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Section 236 Rental Housing: An Assessment of HUE's Ccmments on
GAO's Evaluations. PAD-78-62; B-171630. April 0, IS18. I pp. +
4 appendices (42 pp.).
Report to Sen. William Proxmire, Chairman, Senate Committee on
Appropriations: HUD-Independent Agencies Sutconsittee; ty Elmer
B. Staats, Comptroller General.
Issue Area: Domestic Housing and Communitj Development: Housing
for Low and Moderate Income Families (2101); Domestic
Housinq and Community Development: Federal Credit Incentives
to Stimulate Housing (2104);Progran Evaluation Systems
(2600).
Contact: Program Analysis Div.
Budqet Function: Community and Regional Development: Community
Development (451); Commerce and Transportation: Mortgage
Credit and Thrift Insurance (401); Inccme Security: Public
Assistance and Other Income Supplements (6G4).
Orqanization Concerned: Department of housing and Urtan
Development; Office cf Managesent atd Budget.
Conqressional ;ielevance: House Committee on Banking, Currency
and Housnq. Senate Committee on Eanking, Pousing and Urban
Affairs; Senato Committee on Apprc riaticns: HUE-Independent
Aqencies Subcoiamittae. Sen. William Prcxmire.
Authority: H.R. 17969 (90th Cong.). S. 3149 (gct; CcMg.).
A report issued in January 1978 comprehensively
evaluated the section 236 rental assistance program and made
recommendations to the Congress and the oaartment ct Housing
and Urban Development (HUD) which would assure that moderate
income households receive a reasonable share of future hcusing
assistance. The report concluded that the secticn 2346 program
had been successful in producing quality housing units in iecord
numbers and in providing this housing to a tenant group
drastically different from tue very lcb income households aided
by conventional public housing programs or ty the secticn 8
leasing proqram. The report recommended that HUE take measures
to see that moderate income households receive an equitable
share of Federal housing assistance and that section 2.6 be
reactivated until a preferable alternative is developed.
Findinqs/conclusiotis: HUD shared the view that the program was
an effective means of assisting a segment cf the housing Ecor.
However, they felt that the inflexibility of the section 236
subsidy machanism which tied payments to the mortgage dett, in
comtination with general multifamily irsurance Froblems,
undermined the long term economic viability of section 236. The
Department noted that it was exploring other methods tc aid
moderate income households and agreed that HUD had a
responsibility to respond to the hcusing nieds ct the entire
ranqe of the housing deprived. Current hcusing policy includes
nothing for this income qro'u. In the meantime, the supply of](ViewImageLocal?handle=hein.gao/gaobaaxcg0001&div=1&collection=&method=preview&ext=.png&size=3)