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

RED-75-323 1 (1975-01-24)

handle is hein.gao/gaobabkhd0001 and id is 1 raw text is: TOM'TiROLLE GENEIRAL OF THE UNITED STATE S RASSINGTON, D.C. Z54. B-171630 RELEASED JAN 24 *'15 The Honorable Les Aspin , House of Representatives Dear Mr. Aspin: By your September 4, 1974, letter you requested that we do a complete audit of the Shorehaven housing project in Racine, Wisconsin - a Department of Housing and Urban Development (HUD) section 236 proj- ect. You asked that we determine whether a rent increase effective August 1, 1974, was necessary to insure the project's survival. You stated that HUD had advised you that the increase was essential for the project's survival and was needed because of the general infla- tionary trend and a large underestimation of real estate taxes and electrical expenses. You also stated that the owners said that they operated at a loss of $40,000 during 1973 and projected similar losses for 1974 unless there was a rent increase. We worked at HUD's Milwaukee area office, the Shorehaveti project, and the accounting firm which maintains the project records. Our re- view included discussions with HUD officials, Racine city officials, and the managing agent and an examination of HUD files and project accounting records. Our review showed that the rent increase was necessary to meet increased operating costs. Even with the rent increase, it appears there will be an operating loss in 1974 because of increases primarily in utility costs and real estate taxes. The law covering section 236 projects permits owners to receive a 6-percent return on their investment. The Shorehaven project owners did not receive a 6-percent return in 1973. In that year the project incurred an operating loss. Whether the project would survive without the rent increase is difficult to determine mainly because owners receive certain tax benefits from losses on section 236 projects. We have no way of determining how long the present owners would continue to operate the Shorehaven project at a loss. . ... /5L5-/,1_2

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