GAO Reports HUD Sequestration Impact

42,000 Fewer Households Receive Rental Assistance

GAO Reports Sequestration Impacts for HUDThe Government Accountability Office (GAO) issued a report on March 6, 2014 in which it evaluates “the effects of fiscal year 2013 sequestration,” and other impacts related to the across-the-board cuts in 2013.

GAO found that sequestration “reduced assistance for education, housing, and nutrition,” despite actions that agencies took to “minimize the effects” of the budget cuts.

HUD funding reductions “resulted in fewer services and benefits provided” including providing rental assistance to 42,000 fewer households. GAO described actions taken by HUD to prepare for and mitigate the impact of the cuts on services. These included a hiring freeze, staff furloughs, and reduced staff benefits, all resulting in reduced service delivery.

Program cuts resulted in direct impacts for “partners that administer HUD programs or grantees.” HUD’s Housing Choice Voucher payments to landlords were reduced by $900 million, resulting in fewer housing units provided to very low income families, elderly households, and households that include a person with a disability.

GAO found that due to a $400 million cut to the Project-Based Rental Assistance (PBRA) program, HUD “short-funded” contracts with 8,000 private owners, representing 49% of the PBRA portfolio. GAO reported that once HUD could no longer “short-fund” contracts, a shortfall in funding could put “some occupants at risk of homelessness.”

HUD reported to GAO that reducing funding for public housing operating and capital funding could result in “deteriorating living conditions and increased utility costs” for public housing residents. Additionally, HUD estimated that the Homeless Assistance cuts would result in 60,000 formerly homeless households being removed from housing and shelter programs.

Click here for the GAO report.