Many cities face challenges as they seek to increase their tax base, population density, or affordable housing stock through new development. Multiple strategies exist for addressing this desire: courting developers using incentives, perpetuating suburban sprawl through pioneering new green fields, hyping city dwellers’ quality of life in order to attract a large employer that will increase demand and profits for a developer — usually through a demonstrated need for housing supply. Often overlooked, however, is the role Public Housing Authorities (PHAs) can play in the endeavor to build safe, clean, quality housing for residents of diverse demographics with equally diverse incomes.
- Fluctuating political will and power can hinder the longevity many development projects need to be completed. This can be particularly true when new residential housing contains an affordability component, or has financing gaps that may be covered by municipal funds.
- Unstable funding sources can also pose a challenge for cities that seek to act as developers. Regardless of the extent to which political will can encourage new construction projects, external factors, such as rising construction costs, interest rates, or hesitancy from lenders to embrace a unique vision for new developments, often affect the likelihood of completion.
- And, if we assume that funds and motivation are available for development to occur at all, the challenge remains to find staff with development experience and expertise who are willing to work for bureaucratic wages. This is not to say that city governments do not pay their employees well. However, the development industry has historically attracted a variety of personality types that may or may not thrive within a bureaucratic setting. Indeed, while those involved in development authorities can be very capable and diligent in executing their duties, they may or may not be effective as developers within a municipal setting.
- Housing Authorities have regular, if not stable, federal funding. In fact, good housing authorities are the recipients of a reliable source of revenue. Because PHAs are not as strongly subjected to the political turmoil of elected municipal officials, the stable revenue can allow PHAs to follow longer development timelines for new housing projects. Thus, what PHA’s may lack in privatized expediency, they make up for in stability.
- Fiscally-conservative housing authorities often have access to capital that some municipalities may not. This is especially true for PHAs that are familiar with HUDponsored or HUD-approved programs that provide access to funds for new developments and renovations. A few of these funding sources include HOPE IV grants, tax credits, and Rental Assistance Demonstration fund.
- Another reason why PHAs make good city partners is rooted in their control over section 8 voucher distributions (project-based vouchers included). This means PHAs are uniquely positioned to subsidize a variety of developments focused on workforce and low income populations. Such development opportunities are highly competitive for tax credits that can provide substantial equity that may be required to make a project “pencil.”
Because of these reasons, and undoubtedly many more, most medium- and large-sized cities can form valuable partnerships with an existing housing authority to build more socially thoughtful and equitable housing. Do you have more ideas why housing authorities and cities should partner up? Email us at email@example.com