This week on the physical needs assessment (PNA) web page, HUD posted a report to Congress on the status of the PNA proposed rule. This week’s report, dated July 2015, follows HUD’s first PNA progress report issued in 2014. Congress directed HUD to expand upon the 2014 report to implement more detailed requirements for the PNA, specifically to:

• Assess how the specific aspects of the PNA tool compare to PNAs utilized by HUD’s Office of Multifamily Housing, and by unassisted housing managed by PHAs
• Review if all data sought by the proposed PNA are necessary or if simplification of the tool makes sense from an oversight and management perspective
• Reflect a department-wide effort to identify similar data collection requirements on PHAs to ensure no duplication or overlapping of requirements
• Determine if the objective of the PNA can be achieved by alternative means such as, but not limited to, collection as part of HUD’s Line of Credit Control System, or the acceptance of multiple formats.

The PNA proposed rule was published in July 2011. Due to funding constraints impacting PHAs, HUD has delayed implementation of the rule and publication of a final rule. Since its 2014 report, HUD has decided not to require small PHAs (those with fewer than 250 public housing units under management) to perform a PNA. HUD has also decided to delay implementation of the more detailed energy audit standards to integrate with the PNA activity. The report concludes:

As demonstrated in both this report and our earlier report submitted in June 2014, the Department is working diligently to develop a PNA tool that provides the greatest value and the least burden to PHAs. The proposed PNA requirements for large PHAs are consistent with those required for other types of HUD assisted housing but are much less stringent. HUD has performed a comprehensive review of PNA/CNA and energy audit standards across the Department and has concluded that it is appropriate for public housing to employ a less burdensome PNA process because of the non-transactional nature of its use. The proposed rule nevertheless preserves baseline asset management principles inherent in standard industry PNA practices.

To stay updated, follow the #PNA tag to keep up with all related blog posts, or subscribe to the PIH Alert and receive a daily email with breaking news and analysis for PHAs and housing professionals. Does your agency need assistance with PNA planning and energy audits? NMA can help. Contact sales@nanmckay.com for details.

Last Friday HUD announced that it has scheduled the first in a series of trainings on the capital fund guidebook. Issued October 24, 2013, the capital fund program final rule:

• Combines the capital fund requirements for modernization and development into a single regulation
• Updates and streamlines many of the capital fund and development requirements
• Incorporates recent energy requirements
• Directs more funding toward modernization

According to the announcement, the two-day training will provide a comprehensive review of the guidebook, which has been in development for some time and has not yet been published. The training will be held at the Philadelphia HUD field office on July 22 and 23, 2015.

PHA staff should register for the training class in their specific region. Registration will be limited to one staff member per PHA and to PHAs within the region. Based on space availability, the class may be opened to additional staff and/or PHAs as able. Click here for additional information and to register for the training.

NMA can assist your agency with Green Physical Needs Assessments (GPNAs) and energy audits. For further guidance, don't miss our upcoming class this July 7–8 in Columbia, SC. Contact sales@nanmckay.com for details.

Yesterday Congressman Hal Rogers (R-KY), chairman of the House Committee on Appropriations, introduced an omnibus bill (H.R. 83) to wrap up all of the unfinished appropriations business for federal fiscal year (FFY) 2015. You can read the text of the HUD portion of the bill here (see PDF pages 38 to 55) and the HUD portion of the explanatory statement here. In brief, the bill provides the following amounts for the Department of Housing and Urban Development (HUD):

• Public housing operating fund: $4.4 billion, $40 million over the 2014 amount
• Public housing capital fund: $1.9 billion, no change from the 2014 amount
• Section 8 tenant-based vouchers: $19.3 billion, $127 million over the 2014 amount (This total includes funding for voucher renewals, tenant protection vouchers, administrative fees, and new vouchers for homeless veterans, nonelderly disabled families, and the family unification program.)

If approved by both chambers of Congress, the bill will raise the cap on the number of public housing conversions allowed under the Rental Assistance Demonstration (RAD) from 60,000 to 185,000, relax the flat rent requirements that were mandated under the 2014 appropriations act, and increase the cap on fungibility between public housing capital and operating funds. The bill also includes the following language regarding physical needs assessments:

The agreement prohibits HUD from requiring or enforcing the physical needs assessment (PNA) in fiscal year 2015. HUD is not, however, prohibited from continuing to work on a PNA tool that will help PHAs assess the physical quality of their public housing stock in a way that is not overly burdensome. HUD is expected to continue to evaluate the PNA tool and update its 2014 report to the Committees on Appropriations, as specified in the Senate report accompanying this act, no later than March 2, 2015.

