STATE PUBLIC HOUSING PROGRAMS FY2020 BUDGET REQUEST Subsidies to Public Housing Authorities (7004-9005) – $72 MILLION
Total Page：16
File Type：pdf, Size：1020Kb
National Association of Housing & Redevelopment Officials STATE PUBLIC HOUSING PROGRAMS FY2020 BUDGET REQUEST Subsidies to Public Housing Authorities (7004-9005) – $72 MILLION Subsidies to Public Housing Authorities (7004-9005) – Request $72M State Law: Subsidy Equals Difference Between Rental Income and Actual Operating Costs M.G.L. c. 121B §32 requires the Commonwealth to fill the gap between the reduced rents and the cost of operations with subsidy. However, state budget caps are based on the subsidy appropriated NOT operating costs. There is no relationship between property maintenance/management costs and what the Legislature appropriates yearly in operating subsidy. Documented Need for Operating Subsidy Exceeds $115 Million An October 2006 State Audit, September 2006 Harvard Cost Study, July 2006 Legislative Report and the February 2008 DHCD Real Cost Study all substantiated the true costs, using federal standards, as $112-115 million annually. Line Item Frozen for Six Fiscal Years; 1.5% Increase in FY19 Public Housing Operating Subsidy, line 7004-9005, had been level funded from FY2013- FY2018 – six budget cycles – at $64.5 million. With inflation, that equates to a 6.9% cut. Emergency Assistance program saw a 50% increase over the same timeframe. The FY19 budget added $1 million, a 1.5% increase to $65.5 million. Governor Baker’s House 1 Budget for FY2020 level funded the line at $65.5 million. Public Housing Operating Subsidy v. Emergency Assistance 300 250 200 150 100 $ in Milliona 50 0 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 (Gov. Budget) Fiscal Year Public Housing Operating Subsidy Emergency Assistance - Shelters Commonwealth’s Most Cost-Effective Option Local public housing is the state's most cost-effective housing for low-income seniors, families and the disabled. The average subsidy currently is $130 per unit per month ($65.5M divided by 41,900 eligible units). The cost of a shelter is approximately $3,000 per person per month. Long-term care in nursing homes averages $10,750 per person per month. Allowing seniors to age in place and stay out of premature long-term care placement could save the state millions annually! Public Housing = State's Most Cost-Effective Option 12000 10000 8000 6000 4000 2000 0 Monthly Costs Public Housing Unit [$128] Shelter [$3,000] Long-Term Care/Nursing Home [$10,750] Tenant Rents Cover 75% of Expenses Operating subsidy represents only 25% of budgeted expenses statewide; tenant rents, two- thirds of which are seniors, cover the other 75%. Budgeted Operating Expenses 25% 75% Tenant Rents Operating Subsidy LHAs Meet or Exceed Performance Benchmarks on Stretched Budgets Housing authorities are mandated by law to house qualified homeless families and seniors, and continue to provide safe, decent, sanitary housing on stretched budgets. Newly-implemented performance measurements indicate that the majority of local housing authorities are meeting or exceeding benchmarks. Increased Subsidy = Enhanced Resident Services, More Staff, Faster Unit Turnovers Additional Resident Services & Programs Resident services and programs promote self-sufficiency for families, allow seniors to age in place, and enhance the quality of life for all public housing residents. DHCD recently surveyed residents in the public housing units it oversees statewide. In addition to overall satisfaction among residents with their housing authority’s communication, customer service and responsiveness, the survey results showed: 78% of families would be interested in services and programs, including: job training programs, money management programs (budgeting, income building), children’s programs (tutoring, afterschool activities, child care), adult education (GED, ESL, educational counseling). 70% of elderly/disabled residents would be interested in services and programs, including: visiting nurse, meals programs, home health aides. Faster Vacant Unit Turnovers Currently, the number of vacant units is fewer than 3%, or 1,000, statewide but, considering there are more than 100,000 on waiting lists across the Commonwealth, every unit should be available to house low-income families and seniors, including homeless and veterans. Of the currently vacant units, 60% have been vacant for more than 90 days, and 20% are estimated to cost over $10,000 to get back online. The length of vacancy and high costs are a result of lack of funding for additional maintenance staff, outsourcing costs, and aging developments. The average age of all public housing units is 52 years! Capital funds authorized in the bond bill CANNOT be used for maintenance labor, contract costs or maintenance supplies. Additional operating subsidy would