    Federal Housing Programs: What They Cost and What They Provide
    (18-JUL-01, GAO-01-901R).

    In fiscal year 1999, the federal government provided housing
    assistance to about 5.2 million renter households at a cost of
    about $28.7 billion in outlays and tax credits. Of this amount,
    over $15 billion supported housing units developed under
    production programs that no longer receive appropriations to
    produce new or rehabilitated units. While maintaining the
    inventory of units produced under these inactive programs is an
    important goal of the federal housing voucher program, this
    report focuses on six programs that continue to increase the
    number of households assisted by the federal government: the
    housing vouch program, which is the largest source of federal
    funds for housing assistance, and five production programs, which
    currently receive federal funds to produce new or rehabilitate
    units. GAO found that production programs are more expensive than
    housing vouchers. GAO estimates that the total per-unit costs for
    housing production programs are from 32 to 59 percent greater
    than for housing vouchers in the first year and from 12 to 27
    percent greater over 30 years. If costs were the only
    consideration, GAO estimates would suggest that the production
    programs reviewed in this report should be replaced with
    vouchers. However, in many markets, production programs are the
    only sources of new affordable rental units, and use restrictions
    will keep these units affordable for decades to come, limiting
    the impact of market forces on the supply of affordable units.
    Additionally, there are substantial differences in the housing
    and services provided under each of the production programs that
    must be considered. Finally, in many urban areas, the production
    programs have formed an integral part of an overall community
    development strategy. As a matter of public policy, the benefits
    of increasing the supply of affordable units, providing
    additional services for special needs populations, and
    revitalizing distressed communities must be weighed against the
    alternative benefits of serving more households at a lower
    average cost through the provision of vouchers.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-01-901R
        ACCNO:   A01417
      TITLE:     Federal Housing Programs: What They Cost and What They
                 Provide
         DATE:   07/18/2001
      SUBJECT:   Cost analysis
    	     Housing programs
    	     Federal aid for housing
    	     Low income housing
    	     Rental housing
    	     Comparative analysis
    	     HUD HOPE VI Program
    	     HUD Low Income Housing Tax Credit
    	     Program

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    GAO-01-901R

    GAO- 01- 901R Costs and Characteristics of Federal Housing Assistance

    July 18, 2001 Congressional Committees Subject: Federal Housing Programs:
    What They Cost and What They Provide This letter provides our interim
    response to a mandate in the Quality Housing and Work Responsibility Act of
    1998 (P. L. 105- 276) requesting that we compare the total per- unit costs
    of various housing assistance programs, taking into account qualitative
    differences in the housing and services provided. We previously briefed your
    office on our key interim findings (see enc. I). This letter summarizes
    these findings and discusses several of the policy issues they raise.

    In fiscal year 1999, the federal government provided housing assistance to
    about 5.2 million renter households 1 at a cost of about $28.7 billion in
    budgetary outlays and tax credits. During the same year, almost 9 million
    very- low- income renter households who qualified for housing assistance did
    not receive it because of other budgetary priorities and constraints. This
    year was not unusual: The federal government has never provided housing
    assistance as an entitlement for all households that qualify for aid.
    Instead, the Congress has traditionally appropriated funds for assisting a
    specific number of new households each year, as well as for renewing
    assistance for those households already served by various federal housing
    programs.

    Of the $28.7 billion in federal housing subsidies provided in fiscal year
    1999, over $15 billion supported housing units developed under production
    programs that no longer receive appropriations to produce new or
    rehabilitated units. While maintaining the inventory of units produced under
    these inactive programs is an important goal of federal housing policy, our
    analysis for this report focused, as requested, on six programs that
    continue to increase the number of households assisted by the federal
    government: the housing voucher program, which is the largest source of
    federal funds for housing assistance, and five production programs, which
    currently receive federal funds to produce new or rehabilitated units. 2 Of
    these production programs, the Low- Income Housing Tax Credit program is by
    far the largest, accounting for over 80 percent of the new units produced in
    1999. The six programs we analyzed are as follows:

    Housing Voucher - supplements tenants? rental payments in privately owned,
    moderately priced apartments chosen by the tenants.

    Low- Income Housing Tax Credit - provides tax incentives for private
    investment in the production of new and rehabilitated affordable housing
    units consistent with state- determined housing priorities.

    1 Of these 5.2 million renter households, 4.3 million have very low incomes
    (50 percent or less of area median income) and 900,000 have low incomes (51
    to 80 percent of area median income). 2 This analysis does not include the
    HOME program because HOME funds are often used in

    conjunction with other housing programs, including the ones covered in this
    analysis.

