Federal Housing

The Federal Government is responsible for many tasks that private industry cannot or will not handle. They may deal with the building of road and bridges or having a strong military. One of the crucial roles of our government is helping those in need. They may range from the single mother, to developmentally disabled, or the elderly. The government has social programs that almost everyone will recognize: Food Stamps, Medicare, and Social Security Income for Disabilities. These programs help meet many of the basic needs for struggling citizens. However, these programs do not ensure that everyone has a roof over their head. While housing programs may not be as familiar to public, they are just as wide spread and important. There are over seven million household that receive some type of housing assistance. Several different Federal Agencies operate housing programs including the Department of Housing and Urban Development, Treasury Department (I.R.S), United Stated Department of Agriculture, and Department of Defense. Housing provided by the Department of Defense is for its civilian and non-civilian employees and family; however, the other agencies are all providing housing for low-income households. These different programs tend to overlap and meet the needs of similar citizens. A single apartment complex can have subsidy from multiple federal agencies. They have to follow regulations from these different agencies, which may not agree with each other, and have many different inspections within the course of a single year. These different federal programs create a huge administrative burden and cost on these properties. The layering of subsidy is inefficient and wasteful. Three of the big federal housing programs cover the same group of citizens in the same manor. Housing and Urban Development’s (HUD) Section 8 Multifamily program offers to pay a portion of households rent to a private apartments complex owner for agreeing to lease all of their units to low-income residents. http://www.hud.gov/offices/hsg/hsgmulti.cfm United States Department of Agriculture runs a program call Rural Development or more commonly known as farmer homes. http://www.rurdev.usda.gov/rhs/ It provides money for the construction of low-income housing.http://en.wikipedia.org/wiki/LowIncome_Housing_Tax_Credit The final program I will discuss is the Low-income Housing Tax Credit (LIHTC) program through the Department of Treasury. It offers tax credits to help fund the building or rehabilitation of low-income housing. One property could be built with the help of Rural Development, have Section 8 multifamily to pay for operations, and LIHTC to rehabilitate the property after a number of years of operations. While all of these different types of funding may have been need to keep building, maintain, and redevelop the low-income housing, it creates an administrative nightmare. The federal regulations for the Section 8 Multifamily program alone accounts for three handbooks totaling over 2000 pages of regulations. The Treasury Department has an entire section (42) of the tax code for the regulations of LIHTC program. In addition, Rural Development has its own set of code. These regulations were not development in concert with each other, and these different agencies have little communication. There are many situations for a property to be in compliance with one program will cause them to be out of compliance with a different program. HUD has developed a computer system called Enterprise Income Verification (EIV) system. EIV system accesses data from Social Security Administration and the Department of Health and Human Services. It provides properties information on Social Security, unemployment benefits, employment, and wages. HUD requires the use of this program to verify a tenant is income eligible; however, they ban the use of the EIV system for LIHTC and Rural Development. This creates a catch 22 situation that they cannot be in compliance with all federal programs they are subject too. Properties have to create separate paper work files for each program, and verify each household’s income multiple ways. This is a waste of time and money to ensure that the appropriate people are receiving the help they need. Another waste of time and money are the federal inspections. Each of these programs requires inspection on the physical condition and the administration (paper work) of the property. A property could be subjected to three physical inspections and three administrative reviews within one year. Not only is this a burden on the property, but it is a waste of tax payers tax dollars to send multiple groups out to these properties. The Federal Housing programs help millions of people, but are caught in bureaucracy. These programs need to be evaluated for redundancy to lift administrative burdens and save tax payer money.