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Public H c Hou ousi sing Repos osition oning S g Strategi gies Session 4: Public Housing Program Closeout and Case Studies 1 Why a are we h e her ere? The goal of this training is to help inform PHAs of their repositioning options.

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1

Public H c Hou

  • usi

sing Repos

  • sition
  • ning S

g Strategi gies

Session 4: Public Housing Program Closeout and Case Studies

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2

Why a are we h e her ere?

The goal of this training is to help inform PHAs of their repositioning options. The training will start with the basics of repositioning, then describe the various policy tools involved in repositioning. We will discuss the decision-making process in choosing a repositioning strategy, and how the Project-Based Voucher program intersects with repositioning.

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Ground R Rules

  • Participate in each session of the webinar series
  • Avoid distractions (close email and web-browser)
  • Silence your phone
  • Ask plenty of questions. It is the best way to

learn!

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4

Webcas ast T Trai aining A Agenda

Session 1 Nov 12

Introduction to Repositioning RAD

Session 2 Nov 14

Section 18 Streamlined Voluntary Conversion

Session 3 Nov 19

Repositioning Decision Matrix Intersection with PBV

Session 4 Nov 21

Public Housing Close-out Case Studies

YOU ARE HERE If you don’t recall the earlier sessions, don’t worry. They were recorded and will be posted on HUD Exchange.

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Knowledge Check

What are some reasons why PHAs may choose to reposition?

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Knowledge Check

What are some reasons why PHAs may choose to reposition?

Stabilize Revenue Provides Access to Debt/Equity Reduce Administrative Burden

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Knowledge Check

To whom may a PHA dispose public housing property?

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Knowledge Check

To whom may a PHA dispose public housing property?

Separate legal entity under law:

  • PHA may retain ownership or control
  • May be a non-profit of PHA
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Knowledge Check

True or False? RAD is the only repositioning tool that allows a PHA to carryover existing public housing funds/reserves and use them toward a Replacement Reserve to support the future Section 8 units (PBV or PBRA) following conversion.

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Knowledge Check

True or False? RAD is the only repositioning tool that allows a PHA to carryover existing public housing funds/reserves and use them toward a Replacement Reserve to support the future Section 8 units (PBV or PBRA) following conversion.

True

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Her ere a are som

  • me q

questions we w e will c ll cover t tod

  • day
  • 1. What does it mean to closeout a public housing program?
  • 2. What can a PHA do with any leftover public housing funds

after all the units have repositioned to Section 8?

  • 3. What are a PHAs closeout options?
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What does closeout mean?

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What d t does

  • es c

close-out ut me mean? n?

  • No more public housing program (end of

Section 9 ACC); NOT the end of the PHA

  • PHAs are locally established government

entities; They should continue to focus on providing housing

  • HUD accepts ACC Transfers and Consolidations

in lieu of an ACC Closeout

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When i is cl clos

  • se-out r

required?

  • Section 18 disposition (50 units and under justification)
  • Section 22 Streamlined Voluntary Conversion (250 units and under)
  • RAD (streamlined processing for 50 units and under)
  • RAD (where all public housing units are converted and the PHA has

no authority to develop new units under Faircloth)

Close-out is OPTIONAL when a PHA removes all of its current public housing under other repositioning tools and has Faircloth Authority to develop new public housing units.

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How ea early ly shou

  • uld

ld PHAs th thin ink a about cl clos

  • sin

ing ou

  • ut?
  • NOW…with the first repositioning
  • Things to consider:
  • Where will the assets go? (land, buildings, desks, lawn

mowers, etc)

  • What will you need?
  • What about pensions?
  • What about future staffing?
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Wha hat a about a assets? ?

  • Public Housing Operating Reserves
  • Any remaining proceeds
  • Remaining Public Housing land
  • Future Public Housing Funding

PHAs that removed units via Section 18 may be eligible to receive additional public housing subsidy in the form Demolition Disposition Transition Fees (DDTF) and Asset Repositioning Fees (ARF).

  • Faircloth Authority
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Wha hat a about l liabilities?

  • Remaining public housing obligations (i.e., repayment

agreements, CFFP, EPC)

  • Staffing
  • Pensions

Note: Liabilities should not prevent a PHA from considering repositioning. HUD can help figure

  • ut options!
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What a are el elig igib ible le e expendit itures of

  • f S

Sec ectio ion 9 ACC funds after p r public h housing c close se-out?

