HUD Remains Challenged To Serve the Maximum Number of Eligible Families Due to Decreasing Utilization in the Housing Choice Voucher Program

We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of voucher utilization and reallocation in the Housing Choice Voucher Program based on the HUD Office of Inspector General’s (OIG) report on HUD’s top management challenges for fiscal year 2020 and HUD’s strategic goals and objectives reported in its 2018-2022 strategic plan. In addition, while responding to a congressional inquiry from Senator Chuck Grassley’s office, regarding portability in the Program (audit report number 2020-CH-0006, issued September 9, 2020), we identified that as of September 2019, HUD had more than 300,000 unused vouchers that could potentially be used to house families in need of affordable housing. Our audit objective was to assess HUD’s oversight of voucher utilization and reallocation in the Housing Choice Voucher Program. HUD remains challenged to ensure that the maximum number of eligible families benefits from its Housing Choice Voucher Program. Specifically, while HUD’s voucher utilization rate had decreased, it estimated that as of November 2020, more than 62 percent of public housing agencies in the Program had leasing potential and that leasing potential could increase in 2021. In addition, HUD had not exercised its regulatory authority to reallocate housing choice vouchers and associated funding when public housing agencies were underutilizing their vouchers. HUD remains challenged with voucher utilization because some public housing agencies continue to encounter difficulties that are not within their control to overcome and which negatively impact the agencies’ ability to increase leasing in their service areas. In addition, HUD believed that it could not implement its reallocation regulation because of legislative changes dating back to 2003. As a result, nearly 81,000 available housing choice vouchers could potentially be used to provide additional subsidized housing for eligible families. Further, more than 191,000 authorized vouchers were unused and unfunded, meaning that more than 191,000 additional low- to moderate-income families could possibly benefit from subsidized housing by using these vouchers. However, HUD would need an additional appropriation of nearly $1.8 billion to fund these vouchers. We recommend that HUD’s Office of Field Operations establish and implement a plan to assist public housing agencies in optimizing leasing potential to maximize the number of assisted families and prevent additional vouchers from becoming unfunded. We also recommend that HUD’s Office of Public Housing and Voucher Programs establish and implement a plan for the unused and unfunded vouchers to mitigate or prevent additional vouchers from becoming unused and unfunded.