2017-03-02: Public Housing Commission Proposed “Real Cost” Funding at $116 Million
For those who may not remember, the Commission for Public Housing Sustainability and Reform identified five key recommendations relative to the preservation and improvement of state-aided local public housing. Most of these recommendations, except for elimination of local housing authorities, were contained in Chapter 235, the Local Housing Authority Act of 2014. The one other recommendation, totally ignored by the Legislature and the administration, was intended to address the chronic underfunding of the public housing program. Commission Recommendation 3 appears below and is as valid today as when offered:
“Funding for Long Term Preservation and Sustainability: Despite efforts to provide additional resources, state public housing has chronically had inadequate capital and operating funding, resulting in deferred maintenance and an estimated statewide capital need of approximately $1.6 billion.
Recommendations: The Commission recommends that funders strive to increase operating resources to levels identified in the 2008 study, The Real Cost of Operating Massachusetts Public Housing, and strive to increase and leverage capital funds to restore all units to occupancy and stabilize the state public housing portfolio.”
The DHCD Real Cost Study concluded that state-aided public housing had an operating budget 30% lower than other housing programs in the state. Using the amended Harvard Methodology on State Public Housing Operating Subsidy Needs, the estimated “real need” was set at $116.4 million, an increase of $51.9 million over today’s funding level. DHCD states in the 2014 Training Manual for LHA Board Members that from FY 2010 to FY 2014 the operating subsidy appropriated remained at $64.5 million annually. The same was true in 2015, 2016 and 2017, and the same $64.5 million is once again requested by the Baker Administration for FY 2018, eight years and state budgets later. The Legislature has reneged on the promise to provide LHAs with the resources to preserve public housing and to cover the real cost of operations.
The Commission reforms in Ch. 235 are being implemented, however none of the new resources recommended by the Commission and the DHCD study are forthcoming. MassNAHRO and the Mass. Union of Public Housing Tenants are seeking a modest increase in subsidy to $72 million, way short of the $116 million recommended by DHCD in 2008. Performance Management Reviews are beginning this year at LHAs that have not seen any new subsidy from the Massachusetts Legislature in almost a decade. Any realistic evaluation should take this fact into consideration. LHAs have done remarkably well managing and maintaining their properties with no new resources but many new regulatory requirements. Kudos, housing authorities!