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 households1

 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 VIa 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 VIa 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 ìworst-case housing needs.î

Sources: GAOís analysis of program data and HUDís 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 Section 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

$8,760 $8,000

$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 twobedroom 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 Metro Nonmetro

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 threebedroom 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 twobedroom 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 fourbedroom 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 threebedroom 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%

116% 115%

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%

112% 113% 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