Research and Technology

PROGRAM HIGHLIGHTS

NA = Not Applicable

SUMMARY OF BUDGET ESTIMATES

1. SUMMARY OF BUDGET ESTIMATES

   The fiscal year 2000 Budget proposes an appropriation of $40 million for research, technology, and policy analysis, plus an additional $10 million for the Partnership for Advancing Technology in Housing (PATH) initiative. Administered by the Assistant Secretary for Policy Development and Research (PD&R), $40 million will support ongoing research and policy analysis, including further assessment of HUD's 2020 Management Reform Plan. The fiscal year 2000 Budget request reflects a $2.5 million increase in funding from the 1999 appropriation of $37.5 million for Research and Technology and funds the second year of the PATH program at $10 million.

   The evaluation, research and analysis that is undertaken with the Research & Technology funds contributes directly to improving the Department's policy decisions and programs.

   The 2000 research plan will build on the 1999 agenda. It will focus PD&R's efforts on current policy topics of significance to the Nation while continuing the housing market surveys and other core activities. The focus for 2000 will be on the following types of activities:

   • expanded studies of the effects of welfare reform and links among welfare reform workforce development, and housing and community development activities;

   • evaluation of the use and impacts of HUD economic development programs;

   • research under PATH to develop and disseminate technologies that will result in housing that is substantially more affordable, durable, disaster resistant, safer and energy/resource efficient;

   • research on the process and impacts of HUD 2020 Management Reform on the Agency and those it serves;

   • studies of the impacts of multifamily and public housing reform legislation;

   • studies of effective and ineffective approaches to regional problem-solving that partner cities, suburbs, and rural areas;

   • analysis of the capacity of the non-profit sector including faith and community-based organizations, in providing housing and economic development;

   • further work on the multi-year HOPE VI, Moving to Opportunity (MTO), Bridges to Work, and Jobs Plus evaluations;

   • studies of the impacts of public housing demolition and the conversion of assisted housing projects to tenant-based assistance on families and neighborhoods;

   • studies of housing assistance policies and programs, including housing vouchers, the Low-Income Housing Tax Credit and HOME;

   • studies of FHA's performance and impact in a changing market for housing finance;

   • evaluation of the Public Housing Management Assessment Program (PHMAP) system; and

   • evaluation of Elderly Housing Programs.

   In fiscal year 2000, PD&R will continue to support the Secretary, the Chief Financial Officer (CFO) and the program offices on the design of performance measures and other matters pertaining to Government Performance Results Act (GPRA) implementation.

   Priority projects to be undertaken in 1999 include:

   • research related to the PATH initiative;

   • evaluation of the Section 108 Loan Guarantee Program (economic development);

   • effects of welfare reform on HUD-assisted renters;

   • effects of housing assistance on self-sufficiency of adults and children;

   • new study of tenant-based Section 8 utilization rates;

   • continuation of HOPE VI evaluation;

   • research to support new Government Sponsored Enterprises (GSE) housing goals;

   • studies of Low-Income Housing Tax Credit (LIHTC) project residents and neighborhoods;

   • evaluation of the Regional Opportunity Counseling program;

   • evaluation of Youthbuild;

   • major new research into how the economic prosperity of cities and suburbs are intertwined;

   • updating the low-income housing tax credit data base from 1994 to the present;

   • operation of an information clearinghouse to support the Office of University Partnerships;

   • evaluation of homelessness prevention programs and Continuum of Care; and

   • data collection and support for a third annual State of the Cities Report.

   PD&R carries out many routine responsibilities essential to the proper functioning of the Department programs and carrying out the Department's mission. These include calculating the key parameters used in housing and community development programs; conducting periodic surveys of housing markets and the housing stock; and analytical support for HUD's program oversight of the Fannie Mae and Freddie Mac.

2. CHANGES FROM 1998 ESTIMATES INCLUDED IN THE 1999 BUDGET

   The funds actually obligated in 1998 ($28 million) were $11.2 million less than the $39.2 million estimated. The decrease occurred because funds for some of the projects were reserved in 1998, but were not obligated by the end of the fiscal year. Funds for these projects will be obligated in 1999. Additionally, spending authority was increased by $.2 million due to the collection of funds from Federal sources. This sum and the $11.2 million result in a total carryover of $11.4 million. Actual outlays of $31.3 million were less than the estimate of $40 million due to contractors billing on a slower pace than anticipated and due to the lower obligation level.

