Have you been wondering why HUD hasn't released the final report on the Capital Needs Assessment? You're not alone. As recently as last October, the Department assured the industry that the results of the CNA would be unveiled by November 2010. The study, conducted independently of the Physical Needs Assessment by Abt Associates, used a small sample to create an estimate of the capital needs backlog of the public housing portfolio. For years, the industry has contended that the public housing portfolio's backlog of unmet capital needs is in excess of $30 billion, while the current administration has typically referred to an estimated range of $20-30 billion. Given the current budgetary climate, having an up-to-date figure is critically important as we make the case for additional federal investment in the public housing stock.
In the upcoming edition of the NAHRO Monitor, we will provide an update on our efforts in opposition to the administration's proposal to impose an offset against PHA's operating reserves for 2012. The uncertainty created by that proposal and by HUD's assertion that operating subsidy reserves may not be used for capital expenditures (including extraordinary maintenance and property betterments) is having a deleterious effect on PHAs' planning efforts and on the ability of agencies to properly maintain their public housing units. Unfortunately, HUD's lack of transparency regarding its plans for implementing the proposed offset has only amplified this negative impact.
The need to resolve the uncertainty created by the Department regarding the use of operating subsidy and reserves for capital expenditures is even more urgent given that the final FY 2011 funding bill slashes the Capital Fund appropriation by 20 percent compared to FY 2010. NAHRO believes it is imperative that the Department reverse course by reconsidering the offset proposal and clarifying that certain capital expenditures may be funded using operating subsidy, including reserves.
Returning to the CNA: It is painfully obvious that the final CNA report is a key piece of information that should be considered as the debate over the offset proposal and the appropriate use of reserves plays out. NAHRO would contend that it is irresponsible for the Department to suppress the release of this important information while simultaneously pursuing major policy changes that will, if enacted, drastically limit the ability of PHAs to responsibly maintain their public housing properties. To that end, NAHRO has submitted a Freedom of Information Act request for the final CNA report. HUD has not yet responded to NAHRO’s request.
We will of course keep you posted.