PHADA comments on public housing conversion rules
The following are PHADA's official comments on the Mandatory and Voluntary Conversion of Public Housing to Tenant-based Assistance. The proposed rule was published in the July 23, 1999 Federal Register. Refer to the September 13 edition of the Advocate for an overview of the conversion rules.
The Public Housing Authorities Directors Association, a membership organization representing more than 1,700 public housing agencies, appreciates the opportunity to comment on the referenced proposed rules for converting public housing to tenant-based assistance.
It is clear that the Department has closely followed the statutory requirements and the association commends those involved in drafting the rules for their straightforward approach. Please accept the following comments as applicable to both the mandatory (subpart A) and voluntary (subpart B) parts of the proposed rule.
The organization agrees with the Department on the development of a web-based calculator for conducting the cost comparisons required by the rule. This is an excellent idea which should help reduce the workload on the PHAs, as well as provide consistency for them and for the Department in its review. We would further recommend that the required submissions be postponed until the web calculator is actually installed and running on the Department's web page.
Given the current state of flux in the Public Housing Assessment System, PHADA recommends that no workload or official determinations be made on the basis of PHAS until such time as the system is officially (and legally) in place, and the current confusion has been eliminated. In particular, under the voluntary procedure the rule permits a more streamlined process for those who have passed PHAS as compared to those who have not. Until PHAS is established, all PHAs should be permitted fully streamlined assessments.
Also with regard to the streamlined assessment process, the association recommends the option (permitted in the statute) of a basic market study to assess the availability of market units for possible Section 8 assistance. Many smaller PHAs and market areas have little or no market units suitable or affordable for the Section 8 program, so that no conversion plan however well developed would have any basis in reality.
Given the nature of the localities and the PHA knowledge of the market, this assessment should not prove difficult as an option to the full cost analysis. On the other hand, the possibility of a funded rehab plan for those developments that might otherwise qualify for conversion would be a welcome addition.
While the deadline for voluntary assessments is not until 2001, there is no stated deadline for the mandatory conversion assessments. The Department has expressed its view that the mandatory assessments and subsequent full plans represent an "on-going" requirement of the law. The stipulation that they must be submitted with the next Annual Plan could prove problematic in some situations.
For example, those PHAs with short deadlines for submission of the Annual Plan may be well advanced in the planning process or even have them completed. The addition of the conversion assessment and plan to the Annual Plan, given the timing, seems unreasonable.
Further, those PHAs required to conduct the mandatory conversion are also required to prepare a separate disposition plan (if the proposal is other than demolition). The combination of the Annual Plan, the conversion plan, and the disposition plan at the same time is unnecessarily burdensome and will not produce the best results. PHAs in the mandatory category should be permitted to submit the conversion and disposition plans later, either as a separate package or as addenda to the Annual Plans.
The association also questions the requirement for a separate disposition plan for the mandatory conversions, when it is not required for the voluntary category.
In both the mandatory and voluntary conversion parts, HUD has reserved the right to require the first year of tenant-based assistance be funded from the PHA's operating or capital fund. It would be most helpful for the Department to spell out more specifically the timing of the phased process of substituting assistance, and particularly whether local funding would be applied before or after deducting subsidy for the units being converted.
For the mandatory category, HUD has given 250 family units as the cut-off and has asked the public whether a lower number and non-family units should be included for the mandatory conversion assessment and plan. PHADA emphatically recommends leaving the family unit requirement as is, and further believes the unit count cut-off should not be lowered from the current 250 in the proposed rule.
The Department has also posed several additional questions on which public comment is invited. First is the question of whether to include the average median income of the PHA development as a ratio of the average of the surrounding area as a measure of distress. While the Commission on Distressed Public Housing found this measure highly significant, PHADA believes the measures currently proposed in the rule are more than sufficient for a reasonable person to draw the conclusions necessary.
The income ratio analysis, if used at all, should be at the option of the PHA if in its view the data have any special relevance to their situation. In addition, the data should be gathered and presented by methods and formats most useful to the PHA, not mandated.
Second is the question of whether HUD should provide further guidance to the PHAs in the areas of market analysis, neighborhood impact, and fair housing implications. Such guidance could be very useful, depending on the form it would take. For example, the template developed for the five-year and annual plans, with some exceptions, has been received in most quarters as a helpful addition to the process. Perhaps something similar could be developed for areas outlined in this section of the conversion rule, and presented for public review and comment also.
Third is the question (for the voluntary conversions) of requiring an analysis of the potential impact on minorities and the disabled in the conversion process. It is worth noting here that no such analysis is required for the mandatory conversions, and in addition much of the information generated would already have been captured in the neighborhood impact and fair housing measures noted above.
The association has one additional question as regards debt forgiveness. If the development in question has had the debt forgiven (and there have been no additional capital investments), and the subsidy is removed in the conversion process, why should it be necessary for the Department to review the local plan for disposition? It would seem that under the circumstances, the property would be the PHA's to deal with as it sees fit.
