HomeMy WebLinkAboutMINUTES - 10142008 - C.2 HA HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
TO: BOARD OF COMMISSIONERS
FROM: Joseph Villarreal, Executive Director
DATE: October 14, 2008
SUBJECT: ARTICLES CONCERNING AFFORDABLE HOUSING ISSUES
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
I. RECOMMENDED ACTION:
ACCEPT attached articles regarding affordable housing issues for the Board's information.
II. FINANCIAL IMPACT:
This is for informational purposes only and has no fiscal impact.
III. REASONS FOR RECOMMENDATION/BACKGROUND
For the Board's information only.
IV. CONSEQUENCES OF NEGATIVE ACTION:
None.
CONTINUED ON ATTACHMENT: YES SIGNATURE 'G�
Joseph Villarreal,Executive Director
RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S):
A2M-
ACTION OF BOARD ON � ��% Z�d�rPRO D AS RECOMME DED C O R
VOTE OF COMMISSIONERS
� I HEREBY CERTIFY THAT THIS IS A
�CUNANIMOUS (ABSENT TRUE AND CORRECT COPY OF AN
AYES: NOES: ACTION TAKEN AND ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE BOARD OF
COMMISSIONERS ON THE DATE SHOWN.
ATTESTED
JOSEPH VILLARREAL, CLERK OF
THE BOARD OF COMMISSIONERS
AND EXECUTIVE DIRECTOR
.a
BY EPUTY
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PRESERVING SAFE, HIGH QUALITY PUBLIC HOUSING
SHOULD BE A PRIORITY OF FEDERAL HOUSING POLICY
By Barbara Sard and Will Fischer'
This report, based on significant new research, examines the state ofpublic housing in the United States today and
discusses federal policy changes that have greatly improved public housing over the past decade, as well as the
deteriorating funding situation that is undermining this progress. It then outlines several policy recommendations that
could further strengthen public housing and preserve most developments for the future.
Executive Summary
� TABLE OF CONTENTS
r
Located in more than 3,500 communities j I. Public Housing N9:eets Critical Needs............... 3
across the country,public housing is a vital I
national resource that assists 2.3 million i II. Public 11a3u5n f Las Inirr l*ed I.)rarnaticatlr
! in Past 1.5'1'ears.................................................... 6
vulnerable Americans. Nearly two-thirds of all
public housing households include an elderly III. Recent Shores s....Uncia:rn..irze
.Recent itro;Y,i'ess.................................................. 10 �
person or an individual with a disability;
without housing assistance,many could be IV. :EZc1.71,,c;irrc�l'k�l,l.ic, 111 ,ir tiu rh'Fenarat'-Based
forced to move to an institution. As the U.S. C%<n ckiers is Often t nwlse............... 14 I
population continues to age in coming years, V. -0 1:'rese.rve'Incl.
affordable housing that is suitable for seniors to I1C,lace public Ilot,si. ...............................21
will become even more important. In Conclusion and I3ndnote..................................29
addition,public housing provides crucial State Appendix:
stability for more than 400,000 low-income httl,;/�1,�,��,.c;t,l l,,c,t�/x),_18-08hous statCapp.t)di-
families with children,the majority of them Technical Appendix:
working families. ltt:t L «��!t %1.1 g.r)Shnus a.t�_xlf 1
The public housing stock—and the people who live in it—have changed in significant ways
over the past decade. For example:
• Center research finds that most of the projects that generated negative stereotypes of
public housing in the past have been transformed or demolished. Since 1995,about
200,000 public housing units,including the great majority of large"high rises," have been torn
down. Today, only 48,000 units are in family projects with more than 500 units (this figure
omits New York City,where high-rise housing makes up an unusually large share of the
housing stock occupied by families at all income levels).
• Center research also finds that a much smaller share of public housing units are located in
very poor neighborhoods and a larger share of families living in public housing are
working. Over the last decade,the share of family units in neighborhoods where at least two
in every five residents are poor has fallen by 40 percent. In fact, only 86,000 general-occupancy
units—less than 11 percent of all public housing in the nation outside New York City—are in large
projects in high-poverty neighborhoods. Similarly, since 1997 the share of public housing
families with children that rely on welfare as their primary source of income has declined from
35 percent to 19 percent,and a larger share of families are working.
• The vast majority of public housing developments are now in good physical condition.
Ninety percent of developments meet or exceed housing quality standards,although most
developments are more than 30 years old,and many will need rehabilitation to continue to
provide decent quality homes.
Sound changes in federal,policy contributed to all of these gains. But in the past several years the
federal government has failed to provide the state and local housing agencies that own and operate
public housing with sufficient funds to maintain the units and make needed capital improvements.
The federal government has significantly underfunded agencies' operating subsidies for six
consecutive years. In addition, agencies'annual funding for capital expenses such as renovation and
replacing aging appliances and systems is too low to meet the new needs that accumulate each year,
let alone address the estimated$22 billion backlog they face in unmet needs. (Some units may
require replacement rather than renovation. If 100,000 of the nearly 1.2 million units are
demolished and replaced, the cost of bringing public housing up-to-date would be about$32
billion.)
These large and persistent funding shortfalls threaten to undermine public housing's recent
progress and also have contributed to the loss of thousands of public housing units, forced harmful
cuts in security and other services, and delayed needed repairs.
Some policymakers and housing experts favor replacing public housing with vouchers that
families would use to help pay the cost of renting housing in the private market. The voucher
program is a highly successful form of housing assistance,and vouchers can expand the housing
choices available to needy families. But indiscriminately driving housing agencies to replace public
housing units with vouchers would be unwise, for several reasons.
• Public housing serves certain demographic groups better than vouchers can. As noted,
most households in public housing include an elderly person or an individual with a disability,
two groups that often have difficulty finding units to rent with vouchers. Many public housing
developments,in contrast,are configured to accommodate residents'mobility impairments and
other needs.
• Public housing serves certain geographic areas better than vouchers can, such as those
where the stock of moderately,priced rental housing is limited. Nearly a third of family units
are in lower poverty areas where vouchers may be difficult to use and construction of new
affordable housing would likely face local hurdles.
• Shifting to vouchers could actually cost the federal government mote than providing
sustainable funding to maintain public housing developments. This is because the federal
2
government and local agencies have already made large investments in many of these
developments. We estimate that on average rehabilitating currently available public housing
units and funding their,continuing operation for 30 years would cost eight percent less than
replacing the units with vouchers. Federal costs would almost certainly be even greater,because
agencies would be most likely to shift to vouchers in cases where the voucher subsidies they
would receive are relatively large.
Accordingly, the federal government should adopt a comprehensive plan for public housing that
includes four elements:
1. The federal government should reverse its recent policy of underfunding public housing's
operating costs and provide housing agencies with the full amount of funding they
need for adequate upkeep and operation of developments.
2. The federal government should provide added resources to rehabilitate developments
and establish a new process to allocate those resources efficiently. Direct grants
should play a key role in modernizing public housing,but the federal government should
also create new tools to help agencies leverage loans and other private investment.
3. Housing agencies should be permitted to replace certain developments with
"project-based"vouchers,which make specific units in privately or publicly owned
housing developments affordable to low-income families. This strategy should be targeted
at family developments in areas with high poverty rates and other problems and those with
unusually high capital needs. Replacing public housing funding with vouchers could make it
easier for agencies to borrow the capital funds needed for repairs and to reduce the
concentration of poor families.
4. While most of the large family developments in low-opportunity neighborhoods have been
eliminated, some remain. Housing agencies should be required to transform large,
low-opportunity developments into mixed-income developments or to provide
vouchers enabling',residents to move to better housing. (Mixed income developments
would include residents who do not receive housing assistance.)
I. Public Housing Meets'Critical Needs
The nation's nearly 1.2 million units of public housing represent a vital national resource. The
14,000 public housing developments,located in more than 3,500 communities throughout the
United States (and its territories),provide affordable homes to 2.3 million Americans,including
some of our most vulnerable seniors,people with disabilities,and families with children.' (The
Appendix provides data on the public housing units and residents in each state.)
3
Basic Facts About Public Housing
• Who owns and administers public housing? Public housing units are owned and typicall y
managed by more than 3,100 housing agencies. Most of these are semi-independent housing
authorities,but some are agencies of local or state governments. Most agencies are sm all:half own
fewer than 100 public housing units;88 percent own 500 or fewer units. The Department of
Housing and Urban Development(HUD) oversees public housing at the federal level.
• Is public housing the,same as"Section 8"? Public housing is a separate program from the
Section 8 housing voucher program (which helps tenants rent units of their choice in the private
market),although 47 percent of the agencies that admin sten public housing also run voucher
programs. Public housing is also distinct from"project-based"Section 8 and other federal programs
that directly subsidize private affordable housing owners.
• How many public housing units are there? There are 1.16 million units,located in close to
14,000 developments iri every state and several territories. About 1.04 million units are currently
occupied. The remainder are undergoing renovation or are vacant for other reasons.
• When was public housing created? The public housing program began in 1937. Nearly all of
today's developments had been built before 1985. No funds have been provided to build new public
housing since the mid-1990s (except to replace other public housing that was demolished or
otherwise removed from the program).
• Who is eligible to live in public housing? A family must be"low-income"—meaning that its
income may not exceed 80 percent of the local median income—in order to move into public
housing. At least 40 percent of the new families an agency admits each year must be"extremely low-
income,"with incomes'at or below 30 percent of the local median. But on average agencies exceed
this 40 percent requir ement by a wide margin.
• How much rent do tenants pay?Most tenants are required to pay 30 percent of their income (after
certain deductions are taken out) for rent and utilities. Housing agencies can give tenants the option
of paying"flat.rents,"which are capped based on local market rents even if 30 percent of the tenant's
income would be higher.
• How is public housing funded?The federal government provides three funding streams for public
housing: (1) the Public Housing Operating Fund,which makes up the difference between the rent
revenues tenants pay and operating expenses such as utilities,security, and maintenance;(2) the
Public Housing Capital;Fund,which funds renovation of developments and replacement of
appliances and systems;and(3) HOPE VI,a competitive grant program that supports revitalization
of the most distressed developments. In 2008,Congress provided$6.7 billion from these three
sources. In addition, some agencies receive supplemental resources from states or localities or from
other federal funding streams like the Low-Income Housing Tax Credit.
For example, 350,000 seniors live in public housing,and nearly two-thirds (64 percent) of all
public housing households include an elderly person or an individual with a disability.3 Some 41
percent of public housing households have minor children!
Most public housing residents are extremely poor;the typical (or median) household in public
housing had annual income;of just$8,788 in 2006. Families with children,which are usually larger
and more likely to have earned income, had only slightly higher incomes,with a median of$9,216.
4
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Some 73 percent of the households living in public housing have incomes of 30 percent or less of
the area median income for their household size.' These families—and most other public housing
residents—cannot afford private market rents without diverting resources away from other
necessities.
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Growing Unmet Need for Affordable Housing
Because of funding limitations, federal housing assistance programs serve only one out of four
low-income families eligible',for assistance.' More than 12 million low-income households receive
no federal housing assistance and face housing problems that public housing(or other housing
assistance)would alleviate.'
Even before the current foreclosure crisis,which has caused a substantial number of renters as
well as homeowners to lose,,their homes, the number of households experiencing housing problems
was increasing. From 2000 Ito 2006, the number of low-income renter households whose housing
costs exceed 50 percent of their income (a group HUD categorizes as having"severe housing cost
burdens") increased by 2 million,or 34 percent.'
Given the aging of the population, affordable housing that is suitable for seniors is particularly
needed. The United States will need more than 700,000 additional rent-assisted units by 2020 just to
bring unmet housing needs'among seniors back down to their 1999 level,according to one
estimate.' Moreover,many elderly people are physically frail or have disabilities. Unless the number
of housing units accessible to people with disabilities grows substantially,increased elderly demand
5
will compete with the needs,of non-elderly people with disabilities,including veterans of recent
wars. If the nation fails to preserve existing public housing units, these shortages will grow larger.
II. Public Housing Has Improved Dramatically in Past 15 Years
Many people think of public housing as high-rise warehouses of poor families or bleak expanses
of barracks-style low-rises,where no one with any options would choose to live. In fact,most
public housing never conformed to this stereotype. For decades,public housing has provided
decent, affordable homes to'many low-income families with children, seniors, and people with
disabilities.
To be sure,hundreds of thousands of public housing units had become dilapidated by the early
1990s,and the prevalence of violence and isolation from commercial activities made living
conditions problematic in many projects. Since then,however, the public housing stock—and the
people who live in it—have changed in significant ways:
• A decade ago, 43 percent of family units (that is,units not located in buildings set aside for the
elderly or people with disabilities) were located in what are commonly referred to as "extreme
poverty"neighborhood's,where at least two in every five residents are poor. Today, the
percentage of family units located in such neighborhoods has fallen to 26 percent.10
• Most of the biggest developments,including the great majority of large high rises,have been
demolished. Outside New York City, only 48,000 units today are in family projects that have
more than 500 units. (In New York City,high-rise housing makes up an unusually large share
of the housing stock occupied by families at all income levels.")
