About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

PAD-79-43 1 (1979-01-16)

handle is hein.gao/gaobaaymw0001 and id is 1 raw text is: COMPTROLLEM GENERAL OP THE UNITED STATES WASHINGTON. D.C. Z05 B-171630 6,1979 The Honorable williaim Proxmire Chairman, Committee on Banking Housing and Urban Affairs '108194 I6Z, United States Senate 108394 Dear Mr. Chairman: The Program Analysis Division of the General Accounting Office is currently performing a study of alternative financing mechanisms for subsidized housing production. The alternatives being analyzed include the more traditional FHA insurance programs, state housing finance agencies, the section llb program and others which utilize private owner- ship. All of these methods necessarily include the use of section 8 subsidies since the bulk of housing assistance is now channeled through this program. We have, therefore, looked in some detail at the policies and procedures governing sec- tion 8 and have, during the course of our investigation, observed what appears to be a serious and very costly prob- lem in the way this program is administered./ This problem could immensely reduce the effectiveness and increase the costs of housing assistance by allowing private investors who own and operate section 8 housing to sell their projects or convert them to condominiums in as little as 5 years. This would likely result in the displacement of low and moderate income tenants and is in marked contrast to the much longer service which can be expected from a program such as conven- tional public housing which should serve subsidized tenants for at least 40 years at much lower costs. We believe this will happen because (.1) the Housing Assistance Payments (HAP) agreement which HUD executes with each developer allows cancellation or renewal of the HAP contract, at the option of the owner, after 5 years (or multi- ples of 5 years) and because (2) there will be strong economic incentives for many owners to dispose of their investments long before the end of the 20 years which has been generally anticipated. We discussed this matter with the Department. They are aware of the problem and are working on its solution. In the past, FHA multifamily insurance programs nave been implemented using a regulatory agreement giving the Department ) of Housing and Urban Development control for 20 years over the {y 04 3.2 7-3 PAD-79-43 73 (97350) '

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most