Progress Report on Pilot Program Designed to Reduce Duplicate Inspections

Earlier this year we reported on a physical inspection pilot program that was launched in six states in November 2011. Its goal is to test methods for developing a single, periodically scheduled physical inspection for jointly subsidized multifamily housing that can be performed by one housing agency but will satisfy all other agencies' inspection requirements. The hope is that by cutting back on repetitive housing inspections, those resources can go toward providing more affordable housing. Part of the Obama administration's goal of streamlining federal rental policy, the pilot was the result of a request from the White House's Domestic Policy Council to find ways to increase the efficiency and improve service delivery across federal housing agencies.

The six states involved in the pilot are Wisconsin, Michigan, Minnesota, Ohio, Oregon, and Washington. To highlight areas in which the process of implementing aligned physical inspections can be improved through changes or additional resources, the Rental Policy Working Group (RPWG), the interagency group established by the White House's Domestic Policy Council, created an online survey for each state housing finance agency to complete. The survey was designed to rate the experience and capture the full spectrum of responses, both positive and critical, and suggestions for changes in the future.

The survey revealed that selecting pilot sites was difficult for most agencies. Of the six housing finance agencies, four indicated that properties initially included in the pilot were later dropped. Comments suggested that the difficulty in selecting pilot properties was due to challenges in confirming which properties could be inspected within the pilot period and from challenges in matching properties that are referred to by different names, addresses, and identification numbers among different agencies. Many housing finance agencies reported that they haven’t inspected enough pilot properties to adequately measure the success of the pilot program, yet all recommended extending the pilot.

As of July 2012, the total number of inspections conducted for pilot properties was 197. An additional 292 have been scheduled. The total number of pilot sites to be inspected in calendar year 2012 is expected to be 677. HUD has taken the lead on most inspections in the pilot with the Department of Agriculture taking responsibility for the next largest share. Because of the contract bidding process, the Real Estate Assessment Center inspections have been slow, but are expected to increase in the coming months.

Overall, most housing finance agency participants indicated that the physical inspection pilot program has been worthwhile for their organization. Given that each site selected for the pilot was due at least one duplicative inspection that was avoided as a result of the pilot, the estimated cost savings resulting from the pilot are expected to be at least $250,000. And parties to the program may also experience reduced staff time and travel costs, resulting in increased attention to regular duties.