Problem Identification:
HABC claims high program utilization, but accurate data on the number of units leased is not available, and the data that is available does not include: (1) tenant- and project- based mobility vouchers, for which leasing and development have fallen far short of goals; and (2) special-use vouchers targeted for family unification, welfare-to-work, and persons with disabilities.In April 2000, HUD’s review of HABC indicated that the agency had funding for 11,482 certificates and vouchers. The Section 8 Director claims that only 7,700 ‘ 8,300 units are under lease. Funding for an estimated 1,988 additional units targeted for tenant- and project-based assistance under the 1996 Thompson v. HUD consent decree is also not being utilized. In addition, FY99 funding for 450 of HABC’s 750 Family Unification and Welfare to Work vouchers is not yet scheduled to be utilized under its 12-month leasing schedule. HABC’s effective utilization rate for its 9,082 available units — excluding these 2,400 units — appears to be no higher than 85 percent to 91 percent. This does not meet HUD’s 95 percent standard for full performance, and may subject HABC to a recapture of unit certificates and vouchers.Also, underutilized are HABC’s three court-ordered mobility programs (Thompson v. HUD, 1996). These programs have been very slow in getting started, due in large part to delays by HABC in procurement and contracting with the non-profit organizations that are managing the programs. In the project-based program, 646 vouchers have not been utilized since 1996, while the costs of development have been increasing. (See also Recommendation #10-F.)

Recommended Actions:
Confirm total number of funded units available, and the number of units currently under lease. Disaggregate units in the following categories:

1. fair share
2. family unification
3. mainstream housing for persons with disabilities
4. welfare-to-work
5. relocation caused by demolition
6. Thompson v. HUD consent decree ‘ tenant-based
7. Thompson v. HUD consent decree ‘ project based

Additional steps to achieve implementation should include:

– Establishing leasing schedule that includes monthly leasing goals for all categories consistent with HUD requirements and local objectives, and enforce its use by staff;

– Implementing reliable internal reporting system for monthly progress reports on leasing performance;

– Developing plans to address lack of progress in leasing targeted and non-targeted units including accelerating issuance of vouchers, reducing mismanagement and loss of leasing documents, improving the ratio of number of vouchers issued to the number leased (‘failure rate’), reducing time lapsed between request and initial inspection, and improving the monitoring of contracted mobility programs to identify barriers that can be addressed by HABC; and

– Coordinating oversight and accountability for adherence to court-ordered requirements and schedules under a single high-level HABC executive reporting directly to the Commissioner. These duties should include working strategically with contracted mobility agencies to identify barriers that the Department can address.

It should be noted that efforts to improve utilization should emphasize quality control and oversight of applicant selection and leasing to ensure that program standards are not compromised.
Efforts to improve utilization should not be implemented until new leadership is in place and staff is trained.

Organizational, Revenue Enhancement, Service Improvement

Function/Operational Area:
HABC/Section 8

Estimated Annual Impact:
Utilization of 780 – 1382 unutilized units would generate $4,155,840 – $7,363,296 in HAP payments (payments to landlords on behalf of voucher holders) annually (average monthly HAP is $444). These utilization rates would also generate $425,000 – $753,000 in increased fee revenues annually (average monthly administrative fee per unit paid to HABC is $45.41). Ultimately the most important impact would be providing housing assistance to more needy families.

Estimated Implementation Cost:

Barriers to Implementation:
Given the current culture within the Section 8 program, there may be resistance to instituting more rigorous management techniques.

Projected Implementation:
1 year

Next Steps:
Reconcile number of units available with HUD baseline numbers per Federal Register notice dated 4/19/2000. Collect reliable data on number of units currently under lease.

This is arguably the worst time in years for a Public Housing Authority (PHA) not to know exactly how many Section 8 units it has under lease. HUD has recently revised its procedures for determining baseline Section 8 allocations (the number of Section 8 vouchers for which the PHA is funded) and for renewing expiring contract authority. Under the new procedures (Federal Register April 19, 2000), HUD will assess HABC’s leasing rate and its use of budget authority annually when it processes the authority’s year-end statement.

HABC’s baseline allocation figures should be available now through the HUD field office. Reconciliation of these figures with the authority’s records must be done within 90 days of receiving that notification, or HUD’s figures, which may be lower, will be carried forward.

At the end of the fiscal year (June 30), HUD will issue a warning that if HABC’s leasing rate is less than 90% of the units allocated or if it has expended less than 90% of its annual budget authority. Unutilized relocation units and/or litigation units will be excluded from this count. Units received less than eight months prior to the close of the fiscal year will also be excluded. HABC received 700 Welfare to Work vouchers in November 1999 and 50 Family Unification vouchers in December 1999. These will not be counted this year, but will be counted next year, so it is important to know that leasing is proceeding on schedule.

If HUD determines at the end of this or any subsequent fiscal year that HABC is underutilized, it may reduce HABC’s baseline allocation and recapture annual budget authority.