On February 7, HUD’s Office of Public and Indian Housing (PIH) issued a proposed rule on the existing exemption of small public housing agencies (PHAs) from having an annual PHA Plan and on the public housing capital fund.
The Small Public Housing Authorities Paperwork Reduction Act, one part of the Housing and Economic Recovery Act of 2008 (HERA), exempted “qualified” PHAs from preparing an annual PHA Plan. That statute defined a “qualified” PHA as one that: administers fewer than 550 public housing units and housing choice vouchers combined, is not designated as “troubled,” and did not have a failing score under the Section 8 Management Assessment Program (SEMAP) during the previous year.
The proposed rule would delete current language explaining the purpose of the PHA Plan, “to provide a framework for local accountability and an easily identifiable source by which public housing residents, participants in the tenant-based assistance program, and other members of the public may locate basic PHA policies, rules and requirements concerning the PHA’s operations, programs and services.”
New paragraphs regarding the capital fund in the proposed rule would codify other HERA changes for qualified PHAs, requiring them to certify they have conducted an annual public hearing and consulted the Resident Advisory Board (RAB) to discuss any changes to its goals, objectives, and policies. Non-qualified PHAs must also conduct an annual public hearing and consult the RAB to discuss its proposed Annual PHA Plan. The proposed rule would also require qualified PHAs to have a civil rights compliance certification, and to provide the public with information about any changes in the qualified PHA’s goals, objectives, and policies 45 days before the annual public hearing.
Capital Fund Program
The proposed rule would substantially rearrange and expand part 905, the Capital Fund Program, to combine and streamline former legacy public housing modernization programs such as the Comprehensive Grant Program (CGP), the Comprehensive Improvement Assistance Program (CIAP), and the Public Housing Development Program, according the preamble.
Some of the proposed changes include:
· All PHAs, qualified and non-qualified, would be required to submit project-based Physical Needs Assessments (PNAs) to be used to identify and prioritize work to be included in the Capital Plan Annual Statement and 5-Year CFP Action Plan.
· For modernization projects, PHAs would be able to request an exemption from the 90% of total development cost (TDC) limit in order to undertake integrated utility management, capital planning, and other capital and management activities that maximize energy conservation and efficiency.
· A reduction from 20% to 10%, over a three-year period, in the amount of Capital Funds that can be used for management improvements.
· A transition from a ten-year to a five-year Replacement Housing Factor (RHF) program. When PHAs demolish, sell, or otherwise dispose of public housing units, the formula for allocating Capital Funds to the PHA is affected. To compensate, the RHF program enabled PHAs to receive RHF grants for the first five years and to seek an additional five years if certain requirements were met.
HUD specifically requests responses regarding a number of issues in the proposed rule:
· HUD currently has as a standard for a “reasonable cost” to rehabilitate or modernize an existing structure an amount no greater than 90% of the TDC for a new development. HUD requests comments about this 90% standard in light of lower standards, which since 2006 it has applied to demolition/disposition and voluntary conversion – 62% of TDC for elevator buildings and 57.14% of TDC for all other types of structures. Advocates have sought a return to 90% for demolition/disposition and voluntary conversion in order to rebuild or modernize more units.
· How should energy efficiency be measured, and what specific uses of the Capital Fund would increase energy efficiency?
· What cost-effectiveness tests should be used when deciding whether an energy conservation measure identified in the energy audit should be implemented?
Comments are due April 8. The proposed rule is at http://edocket.access.gpo.gov/2011/pdf/2011-2303.pdf.