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Asset Management for Public Housing

Asset Management for Public Housing. Outline Discussion August 15, 2007. History and Background. 1998: Quality Housing and Work Responsibility Act 1999: Negotiated-Rulemaking I, Funding of Harvard Cost Study 2003: Cost Study Completed 2004: Negotiated-Rulemaking II

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Asset Management for Public Housing

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  1. Asset Management for Public Housing Outline Discussion August 15, 2007

  2. History and Background • 1998: Quality Housing and Work Responsibility Act • 1999: Negotiated-Rulemaking I, Funding of Harvard Cost Study • 2003: Cost Study Completed • 2004: Negotiated-Rulemaking II • 2005: Final Rule on Operating Fund Program • Provides a new formula for distributing operating subsidy to PHAs • Establishes requirements for PHAs to convert to asset management • 2007: PIH Notice 2007-9 (Financial Reporting Requirements)

  3. Operating Fund Rule (24 CFR 990): Key Themes • “PHAs shall manage their properties according to an asset management model, consistent with the management norms in the broader multi-family management industry. PHAs shall also implement project-based management, project-based budgeting, and project-based accounting, which are essential components of asset management.” • “…property-management services [must be] tailored to the unique needs of each property, given the resources available to that property. “ • “…property management services are arranged, coordinated, or overseen by management personnel who have been assigned responsibility for the day-to-day operation of that property and who are charged with direct oversight of operations of that property.” • “The arrangement of property management services must be done in the best interests of the property, considering such factors as cost and responsiveness.”

  4. Suppose… You own a group of restaurants. • Would you hire a manager for each restaurant? • Would you establish a budget for that restaurant? • Would you assign significant responsibility for the day-to-day operation of that restaurant to the on-site manager? • Would you monitor the individual performance of each restaurant in your portfolio, including financial performance?

  5. Project-based Performance assessment Project-based management Project-based accounting Project-based budgeting Project-based funding Initial Priorities/Building Blocks • Project-based funding • Project-based budgeting • Project-based accounting • Project-based management • Project-based performance assessment

  6. Initial Priorities/Building Blocks, cont’d Project-based funding • Separate subsidy form for each project • Project Expense Level (PEL) is a major component Project-based funding

  7. Initial Priorities/Building Blocks, cont’d Project-based budgeting • Must be approved by PHA Board • Not subject to HUD approval • Used for planning purposes Project-based budgeting Project-based funding

  8. Initial Priorities/Building Blocks, cont’d Project-based accounting • Year-end project statements submitted to HUD • Can only charge projects for services actually received • Fees must be considered reasonable Project-based accounting Project-based budgeting Project-based funding

  9. Project-based management Project-based accounting Project-based budgeting Project-based funding Initial Priorities/Building Blocks, cont’d Project-based management • Arrange property management services in the best interest of the project • Assign management personnel to each project

  10. Initial Priorities/Building Blocks, cont’d Project-based performance assessment • PHAS will be revised to emphasize project-based monitoring • Each project will be evaluated on financial, managerial, and physical condition Project-based performance assessment Project-based management Project-based accounting Project-based budgeting Project-based funding

  11. Note • Asset management doesn’t change the mission of public housing. Rather, it is intended to improve the business processes, consistent with the norms in private/multifamily housing.

  12. Helpful Resources The following documents, and other related materials, can be found on the Asset Management Website at http://www.hud.gov/offices/pih/programs/ph/am • Preparing for Asset Management Under the New Public Housing Operating Fund Rule (24 CFR 990): A Planning Document • Demonstrating Successful Conversion to Asset Management: A Site Visit to the Charlotte Housing Authority • Asset Management Newsletter, Issue 02, March 2007, Special Issue on Administrative Reform

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