How's HUD Doing: Agency Performance As Judged By Its Partners Executive Summary

Authors: Abravanel, Martin D.     Urban Institute     Hatry, Harry P.     Hayes, Christopher    

SECTION 1: INTRODUCTION This section presents background information for understanding the survey data to be presented in Sections 2 and 3, below. It defines the nature of the partnership that HUD has with numerous private and public entities that help to administer its programs, provides context for understanding the impact that recent management changes may have had on such partnerships, discusses the partner surveys that form the basis of this report, and describes the organization of the remainder of the report.

HUD, Its End-customers, And its Partners.

HUD administers an array of programs in the housing, public housing, fair housing, and community and economic development areas, and has numerous types of end-customers. ¹ To serve them, the Department generally works with thousands of intermediaries—generally referred to as partners—to carry out its mission. These include: nonprofit organizations; state and local governments and elected officials; housing agencies, authorities, and tribes; community and faith-based organizations; other HUD grantee organizations; various housing industry groups including lenders, brokers, appraisers, and multifamily developers and owners; health care facilities providers; small businesses; fair housing organizations; and investors.² By and large, such public and private partners are HUD's direct link to most of its ultimate customers. The nature and quality of the relationship between HUD and its partners, therefore, has considerable consequence for the achievement of HUD's mission.

HUD's relationship with its partners affects its ability to deliver service—that is, effective working relationships between HUD and its partners enhance the Department's service value to its end-customers. And, given the nature of their immediate relationship with the Department, partners, more so than end-customers, are likely to be aware of, directly affected by, and knowledgeable about HUD's performance.

As intermediaries between HUD and its end-users—clients, recipients, program beneficiaries—or even those affected by the Department's programs, HUD's partners share an interest in providing customer services and benefits to them. To that end, HUD generally provides funds to its partners for their use or redistribution, and aids and supports them in other ways to serve customers. However, HUD's partners may also have interests that are different or independent from those of HUD's end-customers (or at least from some of them), and HUD's various partners may have interests that differ one from another. As the "senior partner" responsible for serving a multiplicity of customer groups with differing and sometimes conflicting needs and perspectives, therefore, HUD is in the position of balancing interests and regulating, monitoring, and sometimes taking adverse actions against its partners. Indeed, this distinction between HUD as "helper" and "enforcer" motivated significant aspects of HUD's management changes over the last several years.

The bottom line is that, with respect to its partners, HUD plays different, sometimes conflicting roles and, as a result, the relationship between HUD and its partners is quite complex and multifaceted. Partners' perceptions of HUD may, likewise, be complicated and conflicted when it comes to assessing the quality or value of the Agency's service to them.

Why should a public agency such as HUD be concerned about how its partners judge the service it is providing? To a corporation in a market environment the answer is clear. Quality service can foster partner or consumer loyalty, sales, and profits. Therefore, there is often a profit motive for taking steps to ensure that the organization and its employees offer services that meet their customers' needs and expectations. Public sector organizations, however, do not necessarily compete in a market environment, do not have profit-oriented goals and, therefore, have no such motivation to provide customer service. In fact, some public sector agencies have organizational, staffing, and financial management systems that are structured more according to their own internal needs and interests than those of their partners or customers. For agencies whose programs, or very existence, may be politically vulnerable, however, such systems can result in a damaging loss of public support. Facing just such a situation, HUD undertook a series of organizational and management changes intended to restore public trust in the Agency. A yet unanswered question is what the effects of these changes have been, if any, on HUD's relationships with its customers and partners.

Recent HUD Organizational and Management Changes, and the Value of Measuring their Effects. In part to create a more supportive constituency for the Department and its programs, and to respond to its designation by the General Accounting Office as a "high-risk" agency, HUD undertook various reforms over the last decade—including a recent round of organizational and management changes termed HUD 2020. The latter emphasized, among other things, the improvement of customer and partner service. For example, a Community Builder function was created to deal with partner and customer relations; storefront offices were opened for customer convenience; and customer service performance indicators were developed for various services. Also, attempts were made to develop more efficient data systems that would provide credible and timely information to partners and end- customers. According to the plan that preceded these changes:

HUD is adopting a business-like structure to achieve a public purpose. It defines a clear mission divided into identifiable functions for each separate business line. It centralizes some operations for economies of scale while decentralizing other operations to improve service delivery and innovation. It uses technology to improve efficiency -- both in front-line service delivery and in the creation of back-office processing centers. It puts a new stress on enforcement and economic development, while making information on HUD's resources more widely available through computers. And it implements a broad set of performance measures to best target resources to communities in need.³

The various organizational, staffing, and systems changes that HUD put into place were intended to create a unified sense of mission across the Agency, alter its organizational culture, and enhance its service value in the eyes of its partners, customers, stakeholders, and the public-at-large.⁴ The expectation was that such changes would improve HUD's ability to achieve desired community and peoplefocused results—the Agency's ultimate raison d'être.