    United States General Accounting Office Washington, DC 20548

    2 GAO- 01- 901R Costs and Characteristics of Federal Housing Assistance HOPE
    VI - revitalizes severely distressed public housing, funds community and

    supportive services, and promotes mixed- income communities.

    Section 202 - develops supportive housing for the elderly.

    Section 811 - develops supportive housing for persons with disabilities.

    Section 515 - develops family and elderly housing in rural areas, sometimes
    including space for community- based supportive services.

    In this letter and enclosure, we compare the total per- unit costs of
    providing housing under these six programs and, for each program, identify
    the share of the total per- unit cost borne by the federal government; the
    assisted household; and other sources, including state and local governments
    and private organizations. Finally, we compare the types of housing and
    services provided and the populations served under the six programs. Our
    cost comparisons for these six programs focus on national averages. More
    detailed information on total per- unit costs in seven local markets appears
    in enclosure I.

    To make comparisons, we collected detailed information on each of the six
    housing assistance programs, focusing on costs and housing characteristics.
    Because there is no central database on most of these housing programs, we
    contacted federal agencies, local housing authorities, and a private
    research firm to construct our database. 3 In addition, we visited
    representative properties in several metropolitan areas to observe
    qualitative differences in the housing and services provided under each of
    the programs. We also interviewed property managers and developers. To
    construct cost estimates that are comparable across the six programs, we
    accounted for differences in the structure and timing of the subsidies in
    each program. For all six programs, we estimated the first- year costs and
    30- year life- cycle costs. 4 Interviews with housing finance experts
    confirmed the reasonableness of our methodology.

    Comparative Cost Analysis

    In summary, production programs are more expensive than housing vouchers.
    Nationally, we estimate that the total per- unit costs for housing
    production programs are from 32 to 59 percent greater than for housing
    vouchers in the first year and from 12 to 27 percent greater over 30 years -
    the life cycle we assumed for units of similar size (see table 1). 5 Our
    findings were similar for seven local housing markets but were limited to

    3 City Research, an urban economics research firm in Boston, analyzed the
    tax credit program using a national database it constructed for a previous
    study. 4 Life- cycle cost is the total cost of owning, operating, and
    maintaining a property over its useful

    life. In this analysis, we assume a useful life of 30 years. 5 We used two
    approaches for calculating these percentages, both of which enabled us to
    control

    for general location (metro or nonmetro) and unit size (number of bedrooms).
    In both cases, we used vouchers as the benchmark for our cost comparisons
    because the voucher program is the largest federal housing assistance
    program. Under the first approach, we adjusted average voucher costs for
    comparability with the general location and average unit size for each of
    the production programs. The results of this approach appear in table 1.
    Under another approach, we compared costs across six programs for units in
    the same general location with the same number of bedrooms. For example, we
    found that in metro areas the first- year costs of tax credit, Section 202,
    and Section 811 one- bedroom units were about 136, 141, and 138 percent
    greater, respectively, than the first- year costs of one- bedroom voucher
    units. Ideally, we would have controlled more fully for structural amenities
    (e. g., square footage of unit, parking, and common areas) and

    3 GAO- 01- 901R Costs and Characteristics of Federal Housing Assistance

    the tax credit, Section 202, and Section 811 programs - the only programs
    for which we had sufficient local market data (see enc. I).

    Table 1: Total Production Program Cost as a Percentage of Total Voucher Cost
    Program First year Life cycle

    (30 years)

    Low- Income Housing Tax Credits 132% 116% HOPE VI a 159 127 Section 202 145
    119 Section 811 138 112 Section 515 142 125

    a HOPE VI costs include only housing- related construction costs. Source:
    GAO analysis of federal, state, local, and private databases.

    Our cost estimates for the production programs are conservative because they
    are not adjusted to reflect the property tax abatements that localities
    often provide for affordable housing. In addition, our HOPE VI estimates do
    not include any funding for capital reserves; for the other four production
    programs, the adequacy of the capital reserves to meet future capital needs
    is unknown. Historically, however, housing production programs have
    underfunded capital reserves. On the basis of very limited information, we
    estimate that these omissions could increase our total costs estimates by
    around 10 percent. 6

    Average costs can mask considerable variation in the costs of individual
    properties developed under the same program. For example, the tax credit
    program has produced in the same area some units that cost about the same or
    less than vouchers and other units that cost about twice as much. To
    understand this wide variation in per- unit costs, more work needs to be
    done on the determinants of development costs and the current cost
    containment guidelines.