Currently, much of the federal government is being funded under a continuing resolution (CR). That resolution will expire tomorrow, so the House likely will pass a new CR to give the Senate time to approve the omnibus bill.

To receive updates and analysis on the latest PIH news, subscribe to NMA’s PIH Alert and receive a daily email with breaking news and other important information for PHAs and housing professionals. Save 10% on your subscription when you order before January 1 during the NMA year-end sale!

This week on the physical needs assessment (PNA) webpage, HUD posted a report to Congress on the status of the PNA proposed rule. As part of the fiscal year 2014 appropriations act, Congress directed HUD to “take every possible measure to ensure that any new reporting requirements associated with the PNA process do not increase administrative burden on PHAs.” HUD was also directed to report on measures taken to relieve such burdens.

The PNA proposed rule was published in July 2011. Due to funding constraints impacting PHAs, HUD has delayed implementation of the rule and publication of a final rule. This week’s report examines the challenges of implementing the rule for PHAs, and details steps HUD has taken to reduce the associated burden. The report also emphasizes that HUD considers the PNA a baseline management tool necessary for long-term strategic planning and preservation of the PHA inventory, while providing data required for HUD’s program oversight and risk management. The report concludes:

HUD shares Congress’s concern for the burdens PHAs face. HUD engaged PHAs directly regarding the PNA initiative and believes that every practical and reasonable step to reduce administrative burden on PHAs are incorporated. HUD believes its appropriate balancing of the burden with its responsibility for capital fund program oversight results in value to the taxpayer and to the PHAs. HUD believes it is necessary to implement the final PNA and energy audit rule to strengthen public housing. Further delay represents a significant lost opportunity.

To stay updated, follow the #PNA tag to keep up with all related blog posts, or subscribe to the PIH Alert and receive a daily email with breaking news and analysis for PHAs and housing professionals. Does your agency need assistance with PNA planning and energy audits? NMA can help. Contact sales@nanmckay.com for details.

Late last year, HUD published the much-anticipated capital fund final rule in the Federal Register. Effective November 25, 2013, the new regulation combined and streamlined former capital fund program (CFP) requirements for rehabilitation and development into one comprehensive regulation.

It goes without saying that while much has remained the same, some significant changes have occurred, and understanding these changes is crucial for efficient and uniform program implementation and management. We hope that this blog series will provide you not only with an overview of the final rule, but also the answers to some questions you many have, and that it will ultimately help you navigate these changes.

• Part I: Background, and where to find the regulation
• Part II: Who does the rule apply to, and what are some of the major changes?
• Part III: What can CFP funds be used for?
• Part IV: What do I need to know about changes to mixed-finance requirements and energy efficiency?

Who does the rule apply to?

The capital fund final rule provides financial assistance to PHAs and resident management corporations (RMCs) to make improvements to develop public housing. It applies to all PHAs that have public housing units under the annual contributions contract (ACC).

What are some of the major changes brought about by the rule?

The main purpose of the rule is to provide a better understanding of program requirements for PHAs and residents to more effectively use capital funds, but there are several other changes brought about by the final rule as well. These include:

• Decoupling (separating) capital fund submission requirements from the larger PHA plan requirements
• Directing more funds towards modernization and maintaining the PHA's physical inventory, given our limited fiscal environment
• Simplifying mixed-finance requirements
• Incorporating HUD's energy efficiency strategic goals, and allowing total development cost (TDC) exception for cost-saving energy initiatives

Given these changes, what is the new process for submitting capital fund requirements?

Because the capital fund final rule decouples capital fund forms from the larger PHA plan submission, PHAs now submit their capital fund requirements with the ACC amendment. The final rule eliminates requirements to submit a preliminary budget, so there's only one budget submission. Additionally, the final rule enables PHAs to hold only one public hearing. All PHAs must complete a physical needs assessment (PNA).

These submission requirements apply to both qualified and non-qualified PHAs. The definition of qualified PHAs found at 24 CFR 903.3 is now the one used for the purposes of the CFP as per the capital fund final rule. Qualified PHAs are PHAs that administer 550 or fewer units (the sum of public housing units and vouchers under Section 8(o)) that are not designated as a troubled PHA under SEMAP during the prior 12 months. PHAs that meet this definition are not required to file the PHA annual plan.

