Detailed Information on the
Housing Vouchers Assessment

Develop and implement the new assessment systems to identify trouble Public Housing Authorities by October 31, 2009.

The Budget proposes to simplify the program and allocate tenant-based assistance on a budget, rather than unit, basis.

Measure: Number of Housing Choice Voucher households that have accumulated financial savings through the Family Self-Sufficiency program

Explanation:

Measure: Percent of Vouchers managed by troubled housing agencies.

Explanation:The Department developed a new methodology for assessing troubled PHAs and plans to use the new method during FY '08 and by FY '09 a new baseline will be added at which point a new APP goal can be implemented.

Measure: Improve the utilization rate of Housing Choice Voucher funding to 97 percent by CY 2011 (B1.10)

Explanation:Utilization rate measures how many low-income families can be assisted with available resources.

Measure: The average annual total cost per voucher (Housing Assistance Payment + Administration Fees).

Explanation:This measure reflects the average cost of rental assistance, which is important in comparing the cost effectiveness of this program versus other housing programs.

Is the program purpose clear?

Explanation: To provide decent, safe and sanitary housing for low-income families. But, no consensus on whether goal is to also help families achieve economic self-sufficiency and elderly/disabled live as independently as possible.

Evidence: 98 percent of units meet HUD housing quality standards upon annual inspection or payments are abated within 30 days if not met.

Does the program address a specific interest, problem or need?

Explanation: Housing subsidies provide access in most cases to better housing, often in better neighborhoods. Lower housing costs free income for other needs. Choice of housing maximizes opportunity and access to schools, services.

Evidence: Most are used by families with children (61%) or disabled (22%) with extremely low incomes at admission.

Is the program designed to have a significant impact in addressing the interest, problem or need?

Explanation: Traditional way to measure contribution is as reduction in worst case housing needs of low-income renters. 2 million low-income households hold vouchers averaging about $6,000 per year. Many use to move to better locations, increase opportunity. Targeted to those in the most need.

Evidence: Evaluations suggest vouchers make a unique contribution to efforts of families to move to self-sufficiency, increase safety and educational opportunity for kids.

Is the program designed to make a unique contribution in addressing the interest, problem or need (i.e., not needlessly redundant of any other Federal, state, local or private efforts)?

Explanation: Although there are other federal housing assistance programs and the function can be performed at lower levels; the portability of housing assistance is a unique characteristic of the program.

Evidence: Only 5 million low-income families get any type of HUD subsidized housing but another 5 million families are in similar circumstances without HUD assistance.

Is the program optimally designed to address the interest, problem or need?

Explanation: In the current administrative structure of the Voucher program, 2,700 PHAs are responsible for the admin and distribution of the vouchers, creating problems in utilization that could be lessened if administered through fewer entities. Higher utilization of funds would ensure more households in need would receive subsidies. Allowing other housing activities besides vouchers would also better address local needs.

Evidence: Nearly $1 billion is recaptured annually from PHAs due to low utilization of funds. Efforts to reform this system have not been successful, and large numbers of households that qualify for assistance remain on waiting lists for extended periods of time despite funds being available.

Does the program have a limited number of specific, ambitious long-term performance goals that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: Along with the goal of providing housing, the program also incorporates goals of mobility, geographic dispersion, and movement toward self-sufficiency. Recently, HUD has given some attention to maximizing benefits of vouchers for families receiving TANF assistance.

Evidence: Starting with FSS, continuing with homeownership vouchers and mobility counseling, efforts are underway to increase mobility value of vouchers for families moving toward self-sufficiency and homeownership. Goals beyond providing housing have been set, but it is unclear if PHAs have embraced these goals and are implementing them.

Does the program have a limited number of annual performance goals that demonstrate progress toward achieving the long-term goals?

Explanation: It is identified with Strategic Objective 3.1 primarily -- to "help families in public and assisted housing make progress toward self-sufficiency and become homeowners."

Evidence: Principal measure for this and other low-income housing programs is increase of 5% above 2002 (baseline year) in average earnings of non-elderly non-disabled households.

Do all partners (grantees, sub-grantees, contractors, etc.) support program planning efforts by committing to the annual and/or long-term goals of the program?

Explanation: SEMAP management performance rating system is used to judge how well local housing agencies deliver vouchers and perform basic tasks. However, the system is new and therefore untested as a method of ensuring accountability. It also is not capable of providing information on a family's move to self-sufficiency after they have left the program.

Evidence: Principal SEMAP components include: Waiting List Selection, Rent Reasonableness, Determination of Income, Housing Quality Standards Inspections, and Payment Standards Various sanctions, including reductions in the administrative fee, should encourage achievement of the goals.