HUD, its stakeholders, the Office of Management and Budget (OMB), the Congress, and the general public have an interest in knowing if these varied organizational and management changes are improving the Agency's overallperformance. Indeed, OMB's 1998 priority management objectives explicitly included the following statement about HUD:

Implementation of HUD's management reform plan began in June 1997 and will extend to 2002. HUD will periodically measure changes in its performance to assess the impact of reform. Performance Measure/Commitment: Use customer surveys (Mayors, public housing residents, project-based housing owners) to measure changes in organizational performance.⁵

Consequently, HUD committed to using partner surveys as one means of determining if the agency is fulfilling its service objectives. Consistent with its responsibilities under the Government Performance Results Act of 1993, the Department's Annual Performance Plans, as well as the Government-Wide Performance Plan for Fiscal Year 2000, such surveys are intended to accomplish three purposes:

• to measure the current level of partner satisfaction with HUD,

• to determine if the services HUD provides have improved in the wake of organizational and management reforms, and

• to establish a baseline against which to measure future change in HUD's performance.

One of HUD's goals is for its partners to be satisfied with the Department and perceive the organization as effective. Surveys provide information with which to measure both satisfaction levels and perceived organizational effectiveness. Once a baseline is established, changes in those levels can be monitored. Hence, the Department intended that the surveys would be re-administered periodically, at intervals of approximately two years, in order to continue to assess partner satisfaction and perceptions. Especially in those areas where HUD's performance is seen to be lacking, the surveys provide a means for measuring the extent of improvement over time.

Partner surveys. To conduct a baseline survey, HUD contracted with the Urban Institute, an independent, nonpartisan research organization located in Washington, DC. Contracting out partner surveys—and doing them at arms-length—was meant to ensure that the results would be valid and credible representations of partners' evaluations of the Department's performance.

Among the many partner groups with which HUD deals, the Department requested that eight of them be surveyed, each representing a significant constituency.⁶ They are:

• Directors of Community Development Departments⁷ in cities and urban counties entitled to Community Development Block Grant (CDBG) funds;

• Mayors⁸ of communities with populations of 50,000 or more;

• Directors of Public Housing Agencies (PHAs)⁹that own and manage 100 or more units of conventional public housing;

• Directors of Fair Housing Assistance Program (FHAP) agencies;¹⁰

• Owners of Section 202 and Section 811 ¹¹ multifamily housing properties;

• Owners of HUD-insured (unsubsidized) multifamily housing properties;¹²

• Owners of HUD-assisted (subsidized) multifamily housing properties;¹³ and

• Directors of non-profit housing organizations affiliated with the National Association of Housing Partnerships (NAHP).¹⁴

A list of issues to be addressed by these groups was jointly developed by Urban Institute research staff, HUD program staff, and representatives of organizations representing each group. The issues generally fall into the following clusters:

• Partner satisfaction with HUD's current performance. This includes their satisfaction with HUD's programs, the quality and timeliness of information received from HUD, the quality and consistency of guidance received from HUD, the reasonableness of HUD's rules and requirements, and the responsiveness and competence of HUD staff.

• Partner beliefs regarding improvement in performance as a result of recent organizational and management changes. This includes their evaluation of the consequences of such changes— whether they are making HUD better or worse, or not changing HUD at all—and the extent to which HUD's organizational and management reform objectives have been achieved to date.

• Partner appraisals of selected program requirements, service provision, or organizational and management changes. These vary by program area and partner group, and indicate the extent to which partners see the Department as performing well or moving in the right direction with respect to key aspects of their program areas.

Responsibility for design of the survey questions, development of procedures, and selection of samples resided exclusively with Urban Institute research staff. Administration of the surveys was the responsibility of the Survey Operations Center of Aspen Systems Corporation, located in Washington, Maryland.¹⁵The surveys were conducted between December 2000 and June 2001, using a combination of mail and telephone administration. To ensure the credibility of survey results, respondents were guaranteed confidentiality, and given the assurance that neither HUD nor others would be able to associate individual names, organizations, or communities with survey responses.¹⁶ Once the surveys were completed, Urban Institute researchers were responsible for independent analysis of the results and preparation of this report.

Response rates. The rate of partner mail and telephone response to the surveys was exceptionally high (see Exhibit 1.1)-indicative of strong partner interest in having the opportunity to provide feedback to HUD and suggestive of a continued need on HUD's part to provide such opportunity.¹⁷For all but HUD's multifamily partner groups, response rates range from to 92 percent (for FHAP agency partners) to 83 percent (for PHA partners); the average for these groups, excluding multifamily partners, is 86 percent. The rate of response for multifamily property owners is lower-62 percent-and ranges from 74 percent (for Section 202/811 owners) to 51 percent (for HUD-insured owners).

