On March 21, 2019, HUD issued Notice PIH 2019-05 (HA), creating a streamlined procedure for Public Housing Agencies (PHAs) with 250 or fewer public housing units to convert the public housing to Section 8 assistance. PHAs may receive Tenant Protection Vouchers (TPVs) which must be offered to tenants as tenant-based assistance but may be project-based in the tenant agrees.
This notice revises the current Section 22 requirements to make it easier for small PHAs to convert public housing to Section 8. Section 22 allows PHAs to convert public housing to Section 8 Housing Choice Voucher assistance if the conversion: (1) is not more expensive than continuing to operate public housing; (2) principally benefits residents, the PHA, and the community; and (3) has no adverse impact on the availability of affordable housing in the community. The regulations require that PHAs conduct a conversion assessment including a cost analysis, market value analysis, rental market analysis, and an impact analysis.
In order to make the process more feasible for small PHAs, the Notice exempts small PHAs from the conversion assessment requirement, except they must still provide an impact analysis. In order to qualify, the PHA must convert all of its public housing units through Section 22 and close out its public housing program. If a PHA without a voucher program wishes to participate, it must find a willing PHA with a voucher program to administer the vouchers.
Applications will be processed by the PIH Special Applications Center (SAC) and must include:
- Environmental Review;
- Impact Analysis, including the impact on available affordable housing, concentration of poverty and other neighborhood impacts;
- Resident consultation;
- PHA Plan/Significant Amendment;
- Local Government Review; and
- Plan for the future use of the project
Conversion requirements include:
- Income screening – only families at or below 80% of the area median income qualify for HCV assistance;
- Relocation – the Uniform Relocation Act (URA) applies. PHAs must provide relocation assistance to all displaced families, including over-income families who do not qualify for TPVs; and
- Davis-Bacon Wage Rates apply to any work associated with demolition or rehabilitation.
If the converted public housing continues to operate as rental housing, residents must be provided the opportunity to remain using a voucher. PHAs may only project-base the voucher assistance if the tenants provide informed, written consent after the PHA holds an informational briefing for families at which HUD personnel are present – either in-person or on the phone. Families must be given at least 30-days to decide whether or not to provide consent, and project-based HAP contracts must exclude any units occupied residents with tenant-based vouchers if the resident elects not to allow conversion to project-based assistance.
Small PHAs interested in such conversion should carefully review the HUD Notice and contact HUD at SACTA@hud.gov for additional information.