SERC Is Opposed to the President S Proposed Spending Control Act

Alabama Association of Housing

and Redevelopment Authorities

2014 Position Paper

The Alabama Association of Housing and Redevelopment Authorities (AAHRA) is an association of knowledgeable and dedicated housing and community development professionals. Organized 74 years ago, AAHRA membership consists of 148 agencies assisting individuals and families from diverse backgrounds and ethnicities. Its membership is comprised of over 39,600 Public Housing units and administers over 34,619 Section 8 Housing Choice Vouchers. We serve over 180,590low-income citizens(87,120 in the Low Rent Public Housing Program and 93,471 through the Section 8 Housing Choice Voucher Program) by providing safe, decent and affordable housing. We also manage several homeless, tax credit, mixed-income properties and programs.

Throughout Alabama, housing agencies have been highly successful in providing a critical housing resource through their federally funded public housing and rental voucher programs, yet many unmet needs remain. For many years, there was a partnership between Congress and housing authorities in an effort to meet the needs, but underfunding of various HUD programs over the last few years has resulted in housing authorities being unable to meet the housing requirements of their communities' families. Through this Position Paper, AAHRA seeks renewed support and a commitment by Congress to properly fund HUD programs and amend rules and regulations in need of reform. AAHRA members are unified in their efforts to house America’s poor, and we urge Congress tosee that these efforts are successful.

AAHRA membersunderstand Congress' financial concerns and we support efforts to responsibly reduce federal spending. However, we believe that safe, decent and affordable housing is essential to the well being of our citizens and that reductions in spending levels should not be directed at vital domestic programs. We urge Congress to do all it can to ensure that one of the most basic of needs -- adequate shelter -- is available to our nation's families, especiallyour elderly citizens and our veterans.

OPERATING FUND

Congress is providing housing authorities additional money for Public Housing operations in 2014 when compared to 2013 appropriations. However, housing authorities still struggle to manage their public housing programs with insufficient funding. Congress and the Administration agreed to $4.4 billion for the Operating Fund for 2014, an amount that provides housing authorities with only an estimated 84 percent proration of the amount to which they are entitled. Congress and the Administration dug a deep hole for housing authorities in 2012 when funding was deliberately shorted $750 million in an effort to force housing authorities to spend their reserves to make up the shortfall. Agencies are still trying to dig their way out of this hole, but will likely be unable to do so in 2014 because of the 84 percent proration of eligibility. Housing authorities still will have to work with less staff, forego certain maintenance projects, and try to make the insufficient funding they receive cover increasing expenses.

AAHRA urges Congress and HUD to consider the adverse impact decreased funding has had over the last several years and work together to provide at least $5 billion in operating funds in 2015, which would still require prorated subsidies, but the proration would be somewhere between a manageable 95 to 98 percent of eligibility.

CAPITAL FUND

Congress approved only $1.875 billion for capital funding in 2014, far less than the estimated $3.4 billion needed to address the annually accruing capital needs. As the need for capital improvements increases due to the aging housing stock, appropriations continue to dwindle. AAHRA urges Congress to provide capital funding of $3.4 billion in 2015, otherwise, the physical needs of our public housing properties will continue to grow, threatening its viability.

HOUSING CHOICE VOUCHER PROGRAM ADMINISTRATIVE FEES

Reductions in administrative fees hurt not just housing authorities, but the families that agencies serve. Calendar Year 2010 saw housing authorities receive 93 percent of the administrative fees to which they were entitled. In CY 2011, that proration dropped significantly to 85 percent and in CY 2012, the proration slid to 80 percent. CY 2013, however, was the year of the most devastating cut of all -- a proration of only 68 percent, the lowest in the 38-year history of the program. Compounding the problem, housing authorities only earn an administrative fee for each household leased, so the downward spiral in the number of families served also adversely affects already low administrative fee prorations.

AAHRA believes housing authorities can more efficiently serve families with their housing needs if Congress provides $1.782 billion for administrative fees in 2015, enough to bring fees up to around a 90 percent proration of eligibility.

FUNGIBILITY

AAHRA believe that fungibility between the Capital Fund and Operating Fund will enable Public Housing Agencies (PHA) to better manage the housing inventory in light of the decrease in funding for both programs. This will provide temporary relief to cope with the current budgetary environment.

GREEN PHYSICAL NEEDS ASSESSMENT (GPNA)

AAHRA believe that the GPNA requirement is burdensome. HUD has dramatically underestimated the costs many PHAs will have to bear to comply with this requirement. We recommend that HUD indefinitely suspend implementation of the PNA requirement.

