During the past decade U.S. public housing agencies (PHAs) have gained much greater discretionary authority over many aspects of their public housing programs. The seeds of this change were sown in the 1990s by revamped laws that culminated in the Quality Housing and Work Responsibility Act (QHWRA) of 1998. The Uses of Discretionary Authority in the Public Housing Program: A Baseline Inventory of Issues, Policy, and Practice, a new report published by HUD's Office of Policy Development and Research, is a systematic record of how PHAs have responded to their increased discretion. It particularly explains PHA priorities in three areas: selecting tenants, creating income incentives, and setting rents. The report shows how PHAs are making broad use of their discretionary authority in these three areas. Key findings include: almost 60 percent of PHAs have dropped the Federal tenant preferences associated with various hardships; only about 10 percent of PHAs have implemented optional income disregards for working households; however, a higher percentage of PHAs delay interim examinations when tenant income rises; and about 50 percent of PHAs have established a $50 minimum rent for all households, the highest amount allowed. Extra-large PHAs, according to the report, do not always conform to expectations. For example, the larger the PHA, the smaller the chance that it will admit new residents on the basis only of preferences not related to hardships. In deciding how to use their discretionary authority, PHAs appear to be tailoring their policies to fit their own perceived needs and priorities. Their policy choices vary widely. Many PHAs address their need for fiscal solvency and uncertainty about continuing HUD subsidies by bolstering revenues-for example, by favoring working households. Conversely, PHAs that still emphasize providing housing of last resort often keep the old Federal, hardship-based tenant preferences. QHWRA, however, may be a catalyst for PHAs to revisit some of their recent policy choices concerning the economic standing of public housing residents, because under the act 70 percent of new admissions are required to have incomes at or below 30 percent of the area median income. These various ways in which PHAs are using their discretionary authority reflect factors, such as local economic and housing market conditions, their management capacity, and State rules for welfare reform programs. For example, in a housing market with many vacancies, some PHAs adopt ceiling rents for residents who might otherwise have more attractive private housing alternatives. But in areas where vacancies are low, PHAs may not implement ceilings. This report explains that, over the next few years, QHWRA will likely result in significant changes in PHAs' use of their discretionary authority. For example, the new law makes permanent the PHA discretionary authority to eliminate all Federal tenant preferences. But QHWRA's income distribution provisions require PHAs to balance their commitment to recruiting more working and upwardly mobile households with their need to serve more low-income households. As PHAs make choices in this context, HUD will be gathering data on their tenants with its Multifamily Tenant Characteristics System (MTCS), a database on approximately 1.3 million households in public housing. As a followup to this report, HUD will use MTCS to study the relationship between laws and actual changes in tenant composition and rent revenues. Order The Uses of Discretionary Authority in the Public Housing Program: A Baseline Inventory of Issues, Policy, and Practice for $5 from HUD USER. Use the order form. |
