CDA to “Dispose” of 32 units of Scattered Site Public Housing

CDA has big plans for scattered site public housing, Straubel Court and the Triangle.  They are starting with the Scattered Site housing with a resolution on their agenda today.

The lingo here is rough.  I’ll try to unpack that for you, but I lost the audio from the presentation and I’m doing it from memory/with limited informatioh.  Here’s the agenda for today, which also has the armed security guards for public housing on it as well.

RESOLUTION UP FOR ADOPTION

National Low Income Housing Coalition Information

Public Housing ‘Repositioning’

HUD’s Office of Public and Indian Housing (PIH) sent a letter to public housing agency (PHA) executive directors dated November 13, 2018 signaling its intent to remove itself from administering the public housing program. HUD’s immediate goal was to “reposition” 105,000 public housing units by September 30, 2019.

Because Congress has failed to provide adequate appropriations for the Public Housing Capital Fund for many years, there is an approximate $70 billion backlog in capital needs (public housing maintenance and repairs). HUD points to that backlog as the reason to provide PHAs with “additional flexibilities” so they can “reposition” public housing.

What is “repositioning?” There are three main ways HUD would “reposition” public housing:

1. The Rental Assistance Demonstration (RAD)
2. Demolishing or disposing of (selling) public housing
3. Voluntary conversion of public housing to vouchers

All of these have already been available to PHAs. Repositioning just means making them easier.

Why Might Converting Some Public Housing to Section 8 Be Okay?

Converting some public housing to Section 8 might be necessary because Congress continues to underfund public housing, leading to deteriorating buildings and the loss of units through demolition. Congress is more likely to provide adequate funding for existing Section 8 contracts than for public housing. And, if a long-term rental assistance contract is tied to a property, private institutions might be more willing to lend money for critical building repairs. Therefore, some homes that were public housing before conversion are more likely to remain available and affordable to people with extremely low- and very low-incomes because of long-term Section 8 contracts.

OPTIONS IN REPOSITIONING PUBLIC HOUSING

For these first units, CDA is choosing the Section 18 Demolition and Disposition option.  And they are disposing of the units, I believe, by selling them to another entity that they are “creating” in agenda item 7 – the Madison Revitalization and Community Development Corporation Board of Directors.  They are “nominating” 6 of the 7 members of the CDA to sit on the board of this new corporation.  I don’t have details about how this entity is being formed, there is very little information in agenda item 7.

SECTION 18 DEMOLITION OR DISPOSITION

HUD info for CDA

One of the slides says to go here for more information:

• Demolition & Disposition (Section 18):
  https://www.hud.gov/program_offices/public_indian_housing/centers/sac/demo_dispo

National Low Income Housing Coalition Information

Background 

Since 1983, HUD has authorized PHAs to apply for permission to demolish or dispose of (sell) public housing units under Section 18 of the Housing Act of 1937. In 1995 Congress ended the requirement that PHAs replace on a one-for-one basis public housing lost through demolition or disposition. In 2016, HUD reported a net loss of more than 139,000 public housing units due to demolition or disposition since 2000.

A PHA must apply to HUD’s Special Applications Center (SAC) to demolish or sell public housing. The application must certify the PHA has described the demo or dispo in its Annual PHA Plan and the description in the application must be identical. Advocates should challenge an application that is significantly different. The information in this article is primarily from the regulations 24 CFR 970.

In 2018, the Trump administration eliminated a 2012 HUD Notice that had modest improvements advocates had suggested. The 2012 Notice served as a reminder to residents, the public, and PHAs of PHAs’ obligations regarding resident involvement and the role of the PHA Plan regarding demo/dispo. The replacement, Notice PIH 2018-04, downplays the role of resident consultation to make demo/dispo easier.

In addition, the Trump administration withdrew proposed regulation changes drafted in 2014 that would have reinforced the modest improvements in the 2012 Notice and required PHAs to submit more detailed justifications for demo/dispo. All of this is a part of the administration’s goal of “repositioning” 105,000 public housing units by September 30, 2019.

Resident Participation

A PHA must prepare a demo/dispo application “in consultation” with tenants and any tenant organization at a project, as well as with any PHA-wide tenant organization and the Resident Advisory Board (RAB). The application (form HUD-52860) must include any written comments made by residents, resident organizations, or the RAB, and indicate in writing how the PHA responded to comments. HUD can deny an application if tenants, resident councils, or RABs were not consulted, so residents should challenge an application if they were not consulted or if the consultation was grossly inadequate.

Demolition Applications

Is the Public Housing Obsolete? PHAs must certify that a development is “obsolete,” either physically or in terms of location, and therefore no longer suitable as housing.

Physically obsolete means there are structural deficiencies that cannot be corrected at a reasonable cost. Structural deficiencies can include settlement of floors, severe erosion, and deficiencies in major systems like plumbing, electrical, heating and cooling, roofs, doors, and windows. “Reasonable” cost is defined as less than 62.5% of total development costs for buildings with elevators and 57.14% for other buildings. To show a development is physically obsolete, a PHA must submit a detailed scope of work describing the major systems needing repair or replacement, the need to remove lead-based paint and asbestos hazards, or the need to make accessibility improvements for people with physical impairments.

An obsolete location means the surrounding neighborhood is too deteriorated or has shifted from residential uses to commercial or industrial uses. It can also mean environmental conditions make it unsuitable for residents to live there. “Other factors” that “seriously affect the marketability or usefulness” of the development can also be considered.

“De Minimus” Demolition. PHAs do not have to apply to HUD to demolish fewer than 5 units or 5% of all units over a five-year period. The units being demolished must either be beyond repair or be making room for services such as a child care facility, a laundry room, or a community center.

Disposition Applications

A PHA must certify that keeping the development is not in the best interests of residents or the PHA for one of three reasons:

1. Conditions in the surrounding area (such as commercial or industrial activity) have a negative impact on the health and safety of residents or on the PHA’s operation of the project (which could mean a lack of demand for the units). The PHA would have to show high long-term vacancy rates due to factors such as declining population in the area or a lack of transportation options and community amenities like stores and schools.
2. Sale or transfer of the property will allow the PHA to buy, develop, or rehab other properties that can be more efficiently operated as low-income housing and in which replacement units are better – e.g., more energy efficient; in better locations for transportation, jobs, or schools; and/or better for reducing racial or ethnic concentrations of poverty.
3. Sale of the property is “appropriate” for reasons consistent with the PHA’s goals, the PHA Plan, and the purpose of the Public Housing Act – a vague option for disposition applications.

Resident Relocation Provisions

The demo/dispo application must have a relocation plan that states:

1. Demolition or disposition cannot start until all residents are relocated.
2. Residents will receive 90 days’ advance notice before being relocated.
3. Each household must be offered comparable housing meeting housing quality standards (HQS) and located in an area that is not less desirable.
4. Residents’ actual relocation expenses will be reimbursed (but the Uniform Relocation Act, URA, does not apply).

INFORMATION ABOUT CDA UNITS

Here are some slides from HUD about the CDA Units as additional background information.  Some of it makes little sense unless you follow this very closely, but I think you can get a general picture from the information.

WHICH UNITS ARE THEY TALKING ABOUT?

WHAT’S NEXT FOR THE SCATTERED SITE HOUSING UNITS?

DETAILS OF OTHER UNITS CDA LOOKING AT DISPOSITIONING?

Straubel Court

Triangle

SO, HERE’S MY QUESTIONS