Next week, we'll discuss what the CFP funds can be used for.

Kaylene Holvenstot has been a technical writer at NMA since 2008. She contributes to and edits NMA Master Books, seminars, and model policies while researching and analyzing the latest HUD guidance to ensure that all course material is always up to date and fully accurate.

NMA’s Capital Fund Program seminar provides you with the information you need to understand and accurately apply the capital fund final rule. Don't miss the upcoming session in Cincinnati this October — save 10% when you register before August 30!

If you're reading this blog, you've probably heard the terms "going green," "green building," "sustainable development," and "sustainable communities."

If you're like me, you probably have a positive association with the terms and may even be able to take an educated guess at what each one means. But, chances are, you probably don't know exactly what they mean. Even if you do, you may not know how they're different, why they're important, or how they're related to the work of a housing authority.

In this blog series, we'll unpack those terms and take a look at some examples of successful sustainable communities' initiatives, as well as provide some resources for where you can get more information and how you can get started planning towards sustainability in your community.

• Part I: Going green? Sustainable communities? What does it all mean?
• Part II: Why is planning a sustainable community important, and how does it relate to the work of a housing authority?

Why is planning a sustainable community important, and how does it relate to the work of a housing authority?

In times of reduced resources, it's important for civic organizations and public housing agencies to plan for the future together in order to find solutions for our community problems and achieve the greatest results. Green building and sustainable development initiatives are commendable, but the health of our communities and country are dependent on developing sustainable communities — that is, communities that focus their resources on preserving the environment, providing clean and adequate transportation options, advancing economic development, and creating affordable housing. Let's look at some examples:

Valley Visions (San Joaquin Valley, California)

The eight counties of the San Joaquin Valley are coordinating on some aspects of these planning efforts to maximize resources; however, each metropolitan planning organization (MPO) is developing a separate plan. Their sustainable communities strategy (SCS) process is referred to as "Valley Visions." These SCS regional plans consider long-term housing, transportation, and land-use needs, taking a big-picture look at how the Central Valley can grow over time in a way that uses resources efficiently, protects existing communities, conserves farmland and open space, and supports the Central Valley economy.

Planning in advance for growth can result in better neighborhoods, more housing and transportation choices, and a higher quality of life for residents. Each SCS regional plan must address the following items:

1. Identify areas to house the region's population growth for at least the next 25 years, including households at all income levels
2. Develop a regional transportation plan (RTP) that meets the needs of the region
3. Reduce greenhouse gas emissions from automobiles and light trucks

Piedmont Together (Piedmont Triad Region, North Carolina)

The population within the Piedmont Triad region in North Carolina is expected to grow by 15 percent within the next 10 years, bringing a new set of transportation challenges. With funding through the Sustainable Communities Regional Planning Grant Program, the Piedmont Authority for Regional Transportation will develop a plan for sustainable development in the region that helps it move from its agricultural and manufacturing history to a strong position in the new knowledge-based economy.

The integrated regional plan will encourage investment in and near urban areas and towns to reduce sprawl, investigate expanding access to non-automobile transportation, define a structure for taking advantage of existing assets in institutions of higher education, and assess the need for and optimal placement of affordable housing.

Oyate Omniciye Plan (Oglala Lakota of Pine Ridge Reservation, South Dakota)

With funding through the Sustainable Communities Regional Planning Grant Program, a consortium of community organizations, nonprofits, and Oglala Lakota tribes led by the Thunder Valley Community Development Organization will implement an unprecedented two-year sustainable development plan. To encourage grassroots development and community empowerment, the grant was awarded to a diverse alliance of stakeholders in addition to local government, thereby involving all facets of the local Lakota community.

The Oyate Omniciye Plan seeks to integrate housing, land use, economic development, transportation, and infrastructure across a wide southeastern swath of South Dakota in order to tackle the interlinked challenges of sustainability. In one part of the plan, Thunder Valley will work with renowned green architecture and design firm Berkebile Nelson Immenschuh McDowell (BNIM) to sustainably develop 85 acres of land in the reservation's Porcupine District near Sharp's Corner, SD. Not only will the development be environmentally sustainable, it will be based on the spiritual and cultural values of local residents. The development will also include a shelter and community center for at-risk youth.

