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Purpose
Section 33 of the United States Housing Act of 1937 requires PHAs
to identify developments (or parts of developments) that must be
removed from the stock of public housing operated under an Annual
Contributions Contract (ACC) with HUD. This site explains the process
of Mandatory Conversion, in general, and provides an overview of
the portion of the background preparation the Department will undertake
for all PHA’s to identify required conversion candidates as part
of the implementation of Section 33.
Background
Section 537 of the Quality Housing and Work Responsibility Act
of 1998 (QHWRA) (Title V of P.L. 105-276) added a new Section 33
to the United States Housing Act of 1937 (42 U.S.C. 1437z-5). In
addition, Section 533 of QHWRA amended Section 22 of the 1937 Act.
Section 33 of the Act governs the required conversion of developments
from the public housing stock and Section 22 of the Act governs
voluntary conversions. The term conversions in this context means
the removal of public housing units from the inventory of a Public
Housing Agency, and the provision of tenant-based, or project-based
assistance for the residents of the public housing being removed.
Separate final rules implementing Section 537 of QHRWA covering
required conversion and Section 533 of QHWRA covering voluntary
conversion, were published in the Federal Register on September
17, 2003, with an effective date of March 15, 2004. These rules
amend 24 CFR Part 972. Public housing developments where the cost
of modernizing and operating them as public housing exceeds the
cost of providing tenant-based assistance to residents must be removed
from the public housing inventory. Public housing developments that
will not be viable over the long term must also be removed from
the public housing inventory.
Conversions will have to be carried out if they are cost-effective.
The cost methodology that PHAs must use to compare the cost of continuing
to operate developments as public housing to the cost of providing
tenant-based assistance was published as a final rule on March 20,
2006. Excel spreadsheets containing the calculations associated
with the cost methodology are available below. The cost methodology
for Required Conversion is different than that for Voluntary conversion.
A sample of a completed spreadsheet has been included as well.
HA's must address all clusters on the "Candidates" list on this
site as part of their HA Plan submission. As part of the HA Plan
the submission, HA's must
- explain why the cluster in question should not be on the list,
or
- certify that it has done the calculations, and determined it
is more cost effective to continue operating the cluster as low-income
housing or,
- submit a conversion plan because the calculations showed the
cluster is not cost effective to maintain when compared to the
cost of Section 8
Implementation
Since April 20, 2006, PHAs (6 months after the effective date of
the Calculation Rule), at the start of their fiscal year, PHAs are
now required to review their inventory annually to determine whether
any of their ACC units must be removed from the public housing inventory.
The affected developments will have to be discussed as part of the
PHAs Annual Plan.
Baseline Data
As a first step in identifying the universe of public housing units
potentially subject to mandatory conversion, the OPHIs Special
Applications Center (SAC) created, in the form of a report, information
from HUD Field Offices identifying public housing developments that
contain clusters of at least 250 dwelling units on one site or on
contiguous sites. Since the movement to AMP groupings this system
has been updated. Although the cluster configurations should not
change, the clusters are now defined down to the building level.
Development numbers are included in the report for clarity, but
they have no bearing on a particular building being in a cluster.
This gives us the flexibility to refine the cluster listing to be
more in line with the definition of contiguous units: "Units are
contiguous if they share a border, or are separated by no more than
a street"
This report is being posted (in MS-Excel
format, and
in PDF) for review by PHAs and Field Office staff for accuracy
and any required changes. It includes the HA Name, the project Development
Number, and an assigned cluster number. The Excel report
can be filtered by State and Housing Authority. Some clusters have
multiple Development numbers that contain contiguous units; other
clusters of 250 or more units are entirely within one Development.
The PDF
report is a static executive summary based on the data in the
Excel file.
This report is being posted with the expectation that it will be
verified and refined with the benefit of further data from Field
Offices and PHAs, especially with regard to projects that individually
have more than 250 units and are not contiguous to other projects.
For example: some of these individual developments are identified
in (PIC as scattered site. Because occasionally a nominally
scattered site development will have a cluster of 250 units on contiguous
sites, a number of these developments have been left on the list
until more definitive information is obtained as to whether they
meet this threshold or not.
