Public Housing Subsidies: Revisions to HUD's Performance Funding System Could Improve Adequacy of Funding: RCED-98-174

June 1998
GAO Reports;6/19/1998, p1
Government Document
In fiscal year 1998, Congress appropriated $2.9 billion to subsidize the operating costs of nearly 3,200 public housing agencies. Almost all housing agencies receive subsidies because the rent that they collect from their residents does not cover the agencies' operating costs. Under its performance funding system, the Department of Housing and Urban Development (HUD) determines the reasonable expenses that it will allow each housing agency to expend in managing its assets and serving its tenants and provides an annual subsidy to cover the difference between these expenses and the housing agency's projected income. This report answers the following four questions: How does the performance funding system allocate the congressionally appropriated subsidy among public housing agencies? How well does the system meet the subsidy needs of individual housing agencies? How does HUD develop budget estimates of housing agencies' annual need for operating subsidies and are these estimates appropriate? What are some of HUD's options for changing the system to make it a more effective tool for subsidizing housing agencies?


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