Score: 18 / 60
RULE SUMMARY
The Housing and Economic Recovery Act of 2008 establishes a Housing Trust Fund to be administered by HUD. The purpose of the fund is to provide grants to states to increase and preserve the supply of rental housing for extremely low- and very low-income families, including homeless families, and to increase homeownership for extremely low- and very low-income families. The Housing and Economic Recovery Act of 2008 charges HUD to establish through regulation the formula for the distribution of the Housing Trust Fund to states. The statute specifies that only certain factors are to be part of the formula and assigns priority to certain factors. This proposed rule submits, for public comment, the proposed formula for allocating funds from the Housing Trust Fund.
METHODOLOGY
There are twelve criteria within our evaluation within three broad categories: Openness, Analysis and Use. For each criterion, the evaluators assign a score ranging from 0 (no useful content) to 5 (comprehensive analysis with potential best practices). Thus, each analysis has the opportunity to earn between 0 and 60 points.
| Criterion | Score |
|---|---|
Openness | |
| 1. How easily were the RIA , the proposed rule, and any supplementary materials found online? This regulation, but not the RIA, is easily findable by searching the RIN on regulations.gov. The preamble of the regulation points the reader to the HUD website in order to find the RIA. On the HUD website, search for "Housing Trust Fund," and fourth down on the page is the Housing Fund RIA. | 4/5 |
| 2. How verifiable are the data used in the analysis? The RIA vaguely mentions some data sources (e.g., U.S. Census) but does not specify which data are used or where they can be found. | 1/5 |
| 3. How verifiable are the models and assumptions used in the analysis? Calculations are explained. A few relevant government reports are cited. Since there is little analysis beyond calculation of alternative formulas, little research was done. | 2/5 |
| 4. Was the analysis comprehensible to an informed layperson? Calculations are relatively simple, yet hard to understand. The few results—mostly funding allocations among states—are understandable, as are the main reasons for differences from use of different formulas. The preamble contains a helpful list of definitions. | 3/5 |
Analysis | |
| 5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them? | 1/5 |
| Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life? Reduced homelessness and "doubling up" among extremely low-income families are mentioned. Not much analysis is provided. | 3/5 |
| Does the analysis identify how these outcomes are to be measured? Not explicitly. The RIA does not attempt to measure benefits, but the outcomes mentioned could be measured. | 1/5 |
| Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes? A single paragraph at the end simply asserts the benefits will be like those of the housing voucher programs: "The primary benefits of the Housing Trust Fund are expected to be similar to the Housing Choice Voucher program. The 'Effects of Housing Vouchers' random assignment evaluation of the impact of receiving a housing voucher versus not receiving a housing voucher showed the primary benefit of housing assistance programs to be reducing homelessness and doubling up among extremely low income families, a problem sought to be addressed through careful targeting of housing trust fund dollars in this rule to markets with inadequate supply. Thus, the primary benefit of the program against no funding or funding without targeting will be to reduce the number of homeless families and individuals in relatively tight housing markets." | 1/5 |
| Does the analysis present credible empirical support for the theory? The paragraph cited above claims that research on housing vouchers supports the claim that the rule will produce benefits. | 1/5 |
| Does the analysis adequately assess uncertainty about the outcomes? The analysis mentions uncertainty about the fact that total amount of funding is outside the department's control, but there is no analysis of uncertainty. | 1/5 |
| 6. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve? | 0/5 |
| Does the analysis identify a market failure or other systemic problem? A shortage of supply of very low income housing is simply asserted with no explanation. | 1/5 |
| Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal? No relevant discussion. | 0/5 |
| Does the analysis present credible empirical support for the theory? No relevant discussion. | 0/5 |
| Does the analysis adequately assess uncertainty about the existence or size of the problem? No relevant discussion. | 0/5 |
| 7. How well does the analysis assess the effectiveness of alternative approaches? | 1/5 |
| Does the analysis enumerate other alternatives to address the problem? HUD analyzes several alternatives that involve weighting the allocation factors differently. Other than that, "The Housing Trust Fund is a new program created in the Housing and Economic Recovery Act of 2008. Failure to create a rule would be in violation of the Act. There is no alternative to this regulation." | 3/5 |
| Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information disclosure, addressing any government failures that caused the original problem)? These are relatively narrow alternatives. | 1/5 |
| Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved? The analysis focuses on how the payment outlays would differ to states under the different weighting systems but not how these differences would affect the ultimate human outcomes of the program. | 1/5 |
| Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future? No relevant discussion. | 0/5 |
| 8. How well does the analysis assess costs and benefits? | 1/5 |
| Does the analysis identify and quantify incremental costs of all alternatives considered? The analysis is based on a "hypothetical" $1 billion federal appropriation. No other costs are considered. | 2/5 |
| Does the analysis identify all expenditures likely to arise as a result of the regulation? It identifies only hypothetical federal expenditures. | 2/5 |
| Does the analysis identify how the regulation would likely affect the prices of goods and services? No relevant discussion. | 0/5 |
| Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation? No relevant discussion. | 0/5 |
| If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis? No relevant discussion. | 0/5 |
| Does the analysis identify the alternative that maximizes net benefits? Since benefits are not calculated, net benefits could not be calculated. | 0/5 |
| Does the analysis identify the cost-effectiveness of each alternative considered? Since benefits are not calculated, cost-effectivess could not be calculated. | 0/5 |
| Does the analysis identify all parties who would bear costs and assess the incidence of costs? The RIA calculates how different weightings of allocation factors would affect distribution of funding among states. The RIA notes that the trust fund was supposed to be funded out of Fannie Mae and Freddie Mac profits; since there are no profits, the administration has requested an appropriation. | 2/5 |
| Does the analysis identify all parties who would receive benefits and assess the incidence of benefits? HUD points to extremely low-income families (with a specific definition) as the primary beneficiaries. | 1/5 |
Use | |
| 9. Does the proposed rule or the RIA present evidence that the agency used the analysis? Preamble and RIA claim that the chosen funding formula strikes a balance for states that have high "needs" that are attributable to different causes. It is plausible that HUD would not have made the decision on the funding formula without exploring the effects of these alternative calculations. | 4/5 |
| 10. Did the agency maximize net benefits or explain why it chose another alternative? Costs are clear; benefits are not measured. Preamble shows no evidence that HUD was cognizant of or concerned about net benefits. | 0/5 |
| 11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future? No goals or measures established, and no useful content that could be used to establish them, | 0/5 |
| 12. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for doing so? Statistics used in the formula suggest that HUD does have relevant data to develop outcome measures and goals, but the structure of the RIA provides no guidance on how to use these data in that way. | 1/5 |
| Total | 18 / 60 |
Additional details
- Agency
- Department of Housing and Urban Development
- Regulatory Identification Number
- 2506-AC23
- Agency Name
- Department of Housing and Urban Development
- Rule Publication Date
- 12/04/2009
- Comment Closing Date
- 02/02/2010