    The federal government provides the bulk of the subsidies for all the
    housing assistance programs (see table 2). When vouchers serve households of
    similar average incomes in units with the same average number of bedrooms as
    production programs, we estimate that the federal cost of serving households
    under the production programs is from 49 to 65 percent greater than it would
    be under vouchers. We estimate that the federal lifecycle cost is from 15 to
    38 percent greater than under vouchers.

    neighborhood characteristics (e. g., crime rate and quality of public
    services such as schools), but these data were not available for most of the
    programs. 6 Industry officials suggest that an annual set- aside of $200 to
    $600 per unit would be required to

    meet future capital needs. The 1999 American Housing Survey estimates the
    national average property tax rate is $11 per $1, 000 in property value. If
    these averages were applied to a worstcase scenario, under which significant
    tax abatements and no payments to reserves were made, the first- year cost
    would be understated by about 10 percent. This scenario is most applicable
    to our data for the HOPE VI program, which include no funding for capital
    reserves and virtually no allowances for property tax payments. Under the
    other four production programs, many projects fund capital reserves and pay
    full property taxes. For these programs, our potential understatement of
    costs is likely to be less than 10 percent.

    4 GAO- 01- 901R Costs and Characteristics of Federal Housing Assistance

    Table 2: Federal Cost of the Production Programs as a Percentage of the
    Federal Cost of Vouchers Program First year Life cycle

    (30 years)

    Low- Income Housing Tax Credits 150% 119% HOPE VI a 162 124 Section 202 165
    125 Section 811 149 115 Section 515 160 138

    a HOPE VI costs include only housing- related construction costs. Source:
    GAO analysis of federal, state, local, and private databases.

    Across the six programs, the federal government and tenants pay the majority
    of the total costs of federal housing assistance programs. Tenants
    contribute between 18 percent (HOPE VI) and 46 percent (tax credits) of the
    total housing costs in the first year. In general, households that pay a
    smaller percentage of the per- unit costs either have smaller incomes or
    live in units that are costlier than average (or both conditions apply, as
    often happens for HOPE VI). Conversely, households that pay a higher
    percentage of the per- unit costs typically have higher incomes or are
    allowed to pay a larger percentage of their income for rent (or, again, both
    conditions apply, as happens for the tax credit program). State and local
    governments and private sources, on average, provide 10 and 14 percent for
    the tax credit and HOPE VI programs, respectively, and smaller contributions
    (2 to 6 percent) for the other production programs. These sources do not
    contribute to the voucher program.

    Observations

    If costs were the only consideration, our estimates would suggest that the
    production programs should be replaced with vouchers. However, in many
    markets, production programs are the only sources of new affordable rental
    units, and use restrictions will keep these units affordable for decades to
    come, limiting the impact of market forces on the supply of affordable
    units. Additionally, there are substantial differences in the housing and
    services provided under each of the production programs that must be
    considered. For example, under the Section 202 and Section 811 programs, the
    elderly and disabled often receive services not easily provided in private
    housing. These services can be particularly important for older, frailer
    elderly or for those with more severe disabilities, for whom housing
    vouchers are probably not a reasonable alternative. As the nation?s
    population ages, production programs for the elderly may become an even more
    important part of national housing policy. Finally, in many urban areas, the
    production programs have formed an integral part of an overall community
    development strategy, as is a goal of the HOPE VI program. As a matter of
    public policy, the benefits of increasing the supply of affordable units,
    providing additional services for special needs populations, and
    revitalizing distressed communities must be weighed against the alternative
    benefits of serving more households at a lower average cost through the
    provision of vouchers.

    Agency Comments

    We provided a draft of this report to HUD, the U. S. Department of
    Agriculture, and the National Council of State Housing Agencies for their
    review and comment. Noting that the report is an interim product and does
    not contain a detailed discussion of our methodology, the agencies and the
    Council said they would wait to comment on our approach until they have
    reviewed our final report. However, they raised several broad

    5 GAO- 01- 901R Costs and Characteristics of Federal Housing Assistance

    issues, including whether we had sufficiently considered the difficulty of
    using vouchers in certain markets, appropriately estimated the extent to
    which replacement reserves are underfunded, and adequately accounted for the
    benefits of the newer, often higher- quality housing and services provided
    by the production programs compared with vouchers. HUD also suggested that
    we provide an additional life- cycle analysis over a shorter time period -
    such as 15 years - in part because projecting costs 30 years into the future
    involves too many uncertainties. We recognized the importance of these and
    other issues raised by the agencies and the Council and took them into
    account in developing our methodology and analysis. While we provided some
    additional discussion of these issues in this interim report in response to
    the comments received, we will reserve detailed explanations for our final
    report. The agencies and the Council offered additional technical comments
    and clarifications, which we incorporated as appropriate.

