CLPHA Meeting Promises Insights for EDs;
King County and Seattle HOPE VI Featured
Developing a HOPE VI community is both difficult and exciting. But the true test of such redevelopment comes long after the groundbreaking and dedication ceremonies.

How to shape a development concept into a thriving and vibrant community is the topic of one panel – "HOPE VI: Life After the Ribbon Cutting" — attendees at the upcoming June 18-20 CLPHA meeting will enjoy. The session will take place during a tour of two award winning Seattle and King County HOPE VI sites, High Point and Greenbridge.

Other highlights of the meeting include a members-only discussion of the Summit on the Future of Public Housing, presentations from leading architects on "Going Green Northwest Style," a discussion of "Serving Homeless Persons: What Public Housing Authorities Can and Should Do, and Not Do," and a peak into the future with the leaders of two innovative housing authorities. For a look at the full meeting agenda, see pages 4-5 of this newsletter. Register by clicking here or filling out the registration form on page 6.

Meanwhile, CLPHA was able to extend the reduced room rate deadline at the Grand Hyatt until this Friday, May 23. See the registration form for details.

See you in Seattle!

(To access the agenda for the Seattle meeting, see pages 4-5 of the PDF version of this newsletter by visiting: http://www.clpha.org/uploads/052208cwr.pdf.)

MTW Working Group Makes
Progress on Asset Management
The working group composed of HUD officials and CLPHA members and counsel, charged with reconciling HUD’s vision of asset management with the practical realities of how MTW agencies administer their programs, made substantial progress toward a resolution of differences following a May 21 conference call.

The call came on the heels of a May 12-13 HUD-sponsored MTW conference at which PHA representatives voiced their frustration at the Department’s most recent iteration of requirements for MTW agencies with regard to asset management. HUD’s views were included in an eight-page draft notice — "Asset Management for Moving to Work Agencies" – that PHAs said would undermine the very flexibility and fungibility provided by MTW.

HUD officials said during the May 21 conference call that the draft notice would not be the basis for moving forward on MTW asset management issues. Instead, they said, they would use language developed by a group of CLPHA members that has been meeting on these issues. The language is designed to bridge the gap between the Department’s objectives and PHA objections on these issues.

There are significant differences between the two approaches. Under HUD’s draft notice, for example, MTW agencies would be required to adhere to the fee-for-service structure required by standard HUD regulations to fund central office cost centers. The CLPHA language, by contrast, allows MTW agencies to develop their own fee structure that they would submit as part of their MTW annual plan. Under both the HUD and CLPHA approaches, an MTW PHA could also choose to use a cost allocation methodology.

The working group discussions are taking place as HUD is urging MTW agencies to sign the revised and amended, or "standard," MTW agreement. Though 15 agencies have signed the agreement, there has been considerable resistance, with some PHAs arguing that their original MTW agreements should be the basis for the ongoing program, while HUD contends that the department needs a uniform agreement to simplify administration of the program. HUD’s standard agreement extends a PHAs MTW authority for 10 years.

Those PHAs which have already signed a standard agreement would also benefit from any changes made subsequent to their signing of the agreement.

The working group is expected to complete its work by the end of June.

 

Preston Poised
For Confirmation
If the May 22 confirmation hearing on the nomination of Steven Preston as HUD Secretary is an indicator of how the full Senate will react to the appointment, expect Preston to be confirmed overwhelmingly. Not a cross word was spoken during the one-and-a-half-hour hearing.

Still, some mild uneasiness about Preston’s lack of background in housing policy issues were raised. Committee Chairman Sen. Christopher Dodd (D-CT) acknowledged having "some concerns" about Preston’s "lack of experience in this [housing] area." Dodd said, however, that he was reassured because his senate colleague, Massachusetts Democrat John Kerry, provided him with a positive report on Preston, with whom Kerry has had significant interaction as chair of the Committee on Small Business & Entrepreneurship.

Preston said, and several members of the committee emphasized, that his background as a leader of large complex organizations was a more than adequate credential for the HUD job. Preston currently serves as administrator of the Small Business Administration (SBA). Prior to his post at SBA, Preston was Executive Vice President of The ServiceMaster Company, where he also served as chief financial officer during a period of expansion, restructuring and significant change in the regulatory environment. During the first half of Preston’s private sector career, he was a senior vice president and treasurer of First Data Corporation, and an investment banker at Lehman Brothers.