• More than 85 percent of public housing units meet or exceed HUD's physical condition
standards 12 and at least 40 percent of developments are considered physically excellent.13
Comparable data are not available from the 1990s,but since 1995,about 200,000 public
housing units—most of them severely deteriorated or obsolete—have been demolished.14
• Only 19 percent of public housing households with children rely on welfare as their primary
source of income. By comparison,in 1997 welfare was the main source of income for 35
percent of families with children in public housing."
6
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located.in extreme poverty, _ projectswith more than 5.00 children in public housing
neighborhoods* units relying on welfare as their
primAry source of income
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Rut,and:a��4 na!8 49
Improvements Partly Reflect Federal Policy Changes
In some cases, these changes reflect larger social trends. For example, one reason that fewer
developments are located inareaswith extreme poverty is that the number of extreme-poverty
neighborhoods has fallen.” Similarly,rates of welfare receipt have fallen not only among public
housing residents but among low-income families generally. But the above improvements also
resulted from major policy decisions that have dismantled many of the developments that fueled the
worst stereotypes of public housing and have improved the developments that remained.
Demolishing Badly Deteriorated Units
Beginning in 1995, Congress allowed housing agencies to demolish public housing without
replacing the units on a one-for-one basis with new public housing." Congress had previously
required full replacement to prevent the loss of badly needed affordable units,but the lack of funds
to construct new units effectively prevented demolition even of very deteriorated developments.
In 1996, Congress required agencies to identify large "distressed"projects with high vacancy rates
that they could not preserve cost effectively and to demolish them within five to ten years.18 The
Clinton Administration then announced a goal of approving the demolition and replacement of
7
100,000 distressed or obsolete units by 2000,hired consultants to assess developments that were
candidates for demolition, and worked with Congress to streamline HUD's procedures for reviewing
demolition requests.19 Some of the agencies with the largest number of severely distressed units
received additional flexibility to revamp public housing through a deregulation initiative called the
Moving to Work (MTW) Demonstration.20
Most of the funding to accomplish these goals came from the annual appropriations for the
HOPE VI program,which Congress initiated in 1993. HOPE VI gave local agencies funds to
demolish distressed or obsolete public housing and replace it with mixed-income communities,
usually created with the collaboration of private for-profit or non-profit developers. Through 2008,
Congress has provided$6.7'billion for HOPE VI.
HOPE VI has funded the demolition of about 155,000
units,or about 75 percent of all units removed from the
public housing program,and HOPE VI grantees have built t y
or plan to build 50,000 replacement public housing units �� anillian . #units
and 48,000 non-public housing units.21 The mixed-income
communities and public-private partnerships that the
program has created are an important part of the dramatic U11:-- 133 mill 6n -
changes in public housing over the last 15 years. Through ,1 1 ib nt�llton I
...
HOPE VI as well as other initiatives,public housing agencyiu
staff got back into the business of developing (rather than c ya j
just managing) housing and;gained expertise in working 9
with the complex tools of affordable housing finance. j[(
While HOPE VI has improved the quality of the public
housing stock and strengthened the capacity of local "mak t {i1i€ int
housing agencies,it also reduced the number of housing '12,
XItMi�r
units affordable to poor families and permanently displaced
many residents of the demolished projects. The House of 3995 '2008 `
Representatives passed legislation in January 2008 that j � � .AMA,, '€ P ,, ly04
would remedy many of HOPE VI's weaknesses,but no
d5 '42if)(1 �$ 1CGr?s tti oibl4� I oC 6(1 u)s14 r e fe
final legislation is expected to be enacted during the 110 r1�s=Ao wer HOPEV3 flhm,kgg', 2007.
22
Congress.
He ping Agencies Meet Their Capital Needs
Recognizing that public housing's capital needs (i.e.,needs for repair and renovation beyond
ordinary maintenance)wer&more substantial than annual appropriations were likely to meet,
Congress gave agencies a number of new tools to meet the capital backlog as part of the 1998
Quality Housing and Work Responsibility Act (QHWRA).
First,QHWRA permitted agencies to borrow against a portion of their future capital fund grants
to help meet their capital needs. Some of the largest agencies, such as those in Chicago,Puerto
Rico,New York City, and the District of Columbia,have used this flexibility. The expertise required
and high transaction costs involved make it more difficult for smaller agencies to use this type of
debt financing, but some have done so by joining together in borrowing"pools,"in some cases with
the help of the state housing finance agency. Money borrowed must be repaid with interest, and due
8
to limitations imposed by lenders or HUD, agencies typically cannot raise more than they can repay
using one-third of their estimated future capital fund allocations. Nonetheless, agencies have raised
significant sums this way, enabling them to improve tens of thousands of units. For example,
Chicago raised almost$300 million to renovate its elderly and scattered-site public housing.
In addition, QHWRA permitted agencies to set up non-profit and for-profit operating entities and
enter into partnerships with",these subsidiaries or other businesses. Such"mixed-finance"
transactions allow agencies to use federal Low-Income Housing Tax Credits and similar state tax
credits that help fund affordable housing development or rehabilitation but require the participation
of a private party. This approach has certain limitations: agencies must usually compete for the
limited amount of credits available, the transaction costs are high, and agreements must be carefully
structured to ensure that providing an ownership interest to private parties does not jeopardize the
developments'long-term affordability. Nonetheless, the flexibility to participate in mixed-finance
partnerships can give agencies access to an important source of added funds.
i
QHWRA also authorized HUD to allow agencies to borrow against the value of their
developments by mortgaging public housing buildings like other real property. HUD, however, has
not yet implemented this section of the law.
Improving Management of Public Housing Agencie
Federal policy changes also sought to improve the management of public housing agencies. While
the management assessment,tools HUD has imposed have been somewhat problematic, they—
together with HUD's concentrated attention on the most troubled agencies—have largely achieved
this goal. Rather than ignore local management issues,as it largely had done previously,HUD has
conducted active oversight since the early 1990s and has turned around most of the worst-managed
agencies. Fewer than 6 percent of public housing units are owned and managed by"troubled"
agencies today, compared with 16 percent in 1996.24
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Condition cif public housing Drop.in units managed by troubled agencies
i developments in SOW
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Some of this progress occurred because HUD enlisted local governments as responsible partners,
reversing the federal government's historical preference for quasi-governmental housing authorities
(which were perceived to beless subject to patronage) to administer public housing. Experience has
shown that public housing agencies'legal structure was often counter-productive,isolating them
from local and state housing and human services planning, service delivery,and funding. As a result,
a number of previously troubled independent agencies—including the housing authorities in
Chicago and San Francisco—have become part of city governments,with the mayors taking
responsibility for and leading the transformation of the public housing stock.
HUD currently is implementing a significant change in operations that could bring further
improvements in public housing management. HUD is requiring agencies to implement an "asset
management"approach,in which an agency assigns costs separately to each development(in some
cases, to groups of developments). Previously,agencies typically lumped together costs from all
their developments in a single, agency-wide budget. Particularly for large agencies, analyzing costs at
the development level should make it easier to identify and address inefficiencies.
III. Funding Shortfalls Undermine Recent Progress
As a result of these recent improvements,most of the developments that drove the worst
stereotypes of public housing no longer exist or have been transformed. Many public housing
developments today provide decent housing in low-poverty neighborhoods or affordable homes for
low-income elderly people or people with disabilities who would otherwise be forced to move to
institutional settings or leave their home neighborhoods.
Nonetheless, there is a high risk that financial pressures will force housing agencies to demolish or
sell many viable public housing units in the coming years. This risk stems largely from the federal
government's failure to provide sufficient funding to cover the costs of operating and maintaining
public housing.
Federal Government Has Deeply Underfunded Public Housing in Recent Years
Federal law requires housing agencies to rent public housing to low-income families at rents the
families can afford. (Generally,rents are set at 30 percent of family income.) Those rents are often
inadequate to cover public housing developments'operating costs (such as maintenance, security,
and utilities),let alone the periodic capital investments required to keep the projects in livable
condition. Consequently, the federal government provides subsidies through the Public Housing
Operating Fund to cover the difference between rents and operating expenses,as well as subsidies
through the Public Housing Capital Fund to address capital needs.
Operating Subsidies Falllncreasin�Short of Need
c
A federal formula determines the amount of operating subsidy each agency is eligible to receive.
In some years,however, Congress has failed to provide sufficient funding to cover these amounts,
so each agency has received a"prorated"percentage of its full subsidy instead. Prior to 2003, such
prorations were intermittent and generally shallow: Congress prorated funding in ten of the 22 years
from 1981 to 2002,but the prorations never lasted more than four consecutive years and agencies
received an average of 98 cents for every dollar they were due.
10
Beginning in 2003, however, the federal government has underfunded agencies'operating
subsidies for six consecutive years. The Administration's fiscal year 2009 budget request and the
2009 appropriations bills approved by the Senate Appropriations Committee and a House
appropriations subcommittee all contain 2009 funding levels that would result in a seventh
consecutive year of shortfalls. Moreover, the resulting prorations have grown deeper, falling below
90 percent of need each year since 2005.25
The shortfalls in the last two years are particularly striking because in 2007,HUD put in place a
new formula to determine the amount of operating funding for which agencies are eligible. This
formula was the culmination of a multi-year,congressionally mandated effort to estimate more
accurately the amount needed to bridge the gap between rental revenues and operating expenses at
each individual development. Yet despite that effort,in 2007 the Administration requested a
funding level far below the amount the formula required. Congress provided an additional$300
million above the Administration's request,but this nonetheless resulted in only enough funds to
cover 83 percent of the subsidies for which agencies qualified under the new formula. For 2008
Congress again increased funding for operating subsidies above the Administration request,but
agencies will still receive only 89 percent of the funding due under the formula.
Large Backlog of Capital Needy Has Been Left Unaddressed
Funding for the other major public housing funding stream, the Public Housing Capital Fund,
has also fallen well short of need in recent years. As noted,more than 85 percent of public housing
units meet or exceed HUD's physical condition standards,and at least 40 percent of developments
are considered physically excellent. Nonetheless,public housing developments—most of which
are more than 30 years old" —have large underlying capital needs. Using findings from the most
recent national assessment of public housing(which used 1998 data) and projections of trends since
that study,we estimate that there are approximately$22 billion in unmet capital needs in public
housing developments.27
Moreover, the $22 billion figure is limited to the cost of repairing or replacing existing building
features (such as roofs and heating and cooling systems) with only modest upgrades. For various
reasons, some public housing developments may require more extensive changes,including major
reconfigurations of floor plans. For example, as the nation's population ages, some communities
may determine that they need fewer public housing units large enough to house families and more
small units designed to house seniors. Other developments may need substantial redesign to
increase safety and enhance interaction with the rest of the community, such as through changes in
building and unit entrances. In addition, some developments are likely in such deteriorated
condition—or so poorly designed or located—that replacement will be more appropriate than
renovating the current structure. Replacement and major reconfiguration would further increase
capital needs. For example,if 100,000 units were replaced rather than renovated,capital needs
would rise from$22 billion to $32 billion.
In 2008, Congress provided$2.4 billion for the Capital Fund. This amount,which is more than
32 percent below the 2001 level in inflation-adjusted terms,is too low to cover the new capital needs
estimated to accumulate in public housing developments each year. As a result, few agencies will be
able to use these funds to address the backlog of existing capital needs.
11
In addition,Congress has "sharply reduced appropriations for,the HOPE VI program, the primary
source of funding for demolishing and replacing the most badly deteriorated public housing
developments. (Congressional support for the program has remained strong, but the appropriations
committees have had difficulty allocating substantial funds in the face of Administration attempts to
eliminate the program.) HOPE VI funding has declined from a peak of$625 million in 1999 to
about$100 million each year from 2006 to 2008. In 2007 (the latest year for which the grant process
has been completed), this was enough only to help revitalize five developments. The most recent
estimates suggest that there are at least several hundred"severely distressed" public housing
developments (out of approximately 14,000 total developments) that would benefit from HOPE VI
revitalization."
—M-11
Public housino agencies are receiving �apitaifunding fbr.public housing bas
less in ci0eratin9'subsi4ies1han they declined in recent years
C'ualifV.lo C #alt E. tsndirettxlli it4;2pt�8cC Mars
rtinr k
Ctvr�wfisr� ,rticrrt ey �* r
(# _r f carticri cif rt�)is€#ft+r�d#irc;frrsr� i� Pi lel i2#()Es�S�ile�r'j
a
X . $2.5 billion
.25 �.
m .. �.
€
LG
E
4 1) `, 19( 98`X t 1. F ° Q 4 '07
s
S at,c HPD
Underfunding Leads to Loss of Public Housing Units
The funding cuts and shortfalls of recent years have had serious, adverse effects on public housing
and the low-income families]with children, seniors,and people with disabilities it serves.
