as property is made available to McKinney Act assistanceprov-
iders under lease,federal ownership and, by extension, the federal gov-
ernment’s exempt status remains unchanged.At the sametime, the
McKinney Act tenants probably will require even more local government
services,particularly schoolsand emergencyassistance,than the pre-
vious federal occupants of the property. Although we would not expect
such a problem to occur with respect to the leaseson property disposed
of under the 1988 DefenseAuthorization Amendments and BaseClosure
and Realignment Act, P.L. loo-526 (1988): somejurisdictions might
seek additional payments in connection with other leasesor other DOD
leasesto assistanceproviders for homelessshelters.6

Another problem exists with respect to leasesfor shelters on active mili-
tary bases,where the property is held as a “federal enclave.” Bases
located in a federal enclave are not within the jurisdiction of state or
local governments. As a result, for example, fire companiesand police
departments do not serve the federal enclave and have no legal
authority on the federal enclave’s land.

The DOD standard leasestipulates that an assistanceprovider may not
take possessionof the leasedpremises in a federal enclave until the
state agreesto accept concurrent jurisdiction on the property. Because
the property was not previously served by local government authorities,
accepting concurrent jurisdiction means adding local government
responsibilities without adding any property taxes to support them.
There is no legal authority for a federal landlord to make a compensa-
tory payment to a local government on behalf of a McKinney Act tenant;
however, a tenant may chooseto make such payments with its own
funds, particularly if securing servicesis an otherwise insurmountable
barrier to operating its facility.

?he taxation issue should not arise for any leases for property under th’e Base Closure Act because
the act provides for special adjustment payments to local governments near bases that are being
closed.
‘In addition to the McKinney Act, the Secretary of Defense has authority under 10 U.S.C. 2646 to
enter into leases for homeless shelters on military bases.



Page 36                                     GAO/RCFJB91-33 Federal Property for the Homeless
                         Chapter 3
                         Leases May Expose the Govemment to
                         Jhblllty and Cwta




                         Our review of leasesfor property leasedunder title V of the McKinney
Conclusions              Act showed that the existing leasesdo not adequately protect the inter-
                         ests of the federal government. Specifically, the leasesand permits
                         exposethe government to potential liability claims. In addition, none of
                         the leaseswe reviewed ensure that, when necessary,negotiating for ser-
                         vices and paying any chargesand other fees requested by state and local
                         governments are the sole responsibility of the tenant. We believe that
                         corrections to these leasesare required to ensure that the federal gov-
                         ernment’s interests are as fully protected as possible.

                         We recommendthat the Secretariesof HHS and Defenseand the Adminis-
Recommendationsto        trator of GSA review and amend as necessarythe leasing or permitting
the Secretaries of HHS   instruments for properties to be leasedfor the homelessunder title V of
and Defeke and the       the McKinney Act to require that the lesseehold the federal government
                         harmless for any injury that occurs on the property, inspect the prem-
Administrator of GSA     ises, and repair all hazardous conditions before allowing the public to
                         enter. In addition, for property other than baseclosure property, we rec-
                         ommend that the leasestate that the federal government assumesno
                         service chargesor fees that may be requested for the homelessfacility.
                         Further, we recommendthat, in addition to lease amendments,the Sec-
                         retaries of HHS and Defenseand the Administrator of GSA obtain evi-
                         denceof current insurance coverageby the lessee.
                         We also recommendthat the Administrator of GSA, as federal property
                         manager, inform the heads of other landholding agenciesabout the need
                         to review their leasesor permits should any title V property under their
                         jurisdiction be applied for.




                         Page 36                              GAO/WED-9133   Federal Property for the Homeletw

                                                      .
    .   ’

.

            ‘i,




    .