Substantively, much of the session focused on Preston’s approach to dealing with the subprime mortgage crisis. He pledged to work collaboratively with the Senate as they develop legislation to deal with the issue. Likewise, he said he would work with Congress to provide accurate information on the shortfall in Section 8 project based accounts.

In response to Dodd, Preston agreed that homeownership was not the answer to all of the US’s housing problems. "We can’t focus all our efforts" on homeownership, he said, and the provision of a "safe decent affordable place to live" for those who rent will be "a very important part of my focus if I am confirmed." Low-cost rental housing, Preston said later, can provide a "basis of stability" for low-income families.

Preston’s first order of business, suggested Dodd, will be to "clean and up and restore confidence in HUD" and to ensure that "taxpayer funds are wisely and properly used."

 

Question & Answer
Q: How should a housing authority report the overhead allocation to each Asset Management Project (AMP) on the Financial Data Schedule (FDS) if the housing authority has opted to use the allocated overhead system of accounting?

A: HUD will create a single allocated overhead line for each AMP on the FDS. The combined actual cost of all business activities, that would have normally required managerial bookkeeping, or asset managment fees, should be included under one allocated overhead line for that AMP, said REAC Director Greg Byrne during a May 15 conference call with housing authorities and other industry representatives.

Housing authorities do not need to have a line showing the cost for each business activity on the FDS, however, housing authorities should keep records detailing each cost if HUD should need to inquire about the amount charged to allocated overhead for a particular AMP, Byrne further suggested.

This call was a follow-up to a previous call relating financial reporting requirements under asset management. If you’d like to be included on future calls, please contact Todd Thomas, Housing Policy Analyst, at tthomas@clpha.org. n

 

BHA Bond Sales
Bring Improvements
Boston Mayor Thomas M. Menino and Housing Authority Administrator Sandra B. Henriquez announced an infusion of $77 million in capital improvement funds for Boston’s public housing communities as a result of a recent bond sale by the Authority. The BHA issued a series of Capital Fund Program Revenue Bonds, which will be used for the physical improvements of 22 family and elderly/disabled developments in BHA communities.

"These badly needed funds will go a long way to preserve this valuable affordable housing resource," said Menino. "Many of our poorest families, elderly and disabled citizens depend on this housing for shelter."

Under this program, the BHA’s three largest and oldest public housing developments, Old Colony and Mary Ellen McCormack in South Boston and the Bunker Hill development in Charlestown, are currently planned to receive plumbing and bathroom upgrades as well as exterior masonry repairs. Mary Ellen McCormack and Old Colony are also slated for storm and sewer line replacements as well. Charlestown is to receive an overhaul to its heating system and a new active video surveillance system.

In addition, safety related improvements will be made to the fire protection systems and elevators at a number of elderly/disabled and two family developments.

"The BHA is pleased to be able to provide, through this creative undertaking, this single largest capital investment in the Authority’s history. This step will help insure the long-term livability of our public housing communities," said Henriquez.

The lump sum of bond proceeds make possible larger-scale improvements at BHA’s biggest sites that could not be undertaken using BHA’s annual capital fund allocation. The capital fund to housing authorities nationwide has been decreasing for a number of years and the BHA’s allocation has gone from approximately $35 million in 2000 to about $24 million currently.

The large scale renovation work will diminish the level of deterioration and will improve the quality of the lives of residents living in these communities. It will also save funds going forward by reducing operating costs in future years.

The bond proceeds resulted in a lump sum payment of $77,464,432 into the BHA’s project fund to use to upgrade the properties as described above. The debt service on the bonds will be paid out over a 20-year period.

 

Lower Court Ruling
Called 'Absurd'
In a reversal of a lower court ruling, the Minnesota Court of Appeals said earlier this week that the St. Paul Housing Authority can evict a resident who acknowledged smoking crack in her public housing unit. A lower court ruled in 2007 that the PHA couldn’t act against the resident because her drug use amounted to a disability under the terms of the Fair Housing Act.

"Interpreting a federal anti-discrimination law to excuse illegal drug use produces an absurd result," the Court of Appeals said. The court noted that the resident’s lease prohibited "any criminal activity, including drug-related criminal activity."

"Ninety-nine percent of [public housing] households succeed," PHA executive director Jon Gutzmann told the Minneapolis Star Tribune. But, he continued, the housing authority has a "very low tolerance for illegal activity and especially when it’s thrown in our face."

 

Next Time in CWR
The Senate Banking Committee, by a vote of 19-2, approved its subprime mortgage crisis legislation this week. Can differences with the House version, particularly as it relates to the proposed Affordable Housing Trust Fund, be reconciled next month?