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November 8, 2000
PHADA comments on NAPA's Draft Final Report, Evaluating Methods for Monitoring and Improving the Performance of HUD-Assisted Housing Programs
On behalf of the 1843 members of the Public Housing Authorities Directors Association (PHADA), I want to thank the Academy for an excellent report which is thorough, insightful and balanced. The Academy has perceptively described the relationship between the Department of Housing and Urban Development (HUD) and public housing authorities and how HUD's culture contributed to the flaws associated with the Public Housing Assessment System (PHAS).
PHADA strongly supports the recommendations of the Academy. In particular, PHADA notes that the Academy has called for:
- a continued refinement of assessment tools which will "require HUD to expand the discussions beyond the definitions of deficiencies";
- "flexible, tailored approaches to quality assurance" allowing for "different assessment approaches for different types of housing providers";
- devolution of responsibility to the local level,
- increased HUD capacity to administer PHAS and
- the creation of a Housing Quality Board to advise HUD on goals and assessment standards for measuring performance.
In short, the Academy calls for a complete overhaul of PHAS, and PHADA is appreciative that the Academy recommends that in carrying out these changes "HUD needs to increase the level and quality of its consultations with the public housing industry and, ...where there is no statutory prohibition, to reach decisions collaboratively." PHADA hopes that NAPA's report will have the effect of opening up a dialogue with the Department to implement the Academy's recommendations.
Comparison Between HQS and UPCS
While PHADA realizes the overall high quality of this report, it has a few specific comments about it that it believes if incorporated will improve the study. The report states that HUD and the industry have not reached broad agreement on assessment standards. One reason this finding is true is because the previous standard, Housing Quality Standards (HQS) and the new standard, Uniform Physical Conditions Standard (UPCS) are so different. Three quotes in the report, however, indicate to PHADA that the Academy has not recognized that HQS and UPCS are two separate standards which differ significantly one from the other. These three examples are found a) on page 52 when the report states, "The new assessment standards [UPCS] do not differ significantly from the previous ones [HQS].", b) on page 43 when the report reads, "Within the 41 physical inspectable items in HUD's new system [UPCS], all of which are included in the traditional HQS measurement tool...", and c) on page 32 where there is the following sentence, "These new protocols [UPCS] are based on the pre-existing Housing Quality Standards [HQS], but they are much more quantitative."
A side by side comparison of HQS and UPCS shows, however, that UPCS is both significantly more extensive and significantly more stringent than HQS. PHADA published an article on this subject and posted a list of 35 examples from the Dwelling Unit area alone on its web site in which the UPCS standard exceeded the HQS standard. For your reference, I am sending this list to you. I am also enclosing form HUD 52580-A, the HQS inspection form, which describes the HQS standard.
A quick perusal of this form will point out the explicit differences between the two standards. For instance, if you turn to page 2, under window condition, it says, "If there is only "moderate deterioration" of the windows the item should "Pass". "Moderate deterioration" means windows which are reasonably weather-tight, but show evidence of some aging, abuse or lack of repair. Signs of deterioration are: minor crack in window pane; splintered sill; signs of some minor rotting in the window frame or the window itself; window panes loose because of missing putty."
Under UPCS, however, a window with a crack, a splintered sill, missing most of its putty, and having peeling paint would have four separate deficiencies with a point loss of 17.72 for that unit. (Remember to divide by the number of units inspected and multiply by the area value for the total number of points deducted for the property.)
Under floor condition, it reads, "Pass floors...including: heavily worn or damaged floor surface (for example, scratches or gouges in surface, missing portions of tile or linoleum, previous water damage). In UPCS, floor covering damage, missing flooring, peeling paint and water damage are all deficiencies which could lead to a point loss of 10.13 points for the unit.
These examples illustrate that HQS is a different standard from UPCS since most of these conditions which pass HQS are considered deficiencies in UPCS with point deductions. I refer you to PHADA's article for the many additional examples.
In addition to being more stringent, UPCS is far more extensive. Contrary to the report's statement on page 43 which says all the inspectable items in UPCS are included in HQS, there are many new inspectable items in UPCS. In the Site area alone, the following are all new inspectable items: Fencing and Retaining Walls, Lighting, Mailboxes/Project Signs, Market Appeal, Parking Lots, Play Areas & Equipment, and Walkways/Stairs. There are also new inspectable items in the Building Systems area, such as Emergency Power, Exhaust System and Fire Protection. Similarly in Building Exterior, Lighting and Doors are new inspectable items. In Common Areas, Closet/Utility/Mechanical, Basement/Garage/Carport and Storage are all new areas. Finally, Dwelling Units has a new inspectable item in Call for Aid.
