Summary

Under the Housing and Community Development Act, federal funds are provided annually to certain local governments to augment their community development activities. The program authorized by the Act consolidated a number of previous federal categorical programs such as urban renewal. GAO examined local housing activities under the Community Development Block Grant program in Dallas, Texas, to describe how the city has used block grant funds to provide and improve housing for low- and moderate-income families.

Dallas has been experiencing a substantial population growth. To help rehabilitate its aging housing stock, the city has used 29 percent of its Community Development Block Grant funds for housing related activities and the remaining 71 percent for activities such as economic development and public works. Of the amount allocated for housing related activities, 42 percent has been used to fund 9 specific housing programs and 58 percent for indirect and administrative programs. Dallas has used seven types of housing activities methods which include: rehabilitation of single family units, relocation of families from flood plain areas, rehabilitation of low rent public housing units, and relocation of houses. It used various types and combinations of grants or loans to finance the projects. Approximately two-fifths of the money spent for administrative programs was spent on code enforcement activities. GAO estimated that the city spent approximately one-fifth of the funds it spent in providing loans and grants on administrative costs. City officials said that these costs were high because the city provided beneficiaries with important services such as awarding contracts and inspecting work during construction. City officials generally supported the move toward housing block grants and were optimistic about being able to administer a block grant program. They felt that the funds should come directly to the city without state involvement in the process and that the Federal Government's involvement should focus on audits and program evaluation.