On April 8, HUD released a “Final Draft Report” entitled, Housing Choice Voucher Program Administrative Fee Study. Abt Associates conducted the study. HUD, which began working on the issue in 2009, expects to publish the report for comment soon. The study is the first analysis of voucher administrative costs since the late 1980s. Congress appropriates funds every year for 2,300 public housing agencies (PHAs) to administer the Housing Choice Voucher (HCV) program, which serves 2.2 million households.
The study found that PHAs “have been significantly underfunded to run the HCV program.” For the past several years, administrative fee funding from Congress resulted in PHAs receiving less than the amount for which PHAs are eligible under the fee formula. For example, in FY15, PHAs received about 75% of the formula amount. The formula is based on the Fair Market Rent (FMR), “with no documented connection to what it costs to administer the HCV program.”
The study predicts that 92% of PHAs would have had greater administrative fees if the study’s proposed new fee formula had been in place and funded between July 2013 and June 2014. The proposed formula is based on seven factors that the authors determined drive the variation in costs of administering the voucher program. Two of the factors, program size and wages, explain 35% of the cost variation. The five other “cost drivers” explaining an additional 30% of the cost variation are health insurance, percentage of households with earned income, new admissions rate, number of voucher holders in high-rent neighborhoods, and percentage of voucher holders living more than 60 miles from the PHA’s headquarters.
On average in 2013, it took a PHA 13.8 hours per voucher per year to administer the program. The average cost of administering a voucher was $70.03 per month, while the average amount received for administering a voucher was $51.64 per month.
A HUD briefing about the study is scheduled for April 17, 10-11:30am ET. This briefing will also be webcast live. More information about the briefing is at http://www.huduser.org/HousingChoiceVouchers/index.html.
The study is at http://www.huduser.org/portal/hcvfeestudy.html.