Notice PIH 2014-14, issued on June 18, offers small public housing agencies (PHAs) a streamlined process for voluntarily converting public housing to Housing Choice Vouchers. To be eligible, a PHA must have fewer than 250 public housing units and convert its entire public housing portfolio. Appendix A of the Notice lists 535 eligible PHAs that have a combined 50,051 public housing units. HUD is making 1,000 tenant protection vouchers available for conversions under this Notice.
Section 22 of the Housing Act of 1937 allows a PHA to convert any public housing project, or portion of one, to HCVs if the cost of conversion will be no greater than the cost of continuing to operate the units as public housing. In order to make the conversion, a PHA must conduct a conversion assessment that includes a cost analysis, an analysis of the value of the public housing project, an analysis of the rental market, and an impact analysis providing evidence that the conversion will principally benefit residents, the PHA, and the community. However, the statute allows HUD to waive or streamline the conversion assessment.
The Notice states that under the streamlined process, eligible small PHAs do not have to conduct a cost analysis, nor do they have to conduct an analysis of the market value of the public housing, because HUD has already done so.
The Notice lists a number of elements that must be included in a conversion plan. For example, a PHA must develop the conversion plan with significant participation by residents, summarize resident comments, and describe how the PHA took resident comments into account in finalizing the plan. In addition, the plan must include an analysis of the likely success public housing residents will have using vouchers, taking into account resident characteristics such as large households, elderly households, and households with disabled members.
A proposed conversion under the Notice must be identified in the PHA Annual Plan or in a significant amendment to the PHA Plan, and the PHA must comply with the Resident Advisory Board, public notice, outreach, and hearing requirements. The PHA Annual Plan or significant amendment must describe a number of features, including any changes in grievance and termination procedures, rent determination, admissions or occupancy policy, and treatment of resident organizations and protected resident participation activities.
The Notice reminds PHAs that under Section 22, a conversion plan must “ensure that, if the project (or a portion) converted is used as housing after conversion, each resident may choose to remain in the dwelling unit in the project and use the tenant-based [voucher] for rent.” The owner must accept the voucher and lease the unit to the household.