Detailed Information on the
Project-Based Rental Assistance Assessment

Performance measures for self-sufficiency will also be developed.

No expansion of the program is proposed in 2008. Funding increases in 2007 only because more properties are renewing assistance contracts than in 2003l the total number of properties assisted does not increase.

HUD will make management improvements, including stepped-up enforcement against properties in poor condition. These actions will increase the number of units meeting acceptable physical quality standards.

Measure: Thousands of households with worst-case housing needs among families with children, the elderly, and persons with disabilities.

Explanation:

Measure: Percent of units meeting physical standards.

Explanation:

Is the program purpose clear?

Explanation: There are several clear objectives for subsidized housing (increasing access to affordable housing, promoting economic self-sufficiency, independence for elderly and disabled populations), but there is little consensus on the balance between these objectives and program focus has been blurred by other objectives such as neighborhood revitalization and housing production.

Evidence: These goals are articulated in HUD Strategic and Performance Plans.

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

Explanation: By providing housing subsidies, provides access in most cases to better housing (if not better neighborhoods). Lower housing costs free income for other household needs.

Evidence: Around 5 million low-income households have "worst case" housing needs, i.e., not in affordable or standard quality housing.

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

Explanation: About 1.3 million households are assisted by this program. Federal rental assistance funds the gap between rents necessary to support developments and tenant contributions that are affordable to low-income households. A reduction in federal funding would imply fewer households assisted or increased rents for tenants.

Evidence:  

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: There are a variety of rental housing assistance programs. Other subsidy approaches such as vouchers, HOME, and low-income housing tax credits could achieve same or greater benefits at comparable cost.

Evidence: Most (60%) units were built to serve elderly, whereas greatest needs are for large families and disabled.

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

Explanation: Housing vouchers have been shown to be more cost-effective in aiding low-income families. Less information is available on the elderly. Vouchers provide greater mobility and choice, avoid direct Federal liability for aging or failing real estate. Many properties are subsidized above the level necessary to fund vouchers. Contribution to supply should be discounted for loss of competing private low-cost housing.

Evidence:  

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: HUD has long-term goals for increasing housing affordability, improving housing quality, and economic self-sufficiency.

Evidence: These goals are articulated in HUD Strategic and Performance Plans.

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

Explanation: HUD has good specific goals for improving physical quality but not yet for improving the economic self-sufficiency of families receiving project-based assistance (these are under development). Hence, they are given a yes but with reduced weight. Project-based assistance is a static program--no new units are produced--so it cannot significantly contribute to increasing housing affordability.

Evidence: HUD Strategic and Performance Plans.

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: Property data provide accurate third-party measures of unit quality, financial management. However, no measures are available of the effects of housing assistance on households' economic or personal well-being.

Evidence: Real Estate Assessment Center produces comprehensive data on property physical and financial conditions.

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

Explanation: There is no collaboration with other government programs, such as TANF and job training programs, that support self-sufficiency. The program does collaborate with the voucher program when properties are converted to vouchers but this is rarely done and is largely a simple administrative process.

Evidence:  

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: No comprehensive evaluation has ever been conducted focusing on the effects of this program on low-income residents.

Evidence:  

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: Program is budgeted on number of outstanding units and expected cost increases. There is no process for linking budget decisions to variations in performance. Renewal of contracts is subject to annual appropriations but is semi-automatic.

Evidence: HUD Budget documents

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

Explanation: HUD has not taken sufficient steps to translate program objectives into performance measures. There is no evidence of the kind of systematic planning and control of costs and services implied by this question. Local owners are responsible for budgeting and maintenance of properties.

Evidence:  

Are acquisition program plans adjusted in response to performance data and changing conditions?

Explanation: This program does not make new acquisitions. It only funds existing developments.

Evidence:  

Has the agency/program conducted a recent, meaningful, credible analysis of alternatives that includes trade-offs between cost, schedule and performance goals?

Explanation: HUD has not considered alternatives such as providing regular vouchers or project-based vouchers as a way of improving program performance.

