Collaborating with PHAs to achieve shared housing goals
Overview
This brief outlines opportunities for cities and public housing agencies (PHAs) to partner on shared housing goals. The assets of cities and PHAs are complementary, providing opportunities to partner on a range of projects, including the rehabilitation of older dilapidated public housing developments, the development on PHA-owned land, mixed-income development, and combatting homelessness.
Opportunities for partnerships
Cities and PHAs play distinct, but complementary, roles in promoting affordable housing. Cities are largely responsible for local planning and determine local policy. City governments develop land-use regulations that govern what types of housing can be built and where; build and maintain the infrastructure that is needed to support housing development; and generate revenue for affordable housing via property taxes, bonds, and linkage fees. PHAs are quasi-public agencies that administer federally-funded housing assistance programs at the local level, including Housing Choice Vouchers and public housing. Many PHAs also own other forms of subsidized housing and serve as affordable housing developers.
Although some jurisdictions have integrated the PHA functions into local government, in many jurisdictions the two entities mostly operate independently of each other, with limited collaboration on policy development or programming. This is unfortunate as PHAs and cities can accomplish more to advance shared housing goals by working together than they can on their own.
Benefits of collaboration
There are many benefits to stronger partnerships between PHAs and cities. First, they often have complementary funding streams: cities generally have access to flexible capital, while PHAs can offer deep operating subsidies that help serve extremely low-income households. By aligning resources, they can develop affordable housing that is financially sustainable and serves people with a wide range of income levels. Second, PHAs and cities can work together to connect low-income households to the resources and services that they need: not only affordable housing, but healthcare, employment services, and other supports. Finally, both entities have an important role to play in developing affordable housing policy, and they have distinct regulatory tools that can be leveraged to achieve affordable housing goals. Below, we describe some of the ways that cities and PHAs can work together to address shared priorities.
Rehabilitating public housing through RAD conversions
In many localities, public housing is a central component of the affordable housing stock, providing a dedicated pool of units affordable to very low-income tenants. Due to long-term shortfalls in congressional appropriations, however, many aging public housing units are in need of rehabilitation and some are in danger of being demolished. In 2017, HUD reported a net loss of 139,000 public housing units since 2000, largely resulting from unmet capital rehabilitation needs. As public housing units continue to age, there is a critical need for additional investment to keep units in safe and healthy condition for tenants. PHAs are pursuing new strategies to preserve these units, and cities can be important financing partners in these efforts.
One of the primary ways that PHAs are preserving public housing units is through the Rental Assistance Demonstration (RAD) program. Under this program, PHAs can restructure public housing subsidies in a way that facilitates private investment. This is accomplished by converting public housing units to project-based rental assistance or project-based vouchers. The conversion gives PHAs the legal ability to leverage the asset to secure additional resources, just as private owners of affordable housing do. Most commonly, owners seek out Low Income Housing Tax Credits (LIHTC), but they may also secure other public or private debt or equity. Together, these investments make it possible for the PHA to rehabilitate units in need of modernization or to replace them with newly-constructed properties.
Even when PHAs are successful in securing LIHTC to support the rehabilitation of RAD-converted properties, however, there is often a shortfall in the financing package that must be addressed for the projects to be financially viable. This is where cities come in. Cities typically have access to flexible funding streams that can be used to fill gaps in financing for LIHTC projects. Cities may be able to contribute funds from local housing trust funds, entitlement programs such as HOME or CDBG, or the proceeds of municipal bond issues. By financing the gap needed to make the projects financially viable, cities can help preserve an important component of the affordable housing stock in their city while improving housing quality for city residents.
Some city officials may look at PHA budgets and wonder why the PHA cannot fund the gap itself. The reason is that nearly all of a PHA’s funding is locked up in subsidy programs that help very low-income households afford their rental costs. They do not have access to the kinds of flexible funding streams available to cities.
