The housing choice voucher (HCV) program is HUD’s largest assisted housing program, providing housing for over 2 million low-income households. In 2013, HUD provided more than $1.8 billion in administrative fees to support the local administration of the program by nearly 2,300 local public housing agencies (PHAs) nationwide. Currently, HCV administrative fees are allocated to PHAs based on a formula that is loosely tied to local housing rents, which do not necessarily reflect the costs of operating the program. In 2010, HUD contracted with Abt Global to measure the costs of operating a high-performing and efficient HCV program, identify the main cost drivers that account for variation in administrative costs among PHAs, and propose a new administrative fee formula based on those findings. The HCV Administrative Fee Study was completed in 2015.

This paper presents an important example of how HUD is using research to improve its understanding of HCV administrative costs and to improve the formula for funding program administration.