This quick survey shows that 16 of 56, or 29 percent, of the inspectable items are new in UPCS. Undoubtedly, in the inspectable items which are common to HQS and UPCS there would also be many deficiencies which are new in UPCS.
Thus PHADA believes that the facts demonstrate that UPCS is a significantly different assessment system than HQS both in terms of its scope and in terms of standard. The proof of this difference is found in the fact that an authority could easily pass HQS and be labeled troubled under UPCS. One HUD field office came to the same conclusion as PHADA, which it expressed in a circular it sent to the PHAs in its area, "The REAC standards are much more stringent than HQS."
The fact that the standards are so different raises the question of the quality of HUD's data. Since HQS measures "decent, safe, and sanitary" housing, UPCS must measure something else beyond "decent, safe, and sanitary". It is unclear what a score based on UPCS is measuring. As a result, even disregarding the many problems with HUD's scoring system, the scores are not an accurate reflection of a housing authority's providing "decent, safe and sanitary housing". Since the Academy reports that the system's underlying goal is a "fundamental focus on providing decent, safe and sanitary housing" (page 2), and since UPCS does not measure "decent, safe and sanitary", PHADA believes that the Academy cannot then conclude, as it does on page 97, that the system has "produced improved data on the status of HUD-assisted housing and its providers."
Cost Effectiveness of PHAS
It is important to ask the question, which the Academy does (see page 57) about whether PHAS is cost-effective. Since the expenditure of apparently more than $100,000,000 has not produced fully accurate scores, would it have been possible to build on the previous system of HQS inspections, IPA reviews and HUD confirmatories at a far more reasonable cost to produce the assurance that PHAs are delivering decent, safe and sanitary housing? Since 87 percent of the public housing properties passed a far more stringent protocol than the one they were inspected to, it is not unreasonable to believe the old system could have been made satisfactory at a far lower cost, especially in light of the fact that most of the distressed public housing is being dealt with under the HOPE VI program. The Academy itself asks the question (p. 94) "would it be better to catch 90 percent of the problems with a reasonably affordable and non-burdensome monitoring and oversight system or 99 percent with an unaffordable and overly burdensome system?"
As a technical correction, on Page 37, the report says that an agency must prepare an improvement plan if it scores between 60 and 70 in any area, but the final rule states that only if a PHA gets a total score of between 60 and 70 must it submit an improvement plan.
Justification for PHAS
On Page 40, the Academy describes the reasons behind HUD's increased oversight with the following sentence, "Highly publicized scandals in recent decades, documenting deplorable living conditions in some public housing properties, have driven HUD's new approach to oversight and monitoring of PHAs and intensified its relationship with the public housing industry."
PHADA believes this analysis brings up the question of the purpose of the oversight system. If the Academy is referring to large urban tower blocks built in the 1950s and 1960s, it should acknowledge the role of federal cost and design standards, the effect of subsequent federal policies, such as the Brooke amendment and federal preferences, and the $22 billion shortfall in capital funding in order to determine all the reasons why deplorable conditions might exist. In addition, the Academy should point out that HUD has now attempted to address many of the problems which led to these "deplorable conditions". It has repealed federal preferences; it has instituted flat rents, income disregards and deconcentration provisions to improve income mixes, and it has funded 147 different HOPE VI programs over the past seven years specifically to tear down these obsolete complexes and replace them with mixed income communities.
Thus PHADA believes the Academy should pose the question to what extent the new, intensified relationship with the public housing industry is necessary.
HUD's Attitude Toward Housing Authorities
In another matter, although PHADA realizes and appreciates the fact that the Academy has made frequent and consistent reference to HUD's failure to engage in consultation with the industry, it notes that the report also makes several references to HUD's willingness to listen to the public housing industry and make changes to the assessment system. For instance on page 43, the report says, "The department has expressed its commitment to continue making revisions so the system will become more accurate and fair." On page 52, the report reads, "The department has held a number of meetings with industry representatives to listen to their concerns, and is continuing its efforts to resolve these issues." On page 98 the following appears, "It (HUD) has taken steps to correct many problems and has expressed its willingness to make additional modifications."
Although these references are few in comparison to the many sections which fault HUD for its lack of willingness to collaborate with the industry, PHADA believes that since these statements do not appear to be an accurate portrayal of the Department's attitude and behavior, they should be modified. As the Academy knows the Department only published the scoring system as a result of a lawsuit brought by the industry. Then, it only entered into negotiations concerning the Dictionary of Deficiencies, because Congressional report language instructed it to do so. During these negotiations, it did not allow for discussion of the weights and criticality levels at all.