When federal funding is inadequate,housing agencies must reduce their expenses,generate added
payments from tenants, or tap other resources. Initially some agencies coped with shortfalls by
drawing on reserves or improving administrative efficiency,but as the shortfalls deepened and were
sustained year after year,many have resorted to more extreme measures. For example, some local
agencies have begun charging low-income tenants more for rent and utilities,29 shifted units to
tenants with higher incomes (who can be charged higher rents than lower-income households but
typically have less need for assistance), or cut back in areas such as security or maintenance.
12
In addition, Congress has sharply reduced appropriations for the HOPE VI program, the primary
source of funding for demolishing and replacing the most badly deteriorated public housing
developments. (Congressional support for the program has remained strong, but the appropriations
committees have had difficulty allocating substantial funds in the face of Administration attempts to
eliminate the program.) HOPE VI funding has declined from a peak of$625 million in 1999 to
about$100 million each year from 2006 to 2008. In 2007 (the latest year for which the grant process
has been completed), this was enough only to help revitalize five developments. The most recent
estimates suggest that there'are at least several hundred"severely distressed"public housing
developments (out of approximately 14,000 total developments) that would benefit from HOPE VI
revitalization.28
F 10,
_ -.. {
t
Pu lit housing ageneif.!s are rec6ivingCapital Braiding for public housing:h
as
less<in operating subsclies^�lan theyertlined in recent years
ctu;�lrfy fc r caplital hino,in 64160i s(2008 collars)
oper"aazinq.{rWqd E•)ro-ratfows by year Cjipitzit (lding frr7r1lji0pr. 3
M,
$2a5 11111iati
.Ez s3.� z �W fisrm4l} ..
I ) "
84:166 38 V.1J 94.' .104 TO ' 04 '018 V1. V2 `03 '04 V5 '06 '07
Underfunding Leads to Loss of Public Housing Units
The funding cuts and shortfalls of recent years have had serious,adverse effects on public housing
and the low-income families with children, seniors, and people with disabilities it serves.
When federal funding is inadequate,housing agencies must reduce their expenses,generate added
payments from tenants, or tap other resources. Initially some agencies coped with shortfalls by
drawing on reserves or improving administrative efficiency,but as the shortfalls deepened and were
sustained year after year,many have resorted to more extreme measures. For example, some local
agencies have begun charging low-income tenants more for rent and utilities,29 shifted units to
tenants with higher incomes (who can be charged higher rents than lower-income households but
typically have less need for assistance), or cut back in areas such as security or maintenance.
12
The consequences of forcing agencies to scrape by with inadequate funds extend beyond public
housing developments. If agencies are compelled to reduce spending for upkeep of grounds and
building exteriors, the resulting blight can harm the surrounding neighborhood. Moreover,like
most older residential buildings,public housing developments often consume unusually large
amounts of energy and water. If they receive inadequate capital funds,housing agencies may have to
forego efficiency improvements that would save scarce resources and reduce emissions of
greenhouse gases and other pollutants.
Faced year after year with inadequate funding,many agencies have concluded that they can no
longer sustain some or all of their developments. HUD reported in July 2008 that applications were
pending to remove 16,672 units.30 Agencies often cite underfunding as a major reason for removing
developments from the public housing stock.
In some cases, agencies have demolished developments that have deteriorated to the point of
uninhabitability(often because of cuts in maintenance, security, and other services). Others have
sold a portion of their public housing stock to generate revenues to help them keep the remainder in
operation,at least temporarily. Finally, some agencies have retained ownership of their
developments but withdrawn them from the public housing program,which allows the agencies to
charge higher rents but can reduce the share of the units available to poor families.
The loss of public housing could accelerate rapidly if a sizable number of large housing agencies
opt to withdraw their developments from the program. Such wholesale withdrawals from public
housing have been rare,but are beginning to emerge as the funding shortfalls drag on. In 2007,the
San Diego Housing Commission withdrew all 1,366 of its public housing units from the program,
citing inadequate funding and burdensome federal regulations as reasons for the decision. Housing
authorities in Salt Lake City, Columbus,and Las Vegas all have announced or are considering plans
to remove substantial segments of their stock from the program.31
Large-Scale Loss of Units Could Exacerbate Shortage of Affordable Housing
Historically, the loss of public housing units has led to an overall decline in the number of
subsidies available in a community to make housing affordable to low-income households. Tenants
in developments that agencies drop from the public housing program generally receive units in other
public housing developments or"tenant-protection"vouchers to help them rent housing in the
private market. In some cases, agencies have received vouchers to replace the public housing units
that are vacant when they are removed from the program (as many units typically are in severely
deteriorated projects), so that the number of housing subsidies available in the community does not
decline. However,replacement of lost public housing units with vouchers has been far from
complete.
For example,new vouchers have replaced only 57,000 of the 104,000 public housing units
demolished through HOPE'VI and not replaced with new public housing.32 In 2006 and 2007,
HUD explicitly limited the issuance of replacement vouchers to units that were occupied when they
were removed from the program. Recent legislative action,however, suggests that Congress is
committed to full (or nearly full) replacement. The 2008 HUD appropriations bill requires HUD to
issue vouchers to replace units removed from the program that have been occupied within the
previous 24 months, and the House-approved Section 8 Voucher Reform Act (SEVRA) would
require replacement of all lost units,without exception.
13
Even if Congress adopts a full replacement requirement like the one in SEVRA,however,
continued shrinkage of the public housing stock could shift as many as several hundred thousand
units from"project-based" subsidies like public housing to "tenant-based"vouchers that can be
used in a modest unit of the tenant's choosing. In some cases this shift is desirable; the voucher
program has proven to be a highly successful form of housing assistance, and tenant-protection
vouchers can cost-effectively enable some public housing tenants to move to safer neighborhoods
or higher quality housing. As'the next section explains,however,indiscriminately driving housing
agencies to replace public housing developments with tenant-based vouchers without regard to local
circumstances would likely prove counterproductive.
IV. Replacing Public Housing with Tenant-Based Vouchers is Often Unwise
The persistent underfunding of public housing in recent years has led a growing number of
housing agencies to eliminate public housing developments in favor of tenant-based vouchers.
Some policymakers and housing experts favor replacing public housing with vouchers as a general
policy,arguing that the voucher program's market-based approach is superior in most or all cases.
In fact, excessive "vouchering out" of public housing could narrow the housing opportunities
available to some groups of low-income residents and in some types of neighborhoods. It also
could cost the federal government more than providing sustainable funding to maintain
developments as viable public housing.
Public Housing Remains Best Option for Some Families and Areas
For households that, because of their characteristics,are likely to have difficulty in using vouchers
and in areas where vouchers generally are hard to use because of the limited stock of moderately
priced rental housing,making the investments necessary to retain public housing is likely the best
policy.
Of all demographic groups, seniors have had the least success in using vouchers. In 2000,only 54
percent of senior households that received vouchers from large metropolitan housing agencies were
able to use them to obtain housing,well below the 69 percent success rate for all households.33
One reason is limited mobility,which makes it difficult for many poor seniors to look for
housing. In one study,well over half of the elderly individuals who received vouchers to relocate
from public housing found it somewhat difficult or impossible to walk three city blocks, and most
did not drive. In addition, seniors had the most difficulty of all relocatees in understanding how a
voucher works or what help's they could receive to search for housing.34 The oldest seniors may be
particularly likely to struggle'to use vouchers,and to be harmed by having to move out of familiar
surroundings. More than 50,000 public housing residents are 83 or older.
Public housing also is a critical resource for two other types of families whom the existing private
rental housing stock does not serve well: households with members who have physical disabilities
and large families with children. People who need housing adapted for wheelchair use or visual or
hearing impairments (or to accommodate other physical disabilities) may have difficulty searching
for housing to rent with a voucher or finding suitable units on the private market. Moderately-
priced rental units with three or more bedrooms also can be hard to find in the private market. In
14
contrast,public housing provides an unusually large proportion of units that are accessible to people
with disabilities or that have three or more bedrooms.35 Where the private market has few units of
the type that particular families require,vouchers are less likely to meet such families'housing
needs."
Such factors are especially worth consideration given the disproportionate number of seniors and
people with disabilities who;live in public housing. Slightly over half of the households living in
public housing are headed by a person who is 62 years of age or older or a younger person with
disabilities.37
Sixty percent of these "elderly"or"disabled" families live in"senior" developments or"senior"
buildings within larger developments. (The remainder of these households,as well as seniors and
people with disabilities who are part of households headed by a younger or non-disabled family
member,live in general occupancy or"family" developments.) Many housing agencies provide
service coordinators (funded by HUD) and other services to improve the quality of life of the
roughly 300,000 seniors and people with disabilities who live in"senior"buildings.38
To meet the increasing needs of aging residents and applicants, a number of agencies have
redesigned senior buildings to make space for activity rooms and shared dining areas,as well as to
reconfigure units and comrrmon areas to better accommodate mobility impairments and other issues.
In this way, senior public housing can provide a continuum of care,in some cases equaling assisted
living. Enabling these often frail individuals to age more comfortably in place also saves money:
such service-enriched housing opportunities avert the public costs that would be incurred if
individuals were forced to go into nursing homes to receive the services they need.39 Moreover,the
potential for such cost savings will grow as the population ages.
A final group that can particularly benefit from public housing consists of families that are most in
need of a range of supportive services if the services they need are provided and the development is
well-designed and well-located. A small portion of public housing families face multiple barriers to
work and self-sufficiency, such as poor mental and physical health,limited education,and behavior
problems of children.41 Such families are especially likely to rely on support systems and services
within the project and the local community. Moreover, there is some evidence that such families
can benefit from a comprehensive set of services,which is more feasible in a"place-based" setting.41
Even for families with somewhat less-complex needs,public housing has been proven to be a
successful platform for the provision of services to help families increase their earnings.42 To realize
this potential more fully,however, changes outside of the public housing program will have to occur
to make the necessary services and resources available.
15
Public Housing in Low-Poverty Areas May Be Irreplaceable
Public housing is an important resource not only for
particular groups of people,but also in areas that are
N iH
I k , • � E �
desirable places to live but where vouchers may be hard to
use. Nearly a third of general-occupancy public housing
units are in neighborhoods where fewer than 20 percent of y t77
residents are poor,43 and close to a sixth are in n; ni... i
neighborhoods with poverty rates below 10 percent. Such €�
tft £ 4 Cert �3llh
neighborhoods are likely to';be safer and have better schools ��x '' 2f3 3 0%W,W. �� r,T2 15 65`1 ,
and other services and amenities than lower-income
Lt'
neighborhoods.
In general,vouchers are more effective in helping poor
families move to low-poverty neighborhoods.than other ,e e to stv e€!
forms of housing assistance. On average,a much higher
proportion of voucher holders nationally live in neighborhoods with low poverty rates than do
residents of public housing or project-based Section 8 developments.'
Nonetheless,voucher holders sometimes struggle to find housing in low-poverty neighborhoods.
For example, one study found that families issued vouchers that could only be used in low-poverty
areas were only about three-fourths as likely to successfully rent an apartment with their voucher,
even with search assistance as families issued vouchers they could use in any neighborhood.45 This
is because low-poverty areas often have few rental units with moderate rents. With high demand for
units in such areas,landlords may prefer not to take on the additional requirements that come with
accepting vouchers." In addition,low-poverty neighborhoods tend to have relatively few minority
families, so it may be more difficult for minority families to find landlords willing to rent to them.
While racial discrimination is illegal in private as well as public housing,it continues to exist in many
areas.47
As a result,preserving those public housing units that are located in low-poverty neighborhoods is
often the best way to enable low-income families to live in these areas. Moreover,it generally is
very hard to develop new housing set aside for the lowest income families in low-poverty areas,
because opposition from residents is often strong and land costs may be high. If public housing in
those neighborhoods were lost, the opportunities these neighborhoods provide would be difficult,if
not impossible,to replace.
Efforts to prioritize preservation of developments in low-poverty neighborhoods are complicated
by the fluctuations that occur in neighborhood poverty rates over time. One analysis found that of
census tracts with poverty rates between 30 and 45 percent in 1970, 14 percent had poverty rates
below 15 percent by 2000. In more than a third of neighborhoods that had poverty rates of 15-30
percent in 1970,poverty rates were below 15 percent in 2000.as Many American cities have
neighborhoods that have gentrified over much shorter periods.
Both because neighborhood poverty rates area moving target and because it is difficult to build
new affordable housing after a neighborhood has undergone an influx of higher-income residents,
there will sometimes be an advantage to preserving some quantity of public housing units in
neighborhoods that currently have moderate or even high poverty and where vouchers currently can
16
be used. This is particularly true when there is little other subsidized housing nearby that could
serve the same types of families or when there are signs that the neighborhood is beginning to
become more desirable or vouchers are becoming more difficult to use.
Replacing Public Housing With Vouchers Would Increase Federal Costs
In addition to eliminating some units that s
provide benefits vouchers cannot readily replicate,
replacing public housing with vouchers on a large
scale would substantially increase federal costs.
