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Transform Rental Assistance. NALHFA – 2011 Annual Educatio n Conference. David Lipsetz US Dept of Housing and Urban Development May 19, 2011. Cheap Ploy to Curry your Favor. Affordable Housing Programs. HUD Rental Assistance. - PowerPoint PPT Presentation
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TRANSFORM RENTAL ASSISTANCE
NALHFA – 2011 Annual Education Conference
David LipsetzUS Dept of Housing and Urban DevelopmentMay 19, 2011
CHEAP PLOY TO CURRY YOUR FAVOR
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AFFORDABLE HOUSING PROGRAMS
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HUD RENTAL ASSISTANCE
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HUD provides direct rental assistance across multiple programs with varying rules and separate administrative structures.
Program Administrators Units Section 8 Housing Choice Vouchers 2,406 2,233,706 Section 8 Project-Based Contract 53 1,189,294Conventional Public Housing 3,123 1,175,244 202 Project Rental Assistance Contract n/a* 102,550 McKinney Supportive** 1,938 87,435
811 Project Rental Assistance Contract n/a* 27,666 Section 8 Moderate Rehabilitation 189 25,037 HOPWA 219 23,862 811 Mainstream Vouchers 203 14,783 HOME Tenant-Based Rental Assistance 134 12,239 Rental Assistance Program n/a* 11,315 Rent Supplement n/a* 9,205
TOTAL 8,265 4,912,336
* HUD administers through its local offices | **The numbers of administrators (grantees) and projects are estimates.
WHAT IS PUBLIC HOUSING?
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• Established by the 1937 Housing Act (Section 9)
• Provides “decent and safe rental housing for eligible low-income families, the elderly, and persons with disabilities.”
• 1.178 million units, from single family houses to high-rise apartments.
• Managed by 3,300 local housing authorities.
• Resident Household characteristics and averages:• 2.2 persons• 52% elderly or disabled Head of Household• $13,425 annual income• $315 rent payment• 51% white, 45% black, 4% other• 52% stay less than 5 years
HOW IS PUBLIC HOUSING FUNDED?
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Source Use FY 2011
Capital Fund Develop, finance, and modernize units, and for management improvements $2.50 B
Operating Fund Operate and maintain units $4.77 B
Other Revitalization grants (HOPE VI) $0.20 B
TOTAL $7.47 B
Per Unit Avg.
Federal subsidy $515
Tenant Rent $315
Monthly $830
Federal subsidies allocated to Public Housing Authorities (PHAs) on a per unit basis to cover capital and operating costs. PHAs also receive rent payments directly from tenant’s.
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HUD currently lacks a viable preservation strategy for its 1.2 million units of public housing and for a number of “orphan” programs
• 150,000 public housing units have been lost over the last 15 years
• Remaining units have unmet capital needs of $20 to $30 Billion
PRESERVATION OF PUBLIC HOUSING
SOLUTION: TRANSFORM RENTAL ASSISTANCE
Allow public housing to convert to long-term, property-based contracts.• Replace the Deed of Trust with a Use Agreement• Provide new Project-Based Section 8 Contract Authority• Replace Section 9 rules and regulations with Section 8 rules
and regulations
Benefits• Allows PHA’s to leverage other sources of funds to maintain,
renovate and replace properties (Estimated at $27 Billion)• Encourage flexibility in financing & property use
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CURRENT STATUS
• May 2010: HUD Discussion Draft: Preservation, Enhancement, and Transformation of Rental Assistance Act of 2010 (PETRA)
• December 1, 2010: Representative Ellison introduced H.R. 6468-The Rental Housing Revitalization Act based on feedback to staff discussion draft
• February, 2011: President proposes a Rental Assistance Demonstration in his FY12 budget submission to Congress.
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FY12 RENTAL ASSISTANCE DEMONSTRATION
• FY12 Demonstration built from TRA; Scaled-down version of authorizing legislation • Budgeted: $200 million
• Part of HUD’s larger strategy for rental housing preservation
• Working with stakeholders and Congress to define components
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FY12 RENTAL ASSISTANCE DEMONSTRATION
• 2 inventories included: • Public Housing• Rent Supp, RAP, Mod Rehab (“orphans”)
• 2 tracks: PBRA and PBV• Convert to Section 8 Property-based contract subsidy • Assign Tenant-based Voucher funding to a specific Property
• Resident choice/mobility component on each track• Built into PBVs now• Add to PBRA track with available vouchers
• Admin changes where possible (limited)• PH inventory: Section 18 processing• Waive competition requirements• 2x15-year contracts
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FY12 RENTAL ASSISTANCE DEMONSTRATION
PBRA - No Existing authority to establish new Section 8 contracts for converting property
• Establish authority to convert under MAHRA?
PBV - 20% inventory cap; 25% per project cap; TPVs to convert stock; “turnover vouchers” to support mobility
• Raise inventory and per project caps?• Enhance choice/mobility limitations
• Long-term contracts/affordability controls?• Combine with PH Capital funds at conversion?• Resident engagement/organizing to support conversion?
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TRANSFORMING RENTAL ASSISTANCE
Visit the TRA web pagewww.hud.gov/tra
Join the TRA E-Mail ListFollow the instructions at the bottom of the TRA web page
Email [email protected] Submit questions and comments to HUD
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REVITALIZATION ACT: GUARANTEED LONG-TERM AFFORDABILITY
Congressman Ellison’s legislation to transform rental assistance assures Long Term Affordability:
• HUD must renew contract unless property or owner is not in good standing• PHAs must accept renewals offered by HUD• 30 year agreement will be extended with each renewal
• In the event of nonrenewal, HUD may issue vouchers or, after consulting with residents, transfer the assistance to another property• Replace every hard unit 1-for-1 with only exception for weak markets
where vouchers are easy to use in low-poverty areas
• If a foreclosure occurs, the property remains affordable in perpetuity:• Federal option to purchase former public housing properties• Rental assistance contract and Use Agreement survive foreclosure and
bankruptcy
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HAP RENTS FOR CONVERTED PROPERTIES
• For properties requiring above-market rents:
• HUD could approve an exception rent up to the higher of 110% of the applicable Fair Market Rent (FMR) or 120% of the comparable market rent. For example, if 120% of the market rent were $500 and 110% of the FMR were $560, HUD could allow an exception rent of up to $560 (the higher of the two) to ensure long-term sustainability
• For all other properties (those not requiring above-market rents):
• HUD could approve a rent up to the comparable market rent, capped at 110% of the FMR unless authorized by the Secretary. HUD could approve a rent higher than 110% of the FMR, but only if necessary for preservation*
* This approval would be based on criteria established by the Secretary to determine whether the property should be preserved. 15
RESIDENT CHOICE AND MOBILITY
Residents of HUD-assisted housing often lack access to economic opportunity because moving means giving up their subsidy.
• Almost 2.4 million households that receive HUD rental assistance cannot move without losing their subsidy because it is tied only to the building
• Even when households have ability to move with a voucher knowledge and jurisdictional barriers are significant impediments to choice
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% living in area of concentrated poverty
Average Income
Public housing resident 48% $13,346
Assisted housing resident 26% $11,504
Housing voucher recipient 19% $12,755
CHOICE NEIGHBORHOODS
• FY 2011 Budget• $100m for HOPE VI; up to $65m can be dedicated to Choice
Neighborhoods• FY 2012 Budget• President Obama requested $250 million for Choice
Neighborhoods• Authorizing Legislation• Representative Waters introduced H.R. 762, which includes Choice
Neighborhoods• Senator Menendez introduced S. 624 on Choice Neighborhoods
WHERE IS PUBLIC HOUSING?
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