                  Page 37   GAO/ltCEDBl-33   Federal Property for the Homelew
Appendix I

Federal Landholding Agenciesand Number of
Federal Properties Leasedor Permitted as of
June 15,199O
               Agency                                                                        Number of propertier
               Department of Agriculture                                                                                1
               Department of the Air Force                                                                              2
               Department of the Army                                                                                   3
               Central intelligence Agency                                                                              0
               Department of Commerce                                                                                   0
               US. Armv Corps of Enaineers                                                                              0
               Department of Education                                                                                   0
               Department of Energy                                                                                      0
               Environmental Protection Aaencv                                                                           0
               Federal Communications Commission                                                                         0
               Federal Emergency Management Agency                                                                       0
               General Services Administration                                                                          15
               Department of Health and Human Services                                                                   1
               Department of the Interior                                                                                2
               Department of Justice                                                                                     1
               Department of Labor                                                                                      0
               National Aeronautics & Space Administration                                                              0
               National Science Foundation                                                                              0
               Department of the Navy                                                                                   0
               US. Postal Service                                                                                       0
               Department of State                                                                                      0
               Department of Transportation                                                                             0
               Department of the Treasury                                                                               0
               U.S. Information Aaencv                                                                                  0
               Department of Veterans Affairs                                                                        3
               Total                                                                                                28
               Note: While there are four other federal landholding agencies, they were not solicited by HUD for prop
               erty to review for suitability.




               Page 33                                       GAO/RCED91-33 Federal Property for the Homeleas
Federti PropertiesApplied for And/Or Leased
or Permitted for HomelessUse as of
June 15,199O

Landholding                                                                                     Assistance
-_.-agency
      -- ..._-.-. Property description                      Leasing status           Value      provider               Intended use
Excess
-- -....... federal
        - .._.
             - -....
                  -  property:
GSA                   18,000 sq. ft. bldg.; Bell Federal    GSA permit            $324,000      Salvation Army         200-bed shelter
                      Service Center; Bell, CA              effective
_____.....
        -_-..__.......___..--                               12/15/87
GSA                   31,000 sq. ft. bldg.; Bell Federal    GSA permit            $669,000      The Shelter            Supply distribution center
._.__ ,_._...
            -_-. .^__ Service
                         -__.-- Center; Bell, CA            effective 2/l 3189                  Resource Bank
GSA                   0.35 acres of land; Bell Federal      GSA permit            $234,000      pcod Partnership,      Office trailer parking
.___- ..-_.___        Service Center; Bell, CA
                - _-___                                     effective 6/l/88
DOT                   11.95 acres of land; Navy Annex       Transfer to HHS      !§6,000,000    Creative Housing       Transitional housing units
                      (Barracks K); Arlington, VAa
-_.- I..-..-.~._. . ..-.----.                               denied                              Solutions, Inc.
Sumlus federal urooertv:
GSA              3.1 acres of land; former Raritan          Lease effective       $716,000      Middlesex Interfaith   Housing for 18 families
                 Depot; Edison, NJ                          417’189                             Partners with the
                                                                                                Homeless, Inc.
GSA                  2.13 acres of land and a 2,900         GSA permit           $4,500,000     Salvation Army         Temporary shelter for 14
                     sq. ft. bld .; 1401 Sepulveda          issued 2/8/89                                              homeless veteran families
._-_ -..-_       _..-- ___-_ d3; W. Los Angeles, CA
                     Boulevar                                                                                          and a recreation center
GSA                  7 acres of land; former Fort           2nd application       $280,000      Sudbury Housing        100 units transitional.
                     Devens; Sudbury, MA                    under reviewb                       Authority              housing
HHS                  0.40 acres of land and a 23,757        Lease effective       $350,000      City of Lynn, MA       SO-bed shelter, health
                     sq. ft. bldn; former old Post          717189                                                     clinic and food kitchen
- . .._.....- .----Office ..-.- bldg.; Lynn, MA
GSA                  0.63 acres of land and a 35,613        Lease effective       $500,000      Pontiac Rescue         Dormitory and transitional
                     sq. ft. bld .; Furlong Building        6126189                             Mission                apartments and meals for
-"--___ .-.-.--..Pontiac, $1                                                                                           the homeless
Air Force            4.83 acres of land and 6               Lease effective         $50,000     Municipality of        Homeless facility
                     buildings (19,215 sq. ft.); former     6120189                             Aquadilla, PR          providing meals and
                     Ramey AFB; Aquadilla, PR                                                                          medical services
Army                 3.1 acres unimproved land;             Lease effective      $1,250,000     Uplift Assistance,     Transitional housing
                     former US Army Reserve Center          6/19/89                             Inc.
.I ..-.- - ._..---- West Palm Beach, FL
GSA                  0.4 acres of land and a 51,573         Lease effective       $800,000      City of San Antonio,   Multi-service including
                     sq. ft. bldg.; Federal Building        6/ 19189                            TX                     emergency shelter,
                     San Antonio, TX                                                                                   transitional housing, and
                                 ------                                                                                dining facility
GSA                  0.75 acres of land and a 7,951         GSA permit            $175,000      Whitman ‘Grady’        Temporary shelter servin
                     sq. ft. bldg.; Federal Building        effective 8189;                     Mayo Scholarship       homeless persons in a 1B-
                     Port Gibson, MS                        lease effective                     Foundation, Inc.       county area
-... .__
       . _. -. _.......-._-_-_C..-.^______                  2/l I90
Army                 4.67 acres of land; Camp               Lease effective         $50,000     Home Between           Transitional housin for
                     Sherman Rifle Range                    7124189                             Homes, Inc.            54 homeless indivi CY
                                                                                                                                           uals
                     Chillicothe, OH                                                                                   and families
Agriculture          0.26 acres of land and a 1,600         Lease effective         $35,000     Interchristian         Four families to be
                     sq. ft. house; Ranger residence        7/l 2189                            Correlation            housed and fed
_- .___..- _...___   Lander,
                 -.-...--           WY
                              -....----_                                                        Organization, Inc.
VA                   4 acres of land and 6 buildings        GSA permit              $50,000     Our House, Inc.        Shelter for 50 individuals,
                     (30,000 q. ft.); VA Medical            10/27/89; lease                                            food program, and child
                     Center; e,rttle Rock, AR               effective 3/21/90                                          care services
                                                                                                                                       (continued)




