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Introduction to Public Housing

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Introduction to Public Housing Introduction to Public Housing Maggie McCarty Specialist in Housing Policy January 3, 2014 Congressional Research Service 7-5700 www.crs.gov R41654 CRS Report for Congress Prepared for Members and Committees of Congress Introduction to Public Housing Summary “Public housing” is often used as a generic term to refer to all publicly assisted housing, but the term “public housing” actually refers to a specific federal program. Created in 1937, the low-rent public housing program was the first major federal rental housing assistance program. The program initially subsidized the construction, and later the ongoing operation and maintenance, of multifamily rental housing properties for low-income families. While public housing is a federally created and funded program, the properties are owned and managed at the local level by quasi-governmental public housing authorities (PHAs) under contract with the federal government. Given this unique federal-local relationship, the program is governed in part by federal rules and regulations and in part by policies set at the local level. The public housing program serves some of the poorest families in the nation, including persons who are elderly, persons who are living with disabilities, and other families with and without children. Families who live in public housing generally pay rent equal to 30% of their adjusted gross income; average rents paid by public housing families lag substantially behind private market rents paid by similar families. Public housing properties themselves can be high-rise buildings, low-rise buildings, scattered site properties, and even part of mixed-income housing developments. Construction and acquisition of new public housing units effectively ended after the federal government stopped funding new development in the mid-1990s, although they began significantly decreasing much earlier as other models of providing housing assistance grew in popularity. As public housing properties have fallen into disrepair and been demolished, the number of public housing units has begun to decrease. Today, there are roughly 1.2 million units under contract and receiving federal funding, down from over 1.4 million units at the program’s peak. Federal funding comes from two main formula grants—the Public Housing Capital Fund and the Public Housing Operating Fund— which are meant to supplement the rents collected by PHAs to meet the operation, maintenance, and capital needs of public housing. There have also been several competitive grant programs that provide additional funding to PHAs, including the HOPE VI program. In recent years, regular annual appropriations for public housing have generally been in the range of $6 billion to $7 billion per year, with an additional $4 billion provided by the 2009 economic stimulus legislation. In response to concerns about the adequacy of federal funding levels—paired with federal restrictions on tenant rents—to meet the capital needs of public housing, proposals have been introduced to promote private investment in public housing in order to preserve the existing stock. An increasing number of PHAs have pursued private financing to meet their capital needs in recent years. However, recent proposals calling for an expansion in the role of private finance in public housing have been met with concerns about the potential for the “privatization” of public housing and a loss of affordability. As the program continues to decline in terms of the number of families it serves, questions are arising about the role the program plays, and should play in the future, in terms of federal housing policy. This report is meant to serve as an introduction to the federal public housing program. It provides information on the history of the program, how it is administered and funded, and the characteristics of public housing properties and the households they serve. While it introduces current policy issues, a full analysis of those issues and discussion of current legislation is not included in this report. Congressional Research Service Introduction to Public Housing Contents Introduction ...................................................................................................................................... 1 Brief History of the Public Housing Program.................................................................................. 1 The Housing Act of 1937: The Beginning of Public Housing ................................................... 2 The Housing Act of 1949: Expansion and Ties to Urban Renewal ........................................... 3 1960s: New Forms of Assistance and the End of Legal Discrimination ................................... 4 The 1970s and the Rise of Section 8 ......................................................................................... 5 The 1980s: Withdrawing Further from Public Housing ............................................................ 6 1990s to Present: The End of Public Housing Development and Decline in Units ................... 7 Overview of the Program ................................................................................................................. 9 Administration ........................................................................................................................... 9 PHAs ................................................................................................................................... 9 PHA Plans ......................................................................................................................... 11 Resident Involvement ........................................................................................................ 12 Public Housing Assessment System .................................................................................. 13 Demolition, Disposition, and Conversion ......................................................................... 14 Eligibility, Rent, Terms of Occupancy..................................................................................... 16 Eligibility ........................................................................................................................... 17 Application, Waiting List, and Preferences ....................................................................... 17 Targeting and Deconcentration.......................................................................................... 18 Screening ........................................................................................................................... 18 Rent ................................................................................................................................... 19 Utilities .............................................................................................................................. 20 Reexamination ................................................................................................................... 20 Termination of Tenancy ..................................................................................................... 21 Additional Programs and Services .......................................................................................... 22 Resident Supports .............................................................................................................. 22 Section 3 ............................................................................................................................ 22 Public Housing Homeownership ....................................................................................... 23 Moving to Work ................................................................................................................ 23 Trends in Units and Characteristics of Properties .......................................................................... 24 Characteristics of Tenants .............................................................................................................. 28 Funding .......................................................................................................................................... 34 Operating Funding ................................................................................................................... 34 Public Housing Drug Elimination Grants ......................................................................... 35 Capital Funding ....................................................................................................................... 35 Leveraging and Mixed Finance Development .................................................................. 36 HOPE VI/Choice Neighborhoods Initiative ...................................................................... 36 Recent Trends in Funding ........................................................................................................ 37 Policy Issues .................................................................................................................................. 39 Funding Levels ........................................................................................................................ 39 The Role of Public Housing .................................................................................................... 41 Congressional Research Service Introduction to Public Housing Figures Figure 1. Public Housing Units Over Time ................................................................................... 25
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