HUD Releases Required and Voluntary Conversion Rules
On September 17, 2003, HUD published in the Federal Register two
final rules and a proposed rule regarding conversion of distressed
public housing developments to tenant-based assistance.
- Required Conversion of Developments From Public Housing Stock;
- Voluntary Conversion of Developments From Public Housing
Stock; Final Rule
- Conversion of Developments From Public Housing Stock; Methodology
for Comparing Costs of Public Housing and Tenant-Based Assistance;
These three rules implement the required and voluntary conversion
programs authorized by the Quality Housing and Work Responsibility
Act of 1998 (Title V of the Fiscal Year 1999 HUD Appropriations
Act; Pub. L. 105-276.) and will provide PHAs with asset management
tools to remove distressed properties that are not viable from the
public housing inventory, and in place to provide families with
replacement units or vouchers.
On March 20, 2006, a final rule on the methodology for comparing
the cost of individual public housing developments to the cost of
providing Section 8 housing choice voucher assistance was published
in the Federal Register. This rule (the Conversion Cost Calculator
Rule) became effective on April 20, 2006. The cost methodology for
Required Conversion is different than that for Voluntary conversion.
The cost methodology rule outlines a methodology for comparing
costs for public housing and Section 8 tenant-based assistance codified
as an appendix at 24 CFR Part 972.
The Special Applications Center (SAC) administers these rules and
reviews required and voluntary conversion proposals submitted by
PHAs. The SAC website will post all information regarding how PHAs
are to apply for required and voluntary conversion approval. This
will include a verification process for PHAs that operate any public
housing developments with more than 250 units with a vacancy rate
at or above 15% for a cumulative three-year period. PHAs are required
to indicate whether continuing to operate and maintain these properties
is cost-effective and less than providing vouchers or these properties
must be removed from the inventory. PHAs that operate any properties
subject to required conversion are required to submit conversion
assessments within their next PHA Agency Plan, and a required conversion
plan to HUD's Special Application no later than the due date of
their next Annual Plan. All Conversion Plans are reviewed and approved
by the SAC.
The SAC will be posting additional application requirements and
instructions for PHAs to prepare required and voluntary conversion
proposals and a list of potential properties that are required conversion
candidates in the near future. The SAC website can be found at:
The Cost Comparison Spreadsheet posted below will enable PHAs to
conduct cost assessments comparing public housing and voucher costs
to make decisions regarding voluntary and required conversions.