                                                           Page 3B                             GAO/lUZD-Q1-88 Federal Property for the Homeleaa
                                                        Appendir II
                                                        Federal Propertier Applied for And/Or
                                                        Leeoed or Permitted for Homeleeo Use au of
                                                        June 16,lBfJO




Landholding                                                                                          Amlrtance
  aoency    Promrhr deSCriDtiOn                          Leaslna status                 Value        DrOVider              Intended ube
GSA              0.32 acres of land; Camp Elliot         Lease effective              $10,000   San Die o Coalition        Transitional housing for
.-_-.__-..*_.-   San Diego, CA                           l/5/90                                 for the II omeless         21 individuals
GSA              0.84 acres of land and a 4,766          Lease effective          $20,000,000   National Coalition         Job trainin and
                 sq. ft. bldg.; Square 571               l/22/90                                for the Homeless,          recreation Bor 1,500
--._.---         Washington, DC                                                               1 Inc.                       individuals weekly
Justice          0.30 acres of land and 2 bldgs.;        Lease effective              $27,650   Community                  Shelter for 20 homeless
                 Border Patrol Station Carrizo           0129109                                Services Agency of         individuals and
                 Springs, TX                                                                    Dimmitt, LaSalle,          counseling program for
                                                                                                and Maverick               the entire community
                                                                                                Counties
Interior         8 small bld s. and 96 acres of          Lease effective             $175,000   Conch0 Valley              Shelter and job training
                 land; Fish I?atchery #2                 2/l 9190                               Center for Human           for 12 handicapped adults
.---             San Angelo, TX                                                                 Advancement
Army             35 acres of land; Fort George G.        le$y;9;ffective             $260,000   Housing America            300 rental housin units
                 Meade; Maryland City, MD                                                       :,hcrough Trarnrng,        to be constructe dgfor 400-
                                                                                                                           500 individuals
Interior         4 acres of land; Santa Ana, CA          Lease effective             $500,000        Orange Coast          64 units of 2- and 3-
                                                         11/7/89                                     Interfaith Shelter,   bedroom apartments for
                                                                                                     Inc.                  256 homeless, including a
--...                                                                                                                      daycare facility
GSA              13.55 acres of land and 6               GSA permit                  $535,500        Community Mental      Residential units for five
                 buildings; former Valley For e          effective                                   Health Services       families and 20 individuals
                 General Hospital; Phoenixvr 7le,        l/25/90; lease                              Properties, Inc.
                 PA                                      ~;;$JI    as of
----~
HHS              1.69 acres of land and 1                Lease pending               $150,000        New Day, Inc.         Shelter for 500 homeless
                 building; Indian School of              as of 6/l 5190                                                    youth per year and
                 cztical   Nursing; Albuquerque,                                                                           counseling services
-.- ---.--
Air Force        19.64 acres of land; Davis              Lease effective           $1,544,000        Vietnam Veterans      80 units of housing for
                 Monthan AFB; Tuscan, AZ                 2/t/90                                      of America, Inc.      320 homeless veterans
                                                                                                                           and families plus
-..--___I_                                                                                                                 counseling
GSA              10 acres of land; VA Hospital           Lease pending               $350,000        New Day, Inc.         Services for housing
                 Albuquerque, NM
                       .       .
                                                         as of 6/15/90
                                                                     I
                                                                                                                           homeless youth
 -~-1




