National Park Service: Reexamination of Employee Housing Program Is
Needed (Chapter Report, 08/30/94, GAO/RCED-94-284).

Since 1916, the National Park Service has provided rental housing in
parks to many of its employees. The Park Service has an inventory today
of about 4,700 housing units. Nearly half of the housing inventory is
more than 30 years old. Park Service estimates of what it would cost to
repair, rehabilitate, repair, and replace this housing inventory have
increased significantly during the past several years; the total
estimate is now more than half a billion dollars. This report (1)
describes the Park Service's housing program and compares it with the
housing programs run by two other large land management agencies--the
Forest Service and the Bureau of Land Management--and (2) identifies
options that are available to the Park Service to deal with its housing
problems.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-94-284
     TITLE:  National Park Service: Reexamination of Employee Housing 
             Program Is Needed
      DATE:  08/30/94
   SUBJECT:  National parks
             National historic sites
             Federal employees
             Repair costs
             Comparative analysis
             Maintenance (upkeep)
             Housing programs
             Housing repairs
             Cost analysis
             Appropriated funds
IDENTIFIER:  NPS Employee Housing Initiative
             Yosemite National Park (CA)
             Grand Canyon National Park (AZ)
             Dept. of the Interior Quarters Management Information System
             Cape Cod National Seashore (MA)
             Big Bend National Park (TX)
             Grand Teton National Park (WY)
             Yellowstone National Park (WY)
             NPS Grand Canyon National Park Housing Management Plan
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on National Parks, Forests, and
Public Lands, Committee on Natural Resources, House of
Representatives

August 1994

NATIONAL PARK SERVICE -
REEXAMINATION OF EMPLOYEE HOUSING
PROGRAM IS NEEDED

GAO/RCED-94-284

National Park Service Employee Housing


Abbreviations
=============================================================== ABBREV

  BLM - Bureau of Land Management
  CBO - Congressional Budget Office
  GAO - General Accounting Office
  OMB - Office of Management and Budget

Letter
=============================================================== LETTER


B-258035

August 30, 1994

The Honorable Bruce F.  Vento
Chairman, Subcommittee on National
 Parks, Forests, and Public Lands
Committee on Natural Resources
House of Representatives

Dear Mr.  Chairman: 

This report responds to your request that we (1) describe the Park
Service's housing program and compare it with the housing programs
operated by the Department of Agriculture's Forest Service and the
Department of the Interior's Bureau of Land Management and (2)
identify options that are available to the Park Service to deal with
its housing problems.  Specifically, the report compares the housing
programs of the three agencies, discusses ways the Park Service could
reduce its housing inventory and alternatives the Park Service could
use to address its housing needs. 

As agreed with your office, unless you publicly announce its 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 copies to
the Secretaries of the Interior and Agriculture.  We will also make
copies available to others upon request. 

This report was prepared under the direction of James Duffus III,
Director, Natural Resources Management Issues, who can be reached at
(202) 512-7756, if you or your staff have any questions.  Major
contributors to this report are listed in appendix II. 

Sincerely yours,

Keith O.  Fultz
Assistant Comptroller General


EXECUTIVE SUMMARY
============================================================ Chapter 0


   PURPOSE
---------------------------------------------------------- Chapter 0:1

Since 1916, the Department of the Interior's National Park Service
has provided rental housing in the parks to many of its employees. 
Currently, the Park Service has an inventory of about 4,700 housing
units.  About 50 percent of the housing inventory is over 30 years
old.  The Park Service's estimates of what it would cost to address
the backlog of housing repair, rehabilitation, and replacement needs
have increased significantly over the past several years; the total
estimate is currently more than half a billion dollars.  Concerned
about the Park Service's housing problems, the Chairman, Subcommittee
on National Parks, Forests, and Public Lands, House Committee on
Natural Resources, asked GAO to (1) describe the Park Service's
housing program and compare it with the housing programs operated by
two other large land management agencies--the Department of
Agriculture's Forest Service and Interior's Bureau of Land Management
(BLM)--and (2) identify options that are available to the Park
Service to deal with its housing problems. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:2

In accordance with Office of Management and Budget guidance, land
management agencies are authorized to provide housing for all
seasonal employees when necessary and for permanent employees if
housing is (1) not available within a reasonable commuting distance
or (2) needed to provide visitor services or to protect government
property and resources.  Using these criteria, the Park Service,
Forest Service, and BLM have determined the amount of housing they
will provide.  The Park Service provides about 4,700 housing units to
employees.  The Forest Service provides about 4,400 housing units. 
BLM provides about 200 housing units. 

As the largest provider of employee housing among the three land
management agencies, in recent years the Park Service's backlog of
housing repair, rehabilitation, and replacement needs has grown
significantly.  In February 1988, the Park Service estimated it had a
repair, rehabilitation, and replacement backlog of about $267 million
for its employee housing program.  Three years later, in April 1991,
the Park Service reported that its backlog estimate had more than
doubled to about $546 million.  Although the Congress has
appropriated a total of $57 million since fiscal year 1989 to help
address the backlog, in July 1994 the Park Service reported that its
backlog estimate is still $546 million. 


   RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3

The Park Service, Forest Service, and BLM have a common basic
mission--managing and protecting the federal lands.  However, the
Park Service places greater emphasis on providing in-park visitor
services, such as interpretation of natural, cultural, scenic, and
historic resources, than either the Forest Service or BLM.  To
accomplish this mission, the Park Service believes it needs to
provide a much larger portion of its employees with in-park housing
than the other two agencies.  Furthermore, over the years each of the
agencies has built up a housing inventory that has a different mix of
unit types.  Compared to the Forest Service's and BLM's housing
inventories, the Park Service's inventory contains relatively more
houses, multiplex units, and apartments and relatively fewer
dormitories and cabins.  As such, the Park Service's housing
inventory is more costly to maintain.  Of the three agencies, the
Park Service has by far the highest reported backlog of housing
needs. 

While the Park Service has a long-standing tradition of providing
housing to some of its employees, a deteriorating housing inventory
and a tight federal budget dictate that the Park Service examine
options to deal with its housing needs.  First, the Park Service can
explore opportunities to reduce its housing inventory.  As GAO
reported in September 1993, inventory reduction can be accomplished
by eliminating housing units that cannot be adequately justified.\1
In addition, where possible, the Park Service can explore ways to
move employees out of Park Service housing and into available housing
in local markets.  Second, since the funds received from rental
income and federal appropriations typically have not been sufficient
to maintain its housing inventory, the Park Service needs to pursue
alternative financing arrangements for repairing, rehabilitating, and
replacing housing units.  These alternatives range from seeking
nonfederal funding for constructing or rehabilitating housing to
private-sector construction and management of housing.  All of these
financing arrangements have advantages and disadvantages.  In
addition, several would require new legislative authority. 


--------------------
\1 National Park Service:  Condition of and Need for Employee Housing
(GAO/RCED-93-192, Sept.  30, 1993). 


   PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4


      PARK SERVICE TAKES A
      DIFFERENT APPROACH IN
      PROVIDING EMPLOYEE HOUSING
-------------------------------------------------------- Chapter 0:4.1

In addition to preserving and protecting the natural, cultural,
scenic, and historic resources under its stewardship, a major part of
the Park Service's mission is providing in-park visitor services.  To
carry out its mission, the Park Service believes it needs to provide
many of its employees with housing within parks.  While the Forest
Service and BLM also have resource management and stewardship
responsibilities, these agencies do not emphasize visitor services to
the same extent as the Park Service.  These differing approaches are
reflected in the number of staff positions that each agency
designates as required to live on-site.  In the Park Service, about
1,400 positions have this requirement, compared with 70 for the
Forest Service and 2 for BLM.  These differing approaches are also
reflected in the relative amounts of housing provided to agency
employees.  The Park Service has an inventory of about 4,700 housing
units and about 24,000 employees (1 unit for every 5 employees).  In
comparison, the Forest Service has about 4,400 housing units and
about 51,000 employees (1 unit for every 11 employees).  BLM has
about 200 housing units and about 12,000 employees (1 unit for every
58 employees). 