allow housing authorities to hire sufficient maintenance staff, contract out unit turnover functions, and purchase adequate supplies. [See chart below for examples of allowable capital expenses vs. operating expenses] Bond Funded Capital Expenses v. Operating Expenses ALLOWED TO BE BOND-FUNDED NOT ALLOWED TO BE BOND-FUNDED (USE CAPITAL FUNDS) (USE OPERATING FUNDS) EXPENSE TYPE SITUATION EXAMPLE EXAMPLE SITUATION Materially adds value Maintains value of the to the asset. asset. Repaint entire Spot painting; GENERAL Prolongs useful life by development interior decorating. Repairs/replacements to CAPITAL at least 5 years. envelope. meet or extend useful EXPENSES life. Project cost is greater Project cost is less than than $1,000 AND $1,000 OR component is component being not tracked in Capital replaced is tracked in Planning System (CPS). Capital Planning System (CPS). Replace entire HVAC Replace a section of system. pipe. Replacement of Roof replacement. Roof patching. Repair to building building systems based systems. BUILDING upon lifecycle. Envelope: replacing Envelope: spot SYSTEMS more than 20% of replacement of siding. worn/damaged siding. Envelope: repointing Envelope: spot a building. repointing. Replacement of all Replacement of one Replacement of kitchen appliances in kitchen appliance equipment based upon a building at the end because it’s broken. lifecycle, generally as of their useful life, BUILDING part of a long-term, per industry norm. Replacement of a broken COMPONENTS predictable schedule, piece of equipment. OR OR as part of an overall EQUIPMENT plan to upgrade Replacement of all Installing one Energy equipment (e.g. for refrigerators to Star refrigerator in a energy or water Energy Star models unit as a replacement conservation as part of an overall for a broken purposes). energy conservation refrigerator. plan. ALLOWED TO BE BOND-FUNDED NOT ALLOWED TO BE BOND-FUNDED (USE CAPITAL FUNDS) (USE OPERATING FUNDS) EXPENSE TYPE SITUATION EXAMPLE EXAMPLE SITUATION Complete Painting; carpet Primarily consists of modernization of cleaning; Replace, repair, or replacement of room(s) in a unit replacement of refurbish components components tracked which has not been failed or failing not listed in CPS; work UNIT in CPS, plus associated turned over for individual typically done on unit TURNOVER finish work and other many years or has appliances; cabinet turnover. incidental repairs been subject to refinishing and which together are unusually hard use repair (as opposed worth less than 15% so that capital to replacement). of the project TDC. components have reached ends of useful lives. Heavy site work Removal of trees or Snow plowing; lawn Routine site SITE WORK requiring special large tree limbs. mowing; regular maintenance. equipment and special landscape expertise. maintenance. STAFF: With project manager approval, LHA may use Capital funds applied toward administration PLANNING & up to 10% of its Formula Funding for capital must be recorded in operating budget. Funds ADMINISTRATION administrative purposes, including paying for are still subject to bond rules for contracts and FOR CAPITAL staff time. AIMM authorities may use up to expenditures. PROJECTS 13% of Formula Funding. Needs to be a formal, approved budget for Upon approval, wages paid on a reimbursable STAFF: the whole project. Wages paid on basis, for overtime or for temporary or seasonal LABOR FOR reimbursable basis at the hourly rate specific employees filling in for more skilled permanent CAPITAL to each permanent employee. Capital bond employees. Requires careful record keeping. PROJECTS funds cannot be used to pay staff retirement benefit costs. Requires careful record keeping. Source: DHCD Massachusetts State-Aided Public Housing Preservation and Modernization Program Guidelines (February 2017) National Association of Housing & Redevelopment Officials About MassNAHRO MassNAHRO is the member organization of public housing authorities across the Commonwealth. VALUE STATEMENT We believe housing is a basic human right. Public and affordable housing is a sustainable and fiscally- responsible business model. Our organization exemplifies commitment to advocacy, professionalism, innovation, resilience. VISION Our vision is to be the premier membership organization and unparalleled resource for the housing profession. We will provide leadership and tools to build capacity and empower agencies to preserve, protect, and expand inventory. In doing so, we will become powerhouse advocates for public housing. Key behaviors we encourage and support: Innovation, Professionalism, Ethical behavior. MISSION The mission of MassNAHRO is to educate, support, and advocate for our member agencies to ensure the preservation, protection, and expansion of public and affordable housing. By adhering to the highest industry standards, we provide