GSA              40 acres of land; Bardane, WV           Applicant                   $225,280        Coalition for the     Emergency and
                                                         withdrew                                    Homeless of           transitional housing
                                                         application after                           Jefferson County,
-._____                                                  HHS approval                                WV, Inc.          -
GSA              0.18 acres of land and 1 bld .          Applicant                 $1,950,000        Travelers Aid         Multi-service center
                 (19,655 sa. ft.): Federal Buil 3 ina    withdrew                                    Societv of Rhode
                 Providence, PI’                         application                                 Island -
---.-                                                    1o/5/09
VA               2.39 acres of land and a 3500           Lease effective             $100,000        Transitional Life     Transition housin for
                 sq. ft. 2-story farm house; VA          6/l l/90                                    Center, Inc.          adult female ex-o Pfenders
                 Medical Center; Lincoln, NE
VA               80,000 sq. ft. IO-story building;       GSA permit               $16,000,000        Vietnam Veterans      Multi-service center
                 VA clinic; Boston, MA                   effective                                   Workshop
                                                         12/21/09; lease
                                                         to be effective
                           *                             a/31190




                                                        Page 40                                 GAO/RCED-B1-33 Federal Property for the Homelew
                                                 Appendix tI
                                                 FederalhoperthrApplkdforhd/Or
                                                 laoed or Permitted for HomeleMl Use aa of
                                                 June 15,lssO




Landholding                                                                          Assistance
  amncy      ProDem deSCriDtiOn                Learina status              Value     Provider            Intended use
The following applicatlona pertain to one floor of an underutllized GSA property at 252 7th Avenue, New York City, N.Y.:
             7,000 sq. ft.                        Permit pending              $28,000 per       Coalition for the         Administrative   offices
                                                  as of 6/l 5190                   annum        Homeless, Inc.
             1,000 sq. ft.                        GSA permit                   $4,000 per       Community                 Administrative   offices
-----                                             effective 5/l 190                annum        Access, Inc.
             4,000 sq. ft.                        GSA permit                  $16,000 per       Community                 Administrative   offices -
                                                  effective 5/l/90
                                                               .   I
                                                                                   annum        Counseling and
---                                                                                             Mediation-
             1,600 sq. ft.                        GSA permit                    $6,400 per      Food & Hunger             Administrative   offices
                                                  effective 2/l/90                  annum       Hotline, Inc.
             1,000 sq. ft.                        Permit pending                $4,000 per      Interfaith Assembly       Administrative   offices
                                                  as of S/l 5190                    annum       on Homelessness &
                                                                                                Housing
             3,000 sq. ft.                        Applicant                   $12,000 per       Legal Action Center       Administrative   offices
                                                  withdrew                         annum        for the Homeless,
                                                  reauest                                       Inc.
             6,200 sq. ft.                        GSA permit                  $24,800 per       The Doe Fund, Inc.        Training and education
                                                  effective 4/l/90                 annum                                  center
             5-7,000 sq. ft.                      Applicant              $20,000-28,000          Westside Cluster of      Administrative offices
                                                  withdrew                    per annum          Centers &
                                                  request                                        Settlements, Inc.
             2,500 sq. ft.                        Applicant                   $10,000 per        Center on Social         Administrative   offices
                                                  dropped request                  annum         Welfare Policy &
--_-..-                                                                                          Law, Inc.       -
             2,200 sq. ft.                        Application                   $8,800 per       New York City            Administrative   offices
                                                  dHirspproved by                   annum        Coalition Against
--I.                                                                                             Hunger, Inc.
             1,500 sq. ft.                        Application                   $6,000 per       Friends and              Administrative   offices
                                                  disapproved bv                    annum        Advocates of the
-..                                               HHS ’          .                               Mentally Ill, Inc.
            - 1,000 sq. ft.                       Permit pending                $4,000 per       Upper Room AIDS          Administrative   offices
                                                  as of 6/l 5190                    annum        Ministrv
The following applications pertain to other underutilized
  property: - - .          -
GSA          1,000 sq ft. of the Federal Bldg.    Permit pending               Unavailable       Nazareth Home,           Storage of furniture for
~--_-~       #l ; Brooklyn, NY                    as of 6/l 5190                                 Inc.                     the homeless
VA           11 housing units; 3.76 acres of      Permit pending               Unavailable       The Veterans             Transitional housing
             land: Ft. Snellina. MN               as of 6/l 5190                                 Incentive Proiect
Air Force    land; Norton AFB                     Incomplete                   Unavailable       Women’s Network          200 beds and services for
             Communications Site                  application as of                              for Cancer               homeless men
-.~-         San Bernadino, CA                    6/15/90                                        Prevention
COE          32 single family homes; Midway       Application                  Unavailable       Housing Authority        Transitional and
             Housing Site; Kent, WA               approved by                                    of King County           emergency housing
                                                  HHS on 6/l l/90
                                                 BAnother federal agency requested the property. This property was erroneously labeled as excess by
                                                 GSA; it was actually being used by the Navy.
                      Y                          bApplication conditionally approved 1l/3/89; however, the entire site was designated a Superfund site
                                                 in February 1990 until a complete environmental assessment is completed.