CHANGES FROM ORIGINAL 1999 BUDGET ESTIMATES

The 1999 Budget requested a total appropriation of $50 million ($40 million for Research and Technology and $10 million for PATH). The appropriated level in 1999 is $37.5 million for Research and Technology and $10 million for PATH for a total of $47.5 million. The increase in the 1999 obligation estimate is due to the addition of $11.4 million of unobligated funds carried over from 1998 which will be obligated in 1999 and includes an estimated $100 thousand for recoveries. The projected outlays ($42 million) are higher due to the increased obligation estimate in 1999.

Referring to the obligation table on page 4, Category I, Program Evaluation and Monitoring includes planned evaluations such as HOPE VI and Continuum of Care Evaluations. Category IIA, Housing Programs, includes planned projects such as Elderly Housing and Tenant Selection and Public Housing Waiting Lists. Category IIB, Safety and Standards, includes research on Manufactured Housing. Category IIC, Housing Markets, provides funding for the American Housing Survey (AHS) and work on housing and financial markets. Category IID, Fair Housing, includes planned research in support of the Department's fair housing initiatives, and other related research. Category IIE, Local Government Management, Community Urban Development includes planned research in Community Economic Growth and Development and Regional Housing Opportunities. Category IIG, Research Support, includes clearinghouse and dissemination activities and Category III, includes PATH activities.

EXPLANATION OF INCREASES AND DECREASES

The 2000 appropriation request is $2.5 million more than the 1999 level, reflecting an increase in R&T non-PATH activities. The $10 million for PATH is the same as 1999. The 2000 obligation level is $8.9 million less than the 1999 level even with an increase in the appropriation amount. This decrease occurs as a result of adding $11.4 million carryover funds to the 1999 estimate offset by the $2.5 million of increased budget authority. The increase in the outlay estimate is due to the estimated increase in budget authority, an anticipated faster billing rate by contractors and the higher obligated balance carried over from 1999.

Making Welfare Reform Work

In fiscal year 2000, PD&R will continue to study the impact of welfare reform on the rent revenues and residents of public and assisted housing. PD&R will, with the Department of Transportation and private funders, continue to support the Bridges to Work demonstration and, with other private and Federal partners, continue the Jobs Plus demonstration as well.

Homeless Studies

In fiscal year 2000, PD&R will study homeless prevention programs and evaluate the Continuum of Care strategy for serving the homeless. The research program will also include an evaluation of the Housing Opportunities for Persons with AIDS (HOPWA) program.

Evaluating the Impact of Public and Assisted Housing Reforms

PD&R will continue to evaluate the HOPE VI, Moving to Opportunity and Jobs Plus programs and will begin to monitor the results of the flexibility that has been provided to housing authorities in the areas of tenant preferences and rents. Studies of tenant-based Section 8 will include a new examination of the rate at which families who are issued certificates and vouchers succeed in finding housing and an evaluation of the experience of families who receive tenant-based assistance to relocate from public housing or to enable them to continue to afford housing as the multifamily assisted stock undergoes transformation. Studies of the effect of the financial and other effects of the portfolio reengineering demonstration and the new mark-to-market legislation are planned.

PROGRAM DESCRIPTION AND ACTIVITY

1. Legislative Authority. Title V of the Housing and Urban Development Act of 1970, as amended, authorizes and directs the Secretary to undertake programs of research, studies, testing and demonstrations relating to the missions and programs of the Department. Work under this authority is a principal source for Departmental program and policy reforms. In order to assure effective use of the results of these activities, the Secretary is authorized to disseminate significant reports, data, and information to Departments and agencies of Federal, State and local governments, to industry, and to the general public.

2. Policy Development and Research. The Assistant Secretary for Policy Development and Research is responsible for the development, planning, and execution of HUD research and demonstration programs; for assisting in the formulation of Department policy; and for disseminating HUD research results. In addition, the PD&R organization has principal responsibility for providing economic and policy analysis, and staff assistance to the Secretary in determining national housing and community development goals, program priorities, and objectives.

3. Goals of the Research Program. PD&R's goal is to provide reliable and objective data and analysis to inform policy decisions--today and in the future. The following table shows the obligation levels for each of the 3 fiscal years.

a/ Totals include estimated recoveries.

The program evaluation and monitoring function has five major objectives:

-- to monitor existing programs more effectively by ascertaining whether they are reaching the intended target populations, whether the programs are being delivered in an efficient manner, and whether the program costs are in balance with program benefits;

-- to build performance measurement, monitoring and evaluation criteria and their reporting systems, into new programs before programs are implemented;

-- to augment and improve existing management information systems for monitoring and evaluation purposes by examining those data systems for quality, information coverage, and policy relevance;

-- to implement an agenda for the timely and periodic evaluation of all programs to ascertain their impact, efficiency, and effectiveness; and,

-- to bring about demonstrated improvements in the design, implementation, and management of HUD programs.