We estimate that the average',cost of providing a F' '
voucher to serve approximately the same
pp Y Rnt tal cost er ut AV
population as public housing in the same regions
of the country would be $6,860 in 2009. (This 'scr '
figure includes administrative fees but does notes
include the funds the federal government would
be obligated to provide to cover transitional costs ' "' S5 300'
such as demolition and relocation assistance for ,
residents.49) By comparison,if it continues to Z
provide funding at the current level (adjusted for #
inflation) the federal government will provide ?0u r F
only$5,500 in operating and capital formulaMO
`��
funding for each public housing unit in 2009. � `� 1 M �
This cost differential is large enough that,on
average,it would be less expensive in the long runAquate Reptament
for the federal government to provide adequate fund# 9. funding to eaucherwitt►
funding to sustain units as public housing than to Iev 1.._ preseive" transilion.cost s
replace these units with vouchers. We estimate pubSEc hus�ng
that on average over 30 years, the cost of unihi�kj
renovating a typical public housing unit, jasi°F '`` Eotm 'E crrt Ore4tttgoir
maintaining it,and funding a,reserve to cover a
portion of future capital needs will come to
approximately$6,520 per year in 2009 dollars.This would be 5 percent less than the$6,860 annual
cost of a voucher; and 8 percent less than the average annual cost over 30 years of replacing public
housing with vouchers when,upfront transition funding is included."
The lower cost of preserving public housing reflects the large investments that the federal
government and local agencies have already made in public housing developments. Generally,the
local agency owns both the buildings and the land, so unless a building requires major
redevelopment or reconfiguration, federal subsidies (along with tenants'rent contributions) need
only cover the costs of operating the housing and making periodic capital repairs." By contrast,a
voucher(together with the tenant contribution) pays the full cost of renting a unit—a cost that
indirectly covers both ongoing operating and repair expenses and the use of the unit and the land on
which it is located.
17
Replacement Vouchers Likely to Be Concentrated in Areas Where They Are More E,%Pensive
Moreover,the above cost comparison likely understates the cost to the federal government of
replacing public housing with vouchers. The factors that influence voucher costs and public
housing costs largely vary independently from each other: voucher costs are driven primarily by
market rents,while the cost)of maintaining public housing developments depends in large part on
their age and condition. Housing agencies can generally be expected to replace public housing
developments with voucher's in those cases where rents—and thus the voucher subsidies the
agency would receive—are relatively high.
To be sure,an agency's decision of whether to voucher out particular units is not likely to be
based solely on relative funding. In many cases,even agencies in areas where voucher subsidies are
relatively high would opt toretain public housing units if they received adequate funding to do so.
But in the face of the deep underfunding that has occurred in recent years,vouchering out will offer
more appealing options to agencies in areas where market rents are high and voucher subsidies are
relatively large. (Under some circumstances,agencies must demonstrate that vouchers are more cost
effective in order to voucher out a development,or are required to convert a development to
vouchers if it shows signs of distress and it would be inefficient to maintain it as public housing.
These cost comparison requirements, however, are sufficiently flexible and limited in their
application they usually do not drive decisions whether to remove developments from the public
housing program.)
The San Diego Housing Conunission (SDHC) is one example. Before SDHC opted to withdraw
from the public housing program,it received about$2,500 annually in operating and capital
subsidies per unit, less than one fourth of the $10,500 it received per voucher (including its
administrative fees for running the voucher program). SDHC has retained control over its
developments and will rent,them to households with incomes up to 80 percent of the local median
income ($63,200 for a family of four in 2008), apparently at rents somewhat below market but well
above the amount the agency previously received from public housing subsidies and tenant rent
contributions. The agency says this approach will generate enough revenues not only to maintain
the developments but also "to build or purchase other developments thereby increasing the
inventory of affordable housing throughout San Diego."Sz
This approach is not without tradeoffs. Current residents would be issued vouchers and could
use them either to rent their current units from SDHC or to move elsewhere,but there will be no
guarantee that those units will be available to the neediest households in the future. Nonetheless,it
represents a far better local'option than is available to communities where rents and voucher costs
are lower relative to public housing subsidy levels.
The Rochester (NY) Housing Authority, for example,received about$5,300 per public housing
unit in 2007 but only$5,000 in funding for each voucher. If an agency like this withdrew from the
public housing program,it ,might not be able to generate enough rent revenues (by renting the units
either to current tenants using vouchers to help them pay, or to unassisted families) to maintain its
developments —let alone build up a surplus to invest in other affordable housing properties. Thus,
while agencies in low-rent areas with high-cost public housing may eventually be forced to demolish
many of their developments if underfunding continues and the developments deteriorate, they are
unlikely to move quickly to replace large segments of their stock with vouchers.
18
Consequently,most large-scale transitions to vouchers would likely occur in areas where they
would substantially increase federal costs. The units that remain would tend to be located in areas
where public housing subsidies are relatively high. As a result, such an outcome would cost the
federal government substantially more just to provide housing assistance to the same number of
families. At a time when federal resources for affordable housing are limited, this could leave less
funding available to meet the large unmet need for housing assistance.
"Problem" Developments that Should Not Be Preserved
Are the Exception, Not the Rule
Some public housing developments create such harmful environments for their residents that they
should not be preserved in their current form, even if doing so offers a relatively inexpensive way to
provide housing assistance. Policymakers have long been concerned that concentrating large
numbers of poor families with children in housing developments,particularly in poor
neighborhoods, can adversely affect residents. Many housing practitioners believe such
developments cannot be made viable in the long term,regardless of improvements in their physical
structures,unless the concentration of poverty in the projects and the surrounding neighborhoods is
reduced substantially. These beliefs underlie many of the public housing policy changes of the last
15 years.
Recent research has validated many of these beliefs. Families with children that were able to use
vouchers to move out of large,distressed public housing projects in high-poverty neighborhoods
through the Moving to Opportunity Demonstration or HOPE VI fared better in many ways.51
Most
significantly, families enjoyed a substantial"safety benefit"compared with the dangerous conditions
that prevailed in the public housing they left. For example, families that moved with vouchers as
part of HOPE VI redevelopment efforts—who typically moved to moderate rather than low-
poverty areas—"reported a wide range of life improvements including allowing their children to
play outside, seeing less fighting among neighborhood children, sleeping better,and feeling less
worried about drug dealing and violent crime.""
In addition to better quality of life,health improvements—such as reduction in obesity rates for
adults and in depression and anxiety disorders for adolescent girls—have been among the notable
changes found so far. This has been the case even when families relocated only to moderate-
poverty neighborhoods, though movers to lower-poverty neighborhoods experienced greater health
benefits. A major cause of improved health,researchers suggest,was the reduction in stress as a
result of living in safer, quieter neighborhoods.55 Particularly for adolescent girls, an additional
reason for the significant improvements in mental health of those who moved to lower-poverty
neighborhoods was the reduction in sexual victimization.56 Girls also were less likely to be involved
in crime or to engage in other problem behaviors.57
Research and experience suggest that the living environments most likely to have a deleterious
effect on residents are large projects in high-poverty neighborhoods with a concentration of poor
families with children. Making major investments to improve the physical condition of such
developments may not make financial sense or be good public policy unless the improvements—or
other accompanying efforts; such as initiatives to strengthen local schools—are likely to reduce the
concentration of poverty within the development and the surrounding community.58 Without such a
reduction, families will often be better served by a tenant-based voucher that allows them to move
19
to a safer,lower-poverty neighborhood. (While families continue to reside in such often-dangerous
developments,however,it will be important to provide adequate policing and take other measures
needed to improve their safety.)
Urban Institute researchers have concluded that residents of metropolitan neighborhoods with
poverty rates of more than 3;0 percent"experience significantly higher rates of disadvantage and
distress than residents of lower-poverty neighborhoods do,even after controlling for individual race,
ethnicity,and income level.;The incidence of undesirable outcomes rises with neighborhood
poverty rates for almost every indicator of adult and child well-being.i59 The poverty rate will not
always be a precise indica of the living environment a neighborhood provides for its residents;
but it does correlate with the quality of that environment to a considerable degree.'o
11
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Urt�ts 125 26 54 51 140 141 249 25C!SOA 541 Tatal
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1.: Append �jrt
The number of large public housing developments located in neighborhoods with poverty rates
above 30 percent of poverty,however,is fairly small. Contrary to the common stereotype,most
"family"public housing units are in small or medium-sized developments outside high-poverty
neighborhoods. More than(half(56 percent) of general-occupancy units are in areas that are less
than 30 percent poor, and two-thirds are in projects that have fewer than 250 units.Gr Putting the
measures of neighborhood poverty and project size together, 78 percent of general-occupancy units
in metropolitan areas (outside New York City) are in small- to medium-sized developments or in
low- or moderate-poverty areas. Only 86,000 general-occupancy units—less than 11 percent of all
public housing outside of New York City—are in large projects in high-poverty neighborhood .61
20
I'
V. Policy Recommendations to Preserve and to Replace Public Housing
In summary, current federal policy persistently underfunds public housing while offering
replacement with tenant-based vouchers as the chief alternative for agencies that cannot make ends
meet. There are two major:problems with this approach:
i
•
Many public housing developments provide benefits that tenant-based assistance cannot
replicate. These include housing for elderly households and others who often do not succeed in
using vouchers,as well{.as access to neighborhoods where vouchers are difficult to use.
• It will often be more expensive for the federal government to issue replacement vouchers than
to provide adequate funding to preserve a development as public housing. By driving up the
costs per family of providing federal housing assistance,replacing such developments with
vouchers would potentially divert funds that could otherwise be used to help some of the
millions of low-income families that qualify for housing assistance but do not receive it.
This does not mean that;all public housing merits preservation. As noted above, a small
proportion of remaining units are located in areas where preservation may be ineffective or counter-
productive,unless mixed-income redevelopment is feasible. To best meet the needs of the families
that federal housing assistance programs are intended to help, the federal government should adopt .
a comprehensive plan for public housing that includes the following components:
i
1. immediate restoration of full operating subsidies for all public housing units;
2. a process for housing agencies to obtain adequate funding for the rehabilitation
necessary to preserve public housing,with priority given to developments that are most
cost effective relative to tenant-based vouchers;
3. an option for agencies to convert public housing developments to"project-based"
Section 8 vouchers that would expand choice for residents while ensuring that the
development continues to provide housing for the neediest families; and
4. a requirement that agencies convert large projects in low-opportunity neighborhoods to
mixed-income developments,replace them with equally affordable housing elsewhere, or
convert them to tenant-based vouchers.
These proposals are described in more detail below.
1. Full Funding for Operating Subsidies
The most basic step in enabling housing agencies to sustain their public housing units is to
provide adequate operating„subsidies. Without sufficient funding to fill the gap between the rent
revenues they receive and the operating costs they must cover,agencies will have difficulty retaining
public housing developments, even when doing so would be cost effective and provide clear
benefits. Restoring full operating funding would send a clear message that the federal government
intends to meet its obligations to public housing and should slow the loss of public housing
significantly.
21
f
' I
Congress and HUD have,gone to great lengths in recent years to assess the amount of operating
subsidies agencies need and!'to develop a formula to allocate that funding among individual agencies.
The Administration should request and Congress should provide adequate funding to cover 100
percent of the amount that formula specifies.
As discussed below, there are strong arguments in favor of creating a unified funding stream that
would distribute funds to meet agencies' operating needs as well as their ongoing capital needs. The
amount of the operating subsidy would be largely based on the current operating fund formula,
except that some flaws in that formula should be addressed. For example, the current formula
calculates the gap between operating costs and rents on the basis of the rent revenues an agency
received in 2004,without ariy adjustment for inflation. Since rent revenues typically rise over time
(particularly for tenants receiving Social Security and other benefits with an automatic cost-of-living
adjustment), this approach makes agencies eligible for more money than they need to cover their
costs. That,in turn,potentially wastes federal funds and makes it less likely that Congress will
provide the full amount forl'which agencies are eligible. The formula should be corrected to
determine funding based on' the most current data available on agencies'rent revenues.63
2. Funding to Preserve Public Housing
At the same time that policymakers close the most urgent short-term gaps in agencies'budgets by
fully funding their operating subsidies, they should establish a multi-year process to allocate
"preservation funds" to address the capital backlog at public housing developments. This process,
which would replace the public housing capital fund, should enable agencies to preserve the bulk of
the remaining public housing stock (excluding the large projects in low-opportunity areas discussed
below).
To ensure that funds are well used and that the most beneficial preservation efforts are funded
first,Congress should require agencies to submit funding applications containing detailed
preservation plans and cost'estimates. HUD would then evaluate these applications and make
funding allocations."
Funding Amounts and Priorities
As discussed below, some agencies could receive preservation funding through up-front federal
grants,while others would borrow funds to address their capital needs and then receive additional
federal funding over time to repay those funds. Whichever mechanism is used,two factors should
limit the amount of preservation funding an agency could receive to address a given development's
capital backlog.
First,agencies should be eligible only for the amount necessary to restore a development to good,
sustainable condition and add certain essential features,such as making enough units accessible for
people with disabilities to meet Fair Housing Act requirements. The preservation funding should not
cover such discretionary improvements as reconfiguring floor plans or demolishing a development
and replacing it with a newone. (Funding to replace severely distressed units is discussed below.)
