We assessed public housing agencies’ (PHA) management of the occupancy of public housing units.  Our audit objective was to (1) assess the occupancy of public housing units, and (2) determine whether HUD had adequate oversight of PHAs’ occupancy, particularly PHAs’ management of vacant units.

We found PHAs had occupancy rates below HUD’s optimal level or a high number of long-term vacant units.  Further, although HUD monitors PHAs’ occupancy rates, it does not require very small PHAs or all PHAs with a high number of long-term vacant units take action to address vacancies.

These conditions occurred because PHAs experienced delays in turning over vacant units, especially units that required extensive repairs, due to (1) a lack of financial and staffing resources, including contractors, (2) inadequate processes or management oversight, and (3) holding vacant units offline to relocate tenants from units or buildings that were being repaired, renovated, demolished, or converted under HUD’s Rental Assistance Demonstration Program (RAD).  Additionally, some PHAs’ units were vacant because they were uninhabitable due to fires, natural disasters, or deterioration.  Further, HUD’s current risk mitigation action plan requires HUD staff to execute occupancy action plans for only PHAs with occupancy rates below 90 percent and 50 or more vacant units.  

As a result, PHAs were not consistently maximizing occupancy, resulting in fewer eligible families benefiting from affordable housing.  In addition, the PHAs that we reviewed lost the opportunity to receive operating subsidies and earn rental revenue for vacant units, totaling nearly $80 million in 2024 and more than $106 million in 2025.
 

We recommend that HUD’s Deputy Assistant Secretary for Field Operations (1) revise its Risk Mitigation Action Plan to include risk indicators to target PHAs with long-term vacant units and assess PHAs’ unit turnover timeliness; and (2) include a review of the physical condition of PHAs’ vacant units and turnovers as part of its field office staff’s monitoring activities.  We also recommend that HUD require PHAs to implement adequate procedures and controls over vacant units to help ensure that potential rent revenue and operating subsidies are not lost on vacant units and evaluate the physical condition of long-term vacant units and develop a plan to address the units, as appropriate.