After the December, 1999 meetings, the industry requested further discussion with the Department, to no avail. Finally, the Department announced it was creating a PHAS Advisory Board to review and modify PHAS. Despite the specific request by industry groups, the Department refused to appoint any industry group staff to this Board. It even informed the industry groups that they could not attend the meetings of the PHAS Advisory Board.
The PHAS Advisory Board met once, on June 30, 2000. The Department representative leading the meeting agreed to convene the Board under the Federal Advisory Committee Act (FACA). This process is not a lengthy one, but it does require OMB approval. At its last request for information several weeks ago, PHADA was informed by the Department that the FACA request has still not been forwarded to OMB.
At best, it will be at least five months between the first and second meeting. If the Board does meet at that point, it will have been one full year since the last substantive formal meeting between HUD and the public housing industry on PHAS.
In August, following the issuance of the Academy's own interim report and the GAO report, the Department commissioned a study on PHAS without requesting any input on the study's scope from the housing industry or the PHAS Advisory Board. When PHADA met with the company conducting the study, it informed PHADA that it had no intention of meeting with any public housing officials.
Therefore, PHADA has serious reservations about the Department's commitment to make modifications to PHAS, its willingness to meet with the industry and its 'continuing efforts' to make the system more fair and accurate. On the basis of this information, PHADA asks the Academy to reconsider its language in order to reflect more accurately the Department's attitude and behavior.
PHADA's Scoring Analysis
PHADA would also like to draw the Academy's attention to a sentence on page 47 which reads, "And the public housing industry's independent efforts to unravel the secrets of the scoring system were flawed, causing them to draw some incorrect conclusions that have further fueled perceptions that the system is unfair and negatively biased."
If this citation refers to PHADA's scoring analysis which appeared in the January 31, 2000 edition of the PHADA Advocate and its 'Facts About the Physical Inspection Scoring System' which appeared in the PHADA Special Report on the Public Housing Assessment System, PHADA does not believe that the citation is correct. PHADA is attaching these two articles for your reference, along with several recent scores from housing authorities showing point deductions. I ask you to review these articles as PHADA is not aware of any flaws. HUD itself published a very misleading and distorted response to these articles, which is another example of its unwillingness to engage in substantive discussions with the housing industry on ways to improve PHAS.
The truth is there are over 3000 potential point deductions per property, and it only takes a loss of 41 to fail. Insofar as the citation on page 47 refers to these published articles, I would appreciate it if the Academy deleted it from the final report.
Refinements to the Formula Factors
PHADA would also like the Academy to clarify a remark it makes on page 99. In the section 'Continue refinement of assessment tools' the report states, "This will also require HUD to expand the discussions beyond the definitions of deficiencies to include the explanation of the formula factors used to convert inspection findings into official scores." On page xx, the same sentence uses the word "examination" rather than "explanation".
PHADA does not believe the Academy means "explain" the formula factors, since PHADA itself has explained the formula factors. PHADA believes the Academy means "examine" or "determine" the formula factors since it wrote "examination" on page xx, and since it stated in footnote 44 on page 43, "The Academy panel did not attempt to determine whether the weights and criticality factors for each element in the system were appropriate...Such determinations should be made in consultation with the industry." If the language on page xx is correct, PHADA would appreciate the Academy making this change on page 99.
The Issue of Whether PHAS Should Be Delayed
As a final comment, PHADA notes that the final report no longer includes the Academy's initial recommendation to delay implementation of PHAS. As stated at the beginning of these comments, the Academy's report calls for an overhaul of PHAS. A system in need of so many revisions should not be declared official and used to sanction housing authorities. Therefore, PHADA urges the Academy to reinstate its call for implementation to be delayed until the Academy's recommendations are carried out.
PHADA appreciates the opportunity to comment on the NAPA draft final report. It would like to reiterate its belief that the Academy has done an excellent job with its evaluation of the HUD quality assurance program, and PHADA commends the Academy for its work. If I can be of any further assistance, please do not hesitate to call on me.
Sincerely yours,
Timothy Kaiser
Executive Director
Attachments:
1. List of differences between HQS and UPCS in the Dwelling Unit Area
2. Form HUD 52580-A
3. PHADA Analysis of the PHAS Physical Inspection Scoring System
4. The Facts About the Physical Inspection Scoring System
5. Inspection Summary Reports
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