Second, the amount of preservation funding should be capped so that over a period of 30 or 40
years,the total cost of preserving a development as public housing does not exceed the cost of
22
replacing it with vouchers unless the agency demonstrates that a development provides benefits that
tenant-based vouchers would not replicate. Examples of developments that would provide such
benefits,and thus be eligible for added funding if needed,include:
• developments located in neighborhoods where voucher holders have had difficulty using
vouchers, such as those with relatively little rental housing or low vacancy rates;
• developments with units suitable for particular groups that typically have difficulty using
vouchers,potentially including the elderly,people with disabilities, or large families; and
• developments that provide supportive services that would be hard to deliver to scattered
tenant-based voucher holders."
The preservation funding discussed here would place a floor,not a ceiling, on the investments
made to preserve a development. In some cases an agency may conclude that it is important to
preserve a development even though it does not fall into the priority categories described in the
bullets above and preservation would cost significantly more than replacement vouchers. In other
cases, an agency may wish to undertake a more costly renovation than federal standards deem
necessary.
Therefore,agencies should be permitted to supplement public housing funds with state or local
resources or other federal funding streams. The largest source of federal capital funds for affordable
rental housing is the Low-Income Housing Tax Credit(LIHTC). Housing agencies have already
used LIHTCs to rehabilitate or replace many public housing developments,particularly those
redeveloped under HOPE VI. LIHTCs should be a major supplemental resource for public
housing redevelopment.
The availability of LIHTCs depends,however,on the willingness of the states to commit the
limited amount of such credits they receive to public housing. Congress should consider measures
to further support use of LIHTCs at public housing developments,potentially including an increase
in the share of a development's costs that the credits can cover.
Priorities in Allocating Preservation Funding
Given the constrained budget environment,Congress is unlikely to increase public housing
funding in a single year by enough to fully fund operating subsidies and immediately meet all public
housing developments'preservation needs. Moreover,many agencies would not be prepared to
immediately put such a large infusion of capital to use at all of their developments,even if they
worked with private partners. Instead,Congress should provide the needed funding gradually over a
period such as five years. In the meantime, developments that have not yet been approved for
preservation funding should continue to receive sufficient capital funds to cover short-term repair
and replacement needs.
Congress and HUD should establish basic standards that applications must meet to receive
preservation funding. The housing agency should demonstrate that it has the capacity to oversee the
planned project;cost estimates should be reasonable;and if the agency plans to supplement public
housing funds with other resources,it should explain how it will obtain them. (Some agencies will
23
need technical assistance to develop preservation plans. Modest funding should be made available
for this purpose.)
In addition, criteria will be needed to determine which developments receive funding first. Most
significantly,applications should be evaluated based on their cost-effectiveness relative to vouchers.
For example, a development should receive priority for funding if it would provide decent housing
at a cost far below that of a voucher in the same area, or if its costs are similar to those of vouchers
but it would provide major benefits that vouchers cannot.
The process described here for determining funding amounts and priorities likely will not preserve
all developments (even setting aside large developments in high-poverty areas). Some agencies may
decide,in consultation with other stakeholders, that vouchers would better serve the eligible
population. Other agencies may be unable to obtain enough supplemental resources to preserve
developments that they wish!to preserve but that do not meet federal priorities.
Assuming that Congress commits the needed resources over a period of several years,however,
such a process should preserve most of the remaining public housing stock. And importantly,this
approach should be particularly effective in preserving those developments where replacement with
tenant-based vouchers would either increase federal costs or narrow the housing opportunities
available to low-income people.
Types of Preservation Funding: Capital Grants and Debt Financing
Congress could provide preservation funds to address existing capital needs in two main ways. It
could give qualifying agencies direct,up-front grants to renovate public housing developments.
Alternatively,it could allow agencies to borrow the needed funds,while providing added federal
subsidies over the period of the loan to cover the resulting debt payments.
These two approaches would have different implications for the federal budget. Up-front grants
would require a large infusion of funds in the short term but would not create long-term liabilities.
Debt financing, on the other hand,would require a much smaller immediate funding increase,but
the increase would need to be sustained until the loan is repaid."
Overall, debt financing would be somewhat less efficient,because lenders would charge agencies
interest rates substantially above those the federal government pays on its debts. In addition,
lenders would insist that an agency's annual funding level cover not only debt payments and
reasonably anticipated operating costs but also a"debt-coverage"cushion (typically 10 to 20 percent
of the debt payments) to reassure lenders that the risk of default is low. (Lenders typically require
such a cushion in private as well as public rental housing transactions. The amount of the required
cushion would be lower if the loan carried federal insurance.) In addition,borrowing funds involves
legal, appraisal,and accounting fees and other transaction costs,which further reduce the efficiency
of borrowing compared to grants.
The total existing capital need is so large—more than$22 billion by our conservative estimate,as
discussed in Part III—than Congress is unlikely to provide enough up-front funding to eliminate
the backlog even over several years. Consequently,debt financing will have to address much of the
24
I'
backlog. Because up-front grants are more efficient,however,it will make sense to use grants to
address capital needs to the(extent that sufficient appropriations can be obtained.
Targeted Presen ation Grants
Unlike the current capital''fund,preservation grants should not be distributed in small amounts to
cover a portion of needs at all developments. Instead,the grants should be provided in amounts
large enough to allow agencies to undertake needed renovations immediately, and should be targeted
on the agencies and developments for which debt financing is unduly costly or ineffective. Possible
examples include:
• Small agencies and types of developments (such as housing for the elderly) that tend to have
relatively low needs, since the transaction costs involved in debt financing are proportionately
higher when the amount to be borrowed is low.
• Developments with unit configurations that are unusual in the local market(such as efficiencies
or units with small room sizes or large numbers of bedrooms) but meet the needs of a segment
of the community's low-income population. Lenders may be reluctant to extend adequate loans
to rehabilitate such developments if the agency does not also reconfigure them to make them
"market comparable."
• Developments that meet important community needs but have high rehabilitation costs
compared to local market rents. Lenders often will not provide loans if the required debt
payments exceed the rent the unit could command in the market, since market rents represent
the revenue a property;could generate if federal subsidies were terminated.
Measures to Support Debt Financing
If housing agencies are to;use debt financing to address a large portion of their capital backlog, the
federal government needs to strengthen their capacity to borrow. Currently, agencies can use debt
financing only in limited ways,primarily by borrowing against a portion of their future capital fund
grants. Agencies could borrow more if they could use the public housing property itself as collateral
for the loan,as is typical in 'private real estate. In 1998 Congress authorized HUD to permit
agencies to mortgage developments,but HUD never issued implementing regulations.'
In addition to enabling agencies to mortgage their properties, the federal government should make
sure that the property is preserved as affordable housing for low-income tenants if the lender
forecloses because the agency fails to make required mortgage payments. For example,lenders that
to give another public or non-profit entity the first option to purchase
foreclose could be required�'
the development. In additign,post-foreclosure owners could be required to maintain the property
as affordable rental housing;and to accept tenant-protection vouchers issued to residents at the time
of foreclosure. They could'also be required to accept"project-based"voucher contracts if offered
by the agency,which would'ensure that other low-income households have access to the property
after the current tenants move out.
In addition,Congress could guarantee loans needed to finance improvements at public housing
developments. Such guarantees would make loans easier to get and would likely reduce borrowing
costs, as lenders would be willing to offer lower interest rates if federal insurance reduced their risk.
25
i
Unified Funding Stream for Operating Subsidies,
Debt Payments, and Replacement Reserves
After approval of their preservation plan, agencies should receive all of their ongoing public
housing subsidies in a singlel'funding stream. It would include operating subsidies, any debt-
payment subsidy they are assigned through the preservation process, and funding to cover a portion
of new capital needs that accumulate over time. A combined funding stream would follow the
model used in the project-based Section 8 program,where owners receive a single federal subsidy
payment that covers both operating and capital needs.
Currently,public housing funding is divided into a capital fund and an operating fund. This
division unnecessarily complicates the funding process and prevents agencies from allocating funds
where they are needed most[ Moreover,only the operating fund now has a formula that defines a
full funding level for each development;the capital fund formula simply sets the percentage each
agency receives of whatever!,amount Congress provides, so there is no agreed-upon way to
determine whether the fundis adequate or is under (or over) funded. Partly due to this difference,
the Administration and Congress have found it easier to allow capital fund appropriations to erode
over time. Since 2001, funding for the capital fund has dropped by 32 percent in inflation-adjusted
terms,while operating funding has fallen 1 percent.GB
To address these shortcomings, Congress should eliminate the separate capital fund and instead
provide ongoing capital funds and operating subsidies together in a single funding stream.
In addition to operating and debt-payment subsidies, this combined funding stream should
include a"replacement reserve" contribution. In private housing, owners typically contribute several
hundred dollars per unit to "such a reserve each year,which they use periodically to replace
appliances or meet other capital needs that arise. Replacement reserves ensure that adequate
resources are available to keep developments in good condition between major renovations.
3. Converting to Project-Based Vouchers
The funding streams described above would provide adequate resources to rehabilitate most of
the public housing stock. Some public housing developments,however,would benefit from
conversion to a different funding mechanism: the project-based Section 8 voucher.
Most Section 8 vouchers are"tenant-based,"meaning that they can be used to rent a modest
apartment of the tenant's choosing in the private market. But housing agencies are permitted to
"project-base" some of their vouchers,meaning that the voucher would be attached to a particular
development,which can be'owned by a for profit or non-profit entity or the housing agency itself
Such vouchers have several important benefits.
• Supporting debt financing. Converting a public housing development to project-based vouchers
would allow housing agencies to borrow more (and/or on better terms) than they could if a
building remained in the public housing program. Lenders would likely perceive the stream of
subsidies from project-abased vouchers as more reliable,because Congress has provided
adequate funding more consistently for vouchers than for public housing. Moreover,even if
voucher funding were inadequate in a particular year, agencies would likely respond by cutting
26 �'
back their tenant-based voucher programs temporarily through attrition (that is,by not reissuing
vouchers that become ayailable) to try to avoid breaking an agreement to provide project-based
voucher funds to a development. Public housing developments have no such cushion, so they
bear the full brunt of any shortfalls.
• Facilitating income mixing. Since agencies can attach project-based vouchers to developments
other than existing public housing developments, these vouchers make it much easier for an
agency to create mixed-income developments without loss of affordable units. For example,an
agency could replace a development that is 100 percent public housing with two or more
developments containing some project-based voucher units and some units targeted at tenants
with higher incomes.
• Giving families the option to move. A family that has lived in a project-based voucher unit for a least
one year is permitted to move out of the development using the first tenant-based voucher that
becomes available. Public housing tenants do not have this option, and generally must remain
in the unit assigned to them in order to keep their subsidy.
In addition to giving families wider choices,an option for tenants to move would impose a
measure of market discipline on development managers. If a development were so unsafe or
badly maintained that many tenants moved out after brief stays, the agency would face higher
costs (to prepare units for new tenants and process other paperwork related to turnover) and
could also face lower rent revenues (since project-based voucher payments cannot be made for
a unit that has been vacant for more than 60 days,and it may be difficult for the agency to fill
units in that time).G' As discussed below,market discipline would be even stronger at mixed-
income developments,where some units must be rented at market or near-market rents to
tenants who could find other suitable housing.
Currently,project-based vouchers can be used in former public housing units,but there are
significant constraints on an agency's ability to do so. Agencies may not use more than 20 percent
of their voucher funds for project-based vouchers,and project-based vouchers may not make up
more than 25 percent of the units in a given development unless the development meets certain
exceptions. As a result, agencies have used project-based vouchers to replace public housing
subsidies in only a relatively small number of developments.
There are two ways Congress could encourage wider use of project-based vouchers. First,it could
exempt converted public housing developments from the cap on the number of units in a
development that can be project-based. Second,it could allow as much as 50 percent of an agency's
voucher assistance to go to,project-based vouchers when converted public housing units are
included.70
It would not be advisable to allow unlimited conversion of public housing to project-based
vouchers immediately—which could result in hundreds of thousands of units moving from one
program to the other—since this approach for public housing is largely untested. A large-scale
conversion to project-based vouchers would also require substantial increases in voucher funding,
which could divert resources needed to provide new vouchers to address the large unmet need for
housing assistance.
27
r -
Therefore,Congress should authorize a limited number of conversions, such as 40,000 per year.
If these are successful,the conversions could continue until they have reached all public housing
units where they are appropriate. This gradual approach would allow Congress,HUD,housing
agencies, and private-sector'parties such as lenders to learn lessons they could apply to later
conversions,and would require only modest additional voucher funding each year.
Initially,it would make sense to target the conversions on (1) family developments in low-
opportunity areas (including the large developments discussed in the following section),where
tenant choice and income-mixing are particularly important, and(2) projects with unusually high
capital needs,which wouldstruggle to obtain adequate resources without the expanded borrowing
that project-based vouchers!would allow in many markets.
