On Monday November 4, HUD posted a proposed rule revising PHAS, the Public Housing Assessment System. PHADA had previously provided formal comment and recommendations in 2022.
On November 7, HUD sent the following email message (below) to housing authorities announcing the proposed rule and seeking feedback. The next Advocate will include analysis of the proposed rule, and PHADA seeks feedback from members to inform the association’s comments.
Comments on the proposed rule are due January 3, 2025.
November 7, 2024
Executive Director,
On November 4, HUD published a proposed rule in the Federal Register to revise the Public Housing Assessment System (PHAS), which assesses how PHAs manage their Public Housing program. These revisions would simplify and more accurately assess PHA performance. The process would be more flexible, as PHAs would be able to request delays in assessment for good cause, and the revisions would permit HUD to be more responsive to problems as they arise. HUD encourages all PHAs who administer Public Housing to review the rule and consider commenting before January 3, 2025.
This rule supports HUD’s goal of improving oversight of troubled agencies. Since PHAS has not been revised in 13 years, HUD conducted a cross-country series of listening sessions with PHAs and other stakeholders to solicit input to improve the system. PHAs asked HUD to build on the existing strength of PHAS (e.g., continue using available data), to eliminate redundancies and unnecessary complications (e.g., eliminate duplicative financial assessment indicators), and to better target the support HUD provides to PHAs with performance issues.
This proposed rule reflects that PHA input. PHAS continues to assess PHAs on four indicators (Physical Condition, Financial Condition, Management Operations, and Capital Fund Program), while making targeted improvements to the weighting or evaluation of each. Here are several of the most significant proposed changes to how PHAS scores would be calculated:
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Financial Condition: The Months of Operating Reserve metric used in Shortfall Funding eligibility is integrated into PHAS, so that PHAs can use one formula in tracking performance and eligibility. A new expense management metric awards points to PHAs that maintain efficient operations.
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Management Operations: Occupancy is measured by only one standard. Two new metrics give PHAs further incentives to complete income reexaminations timely and to avoid audit findings related to program compliance requirements.
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Capital Fund: The measurement of timely obligation of Capital Funds becomes pass/fail rather than awarding points for compliance. The points associated with the Capital Fund measurement are reassigned to the financial and management-related metrics.
Beyond making focused improvements to how PHAS scores are calculated, the PHAS rule proposes several other changes:
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PHAs may request a delay in assessment for good cause. HUD is asking for public comment on what should constitute good cause for such a request.
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HUD may make earlier interventions and require corrective action as soon as a problem is identified through an indicator score or in light of negative performance trends, rather than waiting until a PHA is identified as a substandard or troubled performer.
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Moving to Work (MTW) PHAs operating under the MTW Operations Notice will begin to be evaluated under PHAS, with scoring variations to account for MTW flexibilities.
As in previous years, HUD will issue a separate scoring notice to provide the detailed methodology for how scores will be calculated. The proposed rule seeks public comment on what formulas are appropriate for these indicators and subindicators.
Comments on the proposed rule are due January 3, 2025, and I am asking for your input. Comments may be submitted electronically through www.regulations.gov. HUD needs the insight of PHAs to produce a fair and accurate assessment system and to ensure that HUD is giving PHAs the right incentives to maintain and operate safe and affordable homes.