Evidence:  

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: HUD does collect meaningful information on physical condition and uses it to manage properties. It lacks measures in other areas. Also, a broader management rating tool would be advantageous for properties. Due to these concerns, the weight of this factor is reduced to indicate a mild "yes."

Evidence: Real Estate Assessment Center reports

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

Explanation: Properties with low physical ratings are subject to increased oversight and possible enforcement actions. However, given the limited scope of these mechanisms relative to the larger objectives of this program, this factor is given a low weight.

Evidence: Property enforcement protocols are used to improve properties.

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

Explanation: Funds are obligated but, given the long-term nature of HUD's relationships with properties, this is largely a mechanical process.

Evidence: HUD rental assistance contracts and procedures dictate obligations.

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: Program has procedures to mark rents down to market level. Achievement of full savings has been elusive but recent reorganization may help maximize savings.

Evidence: Rental assistance contract renewal provisions dictate reduction of rents to market levels. Performance reports document properties where rents are reduced.

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 FY 2004 Budget request identifies the required FTEs in both headquarters and the field to administer the program in FY 2002, 2003, and 2004. However, those FTE are not paid for with program dollars, but rather out of a central Salaries and Expense account for the entire Department.

Evidence: 2004 HUD Budget Request and Congressional Justifications

Does the program use strong financial management practices?

Explanation: There are often excess balances and poor information on outstanding contracts. HUD field staff routinely grant rent increases based on owners' analysis of costs or, in some cases, based on inflation.

Evidence: Rental assistance provisions allow for flexible rent adjustments.

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

Explanation: Inspection data are being used to target properties for management attention and improvement. Though benefits have not yet been documented, contract administrators have been employed to improve oversight. The Mark-to-Market program is restructuring properties for physical and financial viability.

Evidence: REAC data and Mark-to-Market performance reports.

Does the program define the required quality, capability, and performance objectives for deliverables?

Explanation: See #1 above.

Evidence:  

Has the program established appropriate, credible, cost and schedule goals?

Explanation: There is no evidence of the kind of systematic planning and control of costs and services implied by this question. Local owners are responsible for budgeting and maintenance of properties.

Evidence:  

Has the program conducted a recent, credible, cost-benefit analysis that shows a net benefit?

Explanation: While cost-benefit analysis could be applied to this program, cost and effectiveness comparisons to other programs, as described in Section 1 #5 and Section 2 #9, are a preferred means of evaluation. Given that the number of households served under this program is not increasing, it has been more appropriate to assess alternative methods of providing low-income housing assistance rather than assessing the benefits relative to cost of making incremental investments.

Evidence:  

Does the program have a comprehensive strategy for risk management that appropriately shares risk between the government and contractor?

Explanation: The structure of the program puts owner equity at risk if there is a failure to perform, but most profits were front-loaded. Owner financial interest is not full substitute for risk management strategy given incentive structure of the program. Contracts are written so that unanticipated costs are covered by higher federal payments and losses from default are paid entirely by FHA.

Evidence:  

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

Explanation: The program does support a large number of affordable housing units. New time series shows improvement in physical quality of units. Progress toward increasing self-sufficiency is unclear, however.

Evidence: Performance Reports

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

Explanation: Targets for physical quality have been met. However, there are few meaningful targets for other objectives.

Evidence: Performance Reports

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

Explanation: Some efficiencies have been gained through the Mark-to-Market program to reduce above-market rents.

Evidence:  

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

Explanation: Available performance information tends to favor housing vouchers, which provide greater personal mobility. However, there is little information on the effects of different subsidy approaches over time on households' opportunity and well-being.

Evidence: Preliminary analysis under a Common Low-Income Housing Cost Measure supports this conclusion.

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

Explanation: Independent evaluations lacking.

Evidence:  

Were program goals achieved within budgeted costs and established schedules?

Explanation: If goals are defined narrowly, then yes. Cost increases are generally in line with inflation, ignoring default losses when projects fail. Some subsidy savings resulted from Mark to Market restructuring of high-cost projects.

Evidence: