By Cheryl Lang, president and CEO, Integrated Mortgage Solutions
During the early 1990s the Department of Housing and Urban Development established the HOPE VI program, dedicated to improving public housing communities and the lives of the individuals who reside there. Many lessons have been learned from the HOPE VI experience as years passed, and it has now evolved into “Choice Neighborhoods.” The goal of this initiative is to reach beyond the transformation of housing within poverty-stricken neighborhoods, treating communities as viable and sustainable entities capable of growth and permanent transformation.
This ambitious undertaking will fall partially within the purview of public housing agencies (PHAs). The PHAs receive their operational funding from HUD, and like any other real estate management businesses, HUD has always had specific requirements for the PHAs to fulfill to receive capital funding for repair, replacement and modernization meant to ensure the long-term sustainability of the property. This has been only marginally addressed and in need of review and adjustment, which it did recently receive from HUD at the end of last year and into 2011.
As the nation has slipped into economic doldrums, additional pressure has weighed on the already-fragile lower-income and public-housing sectors. This coupled with the more notable goals of the Choice Neighborhoods program has become an impetus for change. Like many private-sector businesses that do not operate at peak performance, cost-cutting measures are reviewed, and more importantly, operational improvements allowing for long-term efficiencies and overall cost saving are adopted. After much deliberation, key proposals were made by HUD on how PHAs could and should manage their public-housing portfolios in a more cost-effective and ecologically sound manner.
The old requirements were for physical needs assessments (PNA) to be completed every five years and applied only to PHAs with 250 units or greater. Under that auspice a large number of PHAs in smaller communities fell under the radar screen but will no longer be exempt. The new proposals require PHAs to project modernization and life-cycle replacement repair needs over a 20-year period rather than a five-year period. This industry standard coincides with the life cycle of individual properties and their building components, ensuring a long-term plan is in place to maintain the property. In addition, the proposal included the performance of an energy audit simultaneously with the PNA, both to be completed every five years so energy conservation methods could be considered and have a direct bearing on choices made. Updates to the PNAs will be required annually but only wholly revised every five years.
The new PNA assessment format is not anticipated to be in circulation and available for use until 2012. The assessments are anticipated to be submitted electronically, eliminating mountains of paperwork and reducing the hours for recordkeeping.
Though change to public housing policy has not been known for being overly aggressive, there are public-housing agencies that have already embraced the benefits of long-term planning utilizing ecologically sound alternatives. The Seattle Housing Authority (SHA) is one such success story, as they sought to improve the energy efficiency of its senior-housing portfolio. In 2007 they engaged the services of a company that performed building science engineering and provided an assessment of properties that had sustained moisture damage and would require complete enclosure rehabilitation. Aluminum windows were replaced with energy-efficient insulated vinyl windows. Exhaust fans were replaced and sealed, improving the comfort of the residents and reducing utility costs. The SHA has implemented many other energy- and water-efficient upgrades investing in higher-quality products that reduce future maintenance costs. Their goal of greatly extending the usefulness of the structures, reducing operating costs and keeping affordable units online is being met. As an added bonus, the renovations many times exceeded the expectations of the residents as favorable reviews came in for their new surroundings.
Currently the SHA is in the process of reviewing its high-rise public-housing buildings to determine if they are candidates for solar water-heating systems. SHA is a success story with their adoption of this management approach with a proven track record of energy-efficient and low-cost renovation yielding mutually beneficial results for the PHA and the residents.