Saving the Housing Assistance Plan Improving Incentives to Local Governments

Abstract

Abstract The Housing Assistance Plan (HAP), created by the landmark Housing and Community Development Act of 1974, was designed to improve the coordination between housing and community development activities and to cause local governments to develop genuine housing strategies in the context of their market conditions to assist low-income, poorly housed residents obtain adequate housing. During the 1979 budget preparation and legislative process considerable skepticism was voiced about the quality of the locally prepared HAPs, and hence about the utility of the mix of assisted housing among new construction, rehabilitation, and leasing existing units proposed by HUD. This paper very briefly reviews the relevant sections of the 1974 Act and its intent, and then describes the actual HAP process, as designed and implemented by the Department of Housing and Urban Development over the past four years. Local governments and HUD together deserve good marks for attempting to insure that assisted housing resources are being shared equitably among competing groups, especially in the provision of assistance to families (as opposed to elderly households). Much less satisfactory, however, has been the matching of the delivery strategy, i.e., the mix of new construction, rehabilitation, and lease of existing units, with local market conditions. There are several problems with the HAP implementation process which account for the differing rates of success. These problems, discussed in the text, constitute strong disincentives to local governments to spend the necessary resources—both of staff and of the political executive—to develop solid housing assistance plans. The final section of the paper outlines a series of steps that could be taken to improve the incentives to local communities and to improve the actual HAP process.