    We are planning to issue a more detailed analysis of the costs and
    characteristics of federal housing assistance programs later this year. It
    will expand on the information provided in this report. We performed our
    work from January 2000 through May 2001 in accordance with generally
    accepted government auditing standards.

    If you have any further questions, please call me at (202) 512- 7631. Key
    contributors to this report were Dennis Fricke, Daniel Garcia- Diaz, and
    Elizabeth Eisenstadt. External consultants Denise DiPasquale and Jean L.
    Cummings, City Research, and Edgar O. Olsen, Department of Economics,
    University of Virginia, also contributed to this report.

    Stanley J. Czerwinski Director, Physical Infrastructure

    Enclosure

    6 GAO- 01- 901R Costs and Characteristics of Federal Housing Assistance

    List of Committees The Honorable Jack Reed Chairman The Honorable Wayne
    Allard Ranking Minority Member Subcommittee on Housing

    and Transportation Committee on Banking, Housing,

    and Urban Affairs United States Senate

    The Honorable Barbara A. Mikulski Chairwoman The Honorable Christopher S.
    Bond Ranking Minority Member Subcommittee on Veteran Affairs, HUD, and
    Independent Agencies Committee on Appropriations United States Senate

    The Honorable Marge Roukema Chairwoman The Honorable Barney Frank Ranking
    Minority Member Subcommittee on Housing and Community Opportunity Committee
    on Financial Services House of Representatives

    The Honorable James T. Walsh Chairman The Honorable Allan B. Mollohan
    Ranking Minority Member Subcommittee on VA, HUD, and Independent Agencies
    Committee on Appropriations House of Representatives

    Enclosure I 7 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    Federal Housing Assistance Programs Costs and Housing Characteristics

    Enclosure I 8 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    2

    Contents

    * Background: Housing Affordability and Federal Resources

     Methodology and Data Limitations  Program Characteristics and Costs

    Enclosure I 9 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    3

    Pay 30% of income for rent

    Pay over 50% of income for rent*

    Pay from 31% to 50% of income for rent About One- Third of Eligible Very-
    Low- Income Renter

    Households Receive Housing Assistance

    * HUD characterizes these households as having ?worst-case housing needs.?
    Sources: GAO?s analysis of program data and HUD?s analysis of American
    Housing Survey, 1999.

    4.3 million assisted households

    4.9 million unassisted households

    3.9 million unassisted households

    Background: Housing Affordability and Federal Resources

    Enclosure I 10 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    4

    Federal Government Spent About $29 Billion for Housing Assistance in FY 1999

    HOME 5% Vouchers

    24% Public Housing

    24% Section 8 project- based*

    29% Other**

    6% Tax Credits

    12%

    *Includes expenditures for New Construction/Substantial Rehabilitation, Loan
    Management Set-Aside, Property Disposition, Section 236, Rental Assistance
    Payment, and Rent Supplement.

    **Includes expenditures for HOPE VI, Section 202, Section 811, Section 515,
    and Section 521.

    Active programs Inactive

    programs

    Background: Housing Affordability and Federal Resources

    Enclosure I 11 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    5

    Defining Total Cost of Vouchers and Production Programs Vouchers

    Tenants receive subsidies to rent housing in the private market:

    Total Costs = Rents + Administrative Fee

    Production programs

    Subsidies are used to develop properties: Total Costs = Rents + Development
    Subsidies

    Methodology and Data Limitations

    Enclosure I 12 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    6

    Estimating Total Cost of Vouchers and Production Programs Vouchers and
    production programs

     Rents are paid over multiple years, and development subsidies are paid up-
    front or over multiple years.

    First- year costs

     Converted the present value of the development subsidies to an annual
    payment and added the annual rent.

    Life- cycle costs

     Added the present value of the rents over 30 years and the present value
    of the development subsidies.

    Methodology and Data Limitations

    Enclosure I 13 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    7

    The Federal Government, Assisted Household, and Other Sources Pay for Rents
    and Total Development Costs

    Vouchers

     Total costs are shared by the federal government and assisted household.
    Federal government pays the difference between the unit?s market rent and
    the household?s payment (generally 30 percent of adjusted income).