4. Requirement That Agencies Convert Large Projects in Low-Opportunity Areas
In light of the serious adverse effects on public housing tenants of living in large developments in
neighborhoods with high poverty rates and other problems, Congress and HUD should establish
clear criteria to identify"lo\v-opportunity"neighborhoods and policies to discourage agencies from
retaining large,non-mixed income family public housing developments in those areas.
The criteria should include not only the neighborhood poverty rate,but also a broad range of
other factors such as the triune rate,the quality of local schools,access to public transportation and
other services,and recent trends in home values or market rents (or other indicators of the trajectory
of neighborhood change). Based on these criteria,agencies—in consultation with residents and
other community stakeholders—should be required to identify large projects in low-opportunity
neighborhoods,with federal oversight to ensure that projects are identified properly. As a condition
of receiving increased federal funding to rehabilitate such developments,agencies should be required
to convert them into mixedincome projects. Alternatively,agencies should be eligible to receive
funding to develop replacement housing in higher-opportunity neighborhoods.
Converting to mixed-income developments would eliminate extreme concentrations of poor
families,which research has linked to harmful effects on residents. It also would impose a level of
market discipline on the developments that does not currently exist. Agencies would need to rent a
substantial share of the unit's to non-public housing tenants for rents at or close to local market
levels. Attracting such tenants would generally require major renovations of these projects,and the
private lenders or investors ineeded to fund those renovations would not participate unless they
believed that the planned development (and the surrounding neighborhood) could attract renters
who have the means to choose other housing. In addition,managers would feel pressure to
maintain units in good condition and provide an adequate level of security and other services.
The required mixed-income conversions would carry considerable costs, since most developments
would require major renovation (or demolition and replacement) in order to attract non-low-income
tenants. Replacing even 50;000 of the 86,000 potentially problematic units with mixed-income
developments would cost more than$7 billion, although a portion of that amount could be funded
through Low-Income Housing Tax Credits or non-federal resources."
Congress could provide substantial resources to support mixed-income redevelopment of these
projects, or their replacement in higher-opportunity neighborhoods, by restoring funding for HOPE
28
VI to its (inflation-adjusted);level in 2003,before the sharp funding cuts of recent years. This would
come to $675 million in 2009. Before expanding HOPE VI in this manner,however, Congress
should strengthen the program by requiring replacement of all lost units with new public housing or
units that provide equivalent long-term affordability and also requiring strong supportive services for
public housing residents who are displaced,including those who later return to the rebuilt
development.72
i
If Congress does not provide adequate funding to convert or replace all of the projects identified
under the proposed requirement,the units in the developments should be replaced with tenant-
based vouchers and effective relocation assistance should be provided to tenants so that they are
able to use their vouchers to move to higher-opportunity areas.73
Conclusion
Failure to invest in the preservation of public housing will harm millions of the most vulnerable
Americans. It would also be short-sighted and lead to increased federal costs to provide affordable
housing and care for our aging population. Most public housing now serves seniors and people with
disabilities or provides homes to families with children in small or medium-sized developments
outside of high poverty areas. The nation needs a comprehensive plan that will ensure that this vital
national resource remains available and provides safe and high quality housing for the next
generation.
Endnotes
'The original research presented in this analysis on the current public housing stock and its location was performed by
Leah Staub,who has been an intern in the Housing Policy Unit since the summer of 2007. We are indebted to her for
her painstaking work.
2 The Technical Appendix explains how we estimated the current number of public housing units and their occupants.
3 U.S.Government Accountability Office,"Distressed Conditions in Developments for the Elderly and Persons with
Disabilities and Strategies Used for Improvement,"GAO-06-163(2005). The figure of 350,000 seniors living in public
housing currently is our estimate,based on HUD data. See the Demographics section of the Technical Appendix.
4 Fifteen percent of public housing families with children are headed by a person who is elderly or has disabilities.
i.
5 HUD,"Seventh Annual Report to Congress on Public Housing and Rental Assistance Programs,"2008.
6 Douglas Rice and Barbara Sard,"The Effects of the Federal Budget Squeeze on Low-Income Housing Assistance,"
Center on Budget and Policy Priorities,February 1,2007,p.10,n.21.
7 HUD,"Affordable Housing Needs,2005:Report to Congress,"Table A-4. This is the number of unassisted renter
households with incomes below 8,0 percent of the area median income(the eligibility limit for public housing)who have
moderate or severe housing problems.
8 CBPP tabulations of data from the 2006 and 2000 American Community Survey.
9 Commission on Affordable Housing and Health Facility Needs for Seniors in the 211t Century,"A Quiet Crisis in
America:A Report to Congress,"12002,p.39. The commission found that in 1999 there were 1.2 million rent-assisted
units occupied by a person age 65:or older,one for every 5.82 senior households with housing problems. Given the
projected growth in the senior population,the commission's majority report found that another 700,000 units would be
required by 2020(assuming the 1.2 million existing units were preserved)to maintain the ratio of one rent-assisted senior
i
29
j
household to 5.82 senior households with housing problems. The minority report,submitted by six of the commission's
13 members,estimated that more than twice as many additional units would be needed to meet the needs of half the
anticipated number of very low-income senior renters with housing problems in 2020. Id.,p 153.
10 CBPP analysis of HUD and 2000 Census data finds that only 11 percent of family pr iects are in neighborhoods where
40 percent or more of residents were poor in 2000. The table on p.20 includes additional key findings from this
analysis,and complete data are included as Part C of the Technical Appendix,which also explains how CBPP analyzed
the location of existing public housing and the data we used to identify family and senior public housing developments.
Analyzing the locations of the public housing stock in late 1995,Newman and Schnare found that 43.4 percent of family
public housing units(and 36.5 percent of all units)were in extreme-poverty neighborhoods,based on the 1990 census.
Sandra J.Newman and Ann B.Schnare,"`...And a Suitable Living Environment': The Failure of Housing Programs to
Deliver on Neighborhood Quality,"Housing Policy Debate 8:4(1997),pp.703-741,at p.718. Our updated analysis found
that 22 percent of all available public housing units,including senior developments,are in extreme poverty
neighborhoods(based on 2000 census data).
11 Including New York City and senior projects but excluding U.S.territories,there are now 175,000 units in projects
with more than 500 units,compared with 285,000 units in projects of this size in 1996. HUD,"A Picture of Subsidized
Households,"Litt y htIn
72 HUD,FY 2007 Performance and Accountability Report,p.182. This figure is based on data from HUD's inspection
system. If HUD used as the"universe"for this percentage the 1.15 million units eligible for an operating subsidy that
year,about 165,000 units were in substandard physical condition in 2007. This figure may overstate the number of units
needing major repairs,as units can be judged substandard based on problems that would cost little to remedy,such as
lack of smoke alarms or debris on the grounds. G.Thomas Kingsley et al.,Lessons from HOPE 1I7 for the Future of Public
Housing(Urban Institute,2004). On the other hand,HUD's physical condition standards do not measure conformity
with modern standards of adequate living or storage space;nor do they assess neighborhood or safety factors or any
reconfiguration needs.
13 HUD,"Seventh Annual Report to Congress on Public Housing and Rental Assistance Programs,"2008,p.32. HUD
acknowledges that a somewhat smaller share of units qualify as being in excellent condition,as larger developments tend
not to be in as good condition assmaller developments.
14 HUD data indicate approval of demolition or"disposition"(typically,sale)of 217,875 units for which requests were
made beginning in 1995. See k�i_tl:l/ti;�t mmlzud. ov c�;tices,`l�ih/s stems,'tic/saclde1z1c3lztion dis x>si.tion enor_r.2.xls,
accessed June 24,2008. This figure may include some units that are still standing,and may double-count some units. By
our calculation,as explained in the Technical Appendix,there are 1,161,000 available public housing units in mid-2008
(not approved for demolition or disposition),165,000 fewer than the 1,326,000 budgeted units in 1995 (after adjusting
for the subsequent shift of about 168,000 units on Native American reservations to other funding). During this period,
about 32,000 replacement units were built through HOPE VI,indicating that nearly 200,000 units were demolished or
otherwise removed from the public housing program.
15 Paralleling this drop in the share of families reporting welfare as their largest source of income,by 2006,some 53
percent of families with children 'reported some earned income,and for 48 percent,work was their largest source of
income. By contrast,in 1997 only 36 percent relied primarily on earned income. HUD,"Seventh Annual Report to
Congress on Public Housing and Rental Assistance Programs,"2008. It appears that these figures on the income of
families with children include households whose head is elderly or has disabilities,which made up 14 percent of families
with children living in public housing in 2006. (Some households may have had two parents,one of whom could have
been able to work.) If none of these households have earned income,62 percent of the remaining families with children
(those where neither the head nor the spouse of the head is elderly or has a disability)reported some earned income in
2006. (More families may have a wage earner than report earnings to the agency.) Some of the shift in income sources
may be due to the demolition of distressed units where welfare-dependent families were more likely to reside. About
125,000 fewer families with children reside in public housing now than in 1996.
16 In 2000,2.5 million fewer people—and 1.3 million fewer poor people—lived in extreme-poverty census tracts
(where more than 40 percent of residents were poor)than in 1990,despite the fact that the total number of people who
were poor was 2.2 million larger in 2000,due largely to population growth. This change largely reflected a 26 percent
reduction in the number of extreme-poverty census tracts,as some residents'incomes increased and some poor families
relocated. The decline in concentrated poverty was particularly dramatic for poor blacks,for whom the percentage
living in extreme-poverty neighborhoods fell from 30.4 percent in 1990 to 18.6 percent in 2000. Paul A.Jargowsky,
30
"Stunning Progress,Hidden Problems:'The Dramatic Decline of Concentrated Poverty in the 1990x,"Brookings
Institution Center on Urban and Metropolitan Policy,May 2003.
17 Congress suspended the one-fo'r-one replacement requirement in annual appropriations acts beginning in 1995 and
repealed it permanently in the Quality Housing and Work Responsibility Act in 1998.
18 As subsequently modified by QHWRA,this requirement states that agencies must identify developments with more
than 250 units and a vacancy rate'of more than 15 percent(reduced to 12 percent in 2009)that are"distressed"(not
defined),cannot be made viable for the long term through a"reasonable"plan,and would cost more to modernize and
operate than the cost of providing vouchers to the remaining tenants.
19 See Rod Solomon,"Public Housing Reform and Voucher Success:Progress and Challenges,"Brookings Institution,
2005,p.15.
i.
21 Congress first authorized MTW as part of the same appropriations act that required the demolition of large,distressed
projects. Twenty-eight agencies(administering about 100,000 public housing units)currently participate in Naw,which
seeks to promote innovative housing policies by allowing agencies to operate their voucher and public housing programs
without regard to many federal statutes.A number of large agencies that in the mid-1990s had some of the most
distressed public housing,such as Chicago,Atlanta,Pittsburgh,New Haven,and Baltimore,participate in MTW. Their
ability under MTW rules to use voucher funds to rehabilitate public housing made tens of millions of dollars available to
their public housing programs,at times by substantially reducing the number of families receiving housing assistance.
Recent changes in voucher funding policies would prevent this.
The flexibility MTW provides creates other risks beyond reductions in the number of families served. Many of the
policies that MTW allows agencies to test could have adverse effects on vulnerable families,such as alternative rent
schemes that require sharply higher payments from some tenants and time limits that cut off subsidies even for working
poor families who cannot remain in their homes without assistance. For further discussion of MTW and efforts to
expand it while adding protection's for tenants,see Barbara Sard and Will Fischer,"Bipartisan Legislation Would Build
on Housing Voucher Program's Success,"�zi.i 7 %t t=.-�L_,c;1.�171�.or>_54_1,:t�7hous.ht�,L p.6.
21 More than 25,000 of the new units planned would be for sale rather than rent;about 7,000 of these would be public
housing homeownership units. Some cities have bucked the national trend and replaced all of the public housing units
demolished as part of HOPE VI projects with equally affordable units. The figures in the text and this note are based
on HUD data for HOPE VI demolition and revitalization grants through 2006,updated with the planned activities of
FY2007 HOPE VI grantees as detailed in HUD press releases dated March 20,2008. (Units proposed to be
rehabilitated rather than newly-constructed generally are excluded to avoid double-counting existing public housing units
that are not demolished.) HUD has awarded about 57,000 new vouchers to offset part of the loss of public housing.
See n.32 below.
22 For a detailed discussion of thelHouse bill(H.R.3524)and the evidence concerning HOPE VI,see Barbara Sard and
Leah Staub,"House Bill Makes Significant Improvements in`HOPE VI'Public Housing Revitalization Program,"
Center on Budget and Policy Priorities,hr.i:p;,';wtitw.ca_> :3.<:zr /1-1fi-08horis.11im.
23 Congress first required HUD to assess public housing management in 1990. Under the Clinton Administration,HUD
shifted from a self-certification-based system to one in which HUD contractors conduct independent reviews of housing
conditions. Despite generally more aggressive oversight,HUD's efforts have been inconsistent and not always effective.
