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Issued: March 2003

SUMMARY

In light of Austin's housing crisis of the late 1990s and current decade, Council approved two audits of City housing functions. Rental housing development assistance is the focus of this audit, as the related program serves our lowest income citizens.

The Neighborhood Housing and Community Development Office (NHCD), and its subsidiary Austin Housing Finance Corporation (AHFC), support rental housing creation and preservation through a number of strategies. We audited

• the projects of AHFC's Rental Housing Development Assistance (RHDA) program, and
• like-projects that, due to changes over time of organizational structure, have been implemented by other related programs.

Rental housing assistance refers to the provision of direct, partial financing for new construction or rehabilitation of affordable rental units. We found that through this assistance activity, RHDA has leveraged public and private funds for rental housing development at an average annual ratio of $6 for every dollar of City funds spent.

We found that in addition to demonstrating a positive output trend since fiscal year 1997, NHCD/AHFC has diversified the types of rental housing it funds, focusing on assisted, transitional, and low-moderate income rental units. According to available data, the majority of RHDA rental units serve families making less than 50 percent of area median family income, or $35,550 for a family of four in 2001. Of new projects initiated between FY 97 and FY 02, 529 units are completed and occupied, and 549 units are substantially underway.

While rental housing productivity and diversity trends are positive, NHCD/AHFC is not yet systematically collecting, reviewing, and verifying information from developers for the duration of the housing affordability period agreed to in loan contracts. This has resulted in

• approximately $52,000 in uncollected program income due to NHCD/AHFC on rental housing contracts from sold or foreclosed properties financed since FY 97,
• inability to provide assurance that funded housing is serving eligible tenants throughout affordability periods, and
• inability to report compliance with other contract requirements, throughout the affordability period.

Importantly, NHCD has an initiative underway to operationalize such a monitoring function. In some cases, we also found lack of documentation verifying initial occupants' eligibility. In this area too, AHFC has an initiative underway to complete these files.

NHCD does not currently measure and report the impact its services have upon achieving its mission to move people toward self-sufficiency. RHDA's demand, output, efficiency, and effectiveness measures can be improved by redefining some measures, disaggregating performance as it is currently reported, and aligning outcome measures with housing continuum concepts.

Click here to go to our audit request form to request a hard copy of this report (Report No. AU02305) or download the entire text of the Rental Housing Development Assistance audit (Size: 709 KB) in Adobe Acrobat. You will need Adobe's Acrobat Reader to view these files.

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