     Lower household incomes produce higher federal subsidy costs.

    Production programs

     Total costs are shared by the federal government; assisted household; and
    other sources, including state and local governments and private
    organizations.

     Higher development subsidies respond to higher development costs in
    certain markets. They may also produce lower rents and/ or additional
    amenities.

    Methodology and Data Limitations

    Enclosure I 14 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    8

    Cost Risks Over Time: Vouchers and Production Programs Rent inflation

     Vouchers: Market forces determine their costs. In tight housing markets,
    rents can escalate rapidly, increasing federal costs.

     Production programs: Program regulations and development subsidies can
    limit the impact of rent inflation.

    Capital needs

     Vouchers: The federal government faces no long- term cost risk associated
    with the underfunding of capital needs.

     Production programs: Programs have historically underfunded capital needs,
    resulting in physical deterioration and additional federal costs.

    Methodology and Data Limitations

    Enclosure I 15 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    9

    Key Housing Characteristics Influence Program Costs

     Location (neighborhood characteristics and public services)

     Building type

     Unit size

     Quality

     New construction versus rehabilitation

     Amenities and supportive services

    Methodology and Data Limitations

    Enclosure I 16 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    10

    Estimating Cost Effectiveness of Housing Programs Data required

     With complete data on property characteristics, we could determine
    programs? costeffectiveness by comparing the actual cost incurred with the
    value of the housing and services provided.

    Data limitations

     While we have detailed data on location, unit size, and tenant income,
    data on many important characteristics, such as building type, quality,
    amenities, or services, are not readily available.

    Data employed

     In this presentation, we controlled for

     unit size,

     tenant income, and

     general location.

    Methodology and Data Limitations

    Enclosure I 17 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    11

    Housing Characteristics We Can Control for: Average Unit Size

    2.2 1.6

    1.0 1. 0 1.8

    2.4 0 1

    2 3

    HOPE VI Vouchers Tax credits Section 515 Secti on 811 Section 202

    Average number of bedrooms

    Methodology and Data Limitations

    Enclosure I 18 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    12

    Housing Characteristics We Can Control for: Average Gross Household Income

    $9, 790 $9, 180 $9, 040 $8, 000 $8, 760 $14,150

    $2, 000 $4, 000

    $6, 000 $8, 000

    $10,000 $12,000

    $14,000 $16,000

    Tax credits*

    Vouchers Section 202

    HOPE VI Section 515

    Section 811

    *The average income for tax credit households is somewhat misleading since
    there are two distinct types of households. We estimate that approximately
    40 percent of tax credit households received rental assistance. These
    households had an average income of about $8,350 in 1999 dollars. For
    households who did not receive rental assistance, we estimate an average
    income of about $17,750.

    Annual average income

    Methodology and Data Limitations

    Enclosure I 19 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    13

    Housing Characteristics We Can Control for: General Location of Assisted
    Units

    0% 20%

    40% 60%

    80% 100%

    All rental units

    HOPE VI Vouchers Section 202 Tax credits*

    Section 811 Section 515 Nonmetro

    Suburban Central city

    Percent of units

    Methodology and Data Limitations *Tax credit units with Section 515
    mortgages are excluded. If included, the share of units in nonmetro areas
    would increase from 6 to 22 percent.

    Enclosure I 20 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    14

    Housing Vouchers Offer Choice in Existing Housing

     Provide households with choice in a wide variety of locations and building
    types, including singlefamily homes.

     Property median age is about 35 years.

     Do not generally pay for supportive or social services.

    Program Characteristics and Costs

    Enclosure I 21 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    15

    Voucher Program: Suburban Walk- Up Apartment

    Size: One- and two- bedroom units

    Age: About 30 years Location: Baltimore Program Characteristics and Costs

    Enclosure I 22 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    16

    Voucher Program: Three- Story Central City Apartment

    Size: Two-bedroom units

    Age: 80 years Location: Boston Program Characteristics and Costs

    Enclosure I 23 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    17

    $0 $2, 000

    $4, 000 $6, 000

    $8, 000 $10, 000

    National Metr o Nonmetr o Federal Tenant

    $7,870 $8,350 $5,660

    $0 $40,000

    $80,000 $120, 000

    $160, 000 $200, 000

    National Metro Nonmetro Federal Tenant Cost of Vouchers Varies by General

    Location

    First year Life cycle

    Program Characteristics and Costs $160,580 $170,370

    $115,500 Note: About 7 percent of all vouchers are used in federally
    subsidized properties, primarily tax credit and Section 515 properties. We
    estimate that the subsidy cost associated with these properties would add
    around $200 in the first year and about $2,600 over the life cycle to the
    total cost of vouchers.