Does the program collaborate and coordinate effectively with related programs that share similar goals and objectives?

Explanation: Collaboration with other HUD programs is fairly good but collaboration with other government self-sufficiency programs, such as TANF and training programs, has not been widespread. Periodic efforts to improve collaboration have met with limited success, and were seldom sustained.

Evidence: A partial list of past programs to improve collaboration include: Family-Self sufficiency in the 1970s; Welfare-to-work vouchers; resident self-sufficiency; project bootstrap. HUD funds self-sufficiency coordinators to help about 10 percent of households.

Are independent and quality evaluations of sufficient scope conducted on a regular basis or as needed to fill gaps in performance information to support program improvements and evaluate effectiveness?

Explanation: A variety of completed work shows housing vouchers to be a cost-effective means of delivering housing. A number of high-quality studies are now underway that will provide useful information on the program's effectiveness on other goals of the program.

Evidence: A GAO study in 2001 demonstrated the cost-effectiveness of the program. Preliminary HUD experimental study results suggest the voucher program provides greater benefits than alternatives. Independent surveys (REAC) rate the physical structure of the housing, as well as the financial soundness and managerial competence of the program.

Is the program budget aligned with the program goals in such a way that the impact of funding, policy, and legislative changes on performance is readily known?

Explanation: The Voucher program has aligned its budget with performance goals in a way that the program can be assessed for the outcome of activities that they fund.

Evidence: The 2004 HUD Budget submission has the Voucher program aligned with performance goals including "expanding access to affordable rental housing, improving physical quality of housing, increasing housing opps for people with disabilities and elderly, and help assisted households move towards self-sufficiency."

Has the program taken meaningful steps to address its strategic planning deficiencies?

Explanation: The SEMAP management performance system should correct the lack of performance alignment by stakeholders. After the first full year of data has been collection, actions are planned to sanction those with low scores. Other efforts to increase utilization rates are in place as well.

Evidence: SEMAP scoring is fully implemented. 15 percent of PHAs (270) have failed in initial SEMAP results. Actions to be taken include: no new funding allocations, assessment of programs, corrective action plans. PIH is contracting for technical assistance for these PHAs. Letters of deficiency have been sent to PHAs with 90% or lower utilization rate, however, this does not indicate a failing SEMAP score. In addition, 50th percentile FMRs have been established for the 39 largest metropolitan markets, new vouchers limited to PHAs with high utilization rate, reallocation policy developed, consolidation of small PHAs into regional entities, utilization module developed to track monthly performance, and required reporting of voucher issuance to capture success rate data.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: SEMAP is now in use to measure local program delivery quality, but these data are not timely. Most data for the program lags at least one year and in a program that fluctuates with the market, this can be problematic. Regular information is collected on costs, location, income targeting. No information yet on outcomes for participants during and after assistance.

Evidence: The full implementation of SEMAP system has been slow due to constant changes in the system. The lack of demonstrated ability to move dollars from low performing PHAs to high performing PHAs suggests that the SEMAP system needs some work.

Are Federal managers and program partners (grantees, subgrantees, contractors, etc.) held accountable for cost, schedule and performance results?

Explanation: SEMAP has collected one year of data, but HUD does not seem confident that this system provides accurate performance information. While information about performance has been gathered, no actions have yet been taken to hold PHAs accountable for performance results.

Evidence: Public housing authorities with utilization rates below 97% or rated troubled by SEMAP are not eligible for additional vouchers. In addition, public housing authorities with utilization rates below 90 percent are subject to reallocation procedures that could give unused vouchers to other authorities.

Are all funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: Funds are generally obligated in a timely fashion. Funds are used as intended, with few exceptions. Administrative costs are fixed percentage of assistance. Any funds that are not used are recaptured at the end of the year. (See question 6).

Evidence: The year's appropriations are generally obligated, as expected.

Does the program have incentives and procedures (e.g., competitive sourcing/cost comparisons, IT improvements) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The structure of the program automatically uses market forces for cost comparison. The program allows the market to provide housing at competitive rates. Unfortunately, PHAs have a monopoly on the voucher program and competitive sourcing is restricted by statute to situations where public agency has failed to perform.

Evidence: HUD surveys rents annually and studies of administrative costs rates them as reasonable. HUD voucher rents are well below HUD's project-based rents. Also, HUD requires some rent reasonableness comparisons by its intermediaries.

Does the agency estimate and budget for the full annual costs of operating the program (including all administrative costs and allocated overhead) so that program performance changes are identified with changes in funding levels?

