Cash Management in Public Housing

PHADA Believes the “Sea Change” Under Cash Management Would Be One for the Worse

HUD is considering instituting a Cash Management (CM) system for providing public housing operating funding to housing authorities (HAs). Cash Management was initially implemented in 2012 for the Housing Choice Voucher (HCV) program for disbursing voucher funding to HAs, limiting disbursement to amounts “currently needed” for expenses. The remainder of an HA’s voucher funding is retained in a HUD-held reserve.

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Watch video of PHADA Executive Director Tim Kaiser discussing the Association’s concerns about the potential of instituting a Cash Management system for funding public housing agencies.

Who is Served by the Public Housing and Housing Choice Voucher Programs?

A Closer Look at Who Receives Housing Assistance

In light of the current budgetary environment, as well as the likelihood that funding for federal housing programs may continue to see deep cuts in the future, it is important to reflect on who is served by the public housing (PH) and Housing Choice Voucher (HCV) programs. Housing authorities (HAs) nationwide currently serve approximately 7.8 million people within 3.3 million households, many of them the United States’ most vulnerable populations, like children, the elderly and the disabled.

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Forced Consolidations Would Damage Housing Choice Voucher Program

Theory is Untested, Unproven, and Costly

Certain organizations have proposed consolidating local housing authorities (HAs) based on the assumption that there are too many HAs administering rental voucher programs and claiming this impedes low-income households’ access to neighborhoods of opportunity. They contend that having smaller agencies operate the program increases administrative costs, and makes it more difficult for HUD to oversee the program. Part of their argument is based on HUD’s flawed proposal for ZIP code-based rents that would increase per-voucher subsidy costs. In reality, these proposals would increase out-of-pocket costs for low-income households, displace many from their neighborhoods, serve fewer families, or substantially increase appropriations if Congress chooses to pay these higher costs.

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PHADA Comments on UPCS-V Demonstration

Potential Outcomes Raise Concerns, Many Unanswered Questions Remain

PHADA submitted comments to the Department of Housing and Urban Development’s (HUD) “Notice of Demonstration to Test a Proposed New Method of Assessing the Physical Conditions of VoucherAssisted Housing.” The Association’s submission included approximately 20 pages of questions and concerns for the Department related to both the demonstration and the new proposed inspection standard for the Housing Choice Voucher program (HCV), UPCS-V. Listed below are a selection of highlights from the July 2016 comment letter submitted to the Department. PHADA will continue to urge HUD to move ahead cautiously with the demonstration, and will keep members apprised of its development as it progresses.

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Congress Should Enact Major Changes in the PH & HCV Programs

HAs Can’t Adequately Serve Residents When Their Existence is Imperiled

The Public Housing program has been grossly under-funded. Deep prorations in the Operating Fund have forced HAs to reduce staff, cut services and maintenance, and resulted in an overall decline in quality of life for many low-income families. It should be noted that more than one-third of PH residents are elderly and/or disabled. The federal government should not abandon this vulnerable population.

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FY 22 Appropriations

The White House and the U.S House of Representatives released their funding proposals late for FY 22 as other legislative action, including infrastructure and reconciliation negotiations, took center stage. Their respective HUD spending plans, the best we have seen in many years, are very close overall but have some differences in key accounts. The White House budget, released in late May, provides $68.7 billion for HUD, an increase of $9 billion, or 15 percent from last year, while the House appropriations bill, released in July, provides slightly less with $68.4 billion for HUD.

NOTE: The Senate released its appropriations bill in October 2021; the budget chart in the PDF version of this Position Paper has been updated with the Senate’s budget numbers.

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Industry Groups’ Joint Statement on Universal Housing Vouchers

On June 17, CLPHA, the MTW Collaborative, NAHRO, and PHADA released a joint letter advocating the expansion of the Housing Choice Voucher (HCV) program:

Housing Choice Vouchers are a proven source of permanent housing stability. They are highly effective at providing long-term financial stability to formerly homeless populations and others experiencing housing instability. A recent HUD study found that offering families a permanent housing voucher resulted in greater housing and family stability compared to short-term interventions. Furthermore, a recent study from Columbia University found that expanding housing vouchers to all eligible households could help reduce poverty by 9.3 million people as well as reduce racial disparities in poverty.

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Funding for Public Housing Through an Infrastructure Bill

Why It Makes Sense and How It Addresses Key Priorities of the Biden Administration

Public Housing, like roads and bridges, is a long-term public asset and a critical part of the nation’s infrastructure. Addressing public housing infrastructure would also address key areas of focus laid out by the Biden Transition Team, including COVID-19, economic recovery, racial inequity, and climate change. PHADA urges the Biden Administration to invest a substantial amount of emergency capital funding immediately to address serious and long-standing disinvestment in the Public Housing Capital Fund and to bring a significant number of public housing units back into service.

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FY 21 Appropriations

The FY 21 federal budget process, which began on February 10 with the release of the White House budget, was sidelined while Congress focused instead on several supplemental funding packages to address the effects of COVID-19. The Administration’s proposed budget, while adhering to the Defense spending limits agreed to between Congress and the President in the July 2019 two-year budget deal, seeks to cut Non-Defense Discretionary (NDD) spending by nearly $45 billion. The HUD budget would be cut by $8.6 billion, or 15.2 percent, from the prior year’s budget.

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Legislative Update

Key Authorizing Legislation for Housing Programs, 116th Congress

PHADA advocates to congress for legislation that will help housing authorities (HAs) preserve and develop housing and more effectively provide services to residents. This past year, PHADA has worked closely with congressional committees and staff on legislation featured in this policy brief. As with any legislation, passage of these bills is not guaranteed and often it takes more than one session of congress to achieve desired results. Therefore, it is important to continuously advocate to your representatives and senators for outcomes that will be most beneficial to your agencies, the industry, and the communities and families you serve.

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Update: Over 100,000 Go Without Housing

PHADA’s Cost Neutral Proposal Would Help Fix this Growing Voucher Leasing Crisis

PHADA estimates that for each of the last four years well over 100,000 low-income households (4 percent) could have been otherwise housed with Housing Assistance Payment (HAP) funding already appropriated by Congress in prior years. However, underfunding of Section 8 administrative fees has, in part, contributed to lower levels of leased households and higher levels of HAP reserves than would otherwise be the case if fee prorations had been higher. The primary reason for this outcome is that it takes people to help people.

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FY 20 Appropriations

Budget Deal Does Not Guarantee Adequate Funding for HUD Programs

The House and Senate passed important legislation in July that averted sequestration and raised spending caps for non-defense discretionary (NDD) programs, including HUD, for both FY 20 and 21. The bipartisan package also raises the debt limit ceiling for the next two years, which is necessary because the government has reached its maximum borrowing authority and would have been forced to drastically cut spending had Congress not acted. Under the terms of the bipartisan agreement, Congress will be able to increase NDD spending by $27 billion compared to FY 19, but this is about $15 billion less than the House budget approved in May anticipated.

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