About 75 percent of the Park Service's housing inventory is single-
family houses, multiplex units, and apartments, compared with 50
percent and 25 percent, respectively, for the Forest Service and BLM. 
These units tend to be more costly to maintain than cabins and
dormitories, which form a larger portion of the Forest Service's and
BLM's inventories.  For example, although the Park Service and the
Forest Service have similarly sized inventories in about the same
condition, the Park Service's estimate of the costs to repair,
rehabilitate, or replace its inventory is more than 3 times higher
than the Forest Service's cost estimate--about $546 million versus
about $159 million.  (GAO did not verify the accuracy of the backlog
estimates by the Park Service or the Forest Service.) Other reasons
mentioned by Park Service officials for the higher cost estimate were
higher housing standards in the Park Service and more historic
structures, which are costly to rehabilitate. 

Furthermore, because the Park Service believes it needs to provide a
large portion of its employees with in-park housing, it is seeking to
replace and upgrade its employee housing inventory.  By contrast,
Forest Service and BLM officials said they are not planning to
upgrade or significantly rehabilitate their housing inventory because
of the cost of maintaining the inventory and because the
justification for some of the units may no longer be valid.  The
differences in emphasis can also be seen in fiscal year 1995 funding
requests for employee housing construction.  The Park Service
requested $30 million, the Forest Service about $1 million, and BLM
requested no housing construction funds. 


      ALTERNATIVES FOR IMPROVING
      THE PARK SERVICE'S EMPLOYEE
      HOUSING PROGRAM
-------------------------------------------------------- Chapter 0:4.2

Under the current federal fiscal climate, it is unlikely that the
Park Service will receive sufficient appropriated funds to cover its
housing repair, rehabilitation, and replacement needs.  It is equally
unlikely that the rents that Park Service employees pay for Park
Service housing will make up the difference.  As a result, the Park
Service will probably not be able to arrest the deterioration of its
inventory unless it can reduce its inventory and obtain alternative
financing.  GAO's September 1993 report stated that the Park Service
had adequate justification for about 88 percent of its housing
inventory.  However, GAO questioned the justification for the
remaining 12 percent of the housing inventory.  As a result, GAO
recommended that the Park Service reassess the need for all permanent
housing. 

In response to GAO's recommendation, the Park Service stated that it
planned to reexamine the need for the 12 percent of the housing units
GAO questioned.  However, because of the scope of the housing
problems facing the Park Service, limiting its reexamination to only
those housing units questioned by GAO's earlier review will not
permit the Park Service to determine whether its total inventory is
adequately justified and whether any housing units can be eliminated
beyond those identified by GAO.  This determination should be made on
the basis of a park-by-park review of all housing needs.  Such a
park-by-park review will also permit the Park Service to identify
opportunities for (1) relocating to nearby communities those
employees who do not provide visitor services or protect government
property, (2) reducing the number of staff members required to live
in the parks by revising job requirements, and (3) exploring housing
subsidies when local housing is not affordable. 

The Park Service is exploring alternative arrangements for financing
its employee housing.  The Secretary of the Interior, under the
direction of his Chief of Staff, is examining using the resources of
the National Park Foundation\2 to obtain private-sector funding or
contributions to improve Park Service housing.  In addition, several
employee housing studies conducted since 1988 have identified
alternative financing arrangements for obtaining nonfederal funding
for employee housing.  All of these alternative financing
arrangements have advantages and disadvantages.  Several of them
would require new legislative authority. 


--------------------
\2 The National Park Foundation is a private, nonprofit foundation
chartered by the Congress in 1967 to provide private-sector support
for the national park system. 


   RECOMMENDATIONS
---------------------------------------------------------- Chapter 0:5

In order to better define its housing needs and identify
opportunities for reducing its inventory, GAO recommends that the
Secretary of the Interior require the Director of the Park Service to
conduct a park-by-park review of housing needs to determine whether
the agency's current housing inventory at each location is needed and
justified. 

In order to obtain nonfederal funds to help the Park Service meet its
housing needs, GAO recommends that in addition to those alternative
arrangements being explored by the Chief of Staff, the Secretary of
the Interior require the Director of the Park Service to review the
housing alternatives GAO identified from employee housing studies,
weigh and compare their respective costs and benefits, develop a
strategy for implementing the alternatives that the agency considers
most effective, and present the strategy to its legislative and
appropriations committees in the Congress. 


   AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:6

GAO discussed the factual material contained in this report with the
Secretary of the Interior's Chief of Staff, the Director of the Park
Service, other Park Service officials involved in the housing
program, and BLM and Forest Service officials responsible for
employee housing.  BLM and Forest Service officials agreed with the
facts as presented.  Department of the Interior and Park Service
officials provided some factual and editorial comments, which have
been incorporated into the report as appropriate.  However, as
requested, GAO did not obtain written comments on its findings from
the Department of the Interior or the Forest Service. 


BACKGROUND
============================================================ Chapter 1

The National Park Service and the Bureau of Land Management (BLM),
within the Department of the Interior, and the Forest Service, within
the Department of Agriculture, provide some of their employees with
government rental quarters.  These agencies are authorized to provide
housing when it is essential to accomplish their mission.  Of these
agencies, the Park Service is the largest provider of employee rental
housing--about one out of five of its employees rents quarters from
the government.  The Congress and Park Service officials are
concerned about the adequacy and cost of Park Service housing,
especially since the Park Service has not been able to make any
significant reductions in its housing, repair, rehabilitation, and
replacement backlog--currently estimated at about $546 million. 


   OFFICE OF MANAGEMENT AND
   BUDGET'S (OMB) GUIDANCE ON
   EMPLOYEE HOUSING
---------------------------------------------------------- Chapter 1:1

Federal agencies are authorized to provide housing for all seasonal
employees when necessary and for permanent employees when they
determine that

  employees must live on the federal land to render necessary visitor
     services or to protect government property or

  present and prospective housing is not available for sale or rent
     within a reasonable commuting distance.\1

Also, OMB Circular A-45, dated October 20, 1993, sets out criteria
for agencies to use in establishing rental rates.  Generally,
agencies' rental rates

  should be based on reasonable value, that is, they should be set at
     levels equal to those prevailing in comparable private housing
     located in the same area, and

  may not be set so as to provide a housing subsidy, serve as an
     inducement in recruiting or retaining employees, or encourage
     the occupancy of existing government housing. 

All three agencies participate in a multiagency program that surveys
regional housing markets and uses statistical programs to establish
base rental rates for government rental quarters.  Once base rental
rates are established, OMB's guidance requires park managers to
administratively reduce rents for isolation and allows reductions for
a variety of factors, including the inadequacy or absence of standard
amenities (for example, street lighting, sidewalks, and reliable
utilities). 


--------------------
\1 The Federal Employees Quarters and Facilities Act of 1964 (P.  L. 
88-459), the Government Organization and Employees Act of 1966 (P. 
L.  89-554), and OMB Circular A-11, dated July 2, 1992 (which
superseded OMB Circular A-18, dated Oct.  18, 1957), provide the
conditions under which executive agencies can justify providing
employee housing. 


   HOUSING CONDITIONS WITHIN THE
   PARK SERVICE
---------------------------------------------------------- Chapter 1:2

Since its establishment in 1916, the Park Service has acquired or
constructed over 4,700 housing units.\2 When individual parks were
added to the park system, existing housing was acquired.  Such
housing included quarters from U.S.  Army operations, rustic hotels,
and cabins built by railroad companies.  The Park Service retained
many of these structures, especially at isolated locations, so that
employees could live in the parks to protect natural resources and
provide services to visitors. 

The Park Service built additional housing during two major
construction periods.  The first period occurred during the 1920s and
1930s.  About 965 units, such as cabins, bunkhouses, and lodges, were
built in this period.  The second major construction effort was a
10-year capital investment program called "Mission 66." About 1,780
units were built between 1956 and the program's end in fiscal year
1966.  During the next 20 years, the Park Service built or acquired
about 470 houses, apartments, and duplexes.  It also acquired about
550 mobile homes as "temporary" solutions to housing because no other
housing was available.  About half of the Park Service's existing
housing was built before 1960.  Figure 1.1 shows the percentage of
the Park Service's inventory that was built before 1900 and in the
decades since 1900. 

   Figure 1.1:  Percentage of Park
   Service Employee Housing Built
   Before 1900 and in the Decades
   Since 1900

   (See figure in printed
   edition.)

