Public Housing 101 by galvnews

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									Public Housing 101
     Purpose of this Workshop
•  To provide basic information about the
   programs run by their public housing
   agencies (PHAs);
•  To identify the specific duties of Board
   members; and
•  To clarify the roles and responsibilities
   of Board members and PHA staff;
         Brief Historical Perspective
1. Federal Enabling Legislation
1937: Public Housing Act was a New Deal program
designed to provide housing for working families and to
create jobs for unemployed Americans.
States created Public Housing Authorities and local
governments activated each PHA. The US Government
repaid tax exempt bonds and notes issued by PHAs.
The sale of the bonds/notes financed development of
housing. The bond/note repayment, in Annual
Contributions, was the only Federal subsidy in the
original program. Rents covered operating costs which,
from the beginning included the cost of utilities. There
was no reserve for replacement.
      Brief Historical Perspective
1949: Congress established National Housing Goal,
“A decent home in a suitable living environment for
every American family”. This is still the goal
although full funding to carry out the goal has never
been appropriated.
1964 Civil Rights Act made discrimination in housing
on the basis of race, color, sex, national origin and
religion unlawful. Before the passage of this law
public housing in much of the nation was segregated
by law. Many of these early properties, often built in
areas of minority concentration, are still one-race
developments today.
         Brief Historical Perspective
1968: Fair Housing Act imposed additional
nondiscrimination rules on all realtors and landlords.
Brooke Amendment: Congress established first rent
formula tying maximum rents to tenant incomes to
avoid pricing the very poor out of PH, where average
rents had risen significantly due to increases in the cost
of utilities, salaries and materials
1971: Operating subsidy formula tests. One result of
Brooke Amendment was to plunge PHAs into financial
trouble. Raising rents was no longer permitted and
rents did not cover rising operating costs.
1973 Rehabilitation Act banned discrimination based on
        Brief Historical Perspective
1974 law created: the Section 8 Programs, Performance
Funding System formula for operating subsidy; first
statutory requirements on public housing admissions,
income, rent, lease and grievance procedure; and
replacement of urban renewal categorical grant
programs by Community Development Block Grants
1981 Act increased PH and Section 8 formula rent (from
25% to 30% of adjusted monthly income) and
established the Comprehensive Improvement Assistance
Program (CIAP) because the oldest PH units were
wearing out. This was a competitive modernization
         Brief Historical Perspective
1983 HCDA Amendments redefined income and
1987 Act established the 5-year modernization plan; the
physical needs assessment (PNA), and the management
improvement plan (MIP).
1992 law reformed modernization funding by making it
a formula grant (instead of competitive grant) called the
Comprehensive Grant Program (CGP) for large PHAs.
Hope VI programs were established.
1998 Quality Housing Work Responsibility Act
(QHWRA): required resident commissioner; 5 year and
Annual Plan; replacement of PFS with Operating Fund
and Capital
         Brief Historical Perspective
Grants with Capital Fund; flat rents, imputed welfare
income; earned income disallowance; PHA rent options;
Section 8 certificate and voucher programs merged; and
community service requirement for non-exempt public
housing residents.
1. State Enabling & other relevant legislation
State Housing Authorities Laws: Established PHAs,
defined powers, jurisdiction, appointing individual(s),
terms of Board members; how to remove Board
members, and other requirements. Texas passed the
first housing authority law in the US in 1937.
         Brief Historical Perspective
Sunshine/Public Records Law: Defines “public
meetings”, describes notice requirements for regular
and emergency meetings, defines public documents
(typically anything adopted in a public meeting such as
contracts, policies, budgets).
Landlord Tenant Laws: With HUD rules, governs PHA’s
actions as a landlord in leasing, on-going management,
lease enforcement and lease termination.
         Brief Historical Perspective
3.     Local Activation Resolution and other relevant
local actions
Activation resolution creates housing authority in city,
county or region as required by State enabling
legislation, articles of incorporation and bylaws.
Code enforcement: PHA units must meet local codes or
be subject to code enforcement
      Applicable Federal Regulations:
Found in Title 24 of the Code of Federal Regulations

