CUOMO ANNOUNCES NEW SYSTEM TO TRANSFORM PUBLIC HOUSING

WASHINGTON - Housing and Urban Development Secretary Andrew Cuomo today announced a new public housing transformation initiative to more accurately grade the performance of America's 3,400 local public housing authorities and to inspect every public housing development in the nation for the first time.

The new state-of-the-art grading and inspection system, which is designed to improve living conditions for public housing residents and stop the waste of taxpayer dollars, will be carried out with the assistance of advanced new hand-held computers that will communicate with HUD via the Internet. The system will determine if the 14,000 public housing developments in the nation are in good condition and if HUD assistance is being used properly.

The system is called PHAS - Public Housing Assessment System - and will be based on a physical inspection, financial assessment, management review and customer (resident) survey of every public housing development in the United States.

"This is the most comprehensive evaluation system for public housing authorities since they were created by the Housing Act of 1937," Cuomo said. "We will reward housing authorities that do a good job by giving them more freedom to run their own affairs, and we will act swiftly to increase our involvement with those failing to meet our standards so we can help solve their problems."

In addition to inspecting public housing developments containing 1.2 million apartments for the first time as part of the new assessment system, HUD will also conduct its first-ever inspections of developments containing 1.5 million privately owned apartment units that receive rental assistance under the Department's project-based Section 8 program.

The physical inspections, which will begin this month and be fully implemented in the 1999 fiscal year, will cover sites of apartment developments, building exteriors, common areas, security protection, and a randomly selected statistical sample of the apartment units in each development.

About 3 million people live in the public housing developments to be inspected and about 3.6 million live in privately owned HUD-assisted apartments that will be inspected.

"These inspections are a historic departure for HUD," Cuomo said. "Until now, the Department has relied on housing authorities and private landlords to do their own inspections of housing that receives HUD funds, without uniform inspection standards. While most housing authorities and landlords do a fine job, the new inspection system will protect families from those who act improperly."

"By putting HUD in charge of these inspections and making the inspections more thorough, we'll increase the accountability of housing authorities and landlords," Cuomo said. "We'll help eliminate waste, fraud and abuse in public and assisted housing and we'll improve the quality of the housing. "

The new evaluation system will designate local public housing authorities as either high performers, standard performers, or troubled performers.

Local housing authorities that score 90 or higher on a 100-point scale based on the physical condition of their developments, their financial health, management operations and resident satisfaction will be labeled high performers. These authorities will be given more operating flexibility.

Housing authorities scoring below 60 will be judged to be troubled performers under the Public Housing Assessment System. They will get help from HUD's new Troubled Agency Recovery Center to improve their performance and meet HUD's new standards.

If a troubled housing authority fails to significantly improve its performance a year after it is referred to the Recovery Center, HUD's new Enforcement Center can ask a federal judge to create a receivership to take over management of the authority and remove its members from office. HUD can also seek civil and criminal sanctions against housing authorities and private landlords in the most serious cases.

The steps announced by Cuomo today are part of the sweeping HUD 2020 management reforms the Secretary launched last year to make the Department more effective and efficient. An evaluation of HUD 2020 by management expert David Osborne in May concluded that the management reform plan "as it is being implemented today represents one of the most ambitious, fundamental, and exciting reinvention plans in the recent history of the federal government."

Here are the key elements of the Public Housing Assessment System, which will take full effect in the 1999 fiscal year:

· PHYSICAL INSPECTIONS: HUD will send inspectors to conduct the Department's first nationwide physical inspection of all public housing developments. HUD's new Real Estate Assessment Center will use its own computer software to evaluate the data it receives over the Internet from new hand-held computers used by the inspectors. The Center will then give every housing authority a numerical performance score. Evaluations will be based on new, objective, verifiable and uniform national standards designed to determine if public housing residents receive decent, safe and sanitary housing. The Assessment Center will be staffed by experts in finance and audit, real estate, and housing management. The same physical inspections will be conducted on privately owned apartments receiving project-based Section 8 rental assistance.

· FINANCIAL ASSESSMENT: HUD will evaluate the financial condition of every public housing authority, using generally accepted accounting principles for the first time. Housing authorities will have to electronically submit standardized financial information to HUD every year. The same type of financial evaluations will be conducted of private landlords receiving project-based Section 8 subsidies.

· MANAGEMENT REVIEW: HUD will continue to measure 22 management indicators included in the Public Housing Management Assessment Program (PHMAP) that is being replaced by the more comprehensive Public Housing Assessment System. These indicators include vacancy rates, uncollected rents, completion of emergency work orders, lease enforcement and resident involvement.

· CUSTOMER SURVEY: Housing authorities will survey public housing residents about their satisfaction with the developments they live in, as part of its first comprehensive evaluation of the management of each housing authority. Residents will be asked their opinion of the quality of their apartments, resident organizations, program activities, safety and other issues.

The Public Housing Assessment System was developed with the assistance of groups and individuals representing public housing authorities and organizations, as well as public housing residents, housing advocacy groups, local governments, and other interest groups. Experts in the fields of finance, audit and physical inspection were instrumental in developing the new system.

HUD's new computerized inspection system, developed in less than a year, is based on a system developed over four years by the Department of Energy. DOE provided HUD with software and technical specifications and HUD worked with the same engineering firm hired by DOE to develop the HUD system.