A bill to establish a demonstration program for the purpose of providing for better coordination at the local level of efforts to upgrade housing for families receiving assistance from the Department of Health and Human Services.

Directs the Secretary of Housing and Urban Development to conduct a demonstration project under which funds will be provided to: (1) at least 20 local governments to be used for upgrading low-income rental housing and coordinating local housing inspection, rehabilitation, and social service programs for the purpose of improving the quality and affordability of low-income housing; and (2) States to be used for technical assistance to such local governments.

Requires local government recipients to be selected on the basis of administrative plans to be included in grant applications. Requires that such a plan require the local government to work with the State to implement a schedule of local shelter allowances for recipients of Federal aid to families with dependent children (under title IV of the Social Security Act) applicable to buildings assisted under this Act.

Requires each grant recipient to: (1) contribute an amount equal to 15 percent of the funds received; and (2) allow the Secretary and the General Accounting Office to audit its books.

Directs the Secretary to submit a report on the demonstration project to Congress. Authorizes appropriations.