Report 105-175), we identified (1) the impact of welfare reform on the revenue sources, employment status of tenants, and roles of selected housing agencies and (2) HUD’s role in assisting housing agencies and their clients as they adapt to welfare reform. Impact of Welfare Reform on the Revenue, Employment Status of Tenants, and Roles of Selected Housing Agencies Is Uncertain

It is too early to be certain what impact welfare reform will have on the revenue of the housing agencies we visited, the employment status of their tenants, and the roles of the housing agencies. Although these agencies serve many tenants who depend on cash assistance for some or all of their income, most of their executive directors and other officials had not developed financial estimates of welfare reform’s impact. However, the housing agencies’ supportive service activities were generally operated separately from the states’ welfare reform efforts. Officials generally lack the resources needed to undertake detailed analyses of the impact of their state’s welfare reform plan on their revenue. In addition, the state and local government offices with welfare reform responsibilities that we visited rarely targeted funds and programs to public housing developments. In addition, officials at state welfare offices and housing agencies said the states had not targeted funds for employment, training, and support services to housing agencies with large TANF populations; however, TANF recipients with housing assistance are eligible for the same services as other TANF recipients. Researchers with the Institute for Policy Studies at the Johns Hopkins University have shown that welfare recipients with housing assistance have longer spells on welfare than those without housing assistance. Under Welfare Reform, Housing Agencies Need More Guidance From HUD and Involvement With the States

HUD has a smaller role in welfare reform than the states or some other federal agencies, such as the departments of Health and Human Services and Labor, yet HUD has stated that it is committed to making welfare reform work. HUD’s commitment rests, in part, on the large numbers of tenants who currently receive, but may lose, welfare benefits if they do not find work. While HUD’s strategic plan and other management documents stress the importance of making welfare reform work and explain how HUD’s own programs can facilitate welfare reform, they do not recognize a role for HUD at the state level and do not include a formal strategy for increasing the states’ awareness of the assisted housing population and for improving coordination among HUD, the states, and the public housing agencies. Recommendations

To assist public housing agencies in their efforts to help residents move from welfare to work, GAO recommends that the Secretary of Housing and Urban Development increase communications with field offices and housing agencies to clarify HUD’s role in welfare reform, explain how current programs can be used to complement welfare reform efforts, and identify sources of information about other federal welfare reform efforts; provide additional technical assistance and data on tenants’ characteristics along with guidance that would help housing agencies use the data to assist in managing the units and in determining what impact welfare reform might have on the agencies; and develop a comprehensive strategy that relies on each field office to promote the benefits of using assisted housing developments as places to deliver services related to welfare reform and to help link other field office and housing agency staff with federal, state and local welfare reform efforts.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed the implications of welfare reform on public housing agencies and their tenants, focusing on the: (1) impact of welfare reform on the revenue, employment status of tenants, and roles of selected housing agencies; and (2) Department of Housing and Urban Development's (HUD) role in assisting housing agencies and their clients as they adapt to welfare reform.

What GAO Found

GAO noted that: (1) it is too early to be certain what impact welfare reform will have on the revenue of the housing agencies that GAO selected, the employment status of their tenants, and the roles of these housing agencies; (2) most of the agencies had not attempted to estimate welfare reform's impact on their revenue for multiple reasons, including a lack of resources to undertake detailed analyses of the impact of their state's welfare reform plan; (3) welfare rolls had declined in the states that GAO visited, and state officials described services being provided to help Temporary Assistance for Needy Families (TANF) recipients overcome obstacles to employment; (4) housing agency officials, residents, and others believed that tenants would face significant challenges in moving from welfare to work; (5) their concerns are supported by research, based on past behavior, which shows that welfare recipients with housing assistance tend to have longer stays on welfare than those without housing assistance; (6) executive directors recognized that the role of housing agencies increasingly includes providing social services as well as housing; (7) however, agencies' social service activities were generally operated separately from states' welfare reform efforts; (8) the agencies that GAO visited had limited involvement in their state's welfare reform efforts; (9) state and local government offices with welfare reform responsibilities rarely targeted funds and programs to public housing developments; however, TANF recipients with housing assistance are eligible for the same services as other TANF recipients; (10) HUD has a smaller role in welfare reform than the states or some other federal agencies; however, HUD said that it is committed to making welfare reform work; (11) HUD's role is driven, in part, by the large numbers of tenants who currently receive welfare benefits whose incomes will decline if they do not find jobs or other sources of income within the time limits; (12) HUD's own financial status depends, to some extent, on these tenants' success in replacing welfare benefits with earnings; (13) to date, HUD has emphasized the importance of welfare reform in at least two strategic planning documents, issued guidance on welfare reform, redirected some programs to focus on welfare reform, and begun to coordinate its welfare reform activities internally and externally; and (14) HUD's strategic plans do not include a comprehensive strategy for bringing together HUD's resources for welfare reform and the funds and programs available from the states and other federal agencies.