GAO Finds Numerous Issues with Moving to Work Demonstration

At the request of House Committee on Financial Services Ranking Member Maxine Waters (D-CA), the Government Accountability Office (GAO) undertook an additional review of the Moving to Work Demonstration (MTW), with a focus on how the demonstration affected public housing and voucher tenants.

The “Appropriations Act of 1996,” which authorized the demonstration, states that the purpose of MTW is to give PHAs and HUD the flexibility to design and test various approaches for providing and administering housing assistance that reduce costs, provide incentives for economic self-sufficiency, and increase housing choice. The act requires MTW PHAs to continue to assist substantially the same total number of families and to maintain a comparable mix of families, by family size, as would have been assisted without the MTW demonstration. In addition, at least 75 percent of the families assisted must have incomes less than 50 percent of area median income.

The demonstration program provides PHAs with enormous flexibility from most public housing and voucher program statutory and regulatory requirements. For example, MTW PHAs may merge public housing capital and operating funds with voucher funds in order to use those funds interchangeably. They may also impose higher rents, work requirements, and time limits for public housing and voucher households. Each of the current 39 MTW PHAs sought different statutory and regulatory waivers, which are spelled out in their MTW Standard Agreements.

The GAO’s report, Improvements Needed to Better the Moving to Work Demonstration, Including Effects on Tenants (GAO-18-150), found significant issues in a number of areas. The GAO report provided findings in four areas:

• HUD is limited in its ability to evaluate the effect of MTW rent-reform, work-requirement, and time-limit policies on tenants.
• Due to limited data, HUD cannot fully determine the extent to which the flexibilities MTW affords PHAs affected their efforts, especially regarding the number of tenants served.
• HUD hasn’t implemented a process to monitor MTW reserves or PHA plans for such reserves.
• HUD has taken steps to address staffing deficiencies needed to oversee the current 39 MTW agencies, but it hasn’t finalized its staffing plans in preparation for an expansion to an additional 100 PHAs.