Congressional Justifications for 1998 Budget Estimates

Budget Activity 5
Policy Development and Research
Salaries and Expenses

Scope of Activity

Personnel of the Office of Policy Development and Research (PD&R) are responsible for the management of research conducted under contracts, cooperative agreements and grants, as well as in-house research, economic analyses, tax policy analysis and research, program evaluation and program monitoring, and policy development.

Staff has the analytical skills and experience to address many of the key issues in HUD's Transformation Plan such as the design of formulae for distribution of the performance-based funds; targeting of the funds to assure attention to low-income families and vulnerable populations; assuring that questions of consistency of approach across program lines are addressed; and that a myriad of issues related to the transition from the present program structure to the bold reinvention of HUD are carefully considered.

There are many PD&R functions which would not fundamentally change in the new HUD, because they are rather independent of the Department's program structure. Continued short range research on basic housing and urban issues to allow the Secretary to be a national spokesperson on these matters is one example. Longer range research, including housing technology, the results of which will be available to future administrations, is another. The economic intelligence function, including the American Housing survey and related publications such as the Quarterly Housing Market Conditions report, would also continue. Likewise, setting Fair Market Rents (FMR) and income limits, and assisting on HUDwide, cross-cutting special initiatives, such as the Homeownership Campaign, would be ongoing functions of the Office.

The proposed transformation of FHA will place increased responsibilities on PD&R to provide technical support to FHA and oversight for the Secretary. New ways of doing business required careful upfront study, prompt and thorough evaluations. Actuarial studies, program design, and assessments of who FHA and the Secretary are likely to need assistance. PD&R already has this capacity and has used it on several occasions. PD&R independent status makes its advice particularly useful to FHA and the Secretary.

Staff will continue to provide support to the Secretary for certain Government Sponsored Enterprises (GSEs) activities including: (1) consideration of new program requests; (2) administration of low- and moderate-income housing requirements; (3) administration of fair housing requirements; and (4) writing annual reports to Congress.

Staff will also administer grant programs of the Office of University Partnerships within the immediate Office of the Assistant Secretary.

Workload

The workload of PD&R focuses on ways to improve the efficiency, effectiveness, and equity of HUD programs. This entails developing policy recommendations for the Secretary, performing policy and economic analyses, directing research and demonstration activities, and evaluating and monitoring new and existing programs for the Department. The workload also includes supporting the Secretary in carrying out his responsibilities for Fannie Mae and Freddie Mac regulation and preparing the annual reports to Congress. In carrying out its responsibilities, PD&R conducts analyses using either contract or in-house staff resources, depending on the issue and the nature of the work. PD&R also works with other HUD staff, State and local governments, academicians, representatives of various interest groups, and other interested parties, to assure that all accessible knowledge is brought to bear on issues of concern to the Department.

Travel

	Actual 1996	Budget Estimate 1997	Current Estimate 1997	Estimate 1998	Increase + Decrease - 1998 vs 1997
	(Dollars in Thousands)
Travel . . .	$91	$95	$92	$92	...

For 1998, there is no change to the 1997 current estimate of $92 thousand.

Contracts

The following table identifies the specific contracts unique to this activity and is followed by a brief description.

	Actual 1996	Budget Estimate 1997	Current Estimate 1997	Estimate 1998	Increase + Decrease - 1998 vs 1997
	(Dollars in Thousands)
Data and Statistical Services. .	$1,211	$1,700	$1,700	$5,200	+$3,500
Technical Services. . .	310	695	695	695	...
Total . . .	1,521	2,395	2,395	5,895	+3,500

Data and Statistical Services

This activity provides the Department with current data on the housing inventory and vacancies in selected housing market areas (both metropolitan and non-metropolitan cities) where HUD housing and community development programs are utilized, and for Fair Market Rent. The $3,500 thousand increase in 1998 over 1997 is for the Assisted Housing Quality Control (QC) process which involves drawing a nationally representative sample of all Public Housing and Section 8 units. On-site tenant interviews and file reviews are then conducted. These data are used to determine actual tenant incomes and rents. In addition, tenant incomes will be matched with Internal Revenue Service (IRS) and Social Security Administration (SSA) data on tenant incomes. The QC income and rent determinations are then compared with the program sponsor figures and with IRS/SSA income matches, and the results used to produce national estimates of the type, severity, and cost of errors. After these findings are communicated to HUD, the Department selects the errors of most concern and designs and implements corrective actions. A subsequent QC study then starts another cycle of error estimation and corrective actions.

Technical Services

These activities identify relevant foreign studies and reports in the area of housing and urban development for study, and translate them for HUD program officials and technical experts. Translation of the variety of foreign documents received cannot be completed in-house and is, therefore, accomplished through contractual assistance. In addition, various bilateral and multilateral obligations frequently require the translating of formal documents, technical papers, work programs, agenda, and study tour itineraries.