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Voluntary Conversion

Voluntary Conversion of Developments from the Public Housing Stock

On September 17, 2003, HUD published a final rule covering the program for voluntary conversion of developments from the stock of public housing, as part of the implementation of the changes made to Section 22 of the U.S. Housing Act of 1937 by Section 533 of the Quality Housing and Work Responsibility Act of 1998. This rule (Federal Register 68 page 54612) will become effective March 15, 2004, forming part of 24 CFR 972. It follows the rule issued June 22, 2001 governing the initial assessments, which these statutes require PHAs to perform, addressing the suitability of certain of their developments for conversion from the stock of public housing. Conversion in this context means the removal of developments from public housing Annual Contributions Contracts, and the provision of tenant-based or project-based assistance, and/or relocation to comparable housing, for residents.

Voluntary conversion may be undertaken only where it would be beneficial to the residents of the development being taken off public housing and to the surrounding area, and where it would not have an adverse impact on the availability of affordable housing in the area.

Further, conversions are permitted only 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 also published as a final rule on March 21, 2006. Notice PIH 2011-62 which indefinitely extends Notice PIH 2008-35 (HA), assists PHAs in completing the cost-test analysis and in complying with the applicable cost-test requirements. 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.