HOUSING CHOICE VOUCHER PROGRAM FUNDING LEVEL

Housing authorities assisted 40,000 to 50,000 fewer low-income households in CY 2013 than in CY 2012 and spent considerable amounts of their Net Restricted Assets/HAP Reserves as a result of dramatic funding cuts topped by sequestration. As a result, hundreds of housing authorities began 2014 with little or no reserves to absorb increased Housing Assistance Payments costs throughout the year, which sets up an even more severe decline in the total number of voucher-assisted households in 2014 unless other measures are taken by Congress. In 2012 14% of authorized vouchers in Alabama went unused because of lack of funding.

AAHRA calls on Congress to enact a renewal funding formula to correct for the past harm that has been done to low income families. This can be accomplished in FY 2015 by basing renewals on the higher of 2012, 2013 or 2014 families leased as represented by each housing authorities' HAP expenditures, and taking into account any incremental

HUD-VETERANS ASSISTED SUPPORTIVE HOUSING (HUD-VASH)

Housing authorities in Alabama support incremental HUD-VASH vouchers for FY 2015 in the amount of $75 million, the same amount as was provided this year. By working closely with Veterans Administration hospitals, housing authorities are able to provide affordable housing in the private market for veterans who are both homeless and receiving supportive services from the Veterans Administration. Absent incremental vouchers, housing authorities will be hard-pressed to use their scarce supply of Housing Choice Vouchers to serve homeless veterans in FY 2015.

ANNUAL PLANS

PHAs are required to create and submit an annual plan to HUD. Developing this plan is administratively burdensome, but the plan itself has very little utility. AAHRA recommend that the annual planning requirements be suspended until further notice.

ABATEMENT OF PHAS AND SEMAP

PHAs’ performance is being measured with stringent requirements without appropriate funding. AAHRA believes temporary suspension or abatement of PHAS and SEMAP because agencies are woefully underfunded and meeting the requirements fails to account for current funding and program realities.

FEDERAL OVER REACH ON PHA SALARIES

The job of housing authority executive director has very different demands and faces greater risks than that of a typical HUD employee. Executive Director salaries should remain a local decision and left with boards appointed by the democratically elected mayors and county executives of their communities.

RULE MAKING PROCESS

The current process of changing/updating regulation is cumbersome and time consuming. AAHRA believe fast tracking the rule making process will be beneficial to HUD and PHAs.

RENTAL ASSISTANCE DEMONSTRATION

The Rental Assistance Demonstration (RAD) has both proponents and opponents in the housing industry, largely because of the uncertainties that exist. AAHRA encourages Congress to direct HUD to work closely with affordable housing industry groups to address the flaws and ensure the success of RAD so that additional housing authorities will have the option to convert public housing units to the Section 8 platform. Working together, we can achieve results that do not undermine the fiscal stability of the public housing program for agencies that opt against conversion.

MOVING TO WORK

AAHRA members continue to push for the reauthorization and broad-based expansion of the Moving to Work (MTW) demonstration in a manner that protects existing MTW agreements while providing a significant number of new MTW agencies with financial flexibility and the freedom to pursue innovative policies and practices.

SMALL HOUSING AUTHORITY REFORM PROPOSAL (SHARP)

AAHRA encourages passage of S. 576, the Small Public Housing Agency Opportunity Act of 2013, a variation of the previously considered Small Housing Authority Reform Proposal designed to provide regulatory relief to 80 percent of the 3,200 public housing authorities that administer only a small fraction of the financial resources provided through the public housing and Voucher programs. These small agencies (those operating fewer than 550 public housing units and vouchers combined) would be the primary beneficiaries of the Small Public Housing Agency Opportunity Act, which introduces a number of significant reforms, including revised assessment systems, alternative rent structures, fungibility of housing assistance, and other time- and cost-saving measures. We encourage House of Representatives members to sponsor similar legislation in the House and ask that our Senators encourage a vote on S. 576.

HOUSING PRODUCTION

Congress has not funded a program for the construction of public housing units since 1995. The number of households needing assistance has increased over time yet the number of available affordable housing units has remained basically unchanged or has decreased. AAHRAmembers urge Congress to take steps to ensure an adequate supply of affordable housing in 2015.

LOW-INCOME HOUSING TAX CREDIT PROGRAM

The Low-Income Housing Tax Credit Program is a vital tool for those working to expand the affordable housing inventory. AAHRAurges lawmakers to permanently extend the minimum nine percent and four percent credit rates enacted in the 2008 recovery act.