Public and affordable housing in the USA is always at risk of budget cuts and over-regulation. Our cries as an industry for more funding and attention are often ignored. Below is a mixture of theoretical high level ideas and concepts to shake up the industry. I do realize these ideas might come off as flippant but it might be time to start thinking out of the box.
- Allow 10%-20% of Public Housing to be Rented at Market Rate:
If public housing operating and capital funds are not going to be increased, then let public housing authorities rent a percentage of their portfolio at either market rate or as close as they can get. HUD would basically wash their hands of the agreed upon units and they would come out of IMS/PIC. I still believe that the funding formula should be based on the original number of units. The housing authority would then rent those for as high of a rent as possible to help offset the loss of funds. Yes this would decrease the number of affordable units available across the country. However; with the right approach some housing authorities might be able to leverage these higher rents and create cash-flow that could lead to more development.
I would also argue that if we do not get more money into some of these older public housing sites, we will lose units due to in-habitability. There is also an argument about de-concentrating poverty in public housing by creating an inflow of residents who are not extremely low-income. If a city council or mayor is unhappy with the idea of of PHA making units market rate, they could offer to fill the funding gap.
2. Shut Down HUD, Stop all Funding and Give 100% Ownership of Properties to PHAs:
A hand shake and both sides walk away from each other. What am I talking about? The simple version is that HUD quits giving funds to public housing authorities period and housing authorities no longer live under the rule of HUD. The portfolios become 100% the property of each PHA and they have control on how they set rents, calculate rents or run their portfolios in general. I realize this is pushing borders, but stay with me. The political landscape is getting more ridiculous by the year. The public housing industry continues to advocate but all it takes is the wrong administration to create harm that can last decades. In the Netherlands, the government walked away from funding social housing and let the industry take over more control of renting, building and administering the programs. Yes, there was some mismanagement but if you look at it with an open mind, the social housing industry became far more professional and business like and created billions of dollars of new housing. I do think we need rules and regulations but not the ones that bury the industry in a bureaucratic wasteland. Lets cut ties. If congress does not want to fund public housing, cut us loose.
There are some interesting options if we lose the regulation. The industry could keep a social mission but leverage the billions of dollars of real estate to redevelop, develop and bring a possible golden era to affordable housing in the USA. Perhaps some housing regulation could be taken over at the state level. Mississippi might not want to regulate its public housing stock the same way California does. That is fine. Let a conservative state make rules that works for its population and let liberal states do the same. Germany devolved public housing to the state in 2001 and for the most part it works.
3. No More Income Based Rents:
To much money and time is being spent on changing rents constantly. It is strange, intrusive and de-motivating to many who live in public housing. Lets move to a system where a family income qualifies and then we do EIV checks only to make sure we are not housing millionaires. There could be a threshold like 80 or 100% AMI before someone has to leave the program. Create a mixed set of rents and place people in those units when they first come into the program and then do EIV checks only. In lieu of employing large teams of staff doing income calculations, a PHA could house a smaller team of fraud specialist looking for those rare cases. This might not be popular with many but it is one way to bring down the administrative costs of the program.
4. Regional Housing Authorities:
There are over 3300 housing authorities in the USA. Does it make sense to have all of these individual bureaucracies running? Does it make sense to buy and implement different housing software systems, hire separate I.T. departments, and create separate maintenance departments? Not to mention the financing schemes in public housing are getting so complicated that small and medium sized housing authorities have a difficult time putting the right team together to handle the requirements.
Enter the idea of going regional with public housing authorities. Cut up each state and create regional housing authorities to administer programs. One large central office could be the home of the finance team, the voucher caseload teams and other central services like procurement and compliance. Contracting out maintenance, inspections and case management services could still allow for a local feel to the programs. The regional housing authority could have a feel local staff at libraries to help with hands on questions. There are already several regional housing authorities in place throughout the USA. Again, I fully realize writing this in a blog can sound flippant but that is not my intention. We need to think about ways to run our industry that can save time, money and allow us to focus more attention on housing those who have the least. This is just another idea to float.
5. Devolve all Public Housing to State Level:
This is a play on several of the ideas from above. As mentioned, Germany devolved public housing to the state level in 2001. If the state had more control, there could be local programs to meet local needs. States with higher affordable housing crisis’s could respond with different taxation, rent and subsidy schemes as needed. The federal government would need a cut off period where funding continued for a certain amount of time (10-15 years) while the states figured out their structure.
The ideas outlined here are just to get the brain thinking. I want better funding and more social concern for public housing just like anybody else. However; I also want to hear new and outlandish ideas. I want leaders of our industry, the private sector and third sector thinkers to keep dreaming of ways to make our system work better and ensure a future where affordable housing is part of our country.
Do you have any crazy outlandish ideas? What are your thoughts about the concepts floated in this article? Do you agree or disagree? Please leave comments.