A few of the agencies that have been poor performers for decades —such as New Orleans and Detroit—are still
under HUD administrative control,having shown insufficient improvement to regain independence. HUD has failed to
implement a key QHWRA provision that requires it to petition a court to appoint a receiver if HUD's administrative
control fails to make sufficient progress in a two-year period. Solomon,n. 19 above,pp.5,52.
24 At the beginning of fiscal year 2007,6.2 percent of agencies(197),managing slightly less than 6 percent of units
(71,391),were considered"troubled"under HUD's management assessment system. Department of Housing and
Urban Development,"FY 2007 Performance and Accountability Report,"p.188. (These are the most recent data
available.) In 1996,using a somewhat different assessment system,fewer agencies(65)were considered troubled,but
they managed far more units,both in absolute numbers(199,000)and as a share of the stock(16 percent). Sandra J.
Newman and Ann B.Schnare,"`.;..And a Suitable Living Environment': The Failure of Housing Programs to Deliver
on Neighborhood Quality,"Housing Policy Debate 8(4):703-741,at p.716.
31
d
25 In addition to underfunding operating subsidies,Congress in 2002 discontinued funding for the Public Housing Drug
Elimination Program(PHDEP),which funded a broad range of youth services and other anti-drug and anti-crime
programs in public housing developments. The program had received$309 million in 2001. As result,housing agencies
were forced either to divert funds!from their operating subsidies to support programs that had been funded through
PHDEP,find funding from otherl sources,or cut the programs.
21 In 2000,57 percent of public housing units were in developments more than 30 years old. James G.Stockard,Jr.,et
al,Public Housing Operating Cost Study(Cambridge,MA:Harvard University Graduate School of Design,2003),
11
.ltiLti�,c.�rl,_h�zSr...e h/.retiearch cerrtcr:(}>hc>cs;'cicc �angt�tsft+milt. 2Q6.12,pcif. Since 2000,some of the
oldest units have been demolished,while others have aged into the"more than 30 years old"category. HUD has
reported that demolished units are nine years older than other units,on average. HUD,"Seventh Annual Report to
Congress on Public Housing and Rental Assistance Programs,"2008,p.31.
1
27 Meryl Finkel et al.,Capital Neer of the Public Housing Stock in 9998:Formula Capital Study,Abt Associates,prepared for
U.S.Department of Housing and!Urban Development,January 2000. See Part B of the Technical Appendix for an
explanation of how we projected current needs based on the 1998 estimates.
1
28 U.S.Government Accountability Office,Distressed Conditions in Developments for the Elderly and Persons with Disabilities and
Strategies Used for Improvement,GAO-06-163 (2005). GAO's criteria included resident and census tract income levels as
well as developments'age,physical condition,and vacancy rate. Using more streamlined criteria,the Urban Institute
estimated that,as of 2003,developments with between 47,000 and 82,000 units met a definition of"severely distressed,"
which amounts to between 4 and 7 percent of the stock. Margery Austin Turner et al.,Estimating the Public Costs and
Benefits of HOPE VI Investments: Methodological Report(Washington,DC:Urban Institute,2007),
Izet}�,,,/iuntiz3.z.ztbazt ca zt'(_t�i<�icicdl'1)E/=1"1'1 lam) cost benefits hop t:I_odf.
HUD performance reports indicate that the number of public housing units has fallen by more than 50,000 units
since 2003. Many of these are likely among the units that GAO and the Urban Institute had identified as severely
distressed. Some other units have become severely distressed during this period,but we do not have enough
information to know whether the;current number of severely distressed units is above,below,or roughly the same as
those earlier estimates.
i
29 Housing agencies are generally 'required to charge tenants no more than 30 percent of their income for rent and
utilities(up to a utility allowance s'et by the housing agency),but they have discretion to institute certain policies that
result in higher charges on tenants. For example,they can establish minimum rents of up to$50 a month for tenants
with little or no income or establish fees for services such as parking. Many agencies have taken such measures in recent
years to help meet expenses. In addition,housing agencies facing shortfalls sometimes delay adjustments in utility
allowances when utility rates increase,leaving tenants to bear the full burden of charges above the allowance for a period
of time.(Agencies are required toadjust the allowances to reflect major rate increases,but HUD enforcement of this
requirement is lax)
30 In a letter dated July 2,2008 responding to a Congressional inquiry,HUD provided data on approvals of demolition
or disposition of public housing ui.nits from FY2000 and pending applications.
31 Two other changes could further accelerate the loss of public housing. First,in 2006 HUD issued regulations
implementing provisions from the 1998 QHWRA legislation requiring housing agencies to convert certain developments
to vouchers,and providing them added authority to convert others voluntarily. Second,the new"asset management"
framework discussed in the text above will require agencies to assign costs to particular developments and make it more
difficult for them to use revenues)from one development to subsidize another development.As a result,it may force
agencies to remove less viable developments from their stock.
1
32 The figure of a net loss of 104,000 public housing units includes planned demolition and replacement under grants
funded through FY2007. See n.21. A statement submitted by HUD to the House Financial Services Committee on
June 21,2007 indicates that 56,524 tenant-based vouchers"have or will be provided"as replacement housing under
HOPE VI. It is not clear what tune period this figure covers. From the perspective of overall changes in the public
housing stock,not limited to HOPE VI-related changes,vouchers were awarded for about 100,000 of the 165,000 public
housing units demolished or otherwise removed and not replaced with other public housing between 1995 and 2008(see
n.14 above),based on HUD data published in the Federal Register.
33 Meryl Finkel and Larry Buron,'i"'Study on Section 8 Voucher Success Rates,Volume I,"U.S.Department of Housing
and Urban Development,2001. This is the most recent large-scale study of voucher success rates.
32
34 Robin E.Smith and Kadija Feriyman,"Saying Goodbye:Relocating Senior Citizens in the HOPE VI Panel Study,"
Urban Institute,2006.
35 Housing agencies that have used federal funds to renovate public housing developments are typically required to
ensure that 5 percent of the units in the development are accessible to people using wheelchairs and that an additional 2
percent of units are accessible forepersons with hearing or visual disabilities. Public housing providers must also make
"reasonable modifications" (e.g.,installing grab bars in showers or a ramp into a building)if this does not amount to an
undue financial and administrative burden. About 40 percent of public housing units in developments that are not set
aside for seniors and people with disabilities have three or more bedrooms;in contrast,only 26 percent of private rental
units(at all price ranges)are this large. U.S.Census Bureau,"2005 AHS National Detailed Tables:Size of Unit and
Lot,"htt.s:1 ww\v.CCnsr.is.>c:,�v%.hlic:./w",w .liousit ip/ahs/ahst)5/ahs05.11unt.
36 Having five or more people in a family reduced the probability of success in using a voucher by seven percentage
points in 2000. Meryl Finkel and Larry Buron,"Study on Section 8 Voucher Success Rates,Volume I,"2001. Such
larger families have a higher incidence of housing problems than smaller families,so it is particularly important to have
programs that effectively meet their needs. For example,HUD tabulations of 2000 Census data indicate that 89 percent
of non-elderly renter households with 5 or more people and incomes under$20,000 had one or more housing problems,
compared to 75 percent of all such households.
No data are available on the use of vouchers by people with physical disabilities,but anecdotal reports suggest that they
have limited success,particularly in areas where the housing stock largely predates the accessibility requirements that
apply to housing constructed or substantially rehabilitated since 1988. (Overall,people with disabilities who are not also
elderly—many of whom have mental disabilities that do not require special unit characteristics—are the most
successful at using vouchers of any demographic group studied. The authors speculated that this higher rate of success
may reflect special assistance they,received.) Research on problems with relocation from distressed public housing being
demolished as part of HOPE VI revitalization projects highlighted the difficulties large families faced in using vouchers
successfully,particularly if they included a person with disabilities(as many did). Mary K.Cunningham,Susan J.Popkin,
and Martha R.Burt,"Public Housing Transformation and the`Hard to House,'"Urban Institute Qune 2005).
37 In addition to the 51'percent of households with a head or spouse who is"elderly"or has disabilities,13 percent of
other households include an additional adult who is elderly or an adult or child with disabilities,such as a grandmother
who resides in a 3-generation household. U.S.Government Accountability Office,"Distressed Conditions in
Developments for the Elderly and Persons with Disabilities and Strategies Used for Improvement,"GAO-06-163
(2005).
38 About 530,000 public housing households—51 percent of the estimated 1,040,000 resident households—have a
head or spouse who is elderly.(62 or over)or is less than 62 and has disabilities. (Phis figure is somewhat higher than the
figure of 500,000 such households used by GAO because we estimate that 1,040,000 units are now occupied,while
GAO assumed that approximately 1 million units were occupied in 2005. Some of the difference may be real,and some
likely is due to more complete reporting(and our data-gathering from larger agencies in the MTW demonstration whose
occupancy data was not reportedl'in HUD's RCR system.)
According to GAO(see the noteiabove),47 percent of elderly or disabled households—about 249,000 using our larger
occupied unit count— live in senior developments,in which the majority of the occupants are elderly or have
disabilities or all of the units have no more than one bedroom. An additional 13 percent—or approximately 69,000
households—live in general occupancy developments that have special buildings set-aside for elderly or disabled
households. No data are available to determine how many of these 69,000 households live in the special buildings. The
methods we used to identify senior developments are described in the Technical Appendix.
!'
39 For example,the Miami Dade Housing Agency converted a traditional senior building into the Helen Sawyer Plaza,a
104-unit assisted living facility for low-income seniors.The facility provides services such as meals,transportation,and
physical therapy,and costs 68 percent less than a traditional nursing home.Similarly,Holgate House in Portland,
Oregon provides nursing,transportation,and other support services for elderly public housing residents at less than 20
percent of the cost of a nursing Home facility.See ht >:/iur«w�httclT>ctry,`,offices/ ih(I�ihcc/innovatir.>nstn_tdels.cftn,
accessed September 4,2008.
i.
40 Using criteria related only to the parent's education and employment status combined with longevity in public
housing,Cunningham et al(n.36 above)estimated that such multiple-barrier households represented 10 percent of the
households in severely distressed)developments.
33
I
f
r ,..
•
41 Barbara Sard,"The Role of Housing Providers in an Era of Welfare Reform,"in Barbara Sard and Amy S.Bogdon,
eds.,A Place to Live,a Means to Work:How Housing Assistance Can Strengthen Welfare Policy(Washington DC:Fannie Mae
Foundation,2003),pp. 118-120. (Copies of the volume are available on request from the Center.)
az Howard S.Bloom,James A.Riccio and Nandita Vertna,Promoting Work in Public Housing:The Effectiveness of Jobs-Plus,
Final Report,MDRC,2005. The J6bs-Plus sites were large projects(300–500 units each)in high-poverty
neighborhoods,and many residents had barriers to work or skill deficits that would limit earnings. The study analyzed
the impact of employment-related services and financial incentives on all able-bodied working age residents of the
"treatment"sites. Former welfare recipients did have a statistically significant increase in earnings,but the amount was
small($761 per year)and not as substantial as for other residents. A number of studies found that welfare recipients
who are public housing residents(as well as voucher recipients)benefit more from well-designed employment
interventions than families without housing assistance. See James A.Riccio,"Subsidized Housing and Employment,"in
Nicolas P.Retsinas and Eric S.Belsky,eds.,Revisiting Rental Housing:Policies,Programs and Priorities(Washington DC:
Brookings Institution,2008),pp.205-207.
43 For the third of these units that are in non-metropolitan areas,there may be little rental stock available where vouchers
can be used. See tables 2B in Part C of the Technical Appendix.
44 Deborah Devine et al.,Housing Choice Voucher Location Patterns.-Implications For Neighborhood Welfare,U.S.Department of
Housing and Urban Development,January 2003.
45 Larry Orr,et al,Moving to Opportunity for Fair Housing Demonstration Program.Interim Impacts Evaluation,Abt Associates and
National Bureau of Economic Research,prepared for U.S.Department of Housing and Urban Development,
September 2003.
46 Only a small number of states and localities prohibit discrimination against holders of housing vouchers.The National
Housing Law Project has a list of-states and localities that as of 2005 prohibit discrimination against holders of housing
vouchers,at
http://www.nhlp.org/htrnl/sec8/source of income/2005%20Source%20of"/o201ncome%20Statutes%20%5B3.28.05%
5D_pdf.
47 National Fair Housing Alliance,"2008 Fair Housing Trends Report,"April 8 2008,
http://www.nationalfairhousing.6xg/Fa-irHousingResources/tabid/2555/Default.aspx. Complaints regarding
discrimination in rental housing,on race and other grounds,are the most common type of housing discrimination
complaints.
48 Stuart S.Rosenthal,"Where Poor Renters Live in Our Cities:Dynamics and Determinants,"Revisiting Renta/Housing.-
Policies,Programs,and Priorities,Joint Center for Housing Studies and Brookings Institution Press,2008.
