Overpayments Sabotage Housing Assistance
Racketeering by Landlords, Bureaucrats
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The agency provides housing assistance funds to multifamily project owners and housing agencies. These intermediaries provide housing assistance to benefit primarily low-income households. HUD spent about $19 billion in FY2000 to provide rent and operating subsidies for over four million households.
The HUD Inspector General’s report, which was released in March, projected that nearly $2 billion in subsidies was overpaid. The report went on to note that these overpayments waste limited HUD funds and reduce the agency’s ability to serve families who may be eligible for the program.
Under HUD’s housing assistance programs, housing agencies or individual housing project owners or agents determine eligibility for programs.
The IG has long warned that this structure poses a “significant risk” to the agency. Since oversight is difficult under the arrangement, it provides little means to ensure that housing assistance from HUD is really getting to the people who need the support.
According to the report, 36 percent of rentals were oversubsidized, the renters paying less per month in rent than they would have if their income were accurately reported. Each of the millions of incidents costs the taxpayers an average of $105 per month.
To improve the agency’s oversight of housing assistance programs, the IG recommended improving onsite monitoring and matching tenant income reports with other available financial data, such as tax returns.
Unfortunately, implementing such reforms may prove difficult. Past attempts to improve overall financial controls within the agency have been stymied by delays and cost overruns, according to the report.
But an attempt must be made to correct the problem. HUD should act immediately to implement the report’s recommendations. The cost of these overpayments, harming both the taxpayers and those in genuine need of housing assistance, is too great to ignore.
For more information, contact Keith Ashdown at (202)-546-8500 ext. 110
or by email
at email@example.com. TCS is at www.taxpayer.net
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