    Enclosure I 24 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    18

    States Target Tax Credits to Address Housing Priorities

     Serve different populations in a wide variety of locations and building
    types.

     Produce new or rehabilitated housing.

     Respond to state- determined housing priorities.

     Offer supportive and social services by property, not by program.

    Program Characteristics and Costs

    Enclosure I 25 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    19

    Tax Credits: Central City High- Rise Apartment

    Size: Efficiency; one-, two-, and three- bedroom units

    Age: Newly constructed in 1995

    Location: San Francisco Program Characteristics and Costs

    Enclosure I 26 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    20

    Tax Credits: Suburban Single- Room Occupancy for the Homeless

    Size: One-room units Age: Rehabilitated in 1999

    Location: Baltimore Program Characteristics and Costs

    Enclosure I 27 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    21

    Tax Credits: Rural Walk- Up Apartment

    Size: One- and two- bedroom units

    Age: Newly constructed in 1995

    Location: Lake Pointe, Conway, AR Program Characteristics and Costs

    Enclosure I 28 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    22

    $0 $2, 000

    $4, 000 $6, 000

    $8, 000 $10, 000

    $12, 000 Adjusted metro

    voucher Tax credits

    Federal State/ local/ private Assisted household

    First year

    Note: Cost estimate of tax credits does not account for the subsidy cost of
    property tax abatements or any underfunding of replacement reserves. Tax
    credit properties that received Section 515 loans are excluded from this
    analysis. Program Characteristics and Costs

    Total and Federal Per- Unit Costs Are Higher for Tax Credits Than for
    Vouchers

     Voucher cost is adjusted to reflect smaller average unit size and higher
    average household income under tax credits.

     First- year total cost is about 32% greater for tax credit units than for
    adjusted vouchers. (Life- cycle cost is about 16% greater.)

     Federal cost is about 50% greater for tax credit units than for vouchers.
    (Life- cycle federal cost is about 19% greater.)

    $7,710 $10,200

    Enclosure I 29 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    23

    HOPE VI Replaces and Revitalizes Distressed Public Housing

     Serves households in blighted urban neighborhoods, predominantly in town
    houses and walk- up apartments.

     Transforms distressed and obsolete public housing through demolition and
    new construction.

     Leverages public and private funds.

     Promotes mixed- income communities and economic development.

     Provides comprehensive supportive and social services.

    Program Characteristics and Costs

    Enclosure I 30 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    24

    HOPE VI: Central City Walk- Up Apartments

    Size: One-, two-, three-, and four- bedroom units

    Age: Phased construction, 1997- 2001

    Location: Atlanta Program Characteristics and Costs

    Enclosure I 31 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    25

    HOPE VI: Central City Town House Apartments

    Size: One-, two-, three-, and four- bedroom units

    Age: Phased construction, 1998-2000 Location: Boston

    Before After Program Characteristics and Costs

    Enclosure I 32 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    26

    HOPE VI: Central City Town House Apartments

    Size: One-, two-, three-, and four-bedroom units

    Age: Newly constructed in 2000

    Location: Baltimore Program Characteristics and Costs

    Enclosure I 33 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    27

    HOPE VI: Children?s Computer Laboratory and New Local Business

    Service: On-site learning center Location: El Paso

    Service: Newly located retail pharmacy store Location: Baltimore Program
    Characteristics and Costs

    Enclosure I 34 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    28

    HOPE VI Takes Proactive Role in Economic Development by Locating Properties
    in Poor, Mostly Minority Neighborhoods With Little Homeownership

    50% 81%

    14% 20% 40%

    51% 22%

    45% 43% 38%

    55% 15%

    28% 60%

    16% 0% 30%

    60% 90%

    Poverty Minority Homeowners HOPE VI

    Vouchers Tax credits Section 202 Section 811

    Percent of population in census tract

    Note: Data for Section 515 are not readily available. Program
    Characteristics and Costs

    Enclosure I 35 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    29

    $0 $2, 000

    $4, 000 $6, 000

    $8, 000 $10,000

    $12,000 $14,000

    $16,000 $18,000

    Adjusted metro voucher

    HOPE VI Housing- related

    costs only HOPE VI - All

    costs* Federal State/ local/ private Tenant Total and Federal Per- Unit
    Costs Are Higher

    for HOPE VI Than for Vouchers

    First year

    Program Characteristics and Costs

     Voucher cost is adjusted to reflect larger average unit size and lower
    average household income under HOPE VI.