This list attempts to include all clusters of 250 or more public
housing units, even if the developments in question are otherwise
exempt from required conversion. Please let us know via Email if
any changes are needed. We can add/delete building from clusters,
or add clusters. We need the building numbers in the format they
are identified in PIC as well as the development they are currently
associated with.
Candidate
Cluster List
Cluster data is filtered against information in PIC to come up
with a Candidate Cluster List. The SAC staff will run this report
monthly on the first business Monday of the month, and post it here
as Rich Text and Excel Files on Friday. An HA with a cluster on
the list two months before submission of their HA Plan will have
to address the issue in the plan they submit to their local Field
Office. Cluster Candidate Data.
If an HA feels its units do not belong on the candidate list because
250, or more, units are not contiguous, the occupancy information
is not correct, or other data needs correction, it must contact
the field office and SAC to make the needed corrections.
SAC will rerun the report the next month, and if the cluster still
appears on the report, there are two ways to address having a cluster
candidate, and both require running the cost viability test.
- If the test result show it is more cost effective to keep the
cluster as low-income housing with ACC subsidy, say so in the
HA Plan and maintain a copy of the cost analysis in the HA files.
Nothing needs to be done till the next plan submission.
- If the result shows it is more cost effective to provide the
residents with Vouchers and remove the facility from ACC subsidy,
say so in the HA Plan and submit an application for Required Conversion
per 24 CFR 972.
Cluster
data is run through several PIC data filters to identify candidates:
- Building
and Unit active unit counts - although the cluster had 250, or
more, units when it was originally identified, the unit counts
may have been altered by removals or conversion. The number of
units under management at the time the report is run is the number
used.
-
Building and Unit designation status - Units officially identified
as designated for Elderly, Handicapped or Mixed Population by
HUD field staff are subtracted from the unit totals for the cluster.
-
Occupancy information - To determine the occupancy rates for the
cluster in question a mix of information is currently used.
- Starting
with October 2006, "snapshots"
are taken of the occupancy information in PIC from the buildings
and units database (PICDB).
-
Prior to October 2006, an algorithm is used on historic 50058
information which assess move and move out information.
-
For clusters where that is not successful, the information
from the most recent HUD 51234 data is used.
Candidate
Cluster Report Explained
Implementation
Schedule
From the preamble of the final rule:
PHA Plan. As provided in the July 23, 1999, proposed
rule, this final rule requires that a PHA must submit any required
conversion plan as part of the PHAs Annual Plan. Since the
cost methodology necessary to conduct the required cost comparisons
has not yet been finalized, this final rule provides that this requirement
will not become effective until PHA fiscal years commencing six
months after the effective date of the cost methodology.
Since the calculator rule is effective April 30, 2006, HAs
with fiscal years starting April 1, 2007, will be the first who
will have to address any developments that show up on the candidates
list.
Feedback Required
Since this information will be used by HUD to monitor PHA compliance
with the Required Conversion regulation, SAC encourages PHAs and
HUD Field Offices to examine the current list of clusters to ensure
that it is complete and accurate. The information required is to
identify any developments/units that should be included on the list
as additional clusters, or as part of existing clusters, as well
as pointing out any developments/units that should be removed from
the existing list because they are not part of contiguous sites
with 250 units or more. If the SAC receives no response from a PHA,
it will assume the data is correct as presented. When the program
is in its implementation stage, SAC will be the final arbiter in
deciding if unit/developments are contiguous. Appeals may be made
to the Deputy Assistant Secretary for the Office of Public Housing
Investments.
Also, since the data on this website will be used by PHAs
to prepare their HA Plans, SAC needs to know the optimal time to
refresh the data. The current plan is to run the refresh program
about every three months and inform those PHAs and Field Offices
if any clusters in their jurisdictions are potential conversion
candidates, prior to posting the information on the website. Which
months would be the best to provide PHAs with data for their PHA
Plan preparation?
Feedback and questions should be directed to SAC management:
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