Public Housing 101 Workshop 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 disability. 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 grant. Brief Historical Perspective 1983 HCDA Amendments redefined income and deductions. 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 – provisions 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 Development City/County/Region Public Housing Applicants (Activating Jurisdiction) Compliance with Rules Annual Contributions Operating Subsidy Payment in Lien Capital Fund of Taxes Contract Subsidy & 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 Compliance Rent/ Lease Suppliers, Contractors Lease Public Housing Authority and Vendors Staff Residents Major Contractual Documents Annual Contribution Contract (ACC) (with HUD) 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 period – 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 required – 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 project(s) 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 conditions – Contains HUD-required and other reasonable provisions – Further detail below under Key Policies and Documents Major Contractual Documents Admissions and Continued Occupancy Policies (ACOP) (PH applicants and residents) - Pledges PHA’s compliance with applicable laws and rules - Describes entire policy covering admission and continued occupancy - Further detail below under Key Policies and Documents 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 Documents 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 Program - 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 Documents 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 collections 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 - 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 Communicate - 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 Director - 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 appropriate, Role of the Executive Director & Staff – working with outside agencies as needed to coordinate improved services to residents, – administering the PHA’s capital improvement program(s) 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 residents. - 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 program - 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.