Resources

Last month HUD’s Office of Sustainable Housing and Communities changed its name to the Office of Economic Resilience (OER). With the new name came a new home page and a new director, Harriet Tregoning. As described on its website, the OER “helps communities and regions build diverse, prosperous, resilient economies by enhancing quality of place; advancing effective job creation strategies; reducing housing, transportation, and energy consumption costs; promoting clean energy solutions; and creating economic opportunities for all.”

Other important resources include:

American Planning Association's Sustaining Places Initiative

Department of Transportation's Office of Transportation Policy

Environmental Protection Agency's Office of Sustainable Communities

Partnership for Sustainable Communities

With over a decade of experience working in the affordable housing industry, NMA consultant Nate Paufve has done everything from supervising a team of housing specialists to developing OIG responses, overseeing a document management team, serving as an internal auditor for PBCA operations in multiple states nationwide, and strategic planning related to Moderate Rehabilitation (Mod Rehab), project-based voucher, and housing choice voucher programs. He holds a B.A. in urban studies and an M.A. in public policy from the University of Chicago and has also worked extensively with nonprofit organizations and provided policy research on affordable housing programs.

NMA can assist your agency with PNA planning and energy audits. For more information, contact sales@nanmckay.com.

If you're reading this blog, you've probably heard the terms "going green," "green building," "sustainable development," and "sustainable communities."

If you're like me, you probably have a positive association with the terms and may even be able to take an educated guess at what each one means. But, chances are, you probably don't know exactly what they mean. Even if you do, you may not know how they're different, why they're important, or how they're related to the work of a housing authority.

In this blog series, we'll unpack those terms and take a look at some examples of successful sustainable communities' initiatives, as well as provide some resources for where you can get more information and how you can get started planning towards sustainability in your community.

• Part I: Going green? Sustainable communities? What does it all mean?
• Part II: Why is planning a sustainable community important, and how does it relate to the work of a housing authority?

Going green? Sustainable communities? What does it all mean?

Going green is a blanket term used to describe a philosophy or lifestyle of environmentalism focused on reducing the amount of pollution and waste one generates. At home, this may mean many things, including reusing and repurposing various household items, buying from local food sources, replacing incandescent light bulbs with fluorescent light bulbs, buying household products with natural or less harmful chemicals, and recycling cans, paper, glass, and plastic.

In the workplace, examples of going green might be the workplace recycling program, the cafeteria using recycled materials, or the office deciding to set the thermostat a few degrees cooler in winter and a few degrees warmer in summer.

Green building is used to describe a building process that is environmentally responsible and resource-efficient. Stemming from a need and desire for more energy-efficient and environmentally friendly construction practices, green building uses a variety of techniques to reduce and ultimately eliminate the impacts of buildings on the environment and human health. Green building emphasizes the use of renewal resources — for instance, the use of sunlight through passive solar, active solar, and photovoltaic equipment, or the use of plants and trees through green roofs, rain gardens, and reduction of rainwater runoff.

Other examples of techniques used in green building include using low-impact building materials, or choosing packed gravel or permeable concrete, instead of conventional concrete or asphalt, to enhance replenishment of ground water. Modern sustainability initiatives have expanded green building to include integrating the building lifecycle with each green practice employed to create a synergy among the practices used.

Sustainable development seeks to incorporate the principles of green building with protecting and enhancing the overall health, natural environment, and quality of life. Sustainable development accomplishes these goals by promoting the location and design of developments that reduce amount of vehicle miles traveled, creating developments where jobs and services are accessible by foot or public transit, and promoting energy-efficient and water-efficient buildings and infrastructure.

Sustainable communities are generally a larger concept that tends to emanate from the city or municipality structure — an all-encompassing master plan that includes transportation, affordable housing, economic, environmental, and land-use components. Sustainable communities may coordinate their efforts with other communities in the region to share costs and increase impact. Incorporating the principles of sustainable development, smart growth, and green building, sustainable communities focus on addressing population growth, housing affordability, transportation needs, economic development, and the environment.

Next: Part II: Why is planning a sustainable community important, and how does it relate to the work of a housing authority?

With over a decade of experience working in the affordable housing industry, NMA consultant Nate Paufve has done everything from supervising a team of housing specialists to developing OIG responses, overseeing a document management team, serving as an internal auditor for PBCA operations in multiple states nationwide, and strategic planning related to Moderate Rehabilitation (Mod Rehab), project-based voucher, and housing choice voucher programs. He holds a B.A. in urban studies and an M.A. in public policy from the University of Chicago and has also worked extensively with nonprofit organizations and provided policy research on affordable housing programs.

