DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT: PRIVATIZE SCATTERED SITE HOUSING

3-B
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT: PRIVATIZE SCATTERED SITE HOUSING

 

Problem Identification:
HABC owns approximately 2,600 units of ‘scattered site’ housing. Nearly one-third of these units are vacant. The capital needs of these units exceed $63 million, or more than two years of total capital funding.

Recommended Action:
Privatize the management of all scattered sites and prepare a comprehensive capital plan, which could include the eventual disposition of more than 1,000 units.

Classification:
Service Improvement

Functional/Operational Area:
HABC/Capital Planning

Estimated Annual Impact:
Improved management of scattered site housing.

Estimated Implementation Costs:
While there are capital costs associated with improving the management of scattered sites, the cost of continuing to do nothing is perhaps greater in the long term. This long term cost is caused by further deterioration of the housing stock in the surrounding neighborhood.

Barriers to Implementation:
There are three items barring a more comprehensive and realistic plan for the future of scattered site housing. The first is better physical data on each scattered site unit. The agency has performed an inspection of a sample of units but not a complete census. The second is impact on staff from privatization (as is the case for all agency-operated units). The third is the reality that the agency does not have the funds to retain all of its scattered site units and, therefore, must make hard choices regarding which units to keep and which to rehabilitate.

Projected Implementation:
90 days to conduct physical inspections; an additional 180 days to develop a plan.

Next Steps:
Acquire the services of a firm(s) that will perform an independent physical inspection of each scattered site unit. Upon completion of the physical inspection, ‘triage’ these units based on: (a) cost of renovation; (b) potential for sale for homeownership; and (c) investment climate and larger redevelopment plans for the surrounding neighborhood.

One of the considerations for the long-term strategy for the scattered sites should be whether the ownership and management of some or all of these units should be transferred to qualified neighborhood non-profit housing development corporations and other such organizations.

Analysis:
A year ago, the agency submitted a request to HUD to dispose/demolish 1,000 scattered site units. HUD rejected the request as too vague and without specificity. HUD was right to request more data. Since that time, HABC has taken no further action.

Realistically, HABC cannot retain all of its scattered site units. It needs a plan of action and the first start in that direction is a detailed physical needs assessment of each unit. From there, it can make begin to make intelligent capital decisions.