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HANO: Another Public Agency Failure

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The Times-Picayune reports on the mismanagement of another public agency. After FEMA, Fannie Mae and Freddie Mac it’s now time for The Housing Authority of New Orleans.

HANO defines itself as a “state created public agency dedicated to providing safe, sanitary and affordable housing for low-income residents.” The latest analysis by the Department of Housing and Urban Development found that the agency continues to perform poorly.

The Operational Assessment of the Housing Authority of New Orleans shows that out of the 3,212 available public housing units, 815 are vacant. As Katy Reckdahl from TP reports, there is “no clear indication that the services or the approach meet the needs of residents.”

Unfortunately, HANO’s financial mismanagement and poor customer service are qualities often found in government agencies. These public agencies lack the incentives that encourage organizations to provide quality service at a lower price. In fact, by spending most of their budgets, agencies de facto communicate their need for further (and increased) funding.

A private company, on the other hand, is incentivized to provide better service at a better price. Most investments made by the private sector involve a cost-benefit analysis that aims at efficiently allocating resources in order to maximize profits. This aspect is often neglected by the public sector.

When the government identifies a failing public agency it implements more planning and strives for better collaboration. And it usually spends more money. We should rely less on government agencies and instead seek opportunities to make use of the private sector. This would promote economic growth and provide better services to the recipients of housing assistance.

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