FY 1999 Annual Performance Plan

Increase Availability of Affordable Housing in Standard Condition to Families and Individuals, Particularly in the Nation's Poor and Disadvantaged.

Introduction

The agency remains committed to addressing the broader housing affordability needs of the Nation to help create housing and homeownership opportunities for all Americans.

HUD will continue to provide rental housing opportunities by:

• transforming Public Housing, and

• increasing the supply of affordable rental housing.

Strategies

Transforming Public Housing

Public housing represents a tremendous affordable housing resource for lower-income Americans. The majority of the 1.4 million units of public housing work successfully: they are well-managed and provide decent housing to poor families who desperately need affordable housing at an affordable price. Public housing units represent one third of all of the housing that is available nationwide to families with minimum-wage incomes.

On the other hand, the Department and the Nation is now living with decades of mistakes in public housing. In too many cases, the original site plans and architecture of the developments were flawed. Other times, buildings have outlived their useful lives. In some locations, local management contributed to the deterioration of properties, as did certain program statutes and regulations issued in Washington. In other cases, neighborhoods changed from healthy residential settings to isolated pockets of poverty and despair.

The Department has begun a comprehensive effort to fundamentally transform public housing. In this effort, the Department and its local partners are improving the quality of public housing stock and management and making these communities better, safer places to live. For example, the HOPE VI program has provided $2 billion in funding for the demolition and revitalization of 68 of the worst public housing developments. The Administration's "One Strike and You're Out" policy is based on the idea that public housing is a privilege, not a right, and residents who commit crime and peddle drugs should be screened out or immediately evicted. These efforts contribute to the Department's efforts to increase access to healthy, affordable housing and will continue.

Increasing the supply of affordable rental housing

A fundamental role of the Department is to ensure that Americans of all income levels have access to decent quality housing at a cost that does not drive out spending for food, clothing, and other necessities. This has been a difficult role given budget constraints. Over 5 million very low income renter households pay more than half their income for rent or live in severely substandard housing. A centerpiece of HUD's affordable housing agenda is a proposal to provide 100,000 new incremental rental vouchers. Unlike previous years, however, HUD is proposing to martial new housing resources for specific strategic purposes: 50,000 for helping welfare recipients make the transition to work; 34,000 for homeless persons and families who are ready and able to make a transition into permanent housing in the private rental market; and 19,000 for the elderly, family unification and other targeted purposes.

HUD's programs also concentrate on: creating a supply of housing that is affordable to renters and homeowners whose incomes are low but who do not have extremely low or poverty level incomes; and maintaining the public and assisted housing programs that currently serve over 4 million needy households, most of whom would have worst case needs if they were not receiving assistance.

HUD will construct or rehabilitate more than 400,000 units per year through its programs. Continued Federal funding for public housing and renewal of expiring subsidies under the Section 8 programs will ensure that the overall number of families assisted by these programs does not decline and that they provide decent and affordable housing.

Linkage to HUD 2020: Management Reform Plan

PIH faces many challenges as it continues to transform public housing across America. In order to successfully meet these challenges, PIH will align is staff resources to address the greatest needs. It will establish centers that house "back office' activities, freeing Field Office staff to target their energies on monitoring and providing services to 3,400 Housing Authorities and the 1.4 million families they house.

PIH will: (1) establish its own Grants Center; (2) establish, in coordination with Housing, a Department-wide Section 8 Financial Processing Center; (3) participate in the Department-wide Real Estate Assessment Center; establish Troubled Agency Recovery Centers to work with troubled Housing Authorities; and (4) undertake other privatization and streamlining efforts to encourage greater productivity and accountability with local PIH partners and customers.

With new, more effective approaches to assessing PHAs, HUD will be in a position to move quickly to identify "troubled" PHAs. Because of the complexity and sensitivity experienced by the Department in past work with troubled agencies, we need to make greater efforts to turn around troubled PHAs and prevent them from reaching that stage. This will require more staff attention, which is difficult to allocate given the competing priorities for administering a multitude of programs with limited staff resources.

Programmatically, HUD will revise PHMAP to include better assessment and propose receivers for troubled management and privatize the HOME VI construction management and development process as appropriate. Authorizing legislation for these, and other reforms, has been proposed. For a more detailed discussion, please see page 66 of the Management Reform Plan.

External Factors

As with other objectives, HUD's ability to provide affordable housing to the needy is greatly constrained by the broader economy. The number of housing units that HUD directly affects is a small percentage of the Nation's housing stock and a rather small percentage even of the stock available to those with low incomes. Increases in unemployment, increases in the cost of developing housing, and changes in people's abilities to rehabilitate housing all are major factors affecting housing affordability over which HUD has little control. Within the assisted stock itself, external factors affect HUD's ability to provide affordable housing. When tenant-paid rents are established as percent of income, declining incomes necessitate greater subsidies. This means that fewer families can be assisted with the same amount of funds. These factors make HUD's efforts in this area highly dependent on the unemployment rate, particularly among the working poor, and the numbers of people who lose income as a result of welfare reform.

Annual Performance Goals

Increasing availability of affordable housing requires a two-pronged approach. Not only does HUD need to increase the supply, but also to transform public housing. To increase the supply, we must endorse more multifamily loans and risk-sharing mortgages. HUD must partner with communities to shorten the length of time between approval for demolition of uninhabitable units and completion of construction of new units.

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