  • Administrative costs associated with closeout (i.e., staff, operations, legal reviews, program audits,

board costs, liquidation of equipment/supplies)

  • Outstanding public housing program litigation, claims, or liabilities (e.g., pensions)
  • Staff transitions (e.g., severance packages) required by pre-existing employment contract, or PHA

personnel and employment policies consistent with state/local law

  • Record keeping for five years following the date the PHA removed its last public housing unit
  • Maintenance of any remaining public housing property, including building removal or site remediation

prior to DOT/DORC removal

  • Items in an approved MTW Plan

Note: PHAs can always develop new public housing units, subject to HUD approval.

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How d do P

  • PHAs n

not

  • tif

ify H HUD of i intent to

  • cl

clos

  • se-ou
  • ut?
  • HUD-5837 required when PHA submits an application in PIC (i.e. RAD, S18, S22)
  • PHA must indicate:
  • If it plans to close-out (sometimes required) or develop new public housing

units (if allowed by repositioning tool and Faircloth authority)

  • How it plans to close-out (i.e. consolidation, transfer, or ACC termination)
  • If it has any non-dwelling real property
  • Any major issues/red-flags that Field Office should be aware of regarding the

close-out or future development plan

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Clos

  • se-ou
  • ut Op

Option

  • ns

ACC Closeout – PIH Notice 2019-13 PHA Transfer – PIH Notice 2014-24 PHA Consolidation – PIH Notice 2014-24

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Public Housing ACC Closeout (PIH Notice 2019-13)

Key Requirements:

  • - Complete final program audit and reconciliation of PH Funds.
  • - Inventory remaining PH program assets, possibly reimbursing HUD for items over $5,000

Benefits of this option:

  • Requires no collaboration with other PHAs

Costs of this option:

  • Remaining non-dwelling property must be removed from DOT/ACC through either Section

18 or Part 200 application

  • Equipment sold/accounted under Part 200, with possible return of sale proceeds to US

Treasury

  • Use of PH program funds restricted to closeout or other eligible activities (i.e. MTW) or

returned to US Treasury

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Public Housing Program Transfer (PIH Notice 2014-24)

Key Requirements:

  • Involves complete transfer of Public Housing assets/liabilities to receiving PHA
  • Both PHAs must have an existing Public Housing program

Benefits of this option:

  • Preserves PH resources (equipment, non-dwelling property, PH funds) and Faircloth units; Nothing

returned to HUD

  • Preserves potential future funding for Demo/Dispo removals (DDTF and ARF)
  • Transfer can occur after all PH units are removed

Costs of this option:

  • Prior PHA governance has no control over PH resources once transfer is complete
  • Requires collaboration with transferring PHA
  • May require transfer of liabilities such as pensions and use agreements to new PHAnew PHA.
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Public Housing Program Consolidation (PIH Notice 2014-24)

Key Requirements:

  • Complete transfer of all existing PH program assets and liabilities to newly-created PHA

Benefits of this option:

  • Same preservations as transfers, with same future funding and low burden
  • Creates a new PHA that did not formerly operate PH (i.e., State Housing Finance Agencies)

Costs of this option:

  • Prior PHA governance has no control over PH resources once consolidation is complete
  • Requires collaboration with consolidating PHA
  • May require transfer of liabilities such as pensions and use agreements to new PHA
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Knowledge Check

True or False? A PHA that wants to close their public housing program must return any unused program funds to HUD?

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Knowledge Check

True or False? A PHA that wants to close their public housing program must return any unused program funds to HUD?

  • False. A PHA may choose to

transfer/consolidate their public housing program. Any remaining program resources and liabilities would transfer to the new PHA.

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Public Ho Housing C Close seout – Key t takeawa ways

  • This isn’t the end of your PHA - PHAs are locally-established government entities.

“Public Housing Closeout” just means the PHA will no longer participate in the public housing program.

  • Plan for your remaining public housing funds - Public housing funds may only be used

to support public housing program related costs. Once a unit converts to Section 8 subsidy, the PHA must not spend public housing funds (including any remaining public housing reserves) to support the Section 8 unit.

