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Public Housing Capital Fund
PUBLIC AND INDIAN HOUSING PUBLIC HOUSING CAPITAL FUND PROGRAM HIGHLIGHTS
NA = Not Applicable a/ Reflect outlays from balances transferred into this account, including Public Housing/Section 8 debt service. Excludes outlays for Native Americans. Those balances were transferred to the "Indian Housing Block Grants program." SUMMARY OF BUDGET ESTIMATES
EXPLANATION OF INCREASES AND DECREASES The fiscal year 2000 Budget request of $2.555 billion represents a decrease of $445 million from the 1999 appropriations. Additional funds above the Department's fiscal year 1999 request were provided by the Congress to help reduce the backlog of unmet modernization needs. The Department's fiscal year 2000 Budget requests only the amount necessary to address the accrual of capital needs, pending: (1) the development of the capital fund formula through negotiated rulemaking, and (2) the completion of a study of backlog capital improvement requirements. The development of a formula provides an opportunity for the Department to analyze PHAs usage of capital improvement funds. The aforementioned study, expected to be completed early in calendar year 1999 will provide the Department with a better understanding of the relationship between the demolition of high cost units and the size of the backlog. As noted below, the Quality Housing and Work Responsibility Act of 1998 provides increased flexibility for PHAs to use operating funds for capital improvement activities or vice versa. PROGRAM DESCRIPTION AND ACTIVITY A comprehensive formula-driven program based on need, the Capital Fund is designed to respond to the capital and management improvement requirements of public housing. In conjunction with local officials and residents, the Capital Fund provides PHAs with maximum flexibility in determining the most appropriate strategies for meeting local low-income housing needs. It is a consolidation of the following programs: public housing modernization; public housing development; Major Reconstruction of Obsolete Public Housing (MROP) Projects; and public housing amendments. Modeled after the Comprehensive Grant Program (CGP), the Capital Fund shifts decisions on funding capital needs to the local level and allows PHAs to make funding decisions based on the needs of their housing inventories. The grant to the PHA can be used for several purposes: (1) development, financing and modernization of public housing projects; (2) vacancy reduction; (3) deferred maintenance; (4) planned code compliance; (5) management improvements; (6) demolition and replacement; (7) resident relocation; (8) resident empowerment assistance and self-sufficiency; (9) security and safety, and (10) home ownership. Through new development and focused demolition, lower-density, mixed-income housing will be promoted. The development of a locally developed 5-year and annual plan, and improved accountability requirements, including an annual inspection conducted by the Department, are expected to ensure that capital improvement funds will be utilized in a timely and focused manner. Providing a steady stream of funding through a formula-driven system will allow PHAs to develop realistic plans for their long-term capital needs in a systematic and cost-effective manner. PHAs will be able to leverage funds with other public and private partnership entities to meet their affordable housing goals. Capital Improvements. Through the Capital Fund, funds will be provided for both capital improvements, i.e., developing, rehabilitating and demolishing units, replacement housing, as well as for management improvements. Distribution by formula accelerates the allocation and use of capital improvement funds by replacing the former complicated, time-consuming, staff intensive competitive application process for small PHAs (fewer than 250 units). Up to 20 percent of the allocated funds may be used for eligible operating fund activities. Non-troubled PHAs with less than 250 units have full flexibility among the eligible Capital Fund and Operating Fund uses regardless of which of the two Funds the appropriations originate. Reserve for Disasters and Emergencies. Up to 2 percent of the total amount made available for both the Operating Fund and the Capital Fund may be used for emergencies and other disasters, and for housing needs resulting from the settlement of litigation. Technical Assistance and Intervention Funds. The fiscal year 2000 Budget request includes up to $100 million for technical assistance, intervention and management improvement support, and annual physical evaluations of assisted properties in support of Management 2020. Consistent with the amount made available for fiscal year 1999, the level of technical assistance funding requested is considered the minimum amount necessary to support the full range of inspection and supportive activities that will maintain the continued viability of the housing stock. The technical assistance funding includes up to $2.5 million for related travel to support and expedite the delivery of the technical assistance, physical inspections and intervention measures. Full operation of the national Real Estate Assessment Center (REAC) and the Troubled Agency Recovery Centers (TARCs), as well as the monitoring/inspection contractual services administered by the REAC, requires a substantial level of funding support for unit inspections, and recovery efforts for small and medium PHAs. The following activities are expected to be undertaken by the REAC: physical inspection of assisted housing developments; technical assistance and training of PHAs and other industry groups related to financial data submission to REAC and conversion of Generally Accepted Accounting Principles (GAAP) based standardized reporting; and customer survey and other management assessments. On-site inspections will be conducted of all properties assisted by the Department. Such independent physical inspections are expected to provide the Department with information to identify any potential structural or management problems that would require action by PHAs in conjunction with the Department. Inspections are a critical component of the Department's evaluation and monitoring of PHA and owner performance, as well as ensuring that both assisted households and taxpayers are getting high quality, affordable housing in the most cost effective manner. Funds are also required to support efforts to assist PHAs that are designated as troubled, or in breach of the Annual Contributions Contract/Memorandum of Agreement demonstrating substantial default as defined under 24 CFR 901.05. As part of the Department's Management 2020 reform effort, a new grading and inspection system, called the Public Housing Assessment System (PHAS), will be implemented in fiscal year 1999 and administered by the national REAC. The PHAS will be based on the aforementioned physical inspections of the facilities, as well as a financial assessment, management review and customer (resident) survey of every public housing development in the United States. The new evaluation system will designate local PHAs as either high, standard, or troubled performers. Local PHAs that score 90 or higher on a 100-point scale will be labeled high performers and given more operating flexibility. PHAs scoring below 60 or not meeting thresholds for physical condition, financial, and management reasons will be judged to be troubled performers and will get technical assistance from the TARCs to improve their performance and meet HUD's revised standards. One of the Department's top priorities is implementing preventive measures, notably through additional technical assistance for near-troubled PHAs, to reduce the incidence of agencies being designated as troubled. The TARC will develop and implement an intervention strategy or technical assistance option to improve the PHA's performance to a passing level. This is consistent with Congress' and the Department's emphasis that troubled PHAs must bring their operations up to standard. The extremely short time-frame allowed under proposed regulations and legislation for PHAs to improve, together with the substantial task of assessing PHA performance, requires an intensive, aggressive recovery effort. Such a strategy may include:
Funds are also proposed for contract expertise, training and technical assistance to support the oversight and management of public housing or tenant-based assistance, as authorized by Section 9(e) of the United States Housing Act of 1937, as amended. Among the activities included are the following: inspections and technical assistance for capital programs; resident surveys; data collection and analysis; training and technical assistance for HUD employees, and PHA employees and residents. Finally, a limited amount of technical assistance funds will also be used for lease adjustments to Section 23 projects. FISCAL YEAR 2000 PERFORMANCE MEASURES
Goals: ![]() 2. Indicator: Approve 100,000 units for demolition by fiscal year 2000.
3. Indicator: Demolish 95,000 units by fiscal year 2003.
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Content Archived: January 20, 2009 | |
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