Four of the 10 Park Service regions (Rocky Mountain, Western, Alaska,
and Pacific Northwest) account for about 70 percent of the housing
inventory.  The most common type of housing unit in the inventory is
a single-family dwelling.  About 60 percent of the housing inventory,
or about 2,800 units, can be used year-round and consist primarily of
single-family homes, duplexes/triplexes, and mobile homes.  About 40
percent of the inventory, or 1,900 units, is seasonal and is only
used between 3 to 6 months of the year; this seasonal inventory
consists mainly of apartments, cabins, dormitories, and trailers. 

Today, the Park Service estimates that about 50 percent of its
inventory (about 2,400 units) is rated in obsolete, poor, or fair
condition.  Obsolete housing units are usually beyond economic
rehabilitation.  Housing units rated in poor condition are those with
marginal structural integrity needing major repairs for continued
habitation.  Those units rated in fair condition show early signs of
reversible deterioration, such as leaking roofs, inadequate
electrical service, and minor foundation cracks.  To repair,
rehabilitate, or replace their housing, Park Service officials
estimate a backlog of about $546 million--about $409 million to
replace deteriorated or unusable housing and $137 million to
rehabilitate usable units.  Park Service officials attributed the
condition of the housing and the backlog to insufficient maintenance
funding, rental rate limitations, and isolation adjustments. 

The Park Service's housing program typically has not generated
sufficient rental income to operate and maintain the housing units. 
In fiscal year 1993, for example, the Park Service collected about
$10 million in rents, which covered about two-thirds of the $15
million it incurred in housing operation and maintenance costs that
year.  Rental income, which can be used only to maintain housing
units, has been insufficient primarily because rental rates are
reduced by as much as 60 percent for such factors as isolation or
lack of amenities.  In addition, since fiscal year 1992, the Congress
has capped the amount of annual rent increases the Park Service could
impose.  According to Park Service officials, most park managers use
park operating funds to make up some of the difference between rental
income and housing maintenance needs.  However, in recent years this
practice has become more difficult because of pressing park operation
needs and competing demands on the operating budget. 


--------------------
\2 This figure excludes about 300 trailer pads that the Park Service
inventories but does not rate for condition. 


   PARK SERVICE'S REPAIR,
   REHABILITATION, AND REPLACEMENT
   BACKLOG
---------------------------------------------------------- Chapter 1:3

Concerned about the condition of Park Service housing, the Congress
requested that the Park Service analyze its housing needs in 1987. 
In February 1988, the Park Service completed this analysis and
identified an estimated $267 million backlog in housing needs.  In
April 1991, the Park Service, at the request of the Congress,
analyzed its backlog estimate and found that it had more than
doubled--from $267 million to about $546 million. 

The Park Service began receiving appropriations in fiscal year 1989
under the Employee Housing Initiative to improve employee housing by
repairing, rehabilitating, and replacing existing units.  Since
fiscal year 1989, annual appropriations have totaled $57 million for
the Employee Housing Initiative.  From these appropriations, the Park
Service repaired, rehabilitated, or replaced about 770 housing units. 
In its fiscal year 1995 budget request, the Park Service is asking
for $30 million for employee housing.  Of this amount, $18 million is
requested for replacement housing at three parks in Alaska and at the
Grand Canyon, and the remaining $12 million is to repair,
rehabilitate, and replace housing at 38 other park units. 

Despite the Employee Housing Initiative, a considerable backlog still
exists.  As of July 1994, the Park Service still estimates its
backlog to be about $546 million.  Park Service officials told us
that the $546 million backlog has not been reduced in the past few
years because of the recurring gap between rental income, maintenance
needs, and the cap on rental rate increases.  In its fiscal year 1995
budget justification, the Park Service stated that it would like to
eliminate the backlog within the next 10 years. 


   OUR PREVIOUS WORK ON THE PARK
   SERVICE'S EMPLOYEE HOUSING
   PROGRAM
---------------------------------------------------------- Chapter 1:4

On September 30, 1993, we issued a report to the Chairman,
Subcommittee on National Parks, Forests, and Public Lands, House
Committee on Natural Resources, on the condition of and need for the
Park Service's employee housing.\3 At that time, the Chairman was
concerned about the Park Service's housing program and the size of
the backlog estimate and specifically asked us to (1) describe the
condition of employee housing, (2) evaluate the Park Service's
justification for employee housing, and (3) determine the accuracy of
and reasons for the backlog estimate.  We reported that about 60
percent of the Park Service's housing inventory was rated in fair,
poor, or obsolete condition.  We also questioned the justification
for about 12 percent of the Park Service's housing inventory, as well
as the accuracy of its backlog estimate, which could not be verified
because of a lack of documentation. 

To better manage the Park Service's housing program, we recommended
that the Secretary of the Interior direct the Director of the Park
Service to (1) reassess the need for all permanent housing units and
develop a strategy to eliminate those units that are not needed, (2)
develop a repair and/or replacement estimate that could be supported
for those units that are needed, and (3) develop a strategy for
closing the gap between rental income and maintenance costs.  On July
18, 1994, the Park Service responded to our report, stating that it
generally agreed with the recommendations.  The Park Service stated
that it plans to reassess the need for the housing units we
questioned, is reviewing its procedures for estimating the backlog
and will make changes if needed, and will take all possible steps to
narrow the gap between rental income and maintenance needs--not,
however, at the expense of placing the burden on lower-graded field
employees.  The Park Service did not provide the specifics on how
these actions would be accomplished but stated that it plans to
complete them by May 1995. 


--------------------
\3 National Park Service:  Condition of and Need for Employee Housing
(GAO/RCED-93-192, Sept.  30, 1993). 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
---------------------------------------------------------- Chapter 1:5

Concerned about the management and aging condition of the Park
Service's housing inventory and the lack of progress in substantially
reducing the estimated cost of the repair, rehabilitation, and
replacement backlog, the Chairman, Subcommittee on National Parks,
Forests, and Public Lands, House Committee on Natural Resources,
asked us to further review the Park Service's current housing
situation.  Specifically, he asked us to (1) describe the Park
Service's housing program and compare it with the housing programs
operated by two other large land management agencies--the Department
of Agriculture's Forest Service and Interior's BLM--and (2) identify
options that are available to the Park Service to deal with its
housing problems.  In addition, on a related matter, the Chairman
asked us to determine the number of employees who paid capital gains
taxes on the sale of a residence and whether having to pay the tax
hampers employees' mobility.  The methodology we used to address this
question and the results of our work on this issue are included in
appendix I. 

To compare the housing programs of the three agencies, we reviewed
OMB's guidance as well as the agencies' individual policies for
providing employee housing.  We obtained information on the number,
types, and condition of employee housing from the Department of the
Interior's Quarters Management Information System (this system also
includes information on the Forest Service's housing program).  From
housing officials in each agency, we obtained information on repair,
rehabilitation, and replacement backlogs and whether the agency had
plans to increase or decrease the housing inventory levels.  To
obtain additional perspectives on providing government housing, we
visited with or contacted officials at nine national forests that are
adjacent to national parks.  These forests were the Stanislas,
Sierra, Inyo, and Sequoia in California; Mt.  Baker-Snoqualmie and
Gifford Pinchot in Washington; Gallatin in Montana; Bridger-Teton in
Wyoming; and George Washington in Virginia.  We also contacted
housing officials at the three BLM state offices that manage the
largest number of housing units. 

To describe alternatives the Park Service could use to provide
employee housing, we reviewed studies of employee housing that have
been conducted since 1988.  We also discussed alternatives with
officials from the Department of the Interior, the Park Service, the
Forest Service, and BLM at both headquarters and in the field. 

We conducted our review from December 1993 to August 1994 in
accordance with generally accepted government auditing standards.  We
discussed the factual material contained in this report with the
Secretary of the Interior's Chief of Staff, the Director of the Park
Service, other Park Service employees involved in the housing
program, and BLM and Forest Service officials responsible for
employee housing.  BLM and Forest Service officials agreed with the
facts as presented.  Department of the Interior and Park Service
officials provided some factual and editorial comments, which have
been incorporated into the report as appropriate.  However, as
requested, we did not obtain written comments on our findings from
the Department of the Interior or the Forest Service. 