     First- year total housing- related costs are about 59% greater for HOPE VI
    units. (Life- cycle cost is about 27% greater.)

     Federal cost for housing- related expenses is about 62% greater for HOPE
    VI units. (Life- cycle federal cost is about 24% greater.)

     When all costs for HOPE VI are included, first- year total cost is about
    81% greater than vouchers, and federal cost is about 62% greater.

    Note: Cost estimate of HOPE VI does not account for the subsidy cost of
    property tax abatements or the funding of replacement reserves. * This
    estimate of total cost includes the costs of remediation, demolition,
    construction of housing and community facilities, relocation, and
    community-based planning and participation, most of which are not applicable
    to the other housing programs.

    $8,610 $13,730 $15,580

    Enclosure I 36 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    30

    Section 202 Provides Predominantly New Housing for the Elderly

     Serves only the elderly in a wide variety of locations, primarily in
    elevator buildings.

     Produces mostly new housing.

     Provides one- bedroom units.

     Makes supportive and social services available.

    Program Characteristics and Costs

    Enclosure I 37 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    31

    Section 202: Suburban Elevator HighRise Apartments for the Elderly

    Size: 86 one-bedroom units Age: Newly constructed in 1997 Location:
    Baltimore Program Characteristics and Costs

    Enclosure I 38 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    32

    Section 202: Suburban Elevator Apartments for the Elderly

    Size: 59 one-bedroom units Age: Newly constructed in 1996 Location: Fort
    Worth Program Characteristics and Costs

    Enclosure I 39 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    33

    $0 $2, 000

    $4, 000 $6, 000

    $8, 000 $10, 000

    $12, 000 Adjusted national

    voucher Section 202

    Federal State/ local/ private Tenant Total and Federal Per- Unit Costs Are
    Higher

    for Section 202 Than for Vouchers

    First year

    Note: Cost estimate of Section 202 does not account for the subsidy cost of
    property tax abatements or any underfunding of replacement reserves. Program
    Characteristics and Costs

     Voucher cost is adjusted to reflect smaller average unit size and lower
    average household income under Section 202.

     First- year total cost is about 45% greater for 202 units. (Life- cycle
    cost is about 19% greater.)

     Federal cost is about 65% greater for 202 units. (Life- cycle federal cost
    is about 25% greater.)

    $6,480 $9,420

    Enclosure I 40 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    34

    Section 811 Provides New and Rehabilitated Housing for Persons With
    Disabilities

     Serves persons with disabilities in a wide variety of locations, primarily
    in group homes and independent living projects.

     Provides both new and rehabilitated housing.

     Makes supportive and social services available.

    Program Characteristics and Costs

    Enclosure I 41 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    35

    Section 811: Suburban Independent Living Project for Persons With Mental
    Disabilities

    Size: 15 one-bedroom units Age: Rehabilitated in 1998 Location: Baltimore
    Program Characteristics and Costs

    Enclosure I 42 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    36

    Section 811: Suburban Single- Family Group Home for Persons With Mental
    Disabilities

    Size: One of two three- bedroom homes

    Age: Rehabilitated in 1999 Location: Fort Worth Program Characteristics and
    Costs

    Enclosure I 43 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    37

    Total and Federal Per- Unit Costs Are Greater for Section 811 Than for
    Vouchers

    First year

    Note: Cost estimate of Section 811 does not account for the subsidy cost of
    property tax abatements or any underfunding of replacement reserves. Program
    Characteristics and Costs

     Voucher cost is adjusted to reflect smaller average unit size and lower
    average household income under Section 811.

     First- year total cost is about 38% greater for 811 units. (Life- cycle
    cost is about 12% greater.)

     Federal cost is about 49% greater for 811 units. (Life- cycle federal cost
    is about 15% greater.)

    $6,480 $8,930

    $0 $2, 000

    $4, 000 $6, 000

    $8, 000 $10,000

    Adjusted national voucher

    Section 811 Federal State/ local/ private Tenant

    Enclosure I 44 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    38

    Section 515 Makes Housing Available in Rural Areas

     Primarily serves families and the elderly in rural areas, generally in
    walk- up apartments.

     Provides mostly new housing.

