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Streamlined Voluntary Conversion (Section 22)

Overview

Streamlined Voluntary Conversion (SVC) refers to PHAs’ ability to voluntarily decide to remove their public housing units from a public housing Annual Contributions Contract (ACC), authorized under Section 22 of the U.S. Housing Act of 1937. Families residing in these units receive tenant-based vouchers. Generally, PHAs must demonstrate that it is more cost-effective to issue tenant-based assistance than to continue to operate the project as public housing. The Department recently published the Streamlined Voluntary Conversion PIH Notice 2019-05 that waives the cost-test requirement and makes it simpler for PHAs operating 250 or less public housing units to undergo this process.

5 Key Takeaways

  1. HUD will Issue Tenant Protection Vouchers (TPVs) for any Unit Occupied within the Past 24 Months of Approval. Residents who receive the TPV will have the right to relocate to a private unit or remain in place (provided the former unit will be used for rental housing) with the tenant-based assistance. If the resident decides to relocate off-site, the PHA must pay for the moving expenses. In addition, SVC does not require that the PHA replace the public housing units with new hard low-income or affordable housing units. Provided there are sufficient units for tenants to use their tenant-based assistance to lease units in the private market with their tenant-based assistance, the PHA can structure its SVC plan to not re-use the public housing asset as affordable rental housing.
     
  2. Public Housing-Only PHAs must Partner with HCV Administrating Agency. If the PHA who is applying for SVC does not operate its own voucher program, then it must partner with a voucher agency that can administer the TPVs. HUD will not establish new voucher programs based on the TPV award.
     
  3. Project-basing this assistance is permissible with tenant consent. If the PHA wants to use the TPVs to project-base assistance at the former public housing units, the PHA must receive the resident’s informed written consent. If a resident decides to stay at the property with tenant-based assistance, the PHA must exclude that unit from the PBV Housing Assistance Payment (HAP) Contract until the resident either voluntarily leaves the unit or consents to have their unit project-based. In addition, if a resident leaves with tenant-based assistance at the time of the conversion, the PHA can project-base that unit using its existing voucher resources.
     
  4. Plan for the Use of Any Remaining Public Housing Funds. A PHA may only spend public housing funds to support public housing units that are under a Declaration of Trust (DOT). PHAs may not spend public housing funds to rehabilitate/maintain or operate any units that have been removed from the public housing inventory, including through SVC. Consequently, a PHA should either plan to use those funds prior to conversion (on any eligible public housing activity) or a PHA should consider transferring such funds prior to close-out to another PHA (see PIH Notice 2014-24 on public housing transfers and consolidations).
     
  5. SVC requires a commitment to close-out the PHA’s public housing program.  HUD will only approve an SVC application if it covers all the remaining public housing units at the PHA (up to 250 units). As part of the approval, the PHA must commit to closing out its public housing program by following the guidance in PIH Notice 2019-13.
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