On March 21, 2019, HUD issued a notice (PIH 2019-05) setting forth a streamlined process for PHAs with 250 or fewer public housing units to convert their public housing to Section 8 assistance. PHAs can receive Tenant Protection Vouchers (TPVs) which must be offered to tenants as tenant-based assistance, but may be project-based if the tenants agree.
Section 22 is statutory authority allowing PHAs to convert public housing to Section 8 Housing Choice Voucher (HCV) assistance if the conversion: (1) is not more expensive than continuing to operate public housing; (2) principally benefits residents, the PHA and the community; and (3) has no adverse effect on the availability of affordable housing in the community. Section 22 regulations require PHAs conduct a conversion assessment including a cost analysis, market value analysis, rental market analysis and an impact analysis.
This notice exempts small PHAs from the conversion assessment requirement, except they must still provide an impact analysis. To qualify, the PHA must convert all of its public housing units through Section 22 and close out its public housing program after all the units are converted. PHAs without a voucher program must find a willing PHA with a voucher program to administer the vouchers.
Applications are processed by the PIH Special Applications Center (SAC) and must include:
- Environmental Review
- Impact Analysis, including the impact on available affordable housing, concentration of poverty and other impacts on the neighborhood
- Resident consultation
- PHA Plan / Significant Amendment
- Local Government Review
- Plan for the future use of the project
Conversion Requirements include:
- Income screening – Only families at or below 80% of AMI qualify for HCV assistance.
- Relocation -- the Uniform Relocation Act (URA) applies. PHAs must provide relocation assistance to all displaced families, including over-income families who do not qualify for TPVs.
- Davis-Bacon applies to the extent work is generated for demolition or rehabilitation.
If the project continues to operate as rental housing, residents must be provided the opportunity to remain using a tenant-based HCV voucher. PHAs may only project-base that assistance if the tenants provide informed, written consent after the PHA holds an informational briefing for families at which HUD is present in person or on the phone. Families must be given at least 30 days to decide whether or not to provide consent. Project-based HAP contracts must omit units occupied by residents with tenant-based vouchers. Upon turnover, PHAs may add units to the HAP contract, provided they have the voucher authority available.