HUD’s Office of Public and Indian Housing (PIH) issued Notice PIH 2020-29 providing tools and guidance to help public housing agencies (PHAs) avoid excessive reserves of Housing Choice Voucher (HCV) funds. The Notice observes that in recent years HCV reserves held by PHAs have increased. Reserves are an accumulation of unspent budget authority obligated to PHAs for voucher Housing Assistance Payments (HAP).
PIH notes that while a reasonable level of reserves is a prudent program management tool, there is an important trade-off to consider because excess reserves represent unserved families on wait lists and families facing rent burdens. Excess reserves can also reflect families’ inability to find housing due to low payment standards. An ‘optimized’ HCV program maximizes the number of families served while minimizing rent burden within a given PHA’s financial constraints.
The Notice warns that PHAs ending the calendar year with excessive reserves could lead to Congress directing PIH to rescind or offset those funds. This would mean that this money is no longer available to serve families. In addition, PIH has authority to initiate offsets for reallocation, which would compel a PHA to use available program reserves first instead of new renewal budget authority.
A more PHA-centric concern is that PHAs do not receive administrative fees for unleased units. Because the voucher program is budget-based (future year funding is based on current year spending), unspent dollars are not renewed and therefore are not included in the re-benchmarking process used to establish the baseline for calculating next year’s fund allocation for a PHA.
Most of the Notice is devoted to descriptions of tools and associated guidance intended to help PHAs optimize their HCV program. The Notice closes with four suggestions for best practices: ensuring that payment standards and subsidy standards are optimally set, conducting quality landlord outreach, providing high quality voucher briefings and communication during a family’s search for a home to rent with their voucher, and developing Project-Based Voucher Housing to increase the supply of housing that families can access with their vouchers.
Notice PIH 2020-29 is at: https://bit.ly/35olcY3
More about Housing Choice Vouchers housing is on page 4-1 of NLIHC’s 2020 Advocates’ Guide.