HUD's multifamily partners are an inherently difficult group to survey. In part, this is because of the challenge of identifying appropriate persons who represent the complex set of corporations, syndications, partnerships, and legal entities that own some of the multifamily properties insured or assisted by HUD. And, in part, this is because of the challenges faced by HUD in maintaining a complete, up-to-date list of names, addresses, and telephone numbers of these entities. Of all the partner groups surveyed, only those sampled from HUD's multifamily list resulted in numerous returned ("addressee unknown") mail questionnaires from the U.S. Postal Service or FedEx, or contained some missing or inaccurate telephone numbers such that phone contact could not always be made. Indeed, if such cases are removed from the sampling frame for purposes of calculating a response rate, the overall rate of response for multifamily housing partners improves to 75 percent.

Finally, some multifamily housing partners have relatively little on-going contact with the Department and, as a result, may have less of an interest in responding to a questionnaire; this may also account for the relatively lower response rate achieved for this group.

Overall, however, the high rate of response to the partner surveys is important. In conjunction with the sampling methods used, a high response rate provides confidence that respondents are representative of the various partner groups included in the surveys.

Survey instruments. Survey instruments—reprinted in the Appendix—contain a series of questions common to all partner groups, and additional questions unique to each group's programmatic experiences with HUD. Common questions cover partners' (a) overall evaluations of HUD's performance, (b) evaluations of the quality of service they receive, (c) assessments the effects of recent HUD management changes, and (d) appraisals of the extent to which HUD's management reform objectives had been achieved as of the data of the survey. These, as well as questions unique to each partner's relationship to HUD, are closed-ended—with pre-established response categories. In addition, the survey permitted respondents to provide additional comments about HUD, in their own words, at the conclusion.¹⁸

Exhibit 1.1: Sample Sizes and Response Rates

Respondent Group	Sample Size	Number of Respondents	Response Rate	Adjusted Response Rate*
Community Development Departments	500	449***	90%	—
Mayors Offices	620	524	85%	86%
Public Housing Agencies	500	415***	83%	—
Fair Housing Agencies	85	78	92%	—
Multifamily property ownership entities: Section 202.811 HUD-insured (unsubsidized) HUD-assisted (subsidized)	1,250**	777***	62%	75%
	400	294	74%	86%
	400	203	51%	64%
	400	249	62%	75%
NAHP nonprofit organizations	59	51***	86%	—

Respondents. Questionnaires were sent to directors of Community Development Departments, Public Housing Agencies, FHAP Agencies, and NAHP-affiliated (non-profit housing) organizations; to mayors; and to owners of multifamily properties. Owners consisted of CEO's, managing general partners, presidents, chairpersons, principals, or organization directors.

In many instances, the persons to whom the surveys were sent personally responded, as requested. But, in some cases, others responded on their behalf. In correspondence sent along with the questionnaires or following the initial mailing, or in phone conversations with potential respondent organizations, it was emphasized that the director, mayor, or owner was the intended respondent. If, however, it was not possible for that person to respond, recipients were asked to direct the survey instrument (or phone interview) to someone who could speak authoritatively on behalf of that person.

The proportion of respondents who were directors, mayors, or owners is shown in Exhibit 1.2. When "other persons" responded, they held a variety of positions. For example, speaking on behalf of agency and organization directors were sometimes deputy directors, senior officials, or agency/organization employees. Speaking on behalf of mayors were sometimes deputy mayors, chiefs of staff, senior assistants, members of mayors' immediate offices, departmental senior officials, or local government employees.

And, speaking on behalf of owners were sometimes company/ organization senior officials, employees, and property managers, among others.

A large proportion of directors of PHAs, NAHP-affiliated (non-profit housing) organizations, and FHAP agencies personally responded to the surveys. Smaller proportions of multifamily owners and directors of Community Development Departments responded; and about one in five mayors personally responded to the survey.

Exhibit 1.2 Survey Respondents

Partner Group	Percent Director/Mayor/Owner	Percent Other Persons
Community Development (CD) Departments	44	56
Mayors Offices	22	78
Public Housing Agencies (PHAs)	90	10
Fair Housing (FHAP) Agencies	76	33
Owners of Multifamily properties: Section 202.811 Ownership Entities HUD-Insured (Unsubsidized) Ownership Entities HUD-Assisted (subsidized) Ownership Entities	40	60
	60	40
	62	38
Non-profit Housing Organizations (NAHP affliated)	80	20

Organization of The Remainder of This Report

Survey results are presented below in Sections 2 and 3. Section 2 provides the "big-picture" summary—comparing the eight partner groups' assessments of: (a) HUD's overall performance; (b) the quality of service provided; (c) the effects of organizational and management changes; and (d) the extent to which organizational and management reform objectives have been met.

