Actual construction and operation of public housing projects for low-income families has traditionally been the responsibility of local governments. In 1965, Congress authorized the U.S. Department of Housing and Urban Development (HUD) to provide financial assistance to local housing authorities for the acquisition and operation of existing buildings or privately constructed new housing for low-income Tenants. Under the 1968 Housing and Urban Development Act, the Federal Housing Administration (FHA), an agency of HUD, was authorized to encourage private participation in the development and construction of housing for low-income families through rental and mortgage insurance programs. FHA-insured mortgages and government subsidies were awarded to nonprofit cooperative groups for the construction of low-income housing.
In the late 1970s and early 1980s, housing funds were made available to private Owners to build and manage affordable housing for the low, very low, and extremely low-income population. These units are available throughout the country. Although owned and managed by private Owners and agents, the units must adhere to strict HUD enforcement regarding verification of resident income and meet very high standards of physical condition.
Today, HUD is pushing for the privatization and project-based management of public housing. As there are 3,400 public housing authorities in the United States responsible for more than 1.3 million units, cooperating with HUD is a great opportunity for many property managers. These complex networks are in sharp contrast to private management, which often gives employees authority to make many decisions on-site.
Each government program comes with its own set of rules and criteria. This discussion will highlight certain elements common to each program, but the property manager truly becomes a specialist when managing subsidized housing.
Section 8 Housing Assistance Programs (Voucher Programs)
Single family homes or apartments in public housing buildings covered under the HUD Section 8 Housing Assistance Payments Program are rented on a subsidized basis. A low or very low-income family will pay up to 30 per cent of its adjusted monthly income. HUD pays the Landlord the difference between that and market rent. Income eligibility for occupants of public housing varies according to geographic area and the number of dependents in the family.
Low income is defined as less than 80% of the area median income.
In 1996, HUD established the Real Estate Assessment Center (REAC) in order to assess the stock of private HUD housing in the United States. This set of stringent physical standards requires Owners and Agents to maintain HUD housing to the highest standards of safe, decent, and sanitary housing. REAC has been instrumental in changing HUD housing for the better.
Vouchers for Private Owners
In addition to public housing, the local housing authority in some cities contracts with private investors for housing for eligible recipients. Tenant screening is left up to the private Landlord that chooses to accept the vouchers awarded to the resident by the local public housing authority. HUD has developed several standard lease forms to be used with public housing, and the Property Manager must use these forms and be familiar with their provisions.
Tenant Rental Assistance Certification Systems (TRACS)
HUD developed a computer system to improve the management of all assisted housing programs. The Tenant Rental Assistance Certification System (called TRACS) gives HUD a central information system used to verify subsidy calculations. TRACS has automated the collection of Tenant data and provides HUD offices with an online database, significantly reducing HUD’s paperwork.
Need for Professional Property Management
All subsidized public housing developments, of whatever type, have a common need for ongoing, competent management. Since its inception, low-income housing has suffered from both inadequate property management and bureaucratic mismanagement. Effective January 31, 2010, all public and private affordable housing owners must use HUD’s Enterprise Income Verification system (EIV). EIV provides data from TRACS and both the Social Security Administration and the Health and Human Services New Hire database to ensure that residents are making a full and adequate disclosure of household income to Landlords to reduce waste and fraud of HUD funding. This will allow more households to take advantage of available federal programs.
Professional Property Managers who choose affordable housing as a career have a number of options for specific training and certification through local HUD offices and state finance agencies. Some of the available certifications:
HUD is attempting to correct the lack of trained management by conducting management courses, sometimes in connection with local colleges, and by certifying managers who have graduated from HUD-approved management courses. Additionally, most of the certification programs offered by trade associations contain specific courses in managing low-income housing.