PARK SERVICE TAKES A DIFFERENT
APPROACH IN PROVIDING EMPLOYEE
HOUSING
============================================================ Chapter 2

The Park Service's employee housing program differs from the Forest
Service's and BLM's in several key aspects.  First, the Park Service,
Forest Service, and BLM have a common basic mission--managing and
protecting the federal lands.  However, the Park Service puts more
emphasis on providing in-park visitor services than the other two
agencies; therefore, the Park Service believes it needs to provide a
much larger portion of its employees with housing than the other two
agencies.  Second, the Park Service's housing inventory contains
proportionately more houses, multiplex units, and apartments and
proportionately fewer dormitories and cabins than the Forest
Service's or BLM's inventories.  Such an inventory is more costly to
maintain.  Third, only the Park Service is seeking to replace and
upgrade its housing inventory.  By contrast, the Forest Service and
BLM are not planning to replace or significantly rehabilitate their
housing units. 


   SIZE OF THE PARK SERVICE'S
   HOUSING PROGRAM REFLECTS HOW
   THE AGENCY CARRIES OUT ITS
   MISSION
---------------------------------------------------------- Chapter 2:1

Because its mission emphasizes providing in-park visitor services,
the Park Service believes that it needs to provide a large number of
its employees with in-park housing.  Officials of the Forest Service
and BLM do not believe that their mission requires the same degree of
on-site presence for their employees. 

As of July 1994, the Park Service reported an inventory of 4,718
housing units, compared to 4,402 for the Forest Service and 206 for
BLM.  By itself, however, the number of housing units does not
completely describe the relative size of the three programs. 
Accordingly, to obtain a better indication of the relative size of
the agencies' housing programs, we examined the housing inventories
of the three agencies from two different points of view:  first, as
the inventory relates to the total number of employees and, second,
as the number of year-round housing units relates to the total number
of permanent employees at each agency.  This analysis shows that
proportionately, the Park Service has a significantly larger program
than the other two agencies. 


      MISSION AFFECTS WHERE
      EMPLOYEES LIVE
-------------------------------------------------------- Chapter 2:1.1

In addition to preserving and protecting the natural, cultural,
scenic, and historic resources under the Park Service's stewardship,
providing in-park visitor services is a major part of the Park
Service's mission.  To carry out its mission, the Park Service
believes it is necessary to provide many of its employees with
housing within parks.  While the Forest Service and BLM also have
resource management and stewardship responsibilities, their emphasis
is more on managing the land for multiple uses, such as livestock
grazing, mining, and timber harvesting. 

According to Park Service officials, this difference in missions
affects the agencies' decisions about where many of their field
employees must live.  With its emphasis on preserving and protecting
historical, cultural, and natural resources and providing visitor
services, the Park Service tends to build (or acquire) housing for
employees within the parks.  The Forest Service and BLM, on the other
hand, tend to place more of their operations in or near established
communities.  As a result, the Forest Service and BLM rely more
heavily on established real estate markets for employee housing. 


      TOTAL HOUSING INVENTORY
      RELATIVE TO TOTAL AGENCY
      EMPLOYMENT
-------------------------------------------------------- Chapter 2:1.2

One way of providing an indication of the relative size of each
agency's housing program is to compare its total housing inventory to
its total number of employees.  This comparison shows that the Park
Service has by far the highest number of housing units relative to
the total number of employees--both permanent and seasonal employees. 
As shown in table 2.1, while both the Park Service and Forest Service
have roughly the same number of housing units, the ratio of housing
units to total employees is more than twice as high for the Park
Service than for the Forest Service.  The Park Service has one
housing unit for every 5 employees compared to the Forest Service's
one unit for every 11 employees and BLM's one unit for every 58
employees. 



                          Table 2.1
           
              Comparison of Park Service, Forest
           Service, and BLM Housing Inventories to
                  Total Number of Employees

                                National
                                    Park    Forest
                                 Service   Service       BLM
------------------------------  --------  --------  --------
Total number of housing units      4,718     4,402       206
Total number of                   23,908    50,877    11,861
 employees (including
 seasonals)
Ratio of employees to                1:5      1:11      1:58
 housing units
------------------------------------------------------------

      INVENTORY OF YEAR-ROUND
      HOUSING RELATIVE TO NUMBER
      OF PERMANENT EMPLOYEES
-------------------------------------------------------- Chapter 2:1.3

Another indication of the relative size of each agency's housing
program is to compare the amount of permanent, year-round housing to
permanent employees.  When seasonal employees and seasonal housing
are excluded, the larger size of the Park Service's housing program
relative to the size of its staff is more apparent.  As shown in
table 2.2, the ratio of Park Service housing units to permanent
employees is more than twice as high as the ratio for the Forest
Service.  The ratio in comparison to BLM, however, increases
dramatically, indicating that only 1 in 164 permanent BLM employees
lives in agency housing compared to 1 in 6 for the Park Service. 



                          Table 2.2
           
           Comparison of Inventories of Year-Round
           Housing Relative to Number of Permanent
                          Employees

                                National
                                    Park    Forest
                                 Service   Service       BLM
------------------------------  --------  --------  --------
Total number of year-round         2,792     2,503        61
 housing units
Total number of permanent         15,777    31,749     9,991
 employees
Ratio of permanent employees         1:6      1:13     1:164
 to year-round housing units
------------------------------------------------------------
Another indication of the way the agencies manage their housing
programs can be seen in the extent to which the three agencies
require their employees to live on-site.  In all, the Park Service
requires about 1,400 park employees to live on-site in park housing,
either to provide visitor services or to protect government property
and resources, or both, in accordance with OMB Circular A-11.  The
1,400 employees equate to about 9 percent of all permanent Park
Service employees.  By comparison, a Forest Service official said
that about 70 Forest Service employees (less than 1 percent of
permanent employees) are required to live on-site in government
housing.  A BLM official stated that BLM has only two. 

Each agency uses a substantial portion of its housing inventory--more
than 40 percent--for seasonal employees.  BLM's percentage is the
highest at 71 percent.  The Park Service and the Forest Service
classify 41 percent and 44 percent of their inventories,
respectively, as seasonal. 

The three agencies also have a substantial portion of their
inventories in isolated areas--that is, areas where no housing is
available for sale or rent within a reasonable commuting distance.\1
Fifty-eight percent of the Park Service's housing units are
classified as being in isolated areas.  BLM classified 63 percent of
its units as being in isolated areas; the Forest Service, 55 percent. 


--------------------
\1 A reasonable commuting distance is considered to be less than 30
miles (or less than 60 minutes of travel by automobile) one-way from
the nearest established community.  OMB defines an established
community as one with a year-round population of 1,500 or more and at
least one doctor and one dentist accessible to the public. 


   PARK SERVICE'S INVENTORY
   INCLUDES MORE SINGLE-FAMILY
   HOUSES, APARTMENTS, AND
   MULTIPLEXES
---------------------------------------------------------- Chapter 2:2

The Park Service's employee housing inventory has a greater
proportion of single-family homes, multiplexes, and apartments than
either the Forest Service's or BLM's inventory.  As table 2.3 shows,
75 percent of the Park Service's inventory is composed of such units,
compared to 50 and 26 percent, respectively, for the Forest Service
and BLM.  In comparison to the Park Service, the other two agencies
have higher percentages of their inventories in the form of
multiple-occupancy dormitories, cabins, and similar structures. 



                          Table 2.3
           
           Comparison of Types of Units in Housing
                         Inventories


                                National
                                    Park    Forest
Housing unit category            Service   Service       BLM
------------------------------  --------  --------  --------
Houses, multiplexes, and              75        50        26
 apartments
Mobile homes                          14        17        26
Dormitories, cabins, and other        11        32        47
------------------------------------------------------------
\a Forest Service and BLM percentages do not add to 100 due to
rounding. 


      PARK SERVICE'S MIX OF
      HOUSING TYPES INVOLVES
      HIGHER COSTS
-------------------------------------------------------- Chapter 2:2.1

Houses, multiplexes, and apartments tend to be more costly on a per
person basis than housing such as dormitories, according to the
agencies' housing officials.  A major reason is that a house,
multiplex, or apartment generally provides a much larger living space
per employee than a dormitory, which provides housing to many
employees.  Also, houses, multiplexes, and apartments have
appliances, perhaps two bathrooms, and other amenities that are
costly to maintain.  In contrast, these items are generally not found
to the same extent in dormitories. 