Section 3 is divided into eight parts, one for each of the partner groups surveyed. The presentation for each is similar, and follows the format of Section 2.

Footnotes ¹ Ultimate customers are those provided assistance, services or benefits of various kinds. Included, for example, are people whose home mortgages are insured by FHA as well as those who face housing discrimination; people who live in public housing as well as those who receive businesses loans using Community Development Block Grants; and people who are homeless as well as those who rent private-market housing using vouchers.

² Specific examples of intermediaries are private owners of HUD insured or assisted housing units, public agencies that own and manage public housing developments, fair housing agencies that provide educational and adjudication services, and state and local government agencies and officials involved in community improvement.

³ Performance Goals - Appendix I, pp. 5- 6.

⁴ HUD's 2020 management plan emphasized the following changes: reorganization by function rather than strictly by program cylinders, including consolidation and privatization where needed; modernization and integration of outdated financial management systems; creation of an Enforcement Authority; refocusing and retraining of the Departmental workforce; establishment of new performance-based systems for programs, operations, and employees; and replacement of a top-down bureaucracy with a new customer-friendly structure. The complete catalog of changes, however, is considerably longer, including: creation of a Real Estate Assessment Center; outsourcing of legal and investigative services; integration of a fragmented management system; downsizing of staff; creation of GPRA performance measures that hold staff and grantees accountable for results; and creation of neighborhood "store-front" service centers in communities. In addition, each major HUD "business line" separately instituted its own set of reforms. These included, for example; establishment of two Troubled Agency Recovery Centers for the Office of Public and Indian Housing; development of streamlined contract and procurement processes for the Office of Housing; use of advanced mapping software systems that show communities the impact of HUD funding and activities in their area for the Office of Community Planning and Development; and elimination of the split between enforcement and program/compliance functions in headquarters and the field for the Office of Fair Housing and Equal Opportunity.

⁵ Excerpted from Section IV of the Budget of the United States Government, FY 1999, "Improving Performance through Better Management."

⁶ Methodological information can be found in the Appendix.

⁷ These are local government agencies that engage in a wide variety of community and economic development activities, often in conjunction with HUD's Community Development Block Grant (CDBG) program and other HUD programs.

⁸ Included are other chief elected officials if there is no Mayor, such as Town Supervisor, Council President, President of the Board of Trustees, Chair of the Board of Trustees, Chair of the Board of Selectmen, First Selectman, Township Commission President, etc.

⁹ These are public entities created by local levels of government, through state-enabling legislation, to implement HUD's public housing and Section 8 programs.

¹⁰ These are state and local government agencies that administer laws and ordinances consistent with Federal fair housing laws.

¹¹ Section 202 provides for housing with supportive services for elderly and handicapped persons; Section 811 provides for housing with supportive services for persons with disabilities.

¹² These are owners of multifamily properties whose mortgages are insured by HUD; neither rental assistance or mortgage interest subsidies are provided. Owners represent a range of entities including: public agencies; non-profit, limited dividend, or cooperative organizations; and private builders and profit-motivated businesses.

¹³ These are owners of multifamily properties that are either insured under a HUD mortgage insurance program involving mortgage interest subsidies, or that are provided with some form of HUD rental assistance. Owners may be for-profit businesses or non-profit organizations.

¹⁴ The NAHP is a group of 59 major, independent non-profit organizations across the nation engaged in a wide variety of housing-related activities. Most of them are sophisticated housing developers, lenders, or providers who may work with one or more HUD programs and program offices.

¹⁵ Aspen Systems Corporation served as a subcontractor to the Urban Institute.

¹⁶ Even so, some potential respondents communicated their fear of retribution from HUD should their responses be disclosed, some refused to participate out of concern about disclosure, and a small number removed survey control numbers from the questionnaires to further protect their anonymity. This experience suggests that, for such surveys to accurately reflect partner opinion and be credible, they should only be done under thirdparty auspices and with appropriate provision for the protection of respondent confidentiality.

¹⁷ Ninety percent of the completed surveys were returned by mail, the rest were administered by telephone. Based on survey research industry experience with mail surveys, this mail return rate is unusually strong.

¹⁸ The proportion of respondents who chose to provide additional comments varied by group, and ranged from 22 percent (for HUD-insured multifamily property owner partners) to 52 percent (for Public Housing Agency partners)—with approximately one-third of the respondents in four of the partner groups providing additional comments. Comments often consisted of two or three sentences, but some were considerably longer. Along with the high rate of response to the surveys, the large number of open-ended comments is also indicative of partner interest in being able to provide feedback to HUD. Both positive and negative comments were offered but, as might be expected when presented with such an opportunity, more of them were negative than positive. These are summarized in Section 3 of this report, at the end of each partner group section.

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