Developing deeply subsidized housing
Many local governments support affordable housing development through federal entitlement programs, such as HOME or CDBG, or through local policy tools like linkage fees or inclusionary zoning. While these resources are an important source of capital financing, they are typically not sufficient to ensure that the lowest income households can afford their monthly rent. As a result, housing funded through these mechanisms tends to serve households with incomes between 30 and 80% of the area median income (AMI), rather than the extremely low-income households that have incomes between 0 and 30% AMI. These households require “deep” rental subsidies that cover the difference between the unit rents and what they can afford to pay.
PHAs, on the other hand, receive funding from the federal government each year for Housing Choice Vouchers that offer a reliable, long-term source of “deep” rental subsidies. Most vouchers are targeted at households earning less than 30% AMI; some PHAs also set aside vouchers for specific groups, such as families experiencing homelessness or people with disabilities. Housing vouchers are typically tenant-based, meaning that eligible households use them to offset the rent for a unit the tenant locates on the open market. However, PHAs may choose to project-base a portion of their vouchers, attaching the subsidy to a specific unit which makes the unit affordable to people with extremely low incomes.
By working together, cities and PHAs can allocate project-based vouchers to units in new or rehabilitated developments funded or facilitated by the city with HOME, Community Development Block Grants (CDBG), or local housing trust funds. By layering local funds for development and PHA-administered rental subsidies, these developments can serve households at a broader range of income levels than they would otherwise be able to. This approach ensures that there are dedicated high-quality housing units for low-income families in areas with very low vacancy rates, or in areas where landlords would otherwise be unwilling to rent to a tenant with a voucher. They can also be used to create affordable housing options in resource-rich neighborhoods with good schools, employment opportunities, and transit access.
Leveraging public land for development
PHA-owned land is another resource that collaborating cities and PHAs may be able to leverage for the development of affordable homes. Many PHAs own large tracts of vacant or underutilized land, typically former public housing sites that have been demolished or disposed of when they became obsolete or fell into disrepair. While PHAs can sometimes develop on these parcels without city assistance, in many cases cities can be important contributors to a successful project, facilitating the speedy re-use of land to expand housing for affordable homes or other public uses.
This collaboration has meaningful benefits for both parties. In high-cost areas, land can be one of the largest contributors to development costs. When publicly owned land is made available for free or at a substantial discount, the costs of new development are reduced substantially while also returning vacant land to productive use.
In some cases, undertaking development on land that is vacant or once held now demolished properties may require clean-up and infrastructure upgrades. Cities may be able to help finance these improvements, for example, through local grants for environmental remediation or infrastructure development. Cities may also be able to use federal funds, such as CDBG, for these purposes. As with the redevelopment of public housing properties through RAD, the development of new affordable housing on vacant PHA-owned may require gap financing from the city through HOME, CDBG, housing trust funds, or other city-controlled sources.
Assisting families at risk of homelessness
Many cities serve people who are homeless through local shelters, food banks, domestic violence services, and other city-led programs. Both on their own and as part of local Continuums of Care (see description below), cities often play a leadership role in establishing and implementing strategies to end chronic homelessness. However, cities typically do not have the resources to provide long-term stable housing options for chronically homeless individuals and families and others experiencing homelessness.
PHAs can help fill this gap by targeting housing assistance towards people experiencing homelessness. One approach is to implement an admissions preference for people experiencing homelessness by prioritizing them on the waiting list for public housing or tenant-based rental housing assistance. In some cases, this is implemented by setting aside a specific number of units or vouchers to serve this population. PHAs can also contribute project-based vouchers to a project to provide permanent supportive housing. In addition, PHAs can establish formal partnerships with homeless service providers, including cities, working with them to connect vulnerable clients to subsidized housing. PHAs can train partner organizations to screen and assess applicants, and may choose to implement preferences specifically for clients referred to them through these partner organizations.
The local or regional Continuum of Care (CoC) can be an effective platform for partnership and collaboration between PHAs and local homelessness services. CoCs are consortia of homelessness service providers that typically include representatives from state and local government agencies, non-profit organizations, and social service providers. CoCs are responsible for developing local or regional strategies to address homelessness and managing a coordinated entry system. By participating in the CoC, PHAs can contribute to local planning and policy initiatives and more easily align their programs with those of homeless service providers, including cities.