These higher costs are likely contributing to part of the differences
in the three agencies' cost estimates for repairing, rehabilitating,
and replacing their housing units.  All three agencies have reported
that because they have not been able to keep up with scheduled
maintenance and repair, more than 50 percent of their units are in
fair, poor, or obsolete condition (see table 2.4).  Each agency has
estimated the costs associated with repairing, rehabilitating, or
replacing its inventory to good or excellent condition.  The
estimates range from $8 million for BLM to $546 million for the Park
Service.  As shown in table 2.4, on a per unit basis, the totals
break down to about $116,000 for each of the Park Service's 4,718
units, $36,000 for each of the Forest Service's 4,402 units, and
$39,000 for each of BLM's 206 units. 



                          Table 2.4
           
            Comparison of Repair, Rehabilitation,
                    and Replacement Needs

                                National
                                    Park    Forest
                                 Service   Service       BLM
------------------------------  --------  --------  --------
Percentage of total housing inventory by condition\a
------------------------------------------------------------
Excellent or good                     49        48        40
Fair                                  39        41        47
Poor or obsolete                      11        10        13

Backlog estimates
------------------------------------------------------------
For repair, rehab., and             $546      $159        $8
 replacement
 (millions of dollars)\b
Per unit of housing in              $116       $36       $39
 existing inventory
 (thousands of dollars)
------------------------------------------------------------
\a In describing inventory condition, all three agencies use nearly
the same criteria:  excellent means like new, good means routine
maintenance like painting is necessary, fair means that early signs
of reversible deterioration (like leaking roofs and inadequate
electrical service) are present, poor means major repairs are needed
because of marginal structural integrity, and obsolete usually means
beyond economic rehabilitation.  Park Service and Forest Service
percentages do not add to 100 due to rounding. 

\b The Forest Service's and BLM's estimates are as of June 1994, and
the Park Service's is as of July 1994. 

We asked Park Service officials if they could explain why their
overall backlog estimate per unit was so much higher than the other
two agencies.  One reason mentioned was that the Park Service's
housing standards are higher than those of the other two agencies. 
For example, as part of its Employee Housing Initiative, the Park
Service adopted higher rehabilitation and construction standards for
housing units, which are not followed by the Forest Service or BLM. 
New or upgraded Park Service units should contain features such as
garages, additional bathrooms, and modern kitchens.  Also mentioned
was that many units are historic structures and rehabilitating these
structures costs more because of the need to maintain historical
integrity.  However, the official in charge of the Park Service's
housing program told us that these two reasons alone probably do not
account for the large difference among the agencies' per unit backlog
estimates, but he could offer no other reasons. 

We did not attempt to compare in detail the methodologies that the
three agencies used to develop their backlog estimates, nor did we
verify their accuracy.  We did, however, raise questions about the
reliability of the Park Service's backlog estimate in our September
1993 report. 


   PARK SERVICE PLANS TO MAINTAIN
   AND UPGRADE ITS HOUSING; FOREST
   SERVICE AND BLM PLAN TO
   MINIMIZE THEIR INVOLVEMENT IN
   HOUSING
---------------------------------------------------------- Chapter 2:3

Of the three agencies, only the Park Service is seeking to replace
and upgrade its housing inventory.  For fiscal year 1995, it has
requested $30 million for its Employee Housing Initiative.  This $30
million represents about 20 percent of the Park Service's budget for
all construction projects, which, according to Park Service
officials, indicates the emphasis the Park Service is putting on
improving employee housing. 

Forest Service and BLM officials said they are not planning
substantial upgrading, rehabilitation, or replacement efforts.  They
said that their current inventories were too costly to maintain and
that the previous justification for retaining some units may no
longer be valid.  For example, officials of two national forests
adjacent to Yosemite National Park in California stated that they now
have housing in excess of their needs.  As one forest official
explained, circumstances have changed since the Forest Service
initially justified the need for the housing.  First, a better system
of roads has made it easier for employees to live in local
communities and commute to their work sites; second, employees have
shown a preference for private residences when federal regulations
required that rents for government quarters be comparable with rents
for similar quarters in the private market. 

Other reasons that the housing managers cited for not increasing
inventories were that agencies would no longer be landlords, the
agencies would not be providing housing in competition with the
private sector, and employees would be integrated into the local
communities instead of living in separate government residential
areas. 

Neither the Forest Service nor BLM plans to stop providing housing
altogether.  Officials from both agencies said that meeting their
missions will necessitate some level of housing.  However, they plan
to minimize their involvement in providing housing to employees. 
Accordingly, neither agency had planned or developed a program like
the Park Service's Employee Housing Initiative to pay for the
necessary repair, rehabilitation, and replacement of their housing
units.  Forest Service and BLM officials said that in ranking
construction projects for funding, requests for housing are generally
given low priority compared to funding for other projects, such as
visitor centers or warehouses.  Funding for construction has been
limited to seasonal housing in isolated locations. 

The Forest Service's and BLM's lack of emphasis on employee housing
programs can be seen in their fiscal year 1995 budget requests.  The
Forest Service's request for housing construction is about $1
million, which is for barracks and crew quarters at three separate
locations and one triplex unit.  This level of funding represents
about 2 percent of the Forest Service's construction program for all
types of facilities.  In reviewing BLM's fiscal year 1995 budget
justification, we could not identify any funds for constructing
employee housing and only $40,000 for rehabilitating fire crew
quarters. 


OPTIONS FOR DEALING WITH THE PARK
SERVICE'S HOUSING PROBLEMS
============================================================ Chapter 3

Options are available to the Park Service to deal with its housing
problems.  As a first step, the current housing inventory needs to be
reduced to a level that is needed and can be justified.  The need for
housing units should be made on a park-by-park basis.  In addition,
given the substantial backlog and the tight federal budget, the Park
Service needs to pursue alternative financing arrangements for
repairing, rehabilitating, and replacing housing units.  These
alternative arrangements range from seeking nonfederal funding for
repairing, rehabilitating, and replacing the Park Service's employee
housing to private-sector construction and management of housing. 
All of these alternative financing arrangements have advantages and
disadvantages, and several would require new legislative authority. 


   REDUCING HOUSING INVENTORY
---------------------------------------------------------- Chapter 3:1

The Park Service faces dim prospects for arresting the continued
deterioration of its employee housing if it attempts to keep the
housing inventory at its current level.  Annual rental income covers
only about one-half to two-thirds of basic annual operating and
maintenance costs; therefore, unless rents are raised, the rest must
come from operating funds that are stretched thin across a wide range
of competing demands.  Steps the Park Service could take to reduce
its housing inventory fall into two main areas:  removing from the
inventory those housing units that are not justified and examining
ways to move more employees into nearby communities. 


      REMOVING HOUSING UNITS THAT
      ARE NOT JUSTIFIED
-------------------------------------------------------- Chapter 3:1.1

In our September 1993 report, we concluded that the Park Service
should review its long-standing tradition of providing housing to
employees.  The procedures in place for justifying employee housing
inventory levels have not resulted in sufficient analysis or
documentation to support the need for all units--particularly those
units retained for permanent employees in parks near local
communities.  We found that housing needs were routinely re-certified
with little or no analysis of the viability of local real estate and
rental markets. 

The need to look at local housing in light of local community
development is further illustrated by work we did at two national
forests.  As mentioned in the previous chapter, officials at two
national forests in California, which are adjacent to Yosemite
National Park in California, said they now have housing in excess of
their needs. 

In addition, some parks that have been classified as isolated are
becoming less so with the advent of increasing populations in local
communities as well as improved transportation and communications
systems.  In work we did last year, park managers identified urban
encroachment as the number one threat to parks.\1 Problems resulting
from urban encroachment included residential, commercial, and
industrial development at or near park boundaries.  This development,
especially near park entrances, is making many parks less isolated
than they once were. 

In our September 1993 report, we recognized that the Park Service had
adequate justification for about 88 percent of its housing inventory. 
However, we questioned the justification for the remaining 12
percent.  As a result, we recommended that the Park Service reexamine
the need for all of its permanent housing units and develop a
strategy to eliminate unneeded units from the housing inventory.  In
our view, this is a first step that must be taken as the Park Service
considers ways to better maintain Park Service housing.  Park Service
officials have stated that they will reexamine the need for the 12
percent (about 630 units) of the housing units that we questioned as
being justified.  However, because of the scope of the housing
problems facing the Park Service, all housing needs to be reexamined
on a park-by-park basis in order to reduce housing needs as much as
possible.  As we stated in our 1993 report, maintaining an inventory
that is greater than what can be justified dilutes the availability
of scarce funds.  The Park Service must identify and eliminate
housing units that are not needed so that funds will be applied to
needed units.  A reexamination of housing needs on a park-by-park
basis will help ensure that this occurs. 