PD&R will examine the effectiveness of local Continuum of Care strategies in the integration of homeless shelter and service systems, including successful strategies for improving the delivery of homeless services.

In addition, funding for program evaluation and monitoring is required in areas such as public housing transformation reflecting the substantial resources invested through the Revitalization of Severely Distressed Public Housing and modernization programs, as well as the significant legislative and other policy changes impacting the operations of public housing. It is also critical to evaluate the Department's efforts to reduce the costs of assisted housing, to ensure that reforms to the Section 8 programs are both cost-effective and socially responsible.

The need for funding is also related to the Department's commitment to implementing welfare reform. To support implementation of welfare reform, HUD encourages communities to use HUD programs to help families move from dependency to self-sufficiency, by funding services such as job training and day care, as well as actual job creation projects. Research will evaluate the success of those efforts, and of housing assistance, in helping families become self-sufficient.

With increased local flexibility in the use of HUD and other Federal investments, it is critical that we learn more about the capacity of the nonprofit sector, including faith and community-based organizations, to creatively and efficiently solve problems. The private sector, including private foundations, has joined with us in learning about and promoting that capacity, which should include a capacity to engage in public-private-nonprofit partnerships that extend the impact of Federal resources.

II. Research and Technology
A. HOUSING PROGRAMS

Research work in this area has led to the continued development of strategies for increasing the efficiency and effectiveness of Federal housing programs for low-income families. Major research areas include the future of the multifamily assisted rental stock, improving the effectiveness of tenant-based housing assistance, and efforts which support the Department's programs to reduce drug related crime.

In 2000, the research program will focus on the transformation of public housing and project-based rental assistance. It will examine how local housing strategies are crafted and implemented, using the HOME program and the Low Income Housing Tax Credit.

B. SAFETY AND STANDARDS

The principal goal of this research is to aid in providing safe and sound housing at an affordable cost. Research on building codes and standards, environmental hazards, manufactured housing, removal of regulatory barriers, and simplification of building regulations are all covered under this category.

PD&R will undertake research to explore new cost-saving approaches for production, rehabilitation, and maintenance that enhance affordability and to identify regulatory barriers that contribute to the high cost of housing construction. Work will continue on manufactured housing research with particular attention given to wind, energy and ventilation standards. Research will continue on new materials for single family housing including the deconstruction of older inner city buildings as a source for building materials. Particular emphasis will be on research to develop new technologies for regulatory tools that can encourage cost-effective rehabilitation, and codes and statutes to support sustainable growth.

Research support will also be provided to develop model State zoning codes, model subdivision ordinances and model impact fee laws for use by State and local governments.

Finally, research will be undertaken to assess the impact of environmental regulations on urban redevelopment and urban housing markets.

C. HOUSING MARKETS

Housing and financial market data are essential for the formulation of housing and community development policy. As rapid changes in the housing and housing finance markets continue to occur, it is essential for policymakers to keep abreast of these changes and to understand their potential and actual impacts on homebuilding, the affordability and availability of both owner-occupied and rental housing, and on FHA and Ginnie Mae activity and financial soundness. In addition, surveys will be continued to obtain measures of customer satisfaction and to develop indices of program performance.

The American Housing Survey, a Congressionally mandated survey, is the Nation's primary source of information on the housing stock and housing conditions. Since 1973, the Census Bureau has surveyed a nationally representative sample of approximately 60,000 housing units in odd-number years to gather information on the condition of those units and the characteristics of their residents. In even-number years, smaller, longitudinal samples are surveyed to provide similar data for each of 47 large metropolitan areas at 4 or 6 year intervals. HUD, other government agencies, private entities, and researchers use this information to assess the housing needs of the country, evaluate the performance of national housing policy, and study the dynamics of the housing market.

In 2000, PD&R proposes to postpone the metropolitan surveys normally done as part of the American Housing Survey and use these funds to support the Residential Finance Survey (RFS). The Residential Finance Survey provides detailed information on the financing of non-farm residential properties, both owner-occupied and rental properties. Unless HUD provides funding, this valuable survey will not be conducted as part of the 2000 Census.

Survey of Market Absorption of New Multifamily Units provides quarterly national data on how quickly new multifamily units are rented, by rent level and number of bedrooms.

Survey of New Manufactured Housing Placements compiles data on the number of new manufactured housing units sold or leased and placed on site by manufactured housing dealers for residential use, in and out of home sites.

