HUD Proposes to Set Limits on All PHA Executive Compensation Despite Salary Survey Results

June 5, 2012

In a surprising announcement and unprecedented action, on June 5 HUD released salary survey results for housing authority executive compensation showing that 97% of PHA executives earn less than $155,500 in total cash compensation and also announced a far-reaching policy to cap and regulate the compensation of every housing authority executive director in the country, despite the survey findings.

The current cap of $155,500 on PHA executive compensation—an amount that was arbitrarily selected and established in the 2012 HUD appropriations—only applies to the use of federal funds appropriated for fiscal year 2012 and only applies to salaries, not to other forms of cash compensation.  “HUD is proposing to align PHA compensation with the tiers of the federal government pay system….The use of tiers will ensure that pay ranges are commensurate with the size and number of units in housing authorities.”  HUD will index these caps to federal government salary scales beginning in fiscal year 2013 and “remaining in place indefinitely” with limits on total cash compensation, not just salary. In promulgating their new policy, HUD asserts, “[w]e want to work with Congress to put in place this permanent solution, but we will not wait if Congress fails to act.  So today we are announcing that we will take executive action to put this cap in place in Fiscal Year 2013 under our own regulations if necessary.”

CLPHA has serious concerns about the scope of the proposal and HUD’s executive authority to unilaterally impose a pay cap without congressional statutory action. The data results, which do not justify this kind of sweeping and unnecessary action, show that the vast majority of compensation falls below the current cap with just 3% outside the cap and only 21% of these with salaries higher than other non-profits.  Furthermore, the size category of 1,250 units can include housing authorities managing tens of thousands of units, capping salaries with no regard to the skill sets needed to manage large, complex organizations.

The tiered pay scale to be imposed by HUD is as follows:

PHA Total Unit Size

Salary Cap Range

 

GS Level Equivalent

 

Less than 250 units

$74,628 to $88,349

GS 11/10

250 – 1,249 units

$106,369 to $125,926

GS 13/10

1,250 or more units

$147,857 to $155,500

GS 15/10

 

The remainder of the HUD fact sheet provides details on the data collected by PHAs aggregated according to the 10 HUD regions, by the number of PHAs in each region, by percentile ranking for the highest paid employees, and by median compensation within each region.

CLPHA will be providing further analysis on HUD’s salary survey and compensation cap proposal.