--------------------
\1 National Park Service:  Activities Outside Park Borders Have
Caused Damage to Resources and Will Likely Cause More
(GAO/RCED-94-59, Jan.  3, 1994). 


      EXAMINING WAYS TO MOVE MORE
      EMPLOYEES INTO COMMUNITIES
-------------------------------------------------------- Chapter 3:1.2

Our September 1993 report pointed out that under existing OMB
guidance, about 630 housing units may not be justified.  Beyond the
units questioned in our earlier report, the Park Service may be able
to find ways to reduce the number of housing units needed.  This
could occur by relocating to nearby communities those functions not
related to providing visitor services or protecting resources, by
revising job requirements to reduce the number of employees required
to live in the parks, or by exploring options to subsidize employees'
rents when local housing is found to be too expensive. 


      RELOCATING FUNCTIONS TO
      NEARBY COMMUNITIES
-------------------------------------------------------- Chapter 3:1.3

One way the need for housing inside the parks could be reduced would
be to move certain park functions not needed to provide visitor
services or protect resources to nearby communities.  The Congress
authorized the implementation of such a proposal at Yosemite National
Park in California in 1958 to relieve pressure in the over-crowded
Yosemite Valley (P.  L.  85-922).  One of the proposal's objectives
was to enhance opportunities for park employees to own their own
homes.  Functions not directly related to providing day-to-day
visitor services, such as warehousing, vehicle maintenance, budget
control, and general administration, would be located in El Portal,
California, a site about 16 miles west of the developed area of
Yosemite Valley.  Full implementation of this proposal has been
delayed for a variety of reasons, including inadequate funds,
underestimated development costs, increased employee commuting time,
increased pollution from vehicles, and employees' resistance to
moving to a site perceived to be a less desirable place to live than
Yosemite Valley.  Although this proposal has not been fully
implemented, it would appear to have merit for reducing the housing
inventory. 

In addition to reducing the Park Service's housing inventory,
encouraging employees to live outside the parks has several other
advantages.  For example, employees would have the opportunity for
home ownership as well as a choice of where to live and in what type
of housing; employees would be better integrated into local
communities; the Park Service would not compete with local housing
markets; and for those housing units that are affected, it would no
longer be a landlord.  Also, minimizing the development of facilities
within park boundaries would be consistent with one of the
recommendations in the report entitled National Parks for the 21st
Century - The Vail Agenda.\2


--------------------
\2 This report was based on an international symposium held on the
75th anniversary of the National Park Service.  The report's
recommendations have been adopted by the Director of the Park Service
as a framework to shape the future role of the Service. 


      REVISING JOB REQUIREMENTS
-------------------------------------------------------- Chapter 3:1.4

At several parks we visited, superintendents were exploring ways of
providing visitor services and protecting resources by means other
than requiring employees to live in the parks.  For example, the
superintendent at Shenendoah National Park in Virginia is
implementing a "required presence" approach in which employees are
required to be at the park only when they are on duty.  Also, at Cape
Cod National Seashore in Massachusetts, rather than requiring
employees to live in the park, the superintendent allows them to live
within a "response radius" to the park.  This is a radius within
which employees could respond to emergencies in the park in a minimal
amount of time.  As noted by one park superintendent, having
employees housed within the park does not guarantee that critical
staff will be available for quick emergency responses because
employees are not always home when they are not working. 


      SUBSIDIZING THE COST OF
      HOUSING OUTSIDE THE PARK
-------------------------------------------------------- Chapter 3:1.5

The affordability of housing in local communities was a major concern
of many park managers.  To the extent that the affordability of local
housing may be a valid problem at individual parks, one option that
may be worth exploring for dealing with such situations is to provide
Park Service employees with a housing subsidy at those parks where it
is determined that local housing is clearly not affordable.  The
housing subsidy could take the form of a rental subsidy if employees
choose to rent or a mortgage subsidy if they choose to buy a home.  A
September 1993 Congressional Budget Office (CBO) study of military
housing indicates that providing rental subsidies is 40 percent less
expensive than providing government-built and -maintained military
housing.\3 While providing housing subsidies may increase annual
federal outlays in the short term, this option may be cheaper in the
long term because the Park Service would no longer be a landlord and
because less repair, rehabilitation, and replacement funds would be
needed at the locations where housing subsidies are provided.  A
major barrier that would have to be overcome in providing subsidies
is that the Park Service is now precluded from doing so by OMB
Circular A-45. 


--------------------
\3 Military Family Housing in the United States, Congressional Budget
Office, Sept.  1993. 


   OBTAINING FUNDING FROM OTHER
   SOURCES
---------------------------------------------------------- Chapter 3:2

After reducing its housing inventory as much as possible, the Park
Service will be in a much better position to determine its funding
needs for the housing units that remain.  Funding for the remaining
units could likely come from three areas--appropriations, increased
rents, and private-sector support. 

For several reasons, increased appropriations and increased rents may
have limited feasibility.  Concerns about budget deficits and
continued public pressure to contain federal spending may constrain
any infusion of federal dollars beyond levels already undertaken in
the Employee Housing Initiative.  Likewise, in the past, Park Service
employees, employee advocacy groups, and the Congress have shown
little support for substantial rent increases.  It is likely,
therefore, that the Park Service may have to look elsewhere, at least
for part of the additional funding that would be needed. 


      DEPARTMENT OF THE INTERIOR'S
      EFFORTS TO ARRANGE
      ALTERNATIVE FINANCING
-------------------------------------------------------- Chapter 3:2.1

The Park Service has begun to explore the feasibility of looking for
private-sector support for its housing program.  Recognizing the
persistent backlog and the poor overall condition of employee
housing, the Secretary of the Interior has made improving the Park
Service's employee housing a top priority.  In December 1993, the
Secretary directed his Chief of Staff to explore ways to improve the
Park Service's employee housing by encouraging partnerships with
private industry and the National Park Foundation (Foundation).\4
This effort is examining whether the Park Service can get the private
sector, through the Foundation, to assist in improving Park Service
housing.  Arrangements being pursued include (1) obtaining
private-sector funds or contributions through the Foundation to
rehabilitate and/or rebuild housing in the parks, (2) examining the
ability of the Foundation to construct housing on other than park
land, (3) exploring whether the private sector could construct
housing in the parks, and (4) developing equity programs through the
Foundation to assist employees in buying housing. 

Providing employees with rental subsidies is another option being
studied.  One option under consideration would be for the Foundation
to provide the subsidies.  Another housing subsidy option being
studied is to provide federal land to a private-sector developer for
housing construction.  In this case, the cost of the land would not
be borne by the developer, which should result in lower rents. 
Before exploring these subsidy possibilities any further, Interior
plans to study the legal impediments. 

These efforts are continuing and, to date, have resulted in an
agreement that private homebuilders will provide several new homes to
replace trailers at various parks.  Also, the Foundation agreed to
donate $50,000 for housing at Grand Teton National Park if the Park
Service would match the funds, which it did.  Discussions are also
under way with the Foundation about repairs and/or rehabilitation at
other parks.  The Park Service has identified 13 parks on which major
emphasis will be placed to eliminate obsolete housing over the next 2
years.  In addition, the Park Service plans to eliminate all trailers
in the parks by 1996. 

The Director of the Park Service stated that in September 1994 Park
Service officials will meet with the Foundation to further explore
the Foundation's interest in this area and determine how it might
participate. 


--------------------
\4 The National Park Foundation is a private, nonprofit foundation
chartered by the Congress in 1967 to provide private-sector support
for the national park system. 


      ALTERNATIVE FINANCING
      ARRANGEMENTS IDENTIFIED IN
      EMPLOYEE HOUSING STUDIES
-------------------------------------------------------- Chapter 3:2.2

In addition to the alternative financing arrangements being studied
by the Secretary's Chief of Staff, studies of employee housing
conducted since 1988 have also identified alternative financing
arrangements whereby the private sector might repair, rehabilitate,
or replace Park Service housing both on and off Park Service land. 
Several of the alternative arrangements would require new legislative
authority.  In addition, no one proposed alternative arrangement may
be suitable to all parks.  Similarly, some combination of alternative
arrangements may be possible.  The following alternative arrangements
are examples of ways that nonfederal funding sources could be used to
provide employee housing.  These arrangements have been identified in
seven studies of alternatives to providing employee housing conducted
between 1988 and 1993.  The studies that identified these
alternatives are listed in a bibliography at the end of this report. 