Part 1 – Nondiscrimination
Part 5 – General definitions, citizenship and eligible
immigrants, pets in elderly and disabled properties,
social security numbers, income and rent rules, criminal
history screening
Part 8 –Nondiscrimination based on disability
Part 86 – Procurement requirements
Part 100 – Fair Housing regulations
Part 900 – Selected Public Housing and Section 8 rules
listed below:
     Applicable Federal Regulations:
Found in Title 24 of the Code of Federal Regulations
  Part   902 Public Housing Assessment System
  Part   903 Public Housing Agency Plans
  Part   905 Capital Fund Program
  Part   954 Indian Housing Program
  Part   960 Admissions and Occupancy in PH
  Part   965 PHA owned or leased projects – general
  Part 966 – Lease and grievance
  Part 970 – Demolition or disposition of PH
     Applicable Federal Regulations:
Found in Title 24 of the Code of Federal Regulations

  Part 982 – Housing Choice Voucher Program
  Part 985 – SEMAP
  Part 990 – Operating Fund
                    Public Housing Program Relationships
                                                                      U.S. Department of
                                                                      Housing and Urban
Public Housing Applicants                                                                                                                                         (Activating Jurisdiction)

                                                                                                                                     Compliance with Rules
                                               Annual Contributions

                                                                             Operating Subsidy
                                                                                                                                                             Payment in Lien

                                                                                                 Capital Fund
                                                                                                                                                             of Taxes



                                                                                                                                     & Laws
                                                                                                                                                                       Tax Exemption
                Fair and Equitable Practices                                                                                                                 Pledge of Equal Services
                                                      Public Housing Authority
 ACOP                                                                                                                                                                 Cooperation Agreement

                                                            Board of Commissioners                                                                                        Procurement Policy
 Personnel Policy
                                                   Executive Director and Staff                                                                                   Funding/Payment
                Wages and Salaries

                                                                                                                                                             Goods & Services

                                                                                                                Affordable Housing
                                 Quality Work
                                                                                                                Decent, Safe
                                                                          Rent/ Lease

                                                                                                                                                                 Suppliers, Contractors

Public Housing Authority                                                                                                                                             and Vendors

       Major Contractual Documents
Annual Contribution Contract (ACC) (with
Part 1: Includes information specific to each
individual PH property
  –  Method of development (conventional, turnkey,
     leased housing)
  –  Total development cost, $ bonds/note or grant, $
     annual contribution
  –  Date of full availability and end of initial operating
  –  Legal description of real estate
  –  Number, type and size of units included
  –  Non-dwelling space included (e.g. maintenance area,
     office, community room)
       Major Contractual Documents
Part 2, ACC: Terms and conditions
  –    Consolidates all Part 1 into one ACC
  –    Definitions
  –    Mission of HUD
  –    Mission of the housing authority
  –    Covenant to develop and operate in compliance
       with applicable laws, rules, etc.
  –    Cooperation agreement with local governing body
  –    Covenant against disposition and encumbrances
  –    Declaration of trust
      Major Contractual Documents
•  Part 2, ACC, continued: Terms and conditions
  –  Depositary agreement
  –  Pooling of funds
  –  Operating budget
  –  Civil Rights requirements
  –  Insurance requirements
  –  Employer requirements
  –  Books of account, records and government access
  –  Termination of a project under management
  –  Rights and obligations of HUD while in possession of
       Major Contractual Documents
Cooperation Agreement (with governmental
entity that appoints Board)
   –  Permanent exemption of public housing properties
      from real estate taxation
   –  Obligation for local governing body to provide public
      housing residents with a level of public services
      equal to that provided other residents (taxpayers)
   –  Payment in Lieu of Taxes:
       •  1) How determined - usually 5 or 10 percent of
          annual rents less PHA paid utilities,
       •  2) How distributed – number of units approved for
          development or acquisition
       Major Contractual Documents
General Depositary Agreement (with every
bank holding PHA deposits)
   –  Requires full collateralization to protect deposits
      over $100,000 (above FDIC or FSLIC insurance)
   –  Permits HUD to take over PHA’s accounts if HUD
      determines PHA has substantially defaulted on ACC
Lease (with each PH resident family)
   –  Identifies parties, premises, rent, terms and
   –  Contains HUD-required and other reasonable
   –  Further detail below under Key Policies and
       Major Contractual Documents
Admissions and Continued Occupancy
Policies (ACOP) (PH applicants and residents)
   -  Pledges PHA’s compliance with applicable laws and
   -  Describes entire policy covering admission and
      continued occupancy
   -  Further detail below under Key Policies and
Grievance Procedure (PH residents)
   -  Mechanism for administrative relief for resident
      complaints about PHA’s actions or failure to act
   -  Further detail below under Key Policies and
       Major Contractual Documents
Section 8 Administrative Plan (pledges PHA’s
compliance with applicable law and regulations related to
Housing Choice Vouchers)
   -  Describes all discretionary (non-regulatory) aspects
      of admission and continued participation in Section 8
   -  Further details under Key Policies and Documents
Personnel Policy (plus Civil Service or collective
bargaining agreements that may be in effect) cover the
PHA’s relationship with its staff
   -  Addresses all personnel actions, benefits, work rules
   -  Further details under Key Policies and Documents
       Major Contractual Documents
Procurement Policy         (addresses the PHA’s purchase
of goods or services)
   -  Describes types of procurement, requirements to
      assure competition, relation to budgets
   -  Further details below under Key Policies and
           Role of Commissioners
Fiduciary Responsibility: Overseeing the
PHA’s Financial Operations & Maintaining
its Financial Health
  -  Reviewing, approving, adopting and revising budgets
     for PH operating fund, capital fund, Section 8
     vouchers, any other program budgets if applicable
     (Hope VI, mixed finance development, ROSS, non-
     HUD programs)
  -  Tracking PHA income and spending against budgets
     regularly (for large PHAs this is typically monthly, for
     smaller agencies this is quarterly).
  -  Reviewing year-end statements and annual audits
           Role of Commissioners
Fiduciary Responsibility, continued:
  -  Tracking PH operating reserve and Section 8
     administrative fee reserve for interest earned and
     disbursements authorized
  -  Ensuring adequate insurance coverage
  -  Complying with procurement requirements
  -  Tracking PH rent potential to determine rent losses
     due to vacancy, excessive turnaround time, poor rent

