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HUD Releases Notice on Cooling Options for Public Housing

Future Reimbursements Unclear for the Upfront AC Utility Costs

On June 13, HUD published Notice PIH 2024-20, “Responding to Extreme Heat in Public Housing – Eligible Expenses and Individual Relief for Excess Utilities Consumption.” The new guidance is only applicable to public housing and highlights the eligible uses of capital funds and operating subsidies for air conditioning and other cooling technologies for extreme heat events. Additionally, the notice—which goes into effect immediately—outlines steps HAs may take at their own discretion to streamline individual relief request policies related to cooling.


Reiterates Eligible Uses of Capital Funds and Operating Subsidies

The notice reiterates that capital funds may be used to purchase and install permanent air conditioning and cooling, and to address building modifications for safe and secure installation. However, capital funds may not be used for the cost of installing any seasonal modifications for cooling (for example, window units); annual installation and removal costs are a maintenance activity and thus are an eligible operating subsidy expense.

Under normal circumstances, HUD does not allow utility expenses for in-unit cooling through the operating subsidy. Agencies without an individual relief policy may use the operating subsidy for common area cooling. Air conditioning is specifically excluded from the utility allowance for resident-purchased utilities. When the HA furnishes utilities, they must be able to monitor and measure consumption and residents pay for energy consumption associated with air conditioning.


Establishes Streamlined Process for Requesting Individual Relief

Prior to publication of the notice, HAs could grant individual families relief from air conditioning surcharges on “reasonable grounds,” for example, for the “special needs of elderly, ill, or disabled residents.” An individual relief policy allows the HA to either waive surcharges of excess utility charges or adjust the residents’ utility allowance to include cooling, and once the HA approves the request it then becomes a legitimate operating expense.

The notice expands the “reasonable grounds” for granting individual relief to families for cooling expenses. More details in the notice include:

  • HAs have the option to broaden who may apply for individual relief to all residents during extreme heat events.
  • HAs can define what a ‘severe heat incident’ entails and create a policy accordingly and can begin providing relief while in the process of updating ACOP and utility allowance notices.
  • Households are still required to request relief, however, HAs can streamline the process by letting residents know how the housing authority has defined severe heat and that they can apply for relief based on that definition. The notice provides examples of how an HA can simplify the request form as well.


Operating Subsidy Reimbursements Uncertain

Members should note that while the notice expands the number of families that may request individual relief, additional funding is not included to support utility consumption during life-threatening heat events. Reimbursement for utility expenses—subject to congressional appropriations—comes much later since the utility subsidy measurement period begins 18 months prior to the funding year. Housing authorities that decide to implement the flexibility should consider upfront costs as well.

In the proposed FY 25 budget, the Department is already claiming an inadequate 90% proration rate, which will likely be lower given rapidly increasing insurance and other costs. As more residents request individual relief and the potential amount of operating funds going to HAs increases, there is a possibility for even deeper proration cuts. Unless Congress actually appropriates funding to the operating subsidy for utility costs, it is unclear what the future reimbursement for utility costs that include air conditioning will be for HAs.

PHADA appreciates that, while addressing the issues of extreme heat is critical to tenant health, housing authorities need full funding to implement strategies that support the health and safety of residents. PHADA will provide members with additional analysis of the implications of the notice in the next edition of the Advocate.

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