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HUD Gives $37 Million in Housing Subsidies to the Wrong People

Department of Housing and Urban Development
Source: Department of Housing and Urban Development
Department of Housing and Urban Development

More than $37 million in monthly housing subsidies for needy people ended up in the wrong hands last year because the Department of Housing and Urban Development doesn't know how to verify who's eligible for its program.

The housing subsidies are intended for low-income people who meet the "community service and self-sufficiency requirement" or CSSR. To qualify, you must be between 18 and 62 and log a minimum of eight hours of community service or job training each month. The whole idea is to help prop up people who are trying to get back into the job market or reward those who are helping their communities.

But a recent audit of the program quickly reveals that that's not exactly how the program is panning out.

HUD's Inspector General found that tenants in living in at least 106,000 of the 550,000 subsidized houses didn't meet the service or job training requirements needed to qualify for the program. What's worse, while these people enjoyed housing subsidies they didn't qualify for, the program's waitlist is filling with people that actually do, according to the IG.

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The problem, auditors say, is that HUD lacks a decent way to verify who actually qualifies for the program and who doesn't. They warned that if HUD doesn't address this soon, hundreds of millions of dollars in housing subsidies will go to the wrong people.

"If HUD does not strengthen its controls, it will pay at least $448 million over the next year in subsidies for public-housing units occupied by noncompliant tenants that otherwise could house compliant households," the report said.

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The IG recommends that HUD should quickly develop an efficient strategy to ensure that only eligible people are getting the subsidies. It also suggested holding housing authorities accountable if they continue allowing ineligible people to receive subsidized housing.

HUD concurred with the IG's recommendations and said they are already working on addressing the issue.