NMA can assist your agency with PNA planning and energy audits. For more information, contact sales@nanmckay.com.

In a brief announcement about the publication of the October 24, 2013, final rule on the capital fund program, the Office of Capital Improvements (OCI) includes an update on the capital fund guidebook that has been in development for some time.

OCI anticipates that the guidebook will be available next spring and, together with the final rule, “will ensure that the capital fund program is more efficiently and uniformly implemented by PHAs and managed more effectively by the HUD field offices.” As OCI’s announcement points out, the final rule:

• Combines the capital fund requirements for modernization and development into a single regulation
• Updates and streamlines many of the capital fund and development requirements
• Incorporates recent energy requirements
• Directs more funding toward modernization

Also, we're thrilled to announce that Nan McKay and Associates has been selected (under subcontract to Phineas Consulting) to fully revise and update the HCV guidebook for HUD. (The current version was issued in 2001.) We're very excited to be working on this project, and we'll let you know when HUD releases more information about the new version.

NMA can assist your agency with PNA planning and energy audits. For more information, contact sales@nanmckay.com. To stay updated on the latest program information, subscribe to the PIH Alert and Housing Resource Newsletter.

Last week in the Federal Register, HUD’s Office of Public and Indian Housing (PIH) published the final capital fund rule. As you may recall, it has been nearly three years since PIH published the proposed capital fund rule on February 7, 2011. Among numerous other changes, the new 47-page final rule:

• Consolidates former public housing modernization programs into “a single, clear, updated regulation,” 24 CFR Part 905
• Eliminates three other parts of 24 CFR:
  • Part 941, Public Housing Development
  • Part 968, Public Housing Modernization
  • Part 969, PHA-Owned Projects—Continued Operation as Low-Income Housing after Completion of Debt Service
• Includes two changes made by the Housing and Economic Responsibility Act (HERA) of 2008:
  • The removal of the former emergency set-aside for natural disasters and emergencies
  • The definition of “qualified PHAs”
• Moves and reorganizes the capital fund formula from 905.10 to 905.400 without changing any coefficients defined by negotiated rulemaking in 1999 and 2000
• Establishes a new definition section in Part 905 (with a few definitions revised since the proposed rule and a couple of new ones added)
• Clarifies capital fund eligible and ineligible activities, noting that emergencies not identified in the five-year action plan are eligible capital fund costs
• Phases in over five years (rather than the proposed three years) a cap of 10 percent on the amount of capital funds that a PHA may use for management improvements, noting that the provision of direct social services and the costs for security guards or ongoing security services are not eligible management improvements
• Incorporates energy efficiency standards
• Requires small, as well as large, PHAs to conduct a physical needs assessment (PNA), but delays the applicability of this requirement
• Clarifies the calculation of total development cost (TDC) limits and allows PHAs to request a TDC exception for integrated utility management, capital planning, and other capital and management activities that promote energy conservation and efficiency
• Includes in the regular capital fund formula grant five years of a demolition or disposition transitional funding (DDTF) grant to replace the replacement housing factor (RHF) grant of up to 10 years, also providing for a DDTF transition period
• Provides, as one option to the guaranty of irrevocability of funding, that the required letter of credit be valued at 10 percent of the contract price (rather than 25 percent, as proposed)
• Revises the description of eligible amenities (see 905.202(c))
• Revises the identity of interest regulations to allow PHAs to use an instrumentality as a general contractor in mixed-finance projects without requesting a waiver
• Provides that units removed because of homeownership are ineligible for RHF funding

The final rule, which includes a discussion of comments received on the 2011 proposed rule, will become effective on November 25, 2013.

NMA can assist your agency with PNA planning and energy audits. For more information, contact sales@nanmckay.com. To stay updated on the latest program information, subscribe to the PIH Alert.

Affordable Housing Finance: Affordable housing gap found in every state

NLIHC: Affordable housing shortage, explained

In other news, HUD’s Office of Public and Indian Housing (PIH) announced that the training session on the green physical needs assessment (GPNA) tool that was supposed to air on February 27 has been rescheduled for Thursday, March 21 at 1 p.m. eastern time. PIH recommends that you view the January 10 training session on the GPNA tool before viewing the March 21 session. You’ll find the January session in the HUD Webcast archive.