Survey of New Home Sales and Housing Completions provides monthly and annual data on sales, completions, and prices of new homes. Data are used by HUD and other agencies, and two leading economic indicators for the Nation originate from these data.

Several areas will be covered by the Housing Finance research. In the FHA single-family area, research will continue to focus on the development of a mortgage scorecard for measuring the credit risk of FHA borrowers. This mortgage scorecard will be the key component of an automated underwriting system for FHA borrowers. Research will also focus on estimation of county-level house prices for determining FHA loan limits, loss mitigation strategies for resolving FHA defaults, FHA's Adjustable Rate Mortgage Program, and the neighborhood and regional determinants of FHA default. The nature of affordable lending in the single-family market will be examined using Home Mortgage Disclosure Act (HMDA), Federal Housing Administration (FHA), and Government Sponsored Enterprise (GSE) data. Finally, in the multifamily area, research will examine the affordability and geographic characteristics of multifamily loans being insured by FHA and FHA's overall role in the multifamily finance.

Support also will be provided to the Secretary for certain Government Sponsored Enterprises (GSE) activities, including: (1) consideration of new program requests; (2) monitoring of GSE performance under geographical and income-based housing goals; (3) research support for establishment of new or revised GSE housing goals; (4) administration of fair housing requirements; and (5) writing annual reports to Congress.

D. FAIR HOUSING...

The Department's research agenda in the area of fair housing will include the impact of the transformation of the Section 8 and public housing programs on patterns of segregation and desegregation. Analyses will continue on housing market discrimination by lenders, appraisers, insurers, and other housing market intermediaries; research will also be conducted on Title VI and Title VIII enforcement including studying the disposition of complaints, and will otherwise support the Department's expanded fair housing and fair lending initiatives.

E. LOCAL GOVERNMENT MANAGEMENT & COMMUNITY AND URBAN DEVELOPMENT

This research agenda will evaluate the Department's efforts to create jobs and economic opportunities and improve urban economies through economic development and revitalization activities. In addition to ongoing analyses of Empowerment Zones and Enterprise Communities, studies continue on the Economic Development Initiative (EDI), Section 108, and other current and past economic development programs. PD&R will continue to collect and make available basic data on the economic and social condition of cities.

Starting in 1999 and continuing in 2000, research will be conducted on the interdependence of cities and suburbs. Major new research is planned regarding the relationship between economic prosperity in central cities and economic prosperity in suburbs. Also, work on regional problem-solving will support effective regional cooperation with the goal of improving regional economies and the quality of life, particularly for low-income families.

F. RESEARCH SUPPORT...

This part of the PD&R budget is critical to: (1) ensure that our research results are widely disseminated and diffused so that they are used, and (2) provide administrative support to PD&R, including the funding of short-term, high priority policy analyses and research. PD&R will work to incorporate state-of-the-art practices in the dissemination of best-practice knowledge.

III. PATH

The 2000 request includes $10 million to continue an initiative known as the Partnership for Advancing Technology in Housing (PATH). The PATH initiative, launched by President Clinton in May 1998, is a key component of the President's program to improve the technology infrastructure of the United States and to reduce carbon emissions. A public/private partnership, PATH joins together key agencies in the Federal sector, with leaders from home building, product manufacturing, insurance and financial industries. The goals of the partnership are to reduce the time to market of new technologies, cutting the energy use and the environmental impact of new homes, increasing housing durability, reducing natural hazard risk and reducing the monthly cost of new housing.

The PATH plan calls for a systematic, integrated approach to moving new technologies into the marketplace. Innovative technologies will be identified by PATH's manufacturing partners in cooperation with researchers at Federal laboratories. Industry, working together with PATH's public partners, will develop and deploy the technologies for the next generation of American housing. Promising products will be evaluated by PATH's partner organizations concerned with building codes and standards. Qualified products will be placed in PATH's "technology inventory" and reliable information distributed to builders nationwide.

Advisory and Assistance Services. Advisory and assistance services are included within the activities and funding reported under the seven research categories. As defined in OMB Circular A-120, these services include individual experts and consultants; studies, analyses, and evaluations; and management and professional support services. Estimates of advisory and assistance services are designed to provide PD&R with sufficient flexibility to respond to specific, short-term Departmental requests for policy relevant information where those requests cannot be predicted accurately in advance as to the type of research methodology required. In 1998, $8 million of HUD's Research and Technology appropriation was obligated for advisory and assistance services. The estimate for 1999 is $9 million and the 2000 estimate is $9 million.