      USE SOME FORM OF LEASING
-------------------------------------------------------- Chapter 3:2.3

One study proposed a leasing arrangement whereby a private company
would provide the needed housing units on government land and
maintain the units for the duration of the lease.\5 The study assumed
that the units would become the property of the government at the end
of the lease term. 

An advantage of this arrangement is that the Park Service would have
use of the units sooner than if they were to construct them. 
According to a consultant hired by the Park Service to study housing
alternatives in 1993, the private sector can construct housing sooner
because obtaining construction appropriations and performing
construction planning takes longer for the Park Service.\6 Also, the
Park Service would not have the direct responsibility of maintaining
the units, relieving it of maintenance and rehabilitation costs over
the term of the lease. 

A disadvantage of this approach could be potentially greater
long-term costs because lease payments would need to be high enough
to cover the private company's expected profits and its cost of
capital, which would be higher than the government's.  Another
disadvantage is that the housing units turned over to the Park
Service at the end of the lease could create additional
rehabilitation costs. 

A project with a 30-year lease was proposed in the aforementioned
1990 study of the Big Bend National Park in Texas.  The Park Service
did not carry out this arrangement because it does not have the
legislative authority to enter into leases for the benefit of
employees. 

A similar arrangement could be made for housing constructed on
private land.  Here, the private company would build housing units on
private land on the basis of a guaranteed lease with the Park
Service.  The consultant assumed that because the housing would be
constructed on private land, at the end of the lease the owner would
retain the property.  The advantages and disadvantages would be the
same as if the units were constructed on public land, except that the
units would not become government property at the end of the lease
and therefore would not be added to the Park Service's inventory. 
According to an official of the Indian Health Service, it used this
form of leasing more than 10 years ago in Alaska, but it is no longer
viable because now OMB's guidance does not allow agencies to
guarantee long-term lease contracts.\7


--------------------
\5 Better Housing Now:  Public-Private Venture Housing at Big Bend
National Park, Texas.  Logistics Management Institute, Mar.  1990. 

\6 Report on Park Service Employee Housing.  Thomas L.  Baker,
Consultant, Jan.  15, 1993. 

\7 OMB Bulletin No.  91-02, Oct.  18, 1990. 


      FIND A PROFITABLE OFF-SEASON
      USE FOR SEASONAL HOUSING
-------------------------------------------------------- Chapter 3:2.4

Under this arrangement, the Park Service would find a private partner
who owned and operated a recreation resort in close proximity to the
park who would build and operate seasonal units on Park Service land,
rent to Park Service employees during the park's season, and use the
housing units for its own employees or rent to the public during the
park's off-season.  A study conducted for the Park Service described
such an opportunity between Grand Teton National Park and a major ski
resort operator in Jackson Hole, Wyoming.  The housing would be used
by seasonal park employees during the summer and by ski area
employees during the winter.\8 The study assumed the structures would
become park property after a 20- to 30-year period.  The Park Service
is still studying this approach. 

According to the consultant's study, an advantage of this arrangement
is that the Park Service would obtain seasonal housing at minimal
cost since the cost to construct and maintain the housing would be
borne by the private partner.  Conversely, a disadvantage is that it
may be feasible only at those parks where the park's off-season
corresponds to a private recreation resort's peak season. 


--------------------
\8 Report on Park Service Employee Housing.  Thomas L.  Baker,
Consultant, Jan.  15, 1993. 


      SALE TO THE PARK SERVICE
      THROUGH A MORTGAGE
      TRANSACTION
-------------------------------------------------------- Chapter 3:2.5

Here, a private contractor would construct or rehabilitate housing
for the Park Service on either public or private land.  The Park
Service would obtain a mortgage from a private lending institution to
pay for the construction costs.  The lender would hold title to the
housing until the federal government paid off the mortgage through
rent receipts or appropriated funds.  The advantage of this
alternative is that the park would be gaining the use and value of
the housing units sooner because, as noted earlier, the private
sector can construct housing quicker than the Park Service. 

However, several barriers exist.  First, as we reported in May 1991,
OMB rejected a similar proposal for improving Air Force housing
because of the federal budget guidelines in the conference report
accompanying the Omnibus Budget Reconciliation Act of 1990, which
requires that the full cost of construction projects be fully
accounted for in the year authorized.\9 If the Park Service were to
pursue this option, it would have to be exempted from the Omnibus
Budget Reconciliation Act of 1990.  Second, rental rates established
under OMB's guidance would be insufficient, especially near isolated
parks, to cover the cost of housing, and the Park Service would have
to augment the rents collected to meet the mortgage payments.  For
example, a consultant hired by the Park Service to study employee
housing estimated that developers would expect rental rates of about
$1,000 per month for a house costing about $100,000, which he said
was typical of the housing he saw in the parks he visited.\10
However, most Park Service employees currently pay monthly rental
rates for Park Service housing of less than $800 per month. 
According to the Secretary of the Interior's Chief of Staff, one way
to avoid having to augment rents would be for the Park Service to
donate the land to developers so that land acquisition costs would
not be factored into the rents charged.  Furthermore, the interest
cost to the federal government of borrowing money in this way might
be greater than if the government simply borrowed the additional
funds in its usual way through issuing Treasury securities. 


--------------------
\9 Air Force Housing:  Proposal for Financing Improvements to Family
Housing (GAO/NSIAD-91-181, May 21, 1991). 

\10 Report on Park Service Employee Housing.  Thomas L.  Baker,
Consultant, Jan.  15, 1993. 


      PRIVATE-SECTOR CONSTRUCTION
      WITH DIRECT RENTAL TO PARK
      SERVICE EMPLOYEES
-------------------------------------------------------- Chapter 3:2.6

Under this arrangement, private developers would finance and
construct housing on private land and rent directly to Park Service
employees.  An advantage of this approach is that it would remove the
Park Service from providing employee housing.  Another advantage
would be that there would be no OMB restrictions on such an
arrangement. 

However, a disadvantage is that contractors might have little
incentive to build, because the rents they would have to charge to
make their investment profitable, especially for housing near
isolated parks, would be unaffordable to most park employees,
according to the previously mentioned consultant's study.  A private
developer might be induced to provide housing if the Park Service was
permitted to subsidize the (1) rent, thereby increasing revenue to
the developer, or (2) cost of construction, thereby reducing the
developer's required investment.  However, the Park Service currently
does not have the authority to do either.  If the Park Service did
have such authority, providing subsidies might be more costly to the
government than directly providing employee housing because the
private contractors will expect to earn a profit. 


      CONCESSIONER REHABILITATION
      AND REPLACEMENT OF EMPLOYEE
      HOUSING
-------------------------------------------------------- Chapter 3:2.7

Under this arrangement, concessioners\11 would be responsible for
obtaining financing for the rehabilitation and replacement of Park
Service housing.  At larger parks such as Yellowstone National Park
in Wyoming and Yosemite National Park in California, concessioners
already provide housing for some of their employees; this alternative
would therefore be an extension of what some concessioners are
already doing.  One study provided two places where
concessioner-provided housing might be possible:  the Grand Teton
Lodge Company in Grand Teton National Park, Wyoming, and ARA Leisure
Services in Olympic National Park, Washington.\12 According to this
study, one advantage of this arrangement is that since the Park
Service already has experience managing concessioners and concession
contracts, there would be little additional administrative burden on
the Park Service.  Another advantage is that concessioner-managed
housing would remove the Park Service from managing a housing program
at parks where this arrangement would be implemented. 

The disadvantage of this arrangement is that current concession law
only allows concessioners to provide services to the visiting public,
not to Park Service employees.  Accordingly, the Park Service would
have to seek new legislative authority to implement this
arrangement.\13 Another disadvantage is that this arrangement may be
feasible only at the larger parks with large concessioners who would
be able to attract the capital necessary to rehabilitate or replace
housing.  Also, as in some of the foregoing arrangements, rents would
almost certainly increase from what they are now because the
concessioner would base them on the cost of providing the housing and
recovering investment costs and would not want them reduced because
of isolation or any other factor.  The Park Service would likely have
to provide some form of subsidy to keep rents within affordable
ranges. 