Connecting PHA tenants with services
Partnerships between PHAs and cities can also facilitate connections between households in subsidized rental housing and essential city services like employment services, training, and health services. By linking housing and services, cities and PHAs can enhance residents’ economic prospects and well-being and ensure that the most vulnerable residents, such as older adults or people with disabilities, have equitable access to the services they need.
Local governments can coordinate with PHAs to bring essential services directly to residents in PHA-managed properties. Many public housing properties have dedicated community spaces that can be used to deliver services on-site. This can help ensure that low-income families, many of whom lack transportation or are facing other barriers that make it difficult to reach service providers, can benefit from the services offered by city agencies. For example, during the COVID-19 pandemic, PHAs throughout the country partnered with local public health authorities to offer on-site vaccination clinics for residents of public housing developments. This approach helped ensure that vulnerable residents could get their shots quickly and efficiently, boosting vaccination rates in hard-hit communities.
PHAs and cities can also work together to integrate services into affordable housing programs to help families make progress toward economic security. One promising platform for this type of partnership is HUD’s Family Self Sufficiency (FSS) Program. Under this program, when a participant’s rent increases as a result of an increase in earned income, an amount equal to the increased rent is deposited into an escrow account that participants can access tax-free when they graduate. PHAs are required to provide coaching or case management for participating families to help them access services, such as job search assistance, financial education, and job skills training that will help them make progress toward their goals. However, HUD provides only limited funds for FSS program coaches, greatly constraining the number of families that can benefit from the program. Some localities, such as Montgomery County, MD, have provided funds or staff to help support the expanded enrollment of families into the FSS program. FSS programs also need strong partners that can provide complementary services to FSS participants. City services like public libraries, workforce development boards, or health and human services agencies can help meet this need. PHAs may also seek grant funds from local governments to fund additional services for program participants.
Collaborating on policy and planning
Cities and PHAs share a common goal of creating affordable housing for low-income households, so there are many opportunities for them to collaborate on policy development and planning. A growing number of localities are developing comprehensive local housing strategies to strengthen the strategic alignment of housing policies and programs across local agencies. Cities and PHAs are both critical partners in these efforts, along with housing finance agencies, county and regional governments, transportation and infrastructure agencies, and housing developers and tenant representatives.
A comprehensive local housing strategy lays out a locality’s goals for housing, sets clear targets for production and preservation activities, and describes the broad range of policy tools and funding streams that the locality and its partners either have or plan to adopt to achieve the goals and targets. The development of a comprehensive local housing strategy can be an opportunity for cities and PHAs to consider how their work complements each other, and how they can leverage each other’s resources and policy tools to address the locality’s affordable housing needs.
Cities and PHAs also share an obligation to affirmatively further fair housing, which requires agencies and jurisdictions receiving certain HUD funds to combat historical segregation, promote the development of diverse housing options in resource-rich neighborhoods, and expand the resources available in segregated neighborhoods. HUD’s 2015 Affirmatively Furthering Fair Housing rule required both PHAs and cities to prepare an Assessment of Fair Housing, a policy document that identifies key barriers to fair housing and presents steps to address them. The rule was terminated in 2020, but in 2021, HUD issued an interim rule reinstating much of the prior rule and giving grantees the option to complete an Assessment of Fair Housing. This is another opportunity for cities and PHAs to work together to establish fair housing policy goals and plans. By creating a joint Assessment of Fair Housing, PHAs and cities can establish more coordinated policies, share data to support the assessment, and make more efficient use of staff time and administrative resources.
Conclusion
Local governments and PHAs share similar goals of expanding affordable housing opportunities and creating economically diverse neighborhoods. Both are critical partners in addressing local housing challenges, and both would benefit from a stronger working relationship and collaboration on programmatic and policy priorities. As outlined in this brief, there are many concrete opportunities to work together on shared endeavors that will advance shared goals and leverage each other’s strengths
Examples
Rehabilitating public housing through RAD conversions
Several PHAs have successfully rehabilitated most or all of their public housing stock with support from local government. In Ann Arbor, Michigan, the PHA converted its entire public housing portfolio to project-based subsidies through RAD. The City of Ann Arbor contributed over $700,000 through their local Housing Trust Fund, covering half of the remaining gap after the PHA secured Low Income Housing Tax Credits and other debt financing. The PHA secured additional grant funds through the CDBG program and the local Downtown Redevelopment Authority.