49 For several reasons,this figure is significantly below the average cost of vouchers,which we estimate at$8,062 in 2009
(including fully funded administrative fees). Public housing tends to be located in areas where rents are lower than in
the areas where vouchers are used;households living in public housing tend to be smaller than voucher households;and
public housing tenants have somewhat higher incomes than voucher tenants,on average.
so Like the$22 billion estimate in the text above,the$6,520 figure would cover full repairs to existing building features
but not major reconfiguration of'units or replacement with new buildings.It assumes that 80 percent of the public
housing capital backlog would be funded through borrowing,and 20 percent would be funded through up-front grants.
For a description of the methodology and assumptions we used to develop these estimates,see Part B of the Technical
Appendix.
The estimate that adequately funded public housing would be five percent less expensive than the cost of providing
vouchers to the same populationl(or eight percent less expensive including transition costs)uses inflation-adjusted total
costs,without any adjustment to reflect the fact that public housing preservation partly funded through upfront grants
would require a larger upfront investment. If costs were compared using net present value—that is,by applying a
discount rate to future costs—public housing preservation would be three percent less expensive than replacement
vouchers(or seven percent less including transition costs).
1
51 Since the cost estimates in the text only look at federal costs,they do not include the value of the land on which public
housing is located on either side of the ledger(i.e.,as a cost of maintaining public housing or as a source of revenue
upon disposing of it). The local agency generally owns the land,so that agency,not the federal government,would
receive any financial benefit from its sale.
34
1.
52 San Diego Housing Commission,"Repositioning of the San Diego Housing Commission's Public Housing Portfolio,"
Housing Authority Report.November 9,2006.
53 See generally,Larry Orr et al.,Moving to Opportunity Interim Impacts Evaluation(Washington,D.C.:U.S.Department of
Housing and Urban Development,2003); Margery Austin Turner and Xavier deSouza Briggs,"Assisted Housing
Mobility and the Success of Low-Income Minority Families:Lessons for Policy,Practice and Future Research,"Urban
Institute,March 2008;and Testimony of Dr.Susan J.Popkin,June 21,2007,
11rm.://w�,w;.urban.or C .loacledl'l:)E 901048 N.OI'Is V:L�
sa Jennifer Comey,"HOPE VI'd and On the Move,"Urban Institute,June 2007,p.5.
ss Specific health benefits have been found in the Moving to Opportunity Demonstration(see note 53)but not in the
HOPE VI research,possibly due to the"shorter period of time that had elapsed after relocation for the latter group of
families. Among the MTO movers,significant improvements in adult mental health were found only for families that
moved to low-poverty neighborhoods initially. Turner and Briggs note that the mental health gains for adults and girls
who moved to low poverty areas as part of MTO"are on par with mental health gains typical under the most effective
psychotherapeutic treatments available,"and that improved maternal mental health could have substantial benefits for
child development. Margery Austin Turner and Xavier deSouza Briggs,"Assisted Housing Mobility and the Success of
Low-Income Minority Families:Lessons for Policy,Practice and Future Research,"Urban Institute,March 2008,p.5.
56 Susan J.Popkin,Tama Leventhal,'and Gretchen Weismann,"Girls in the`Hood:The Importance of Feeling Safe,"
Urban Institute,March 2008.
57 Both the MTO and HOPE VI research have found a significant reduction in problem behaviors among adolescent
girls.
58 Margery Austin Turner et al.,"Severely Distressed Public Housing:The Costs of Inaction,"Urban Institute,March
2007;Lawrence J.Vale,ReclaimingPublic Housing(Cambridge MA:Harvard University Press,2002),pp.398-399;
Newman and Schnare,n. 10 above.
59 This research was based on data from the National Survey of America's Families(NSAF). It also finds that in non-
metropolitan areas,youth behavior and school engagement and a number of indicators of quality adult-child interaction
do not deteriorate as the poverty rate of the tract rises,in contrast to central city areas. Margery Austin Turner and
Deborah R.Kaye,"How Does Family Well-Being Vary Across Different Types of Neighborhoods?",The Urban
Institute,April 2006,pp. 13,20.
G0 Experts debate whether the threshold most likely to correlate with indicators of social distress is a poverty rate of 30
percent or 40 percent. We have chosen the lower threshold here because of mounting evidence that neighborhoods in
these two categories are quite similar in important ways. For example,in 2000 the shares of(a)adults without a high
school diploma and(b) single-mother families with children are nearly as great in neighborhoods with"high poverty"
(i.e.,with poverty rates of 30-40 percent)as in neighborhoods with"extreme poverty"(poverty rate of 40 percent or
more). Also,the"high poverty"neighborhoods were distinctly different on both indicators than the metropolitan areas
as a whole. G.Thomas Kingsley and Kathryn L.S.Pettit,"Have MTO Families Lost Access to Opportunity
Neighborhoods Over Time?"Urban Institute,March 2008,p.3.
61 Federal policy already treats developments of 250 or fewer units differently from others,requiring housing agencies to
analyze whether the development's are so distressed that they must be converted to vouchers.See 24 C.F.R.Part 272.
62 Four-fifths of these 86,000 units are in majority-minority areas,and three-fifths are in areas where more than 80 percent
of residents are black or Hispanic.` These facts are particularly important in light of the history of racial segregation in
the public housing program. If government policies were responsible for locating particular public housing
developments in segregated neighborhoods,government agencies may have the legal obligation to create housing
opportunities in non-segregated areas. Regardless of whether there is potential legal liability for past actions,public
housing agencies and HUD must r"affirmatively further fair housing"going forward. This duty may affect decisions
made about the future of such projects.See Cara Henrickson,"Racial Segregation and Income Deconcentration in
Public Housing,"Georgetown Journal on Poverty Law and Policy, Vol. 9, Winter 2002,p.44(on historical patterns of
segregation)and p.53 (on current segregation).
35
G3 Currently,the operating subsidyl,regulations require that the freeze continue through 2009,and do not specify how
rent revenues will be calculated in 2010 and later.
64 It may be impractical for HUD to review all such preservation plans directly,particularly because few HUD staff have
the necessary expertise in housing idevelopment and financing. State housing finance agencies have the necessary skills,
and already are responsible for allocating some of the types of funds(such as Low Income Housing Tax Credits)that
public housing agencies may seek as part of their preservation strategy. HUD already contracts with many state housing
finance agencies to oversee subsidy contracts with private owners. Only a few state agencies administer public housing
directly,which would pose a potential conflict in taking on this additional function. HUD also could contract with
private entities.
n
65 In cases where the agency must make payments on previous borrowing through mechanisms such as the Capital Fund
Financing Program,funding should be adequate to cover those payments,regardless of whether it would otherwise be
capped at a lower level.
66 The federal government would not be legally obligated to continue the funding to cover debt payments,but if federal
credit insurance is provided,the federal government could be obligated to repay the loans if housing agencies default.
Even if credit insurance is not provided,defaults could have serious adverse consequences.Tenant could be largely
protected from the consequence if loans were accompanied by foreclosure protections like those proposed in this
analysis,but lenders would likely be reluctant to make similar loans in the future.
67 The original construction of public housing was funded through grants and loans from the federal government,not
through private sector mortgages.
61 The 2001 level used to calculate'the 1 percent decline in operating funding includes funding for the Public Housing
Drug Elimination Program,which was eliminated in 2002. The operating fund can be used to support anti-crime
activities similar to those funded under the DEP,although agencies are not required to use funds for such activities.
69 In addition,if turnover is very rapid at developments with large numbers of project-based vouchers,an agency could
find that most or all of its tenant-based vouchers are being allocated to families who are leaving units with project-based
vouchers. This could provoke opposition from low-income families on the voucher waiting list,who would likely resent
being effectively forced to spend a year living in an undesirable project-based voucher development in order to gain
access to a tenant-based voucher.
70 Developments that are converted to project-based vouchers would often be mortgaged,so it also would be important
that in the event of foreclosure they be subject to the same protections against tenant displacement or loss of
affordability as suggested above for mortgaged public housing developments.
71 See Part B of the Technical Appendix for an explanation of our replacement cost estimates. The 86,000 units are
those in large(250 or more units)'general occupancy developments in neighborhoods outside of New York City where
30 percent or more of the residents have incomes below the poverty line. See pp. 19-20 above.
72 See Barbara Sard and Leah Staub,"House Bill Makes Significant Improvements in`HOPE VP Public Housing
Revitalization Program,"Center on Budget and Policy Priorities,htm:!/wunv.cbpp.c>rs;Ll-16-08hous.1ann.
i
73 Congress should provide adequate funding for both these new vouchers(which would be substantially less expensive
than the cost of building new replacement housing)and project-based vouchers to replace other developments that
agencies seek to withdraw from the public housing program voluntarily. If funding turns out to be inadequate to cover
both types of developments,Congress should direct HUD to prioritize allocating vouchers to developments where
conversion is required and should defer approval of further voluntary conversion of public housing until the following
year. It will also be important that when developments are replaced with tenant-based vouchers,all of the units in the
development should be replaced,not just those that happen to have been occupied in the period immediately before
they were lost.
36
i
I
r'
,........,.,s a.. ,., . .. ..».. ....;.. WNW
....
„Public Housing Units Types of Famllres In. ubllc Housing*
Percent Other
Percent (Non-Elderly,No
Estimated Number of Public Percent Percent Families with Children,Non-
State Housing Units,2008*** Elderly Disabled Children Disabled
United States .,m „31, 20 . 13
Alabama }, 40,070 23 23 47 14
Alaska 1,285 21 20 57 7
Arizona 6,938 22 21 61 6
Arkansas14,671 27 27 39 13
California f. 41,107 28 22 52 9
Coliado. 8';287
Connecticut
3.F 15';67,8 ......
;Delaware* ', �.,' 27,91 22 , 24 42
Di§trio of,'Columbra• �'
.3 Vat ,..
:Florida,., 36;194, , 33 . 20 . 46
Georgia** 45,039 23 19 52 12
Guam 751 14 15 78 4
Hawaii 5,442 33 19 49 7
Idaho 811 39 36 25 2
Illinois** ! 61,237 38 22 29 14
Indiana, 28� ®_ ,.., 25 ,� `X40 .
�; �.,, ..16';300.<-., . ..
lowal� . 4-,466,'.,.,,..,` 51. . ,�22,E 24
::Kansas
279;151..,':;` 36
s, 26 „ 14...
`Kentuck.,",• 23;200 X27. 25.`. I 41.. a13 ,
..,.
Louisiana ,... ,25005u
�.
Maine i, 4,140 39 21 39 6
Maryland— 21,330 32 20 39 11
Massachusetts 33,384 41 27 30 8
Michigan 23,447 35 28 31 10
Minnesota 20,739 36 30 24 17
22 >s... ..
Missouri , ,,, p: 17„479 30 2710��a..
;`Montana 2;072 26
,,.39... ; 23
Nevada „ a 4;1'54” 34-n
16« 524:
New Hampshire 4,331 50 28 24 2
New Jersey 39,387 47 19 29 10
New Mexico 4,655 26 23 48 8
New York 196,845 36 17 37 17
North Carolina 36,499 20 21 53 12
North Dakota i, .,
1';779. 34 .,28zE,h„ 27 13
46;382 21 ... 24;;1
Oklahoma .•°%` _ 12;968 .28 ..'; ... 22 37•,
Ore on* 24 _ . ... 30 ,,. » ,Al
Penns Ivania",w . .:
62 878.< 32 .,,"�;-
Puerto Rico I 54,084 18 7 54 24
Rhode Island 9,779 51 22 25 6
South Carolina 14,446 18 20 55 13
South Dakota 1,767 49 24 19 9
Tennessee 35,918 23 26 43 15
:Texas
Utah X32;159,s42,k: 14..
Vermont. 28;x,. .. X423r
Vir in Islands== y 3;494, 31, 7, 46, 20
Vir ipia, . ;,., ..,:,19;742. :,:.•.,21 19=... ,.55. 12:x: . .
i
W
x_.ate. ,
Publtc Housing Units,, Types of FamUles; n Public Housing, 5 '
Percent Other
Estimated Number of Percent (Non-Elderly,No
Public Housing Units, Percent Percent Families with Children,Non-
State 2008*** Elderly Disabled Children Disabled
Washington— 12,982 26 33 43 6
West Virginia 6,958 28 25 33 18
Wisconsin 13,097 39 28 1 27 10
Wyoming 1 785 28 27 45 1 6
*Percentages add to more than 100 percent because elderly families with children are counted as both elderly and families
with children,and non-elderly disabled families with children are counted as both non-elderly disabled and families with
children.More detailed breakdowns(such as the number of elderly families with children and the number of families that are
both elderly and disabled)are available from HUD's Resident Characteristics database at
https://pic.hud.gov/pic/RCRPublictrcrmain.asp.The percentages in this table were downloaded from RCR on September 9,
2008,and reflect data reported to THUD for the period May 1,2007 to August 31,2008.
**State percentages do not include complete data from agencies participating in the Moving to Work(MTW)Demonstration
that have more than 10%percent,i of the state's public housing units.
***CBPP estimate of units available currently or in the near future,based on HUD data. See Technical Appendix.