     Supportive and social services vary with the properties and populations
    served.

    Program Characteristics and Costs

    Enclosure I 45 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    39

    Section 515: Rural Walk- Up Apartment for the Elderly

    Size: One-bedroom units Age: Newly constructed in 1998

    Location: Wachusetts, MA Program Characteristics and Costs

    Enclosure I 46 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    40

    Section 515: Rural Housing for Families

    Size: Two-bedroom units

    Age: Newly constructed in 1994

    Location: Nelsonville, OH Program Characteristics and Costs

    Enclosure I 47 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    41

    Total and Federal Per- Unit Costs Are Higher for Section 515 Than for
    Vouchers

    First year

    $0 $2, 000

    $4, 000 $6, 000

    $8, 000 Adjusted nonmetro

    voucher Section 515

    Federal State/ local/ private Tenant

    Note: Cost estimate of Section 515 includes tax credits but does not account
    for the subsidy cost of property tax abatements or any underfunding of
    replacement reserves. For 515 properties without tax credits, average total
    cost decreases to about $6,920 in the first year. This is about 35 percent
    greater than vouchers and 20 percent greater over the life cycle. At $6,920,
    the federal cost is about 50 percent greater than vouchers and 28 percent
    greater over the life cycle. Program Characteristics and Costs

     Voucher cost is adjusted to reflect smaller average unit size and lower
    average household income under Section 515.

     First- year total cost is about 42% greater for 515 units. (Life- cycle
    cost is about 25% greater.)

     Federal cost is about 60% greater for 515 units. (Life- cycle federal cost
    is about 38% greater.)

    $5,190 $7,360

    Enclosure I 48 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    42

    Comparison of Total Cost Between Production Programs and Vouchers After
    Adjustments for Unit Size

    100% 132% 138% 142% 145%

    159% 100%

    116% 112% 125% 119% 127%

    0% 20%

    40% 60%

    80% 100%

    120% 140%

    160% Vouchers Tax credits Section 811 Section 515 Section 202 HOPE VI

    First- year Life- cycle

    Program Characteristics and Costs

    Production program cost as percent of voucher cost

    Enclosure I 49 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    43

    132% 142% 126%

    147% 127%

    139% 140% 154%

    123% 116% 130%

    118% 126% 115% 116% 125%

    0% 20%

    40% 60%

    80% 100%

    120% 140%

    160% 180%

    Metro Baltimore Boston Chicago Dallas/ Fort Worth

    Denver Los Angeles New York First year Life cycle Comparison of Total Cost
    Between Tax Credits and

    Vouchers After Adjustments for Unit Size, by Location

    Program Characteristics and Costs

    Tax credit cost as percent of voucher cost

    Enclosure I 50 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    44

    145% 154% 130%

    168% 122%

    136% 146% 162%

    132% 118% 109% 102% 141%

    106% 119% 126%

    0% 20%

    40% 60%

    80% 100%

    120% 140%

    160% 180%

    Nation Baltimore Boston Chicago Dallas/ Fort Worth

    Denver Los Angeles

    New York First year Life cycle Comparison of Total Cost Between Section 202
    and

    Vouchers After Adjustments for Unit Size, by Location

    Program Characteristics and Costs

    Section 202 cost as percent of voucher cost

    Enclosure I 51 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    45

    138% 136% 137% 160%

    139% 126%

    149% 183%

    150% 121% 103% 113% 134%

    113% 112% 108% 0% 20%

    40% 60%

    80% 100%

    120% 140%

    160% 180%

    200% Nation Baltimore Boston Chicago Dallas/ Fort

    Worth Denver Los

    Angeles New York

    First year Life cycle Comparison of Total Cost Between Section 811 and

    Vouchers After Adjustments for Unit Size, by Location

    Program Characteristics and Costs

    Section 811 cost as percent of voucher cost

    Enclosure I 52 GAO- 01- 901R Costs and Characteristics of Federal Housing
    Assistance

    (391005)

    46

    $3, 000 $6, 280

    $4, 200 $4, 440 $2, 910 $4, 510

    $10,210 $6, 930 $6, 620

    $4, 658 $0 $2, 000

    $4, 000 $6, 000

    $8, 000 $10,000

    $12,000 Tax Credits HOPE VI Section 202 Section 811 Section 515

    Adjusted voucher Production program Comparison of Federal Cost for
    Production Programs and

    Vouchers Adjusted for Unit Size and Household Income

    Program Characteristics and Costs

    Federal cost
    *** End of document. ***