Set Policy & Oversee Implementation
  -  Board adopts 5 Year Plan (Mission, Goals, Objectives
     and Strategies) and an Annual Plan.
         Role of Commissioners
-  The Annual Plan includes all the PHA’s other policies
   Further details under Key Policies and Document
-  Certain policies require resident and/or public
   comment before Board adoption (5 Year Plan, Annual
   Plan, Lease, Grievance Procedure, Capital Plan, Hope
   VI, demolition/disposition)
-  Typical process for adopting/revising policy
   documents has several steps – staff prepares/revises
   draft policy, provides to residents, and Board adopts
-  Policy adopted between Annual Plan submissions
   may represent a substantial modification of last
   Annual Plan
           Role of Commissioners
     •  Board may wait until next year’s Annual Plan or
        must hold 45 day comment period, public hearing
        as Interim Plan revision, staff receives comments,
        collates, summarizes for Board – Board makes
        revisions, adopts policy/revision

Oversee efficient & effective operations:
  -  Sometimes issues arise from complaints by residents,
     elected officials or the public
  -  Board members must not interfere in day-to-day
     operation of PHA, however, Board may ask for
     complete written investigation of complaint,
     explanation of PHA staff action with citations to
     applicable rules and policies
           Role of Commissioners
  -  If Board agrees that staff is either interpreting policy
     incorrectly or implementing it incorrectly, Board can
     direct staff through motion or resolution

Improve PHA’s Public Image & Commun-
ications with Elected Officials, Agencies,
Organizations, Residents & the Public
  -  Board members are often better connected both to
     political power structure and organizations that
     serve PHA residents than are PHA staff
  -  Board works to ensure PHA is “at the table” when
     locality’s Consolidated Plan is being developed,
             Role of Commissioners
  -    Board members can help connect service agency
       leaders and staff with PHA counterparts
  -    Board members may have acquaintances at local
       foundations that could fund certain PHA activities
  -    Resident board member (now required) can help
       build bridges between Board and various resident/
       Section participant constituencies

How Board and Executive Director Will
  -    At many PHAs, Board members speak only with the
       Executive Director, which avoids staff confusion
       about how they are supposed to do their jobs
           Role of Commissioners
Hiring and Supervising the Executive
  -  Executive Directors are typically hired under personal
     services contracts, often with incentives for
     improved performance and sanctions for failing to
     meet goals.
  -  The Executive Director is responsible for carrying out
     the law, regulations, and the Board’s policies
     through day-to-day administration of the PHA.
  -  The Board hires and supervises the Executive
     Director but the Executive Director is responsible for
     all other personnel administration in compliance with
     the Personnel Policy (plus union contracts and /or
     civil service requirements, if applicable).
          Role of Commissioners
-    The Executive Director must provide Board
     members with complete and accurate information
     on PHA operations on a regular basis so the Board
     can ensure that budgets are being followed and
     policies carried out.
-    When recruiting a new Executive Director, a Board
     must weigh the value of local knowledge (the
     residents, neighborhoods, elected officials) against
     technical program knowledge (specifically the public
     housing and Section 8 progams).
-    The position of Executive Director is critical to a
     PHA’s success. This is not a position where on-the-
     job training is appropriate.
  Role of the Executive Director & Staff
Implementing policies of the Board:
  -  setting operating procedures, methods & systems,
  -  training staff,
  -  monitoring performance, work volume and results