  • Consider transferring assets/liabilities during repositioning - PHAs may be able transfer

their public housing program assets and liabilities as part of the public housing conversion actions. For instance, if a PHA has Public Housing maintenance equipment at a building they may want to convert those assets as part of the public housing conversion.

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Public Ho Housing C Close seout – Key t takeawa ways (continued)

  • PHAs must announce their plans on the HUD 5837 - This form must

be submitted with the PHA’s last PIC Removal Application. On the HUD 5837, the PHA will indicate if they plan to develop new public housing, transfer/consolidate, or terminate their Public Housing ACC.

  • Consider a Transfer/Consolidation - With HUD approval, a PHA

may transfer public housing assets (including public housing program funds and Faircloth Authority) to a local PHA rather than returning any remaining public housing grant funds to HUD.

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Important R Resou

  • urce

ces

  • HUD Repositioning Website - check out new training videos, helpful links and other resources

https://www.hud.gov/program_offices/public_indian_housing/repositioning

  • HUD RAD Website - find additional guidance on RAD, fact sheets for residents, a table to

compare a projects RAD Rents with FMR https://www.hud.gov/rad

  • RAD Resource Desk - even more RAD-related resources, training videos, and the place you go

to submit a RAD application

  • Local PIH Field Offices - Field Offices can help you submit a RAD or Section 18 application. They

can also set up a Repositioning Assistance Panel to speak directly with HUD program experts

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Case Study Conversion Analysis

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Case Study A

The Byrnesville Housing Authority (BHA) has an inventory of 2,000 units, of which 200 are scattered site units and 100 are in an elderly high-rise with significant capital

  • needs. What public housing

repositioning options should BHA consider?

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Case Study A

Scattered Sites – If the units meet the Section 18 definition of Scattered Site, (4 units or less on a non- contiguous site) then they would qualify for removal through a Section 18 PIC Removal Application. BHA could then decide to maintain units with PBV assistance

  • r provide tenant-based voucher assistance instead.

Obsolete Units – If the units meet the Section 18 definition of Obsolete, then BHA would qualify for removal through a Section 18 PIC Removal Application. BHA could then decide to rehab and maintain the units with PBV assistance, demolish and rebuild the units with PBV or public housing, or provide tenant-based voucher assistance instead. RAD - Once BHA completes Sec 18 actions identified above, they will be eligible for DDTF, which can be used to increase RAD rents for a future RAD development. BHA could also use any proceeds from a Sec 18 disposition as a source in a RAD conversion.

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Case Study B

The Esterling Town Housing Authority (ETHA) has an inventory of 90 units, they want to maintain the same hard units in their community. What public housing repositioning options should BHA consider?

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Case Study B

RAD Closeout Blend – ETHA could apply for RAD for all 90 units. Then, move up to 50 units to a Sec 18 PIC removal application. This way, ETHA could take advantage of the typically higher Section 18 PBV rents for some units, while still maintaining the resident rights associated with RAD, and the ability to utilize public housing funds as part of the conversion. ETHA must have a voucher program to utilize this option. If ETHA doesn’t have a HCV program, they will need to partner with an HCV Agency in order to provide PBV assistance. If ETHA doesn’t have a HCV program and can’t find an HCV partner, they could convert to RAD PBRA, but they would be limited to conversion 100% of the units under RAD.

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Case Study C

The Szybist Co Housing Authority (SCHA) has an inventory of 240 public housing and an HCV program with 1,000 vouchers. They want to maintain the same hard units in their community. What public housing repositioning options should SCHA consider?

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Case Study C

RAD – SCHA should first compare their RAD Rents with the potential PBV program rents. (The RAD Rents table

  • n the HUD RAD Website will help with this

comparison.) Section 18 – The PHA may look for options that allow conversion via Section 18 such as scattered site units, and 50 and under. Doing this would allow the PHA to receive DDTF/ARF, and automatically PBV the replacement HCV subsidy (TPV). Streamlined Voluntary Conversion (SVC) -- If PBV program rents are higher, the PHA may want to consider

  • SVC. The PHA needs to beware that tenants may decide

to leave with their voucher assistance, in which case the PHA could backfill the unit by PBV-ing an unused voucher from their regular HCV program.