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Rental Assistance Should Be More Efficient, Not Less Accountable

A new bill introduced by Rep. Steve Palazzo (R-MS) and other House members that seeks to streamline small local housing agencies’ administration of the Housing Choice Voucher and public housing programs would sweep aside many federal rules and safeguards for small agencies, reducing accountability and risking higher rents and other significant harm to low-income families.  A better approach would (1) carefully streamline certain rules for all housing agencies and (2) give small agencies the tools to work together to administer rental assistance more efficiently.

As we’ve explained, close to 3,800 agencies administer vouchers and public housing that help low-income families rent decent, affordable housing.  Almost three-fourths of those have 550 or fewer total vouchers and public housing units (Congress’s definition of a small agency).  Having so many agencies running these programs raises local administrative and federal oversight costs.  For example, it costs the smallest agencies 24 percent more than the largest agencies to administer a voucher, largely because many administrative tasks cost the same regardless of how many vouchers an agency has.  Splintered rental assistance administration can also make it harder for voucher holders to move to lower-poverty neighborhoods, since these may be outside the jurisdiction of the agency that issued the family’s voucher.

Rep. Palazzo’s bill — and a similar bill from 2015 from Senators Jon Tester (D-MT) and Deb Fischer (R-NE) — would respond by weakening or eliminating key program standards for small agencies.  That’s the wrong approach, as we explained when another similar bill was introduced in 2012.  (The Palazzo and Tester-Fischer bills are largely the same as the 2012 bill, except that they both drop provisions allowing small housing agencies to convert public housing developments to Section 8 assistance and reducing how frequently local agencies must inspect public housing.  The Palazzo bill also adds provisions further weakening or eliminating program requirements for small agencies.)  

The Palazzo and Tester-Fischer bills would create two sets of rules based on agency size, complicating federal oversight and increasing complexity for some low-income families and private owners renting to voucher holders.  They would cause other problems as well, such as making it harder for the Department of Housing and Urban Development (HUD) and local communities to hold agencies accountable and allowing small agencies to require families to pay a much larger share of their income for rent than they can afford.  The Palazzo bill would go further by giving agencies a financial incentive to raise “minimum rents” on the most destitute rental assistance recipients.    

Policymakers should streamline certain program rules to ease administrative burdens, but where this is appropriate it should be done for all agencies.  In February, the House unanimously passed H.R. 3700, a bill that would take substantial steps in that direction and make other key improvements to federal housing programs.  The Senate should approve that important bill promptly.  

The best way to address the challenges created by small agencies’ administration of rental assistance is to help them form consortia and cooperate in other ways to increase their efficiency and effectiveness.  The Administration should finalize regulations that would allow multi-agency consortia to have a single funding contract with HUD (a key step for reducing administrative burdens and facilitating moves across jurisdictional lines to areas with more jobs or better schools), and it should revise the current policy for allocating voucher administrative funding to eliminate disincentives to form consortia.  Alternatively, Congress could direct HUD to carry out these two policy changes.  In addition, Congress could support regional coordination by funding a $15 million regional housing mobility demonstration that the President proposed in his 2017 budget.