Developing deeply subsidized housing through project-based vouchers
A Regional Coalition for Housing (ARCH) is a partnership of cities and counties in East King County, Washington, that collaborate to develop affordable housing strategies and tools for municipalities and other partners. ARCH works with developers to coordinate a variety of funding sources from public and non-profit entities. Common funding sources for ARCH projects include King County Housing Authority project-based vouchers, locally administered CDBG and HOME funds, and federal Low Income Housing Tax Credits.
Leveraging public land for development
In 2019, the City of Atlanta launched its new affordable housing strategy, with the goal of creating 20,000 new affordable homes by 2026. As part of that strategy, the city identified over 1,300 acres of vacant land owned by public and quasi-public agencies, including 400 acres owned by the Atlanta Housing Authority. An extensive survey of these parcels is underway to determine which would be suitable for development as mixed-income housing by Atlanta Housing Authority in partnership with a range of city agencies and private entities. The Atlanta Housing Authority has already secured HUD funds to begin development on a 77-acre former public housing site that had been vacant for over a decade.
Connecting families at risk of homelessness to housing
In 2011, the Boston Public Health Commission and the Boston Housing Authority (both members of the Boston CoC) formalized a partnership to launch the Healthy Start in Housing Program. The program uses the Public Health Commission’s existing prenatal support programs as a point-of-entry to public housing for pregnant women. When public health caseworkers identify a client who is housing insecure, they screen them for eligibility for subsidized housing; if the client is eligible, caseworkers help them complete and submit the application. The two agencies worked together to develop a streamlined screening and enrollment process. The Boston Housing Authority has set aside 75 public housing units for clients referred through the program.
Connecting PHA tenants with services
New York City PHA’s Family Self Sufficiency program includes a financial education component, delivered by staff from NYC’s Department of Consumer Affairs. City staff deliver financial literacy workshops for program participants and refer them to other city services, such as free tax preparation support and financial counseling services.
Collaborating on policy and planning
In 2018, the City of Omaha collaborated with two neighboring cities and four PHAs to create a shared regional Assessment of Fair Housing. The plan identifies barriers, goals, and priorities for each participating entity and the region as a whole. The partners worked together to develop and implement a community engagement process, and shared programmatic data to inform the assessment.
Related resources
- Local Housing Solutions offers a series of resources on developing a local housing strategy, including considerations for developing interagency partnerships and practical steps for shared decision-making. Key steps to develop a local housing strategy | Local Housing Solutions
- HUD has published a guide to collaboration between local Continuum of Care and PHAs, including initial steps for establishing partnerships and a discussion of homeless preferences for voucher programs. CoC and PHA Collaboration: Strategies for CoCs to Start the Partnership Conversation (hudexchange.info)
- The Interagency Council on Homelessness has similarly published a series of resources for PHAs interested in participating in homelessness planning and response efforts through their local Continuum of Care. Planning-_COC.pdf (usich.gov)
- HUD commissioned a study of PHA’s efforts to serve people experiencing homelessness. The study, led by Abt Associates, describes different types of collaboration and partnership between PHAs and CoCs. Final Report|Study of PHAs’ Efforts to Serve People Experiencing Homelessness (huduser.gov)
- Abt Associates developed a Policy Brief on HUD’s Family Self Sufficiency Program, which includes a discussion of the role of local partners in delivering financial coaching services. Abt Policy Brief_Realizing FSS Enrollment Potential_Final_2019_07.pdf (abtassociates.com)
- Local Housing Solutions’ policy library includes a brief on project-basing of Housing Choice Vouchers. Project-basing of housing choice vouchers | Local Housing Solutions