Explanation: The administrative cost, both for HUD and its intermediaries, are not separately identified. Also, the program is purposely over funded to ensure that no family loses its housing assistance. Changes in funding levels are related primarily to outputs in terms of people housed, rather than in outcome terms, such as other improvements in peoples lives outside of housing.

Evidence: Congressional Justifications allocate costs by objectives to indicate how changes in funding are reflected in increased program capacity.

Does the program use strong financial management practices?

Explanation: No incentive for administrative efficiencies given fixed fee structure. Local finances subject to HUD monitoring and outside audit. There are also instances of erroneous overpayments to tenants. The recaptured funds also suggest a weakness in financial management.

Evidence: Financial management practices are fairly good in comparison to other HUD programs. No major scandals over 25 years. But, PD&R study and IRS/HUD data matches found 60 percent of tenants' rents were calculated incorrectly and a significant difference between income reported in the program and income reported in IRS/SSA data bases.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: HUD has implemented a number of policy changes to address management deficiencies related to utilization. The SEMAP program is fully implemented, and the first full year of data has been gathered.

Evidence: SEMAP scoring is fully implemented, increased local surveys to determine maximum rent levels, higher 50th percentile FMRs have been established for the 39 largest metropolitan markets, new vouchers allocated only to PHAs with high utilization rates, reallocation policy developed, consolidation of small PHAs into regional entities, developed new modules to track utilization monthly, and required reporting of voucher issuance to capture success rate data. HUD has data systems to support the impact that these changes have on utilization and should reflect improved performance in FY 2003 and FY 2004.

Are grant applications independently reviewed based on clear criteria (rather than earmarked) and are awards made based on results of the peer review process?

Explanation: Most incremental assistance is initially awarded based on need and competitive factors, including previous performance. Annual Notice of Funds Availability and mandated scoring procedures ensure fair award.

Evidence:  

Does the grant competition encourage the participation of new/first-time grantees through a fair and open application process?

Explanation: Participation is encouraged for all eligible applicants.

Evidence:  

Does the program have oversight practices that provide sufficient knowledge of grantee activities?

Explanation: SEMAP rating system and other reporting now provides a good base of information on local grantees.

Evidence:  

Does the program collect performance data on an annual basis and make it available to the public in a transparent and meaningful manner?

Explanation: HUD collects detailed information on the characteristics of households served and regularly reports on costs and location, but these reports are not timely and usually not transparent to the public. Other information, such as resident satisfaction, is being collected for the first time. Outcomes of households during and after assistance not yet measured regularly.

Evidence:  

Has the program demonstrated adequate progress in achieving its long-term outcome goal(s)?

Explanation: Most assistance goes to households who otherwise would have high rent burdens. However, evidence on how assistance affects household outcomes such as income and well-being is still fragmentary.

Evidence: Performance data are either not available or were not achieved. Well targeted to families with children compared to project-based Section 8 (61% vs. 33%). The program has also maintained bi-partisan support for 25 years.

Does the program (including program partners) achieve its annual performance goals?

Explanation: By traditional measures such as improved management, the answer is yes. However, no time series on earnings, self-sufficiency, homeownership access, other outcomes is available yet.

Evidence: Only one key goal was achieved.

Does the program demonstrate improved efficiencies and cost effectiveness in achieving program goals each year?

Explanation: Cost growth per household served has been in line with or below inflation in rents in most recent years, although growth in 2001 will probably be higher due to program changes that allow rental of more expensive apartments.

Evidence:  

Does the performance of this program compare favorably to other programs with similar purpose and goals?

Explanation: GAO and other studies find vouchers more cost-effective than other HUD rental subsidy programs by traditional measures. New research comparing to public housing shows voucher holders often benefit from moves to better locations.

Evidence: Vouchers are better targeted to families with lowest incomes than are other HUD subsidy programs, including project-based Section 8 and HOME block grant. Also more likely to reach disabled.

Do independent and quality evaluations of this program indicate that the program is effective and achieving results?

Explanation: There have been favorable independent reviews on the cost-effectiveness of the program. Less information regarding self-sufficiency and other long-term outcome goals.

Evidence: " MTO preliminary findings and evidence from Minnesota study indicate: MTO treatment group families moved to economically and racially mixed communities. Freedom from fear enabled families to start making progress. Significant health improvements occurred. The children of treatment group families have improved reading and math Scores. There are substantial declines in violent juvenile crime. Dependence on welfare has declined. Statistically meaningful changes occurred sooner than expected in the lives of children and adults."