--------------------
\11 Concessioners provide visitor accommodations and services on Park
Service lands.  Concession-operated services include restaurants and
snack bars, souvenir shops, marinas, and a variety of other services. 

\12 Report on Park Service Employee Housing.  Thomas L.  Baker,
Consultant, Jan.  15, 1993. 

\13 Concessions Policy Act of 1965, P.  L.  89-249. 


      SPECIAL-USE PERMITS
-------------------------------------------------------- Chapter 3:2.8

This arrangement would be similar to the concessioner arrangement
except that it would be done under a special-use permit.  The Park
Service issues special-use permits for specific activities (usually
outfitting or guide activities) and limits their term to 5 years. 
Implementation of this arrangement would require extending the 5-year
limit on special-use permits to 25 to 30 years (the term of loan
amortization) so that the contractor could obtain the necessary
private financing for rehabilitating and replacing housing.  The
advantages and disadvantages of this arrangement would be similar to
those that would occur under the concessioner arrangement.  Also,
since current legislative authority does not allow the Park Service
to guarantee occupancy levels or pay for vacancies, contractors may
have little incentive to participate in this arrangement unless the
Park Service seeks new legislative authority to do so. 


      SELL GOVERNMENT HOUSING TO
      EMPLOYEES
-------------------------------------------------------- Chapter 3:2.9

An arrangement that would effectively end the Park Service's
involvement in employee housing would be for the Park Service to sell
government housing to employees.  Such an arrangement was discussed
in a 1990 housing management plan for the Grand Canyon in Arizona.\14
While the advantage of this arrangement would be to relieve the Park
Service of providing housing, a disadvantage is that this arrangement
would create in-holdings in the parks if the houses were sold in fee
simple.\15 In addition, the Park Service would be faced with ensuring
that future resales would be made to Park Service employees. 


--------------------
\14 Grand Canyon National Park Housing Management Plan.  June 1990. 

\15 In-holdings are private property within the boundaries of a park. 
When property is acquired in fee simple, the owner acquires all
rights and interests associated with the land.  This would restrict
the Park Service's ability to control activities within the park,
since the housing would in effect be private property. 


      SELL ALL PARK HOUSING TO A
      PARK SERVICE EMPLOYEES'
      COOPERATIVE
------------------------------------------------------- Chapter 3:2.10

A variation on selling housing directly to employees, which was also
included in the 1990 Grand Canyon housing management plan, would be
for the Park Service to sell the houses to an employees' housing
cooperative.  The cooperative could use the housing as collateral for
a loan to rehabilitate housing.  The cooperative would contract for
maintenance and collect rents.  An advantage, as in selling the homes
directly to employees, is that the Park Service would no longer be
involved in providing employee housing at the parks where a
cooperative existed.  The disadvantages are similar to the ones
identified if the houses were sold to employees.  An additional
disadvantage is that no such cooperative currently exists, and the
Park Service would have to seek legislative authority to create one. 


   CONCLUSIONS
---------------------------------------------------------- Chapter 3:3

While the Park Service has a long-standing tradition of providing
housing to some of its employees, a deteriorating housing inventory
and a tight federal budget dictate that the Park Service reexamine
its employee housing needs and reduce its housing inventory as much
as possible.  The first step in this reexamination should be a
park-by-park review of housing needs.  This review of housing needs
will provide the Park Service with the information it needs to direct
limited funding.  In conducting a park-by-park review, consideration
should be given to whether employees can be moved to nearby
communities, job requirements could be modified so that fewer
employees are required to live in the parks, and housing allowances
would be feasible at parks where housing is not affordable.  A
park-by-park review of housing needs would also provide the Park
Service an opportunity to validate and document its backlog estimate
of repair, rehabilitation, and replacement needs. 

Once housing needs are clearly defined and the inventory reduced as
much as possible, the Park Service may still face problems in
maintaining its housing inventory because, traditionally, rental
income and federal appropriations have not met repair,
rehabilitation, and replacement needs.  Therefore, the Park Service
needs to explore additional alternative financing arrangements in
order to maintain its housing program.  These alternative financing
arrangements should include not only those being pursued by the
Secretary's Chief of Staff, but also those identified in employee
housing studies conducted since 1988. 


   RECOMMENDATIONS TO THE
   SECRETARY OF THE INTERIOR
---------------------------------------------------------- Chapter 3:4

In order to better define its housing needs and identify
opportunities for reducing its inventory, GAO recommends that the
Secretary of the Interior require the Director of the Park Service to
conduct a park-by-park review of housing needs to determine whether
its current housing inventory at each location is needed and
justified. 

In order to obtain nonfederal funds to help the Park Service meet its
housing needs, GAO recommends that in addition to those alternative
arrangements being explored by the Chief of Staff, the Secretary of
the Interior require the Director of the Park Service to review the
housing alternatives GAO identified from employee housing studies,
weigh and compare their respective costs and benefits, develop a
strategy for implementing the alternatives that it considers most
effective, and present the strategy to its legislative and
appropriations committees in the Congress. 


CAPITAL GAINS TAX AND PARK SERVICE
EMPLOYEES' MOBILITY
=========================================================== Appendix I

Neither the Park Service headquarters, the regional offices, nor
individual parks maintain data on employees' mobility.  Consequently,
we relied on payroll data from the Park Service's Accounting
Operations Division, which provided us with information on employees
who transferred from park to park in fiscal year 1991.  We focused on
employees who transferred in fiscal year 1991, since the 2-year time
period had expired whereby if they sold a residence, they would have
had to reinvest any capital gain in a new residence or pay tax on
it.\1 We did not verify the data in total, but we did contact several
regional offices to check on the accuracy of the data.  As agreed,
our work included only those employees who transferred. 

Of the employees who transferred, we determined how many were
reimbursed by the Park Service for the sale of their residence when
they transferred.  We then determined if any of the employees who
were reimbursed were currently having rental payments deducted from
their pay because they were living in government rental quarters.  We
subsequently contacted all of the employees who transferred and were
having rental payments deducted from their pay to determine whether
the prospect of having to pay capital gains tax affected their
decisions to transfer. 

During fiscal year 1991, according to the Park Service's accounting
data, 672 employees transferred to parks, and of these only 9 sold
private residences and are currently living in Park Service
housing--about 1 percent of the employees who transferred.  Of these
nine, eight indicated that the prospect of having to pay capital
gains taxes had little or no effect on their decision to transfer. 
One employee stated that the prospect of paying these taxes somewhat
influenced his decision to transfer. 

Five of the nine said they paid capital gains taxes:  three said the
tax had little or no effect on their financial situation, one said it
had some effect, and one claimed a very great effect.  None of the
employees contacted, however, ruled out accepting future transfers. 
We also discussed this issue with two former Park Service Directors
and the housing or administrative officers at the 10 parks with the
largest employee housing inventories.  These officials told us that
in their experience, Park Service employees have not considered the
prospect of paying capital gains taxes to be a major consideration in
their decision to transfer. 


--------------------
\1 Internal Revenue Service regulations state that the taxpayer must
buy or build and live in another house within 2 years before or 2
years after the sale of an old home to postpone the tax on the gain
from the sale. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II


   RESOURCES, COMMUNITY, AND
   ECONOMIC DEVELOPMENT DIVISION,
   WASHINGTON, D.C. 
-------------------------------------------------------- Appendix II:1

Cliff Fowler
John S.  Kalmar, Jr. 


   SEATTLE REGIONAL OFFICE
-------------------------------------------------------- Appendix II:2

Sterling J.  Leibenguth
Robert Miller
Stanley Stenersen


BIBLIOGRAPHY
=========================================================== Appendix 1

Report on Park Service Employee Housing.  Thomas L.  Baker,
Consultant.  January 15, 1993. 

DOD Report on Alternate Methods of Providing Housing or "Capehart
Report." May 10, 1988. 

Military Family Housing in the United States.  Congressional Budget
Office.  September 1993. 

Yosemite Valley Housing Plan.  Draft Supplement to the Final
Environmental Impact Statement for the General Management Plan.  May
1992. 

Grand Canyon National Park Housing Management Plan.  June 1990. 

Housing Options for United States Employees.  Logistics Management
Institute.  November 1990. 

Better Housing Now:  Public-Private Venture Housing at Big Bend
National Park, Texas.  Logistics Management Institute.  March 1990. 