Carrying out day-to-day operations:
  -  maintaining complete, accurate and up-to-date
     books of accounts,
  -  receiving & processing applications - PH & Section 8,
  -  managing & maintaining public housing units,
  -  administering the Housing Choice Voucher program,
  -  providing information to residents, receiving their
     input & modifying the PHA’s approach when
  Role of the Executive Director & Staff
  –  working with outside agencies as needed to
     coordinate improved services to residents,
  –  administering the PHA’s capital improvement

Reporting to the board:
  -  submitting regular monthly reports to the Board in
    advance of meetings,

  -  keeping Board members informed promptly of any
     emergencies or newsworthy occurrences
  Role of the Executive Director & Staff
Short and long term planning:
  -  monitoring all aspects of the PHA’s programmatic
     and financial performance to spot negative trends
     and respond quickly.
  -  tracking the PHA’s ongoing progress in meeting
     PHAs and SEMAP targets and modifying the PHA’s
     approach if needed,
  -  following changes in program laws and rules so the
     PHA can adjust in a timely manner,
  -  preparing draft policies and budgets for the Board to
     use in carrying out their responsibilities
         Overview of PHA Programs
Public Housing
  -  PHA owns and manages public housing buildings,
     developments & scattered site units
  -  HUD subsidized development of PH “projects” by
     annual contributions to repay PHA issued bonds or
     notes or by direct development grants
  -  Today HUD subsidizes PHA operations through the
     Operating Fund, which pays PHAs the difference
     between the Project Expense Level & PHA income
  -  Costs of Central Office Operations are paid by
     management fees charged to properties, the HCV
     program and the capital fund.
       Overview of PHA Programs
-  HUD subsidizes capital costs (rehab of existing units
   or development of new units) through the capital
   fund. This formula assigns each PHA a share of the
   funds appropriated by Congress based on the
   number, size, type, age & condition of their units.
-  Until 2012, PHAs could compete for Hope VI dollars
   to revitalize severely distressed PH properties. HOPE
   VI requires substantial leveraging of non-HUD funds,
   consultation with residents & neighbors and broad
   cooperation from local government & service
   agencies. The revitalization process must address not
   only the physical needs of the property but also the
   social and economic needs of the property’s
-  PHAs may compete for Choice Neighborhoods,
   Resident Opportunity and Supportive Service grants,
   which enable grant winners to carry out a variety of
   programs to benefit residents.
       Overview of PHA Programs
–  PHAs may engage in “mixed finance transactions” in
   which the PHA partners with private developers,
   equity partners and often, private managers to
   develop new housing. This may be a mix of non-
   subsidized market rate units, shallow subsidy (e.g.
   tax credit) units and low-income units.
–  PHAs are now eligible to complete for state-awarded
   tax credits. Housing built with such credits must
   house families with incomes less than sixty percent
   of area median income. Tax credits are often used in
   conjunction with mixed finance transactions
–  The number of units eligible for the operating &
   capital fund is frozen, but if a PHA demolishes or sells
   properties it may reclaim the “subsidy slots” for use
   with future development..
         Overview of PHA Programs
Section 8 Housing Choice Vouchers
  -  PHA administers the program, which provides
     Housing Assistance Payments to private landlords on
     behalf of eligible families
  -  PHA does not own or manage housing under this
  -  PHA takes applications, maintains waiting list,
     processes families for admission, verifies facts
     related to income and rent, issues vouchers, inspects
     units, determines whether rent requested by landlord
     is reasonable, re-examines income, re-inspects units
     once each year, and pays HAPs to landlords for
     leased units. PHA receives an administrative fee for
     its duties.
       Overview of PHA Programs
–  PHA may receive additional vouchers to assist
   families from project-based Section 8 whose owners
   opt out or fail to quality for ongoing subsidies.
–  PHAs also get vouchers as relocation or replacement
   for PH demolition or sale.
–  HC vouchers are portable. Families from the PHA’s
   waiting list who receive vouchers may move
   anywhere in the U.S. that there is a PHA to
   administer the program.
–  PHAs may “project base” up to 20 percent of their HC
   vouchers in accordance with HUD rules.
–  HC vouchers may be used for homeownership for
   qualified working families.

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