OIG: More Eligible Families Could Benefit from Voucher Program

The Housing Choice Voucher program, funded by HUD, allows eligible families to lease safe, decent, and affordable privately owned rental housing. The program is implemented through a combination of an annual contributions contract between HUD and each public housing agency (PHA), which authorizes a certain number of vouchers to be issued according to that contract, and annual appropriations by Congress to fund the contractual agreements.

A public housing agency determines a family’s eligibility and issues a voucher. Once the family has found an acceptable unit, the PHA pays the HUD-funded housing subsidy directly to the landlord on behalf of the family. The family pays the difference between the actual rent and the amount subsidized by the program, typically 30 percent of its monthly adjusted gross income, for rent and utilities. There are more than 2,000 PHAs across the nation that administer the program, serving approximately 2.25 million households.

HUD’s Office of the Inspector General (OIG) audited HUD’s oversight of voucher utilization and reallocation of vouchers in the Housing Choice Voucher program. In overseeing voucher and funding utilization, HUD has a responsibility to Congress to ensure that the funds authorized for housing assistance are used to assist the maximum number of families. This audit follows a report issued in September 2020 that found, as of September 2019, HUD had more than 300,000 unused vouchers that could potentially be used to house families in need of affordable housing.

Audit Findings

Every year, HUD provides an assessment of the voucher leasing rate and use of annual budget authority by each PHA. This determines the program’s utilization rate. In addition, as part of monitoring PHAs’ utilization, HUD assesses each agency’s leasing potential. To determine leasing potential for each PHA, HUD determines the number of Housing Choice Vouchers and amount of funds that a PHA is projected to have remaining available at the end of the calendar year and estimates how many vouchers could likely be leased, based on the agency’s average per-unit cost.

OIG found that HUD isn’t maximizing the number of eligible families that could benefit from its Housing Choice Voucher program. OIG stated, while HUD’s voucher utilization rate had decreased, as of November 2020, more than 62 percent of PHAs in the program had leasing potential and that leasing potential could increase in 2021. The report found that more than 191,000 authorized vouchers were unused and unfunded, meaning that more than 191,000 additional low-to-moderate-income families could possibly benefit from subsidized housing by using these vouchers. However, HUD would need an additional appropriation of nearly $1.8 billion to fund these vouchers.

According to the report, HUD believes that it couldn’t implement its reallocation regulation because of historical legislative changes to the funding process for PHAs’ voucher programs. However, the report finds that HUD hadn’t exercised its regulatory authority to reallocate vouchers and associated funding when PHAs were underutilizing their vouchers.

OIG Recommendations

OIG recommends that HUD’s Office of Field Operations establish and implement a plan to assist PHAs in optimizing leasing potential to maximize the number of assisted families and prevent additional vouchers from becoming unfunded.

The plan should include addressing the circumstances that prevent PHAs from leasing vouchers and assessing whether legislative, policy, or funding changes are needed to optimize voucher use. OIG also recommends establishing time frames and to implement appropriate corrective actions for those PHAs that don’t increase their leasing to prevent additional vouchers from becoming unfunded.

• HUD Audit 2021-CH-0001