Summary: Congress is currently considering various alternatives for administering federal housing subsidies. GAO studied the Community Development Block Grant Program activities of Pittsburgh, Pennsylvania, to assist Congress by describing how cities and counties have used their block grant funds to provide and improve housing for low- and moderate-income families.
GAO found that Pittsburgh has rehabilitated a significant portion of its housing units using Community Development Block Grant funds. Grant funds were used primarily in providing direct loans to low- and moderate-income homeowners. However, private rental units and renters were less affected by Community Block Grant funds. In an attempt to reverse or stabilize a substantial population decline and to rehabilitate its aging housing stock, the city elected to use 56 percent of its Community Development Block Grant funds for housing-related activities. GAO found that the city used 19 different types of housing interventions. The major housing activity was the rehabilitation of owner-occupied housing, and the major subsidy mechanism was direct loans. The most costly intervention was the acquisition and rehabilitation of housing units by owner occupants or investors using loans. The least costly intervention was the rehabilitation of owner-occupied housing units using full grants. City officials were supportive of a move toward housing grants, but were concerned that considerable forethought should be given to the move from federal control to local control over housing activities.
