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Public Housing Authority Operations and FundingOn 9/19/2005 Revisions to the Public Housing Operating Fund Program was issued by the Department of Housing and Urban Development (HUD), the federal agency that sets rules and provides funding to Public Housing Agencies (PHAs). The rule requires PHAs to convert to "asset management" and provides a new formula for distributing operating subsidies to PHAs. A copy of the final rule can be found here: The final rule includes incorrect dates for implementation. The corrected dates can be found at here: BackgroundIn 2000, HUD received funding to contract with the Harvard Graduate School of Design to study what it should cost to operate well-run public housing. The resulting Public Housing Operating Cost Study compared costs for PHAs with costs for privately operated, HUD-assisted, FHA-insured rental properties. It is the basis for both the change to asset management and the change in funding. Listed below is the link to the study. Note that its appendices indicate by state and PHA changes in funding that PHAs would realize if the study recommendations were followed precisely. The final regulations differed from these recommendations somewhat. Asset ManagementOne of the major changes in the rule is the requirement that all but very small PHAs (less than 250 units) convert to "asset management", or property-based accounting and management, which is an attempt to make PHAs operate more like private property management entities. PHAs will be required to provide services, track cost and performance data, and prepare reports and request funding, by project rather than agency-wide as is now the norm in public housing. Currently, if a PHA is comprised of ten (10) projects, information is reported to HUD, and funding is received, for the authority as a whole. Under the new rule, information will be reported and funding will be allocated for each of the ten (10) projects individually, although PHAs have some discretion in defining specific projects. The new rule encourages managerial flexibility and some PHAs may seek changes in job assignments and terms and conditions of employment. However, contrary to what some PHA managers are saying, nothing in the final rule changes bargaining relationships. PHAs must implement project-based accounting and budgeting by FY 2007. They must implement the other aspects of asset management by FY 2011. FundingThe formula for providing subsidies to PHAs was also changed, with some authorities slated for increases and others slated for decreases. Changes to the formula will begin the first year after 11/18/2005 and will be phased in over two years for PHAs getting an increase and five years for PHAs receiving a decrease. Overall, the study recommends an increase in PHAs funding, but actual funding levels are determined through the appropriations process in Congress. The rule contains financial incentives for PHAs to convert to asset management rapidly. PHAs that are targeted for cuts in their operating funds, but can demonstrate that they comply with asset management, will have their cuts discontinued at the next subsidy calculation. HUD will fund all PHAs upon determination that the PHA complies with asset management. For updated information that HUD is disseminating to all the PHAs, with other important dates, notices and data, please use the link listed below. In addition, individual PHA data can be obtained. For instance, when you go to the link, click on "Operating Fund". Once there click on the "Transition Analysis Report" link which brings you to a spreadsheet that shows the "decliners" (PHAs slated for funding cuts) and "gainers"(those PHAs receiving an increase in funding). If your PHA is experiencing cuts in funding, using the link below, click on "Asset Management". There is a "Stop Loss" link that explains what a PHA can do to curtail the cut. http://www.hud.gov/offices/pih/programs/ph Department of Research and |
 Vanetta Lloyd
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