Today, Congresswoman Maxine Waters (D-CA), Ranking Member of the Committee on Financial Services, released a statement on a new Government Accountability Office (GAO) report titled, “Rental Housing: Improvements Needed to Better Monitor the Moving to Work Demonstration, Including Effects on Tenants” (GAO-18-150). The GAO report was requested in 2015 by Ranking Member Waters, who has been a longstanding critic of the program. The report’s release comes on the heels of President Trump’s FY2019 budget request to Congress, which would widely expand the use of policies similar to those utilized in the Moving to Work demonstration.

Moving to Work (MTW) is a controversial demonstration program at the U.S. Department of Housing and Urban Development (HUD) that provides a limited number of public housing authorities (currently 39) with expansive flexibilities in administering the public housing and Section 8 Housing Choice Voucher (HCV) programs. Currently, these 39 agencies manage approximately 430,000 public housing and HCV units, representing over 13 percent of the total public housing and HCV stock. The demonstration program was created in 1996, and despite over two decades of implementation, the program’s impact on tenants has never been comprehensively evaluated until now.

“This GAO report confirms my longstanding concern that the Moving to Work (MTW) demonstration program has serious shortcomings and is in desperate need of reform,” Ranking Member Waters said.

“With the release of this GAO report, we now know that HUD -- under the management of Secretary Ben Carson and President Donald Trump -- does not have the required amount of staff or capacity to adequately monitor this program, especially when it comes to evaluating impacts on residents. Troublingly, HUD has indicated that it will not adopt several of GAO’s recommendations for improvement, including a process for monitoring the surprisingly large amounts of voucher reserves that have been amassed by MTW agencies, which despite this funding windfall, house fewer families and have higher operating costs than non-MTW agencies.

“The Trump Administration’s FY19 budget proposes to allow HUD to give over 3,000 housing agencies similar flexibilities to those that MTW agencies currently have, including the ability to charge higher rent amounts and impose time limits and/or work requirements for residents. Given that this GAO review has shown that HUD is unable to adequately oversee this demonstration program in its current form, such an expansion of these “alternative” policies would be grossly irresponsible.

“Congress must pay heed to the concerns raised in this report, and make common sense reforms to this demonstration program that will provide stronger tenant protections, increased accountability, and a more responsible use of federal resources.”

The GAO report found that:

• HUD is extremely limited in its ability to oversee the activities and outcomes of the 39 program participants due to inadequate staffing and limited data collection. HUD lacks reporting and impact analysis requirements for monitoring the effects of changes to rent structures, work-requirements, and time-limit policies that could risk serious hardship for recipients. When HUD officials were asked why stricter reporting requirements were not implemented for program participants, their response was that the Department did not want to require agencies to report information HUD did not intend to analyze.
  
  
• The 39 MTW agencies have amassed more in HCV funding reserves than the remaining 2,166 non-MTW agencies combined (over $800 million in cumulative reserves held by the 39 MTW agencies, compared to $737 million in cumulative reserves held by the remaining 2,166 non-MTW agencies), highlighting serious concerns about fiscal accountability and HUD’s intention to ensure federal funds are spent appropriately. In response, the GAO recommended the Department develop a process for monitoring MTW agencies’ reserves. HUD disagreed.
  
  
• Current MTW agencies are serving fewer families than non-MTW agencies, have higher operating costs and lower occupancy than non-MTW agencies, calling into question whether the model is truly beneficial for serving more families and decreasing costs to the federal government.
  

The GAO has made 11 recommendations to HUD, which include completing workforce planning, developing processes to track use of funds and monitor agencies’ reserves, and developing a framework—including clear guidance on reporting requirements and analysis plans—to monitor effects on tenants. HUD’s disagreement with three of the recommendations raises serious concerns about continued adequate oversight over the demonstration program, especially in light of the fact that Congress authorized an expansion of the demonstration to an additional 100 agencies.

Ranking Member Waters has long been outspoken in her call for reforms to the MTW program, and introduced legislation in 2015 to make much-needed changes to address the program’s deficiencies. Additionally, she opposed the expansion of the controversial demonstration program in the Fiscal Year 2016 appropriations bill that ultimately expanded the program by 100 additional agencies.

To view the full report, click here.