                                                 Page 41                                      GAO/~91-38          Federal Property for the Homeless
Appendix III                                                                                       1
Other Federal property ProgramsThat Can                                                            -*
Help the Homeless

               Besidesthe title V surplus federal property program, there are other
               ways to get federal property or use existing federal facilities for the
               homeless.These include (1) ownership of existing facilities under fed-
               eral property law for public health facilities, such as drug treatment
               centers for the homeless;(2) ownership or leasing of homesthat the
               Department of Veterans Affairs (VA), the Federal Housing Administra-
               tion (FXA),or the Farmers Home Administration (FM-IA) repossessed
               when the owner defaulted on the federally insured mortgage; (3) owner-
               ship of homes acquired from failed thrifts by the Resolution Trust Cor-
               poration (RTC); and (4) use of existing buildings on military installations
               for shelters.
               Public-Benefit Programs- Section 203 (k) of the Federal Property and
               Administrative ServicesAct of 1949 authorizes the sale or lease of sur-
               plus properties for public-benefit use to state and local governments or
               nonprofit medical organizations.1Public-benefit usesinclude facilities
               such as prisons, hospitals, parks, and drug treatment centers. An assis-
               tance provider who wants to open a drug treatment center for the home-
               less can apply to HHSto buy or leasesurplus federal property under HHS’
               public health benefit program.

               Federally Acquired ForeclosedHomes-Four federal entities offer
               repossessedhousing to nonprofit groups to assist the homeless.They are
               administered by VA, FHA, F~HA,and the RTC.The VA program allows for
               outright purchase of housing with defaulted VA loans. WHA allows
               leasing for up to 10 years and purchase of defaulted properties for tran-
               sitional housing at a 10 percent discount off fair market value. FHA
               allows leasing of defaulted housing at $1 a year for 3 years to assistance
               providers and/or sale at a 10 percent discount off fair market value. The
               RlT gives advanceopportunity to public agencies,nonprofit organiza-
               tions, and lower income families to purchase eligible single- and multi-
               family properties acquired from failed thrifts. These entities give
               priority for certain properties to assistanceproviders over others who
               might want the property.
               Department of DefenseHomelessFacility Assistance-In addition to the
               McKinney Act, DODcan make military installation property available
               under its own authority (10 USC. section 2646) for homelessshelters.




               ‘Surplus property in this case means only the category surplus.



               Page 42                                      GAO/lZCED-91-33
                                                                         FederalPropertyfor the Homeless
AppsndlxIn
OtJmFederaIPrope~prolpamr~hatcnn
Help thelHome4eM




The military may furnish and provide, without reimbursement, inci-
dental services as required, such as utilities, bedding, security, and reno-
vation of facilities. DODhas established or allowed to be established 16
facilities nationwide under this authority.




Page 43                          GAO/RCED91-33Federal Property for the Homeleerr
                                                                                               f
Appendix IV                                                                                        m

Major Contributors to This Report


                        Marnie Shaul, Assistant Director
Resources,              EugeneE. Aloise, Assignment Manager
Community, and          Donna M, Lucas, Evaluator-in-Charge
Economic                Molly MacLeod,Reports Analyst
Development Division,
Washington, D.C.

                        Margaret Ax-men,Senior Attorney
Office of the General
Counsel




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