THE FUTURE OF PUBLIC HOUSING Douglas Rise-Bay City Michigan Housing Commission Bob Lane-New Albany Indiana Housing Authority Presented to the North Central Region of The National Association of Housing and Redevelopment Officials Grand Rapids, Michigan 2009 ASSET MANAGEMENT 1
HUD ASSET MANAGEMENT PROGRAM FEDERAL REGISTER SEPTEMBER 19, 2005 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 24 CFR PART 990 FINAL RULE A PART OF THE PUBLIC HOUSING REFORM OF 1998 2
HUD ASSET MANAGEMENT PROGRAM MANDATES PUBLIC HOUSING AGENCIES WITH 250(400) OR MORE UNITS WILL USE AN ASSET MANAGEMENT MODEL. PUBLIC HOUSING AGENCIES SHALL MANAGE THEIR PROPERTIES ACCORDING TO AN ASSET MANAGEMENT MODEL, CONSISTENT WITH MANAGEMENT NORMS IN THE BROADER MULTI-FAMILY INDUSTRY. 3
ASSET MANAGEMENT MODEL SEVEN CRITERIA 1. PROJECT-BASED ACCOUNTING/BUDGETING 2. PROJECT-BASED MANAGEMENT 3. CENTRAL OFFICE COST CENTER (COCC) 4. CENTERALIZED SERVICES 5. REVIEW OF PROJECT PERFORMANCE 6. CAPITAL PLANNING 7. RISK-MANAGEMENT RESPONSIBILITIES RELATED TO REGULATORY COMPLIANCE 4
HUD ASSET MANAGEMENT PROGRAM SEVERAL PUBLIC HOUSING AUTHORITIES ARE REQUIRED TO CONVERT TO ASSET MANAGEMENT. THE FEDERAL GOVERNMENT WILL PROVIDE A SUBSIDY TO ASSIST PHAs TO SERVE LOW,VERY LOW, AND EXTREMELY LOW-INCOME FAMILIES. THE MONITORING OF PERFORMANCE AT EACH PROPERTY/AMP. 5
HUD ASSET MANAGEMENT PROGRAM PUBLIC HOUSING AUTHORTIES WILL HAVE A BUDGET AND MANAGEMENT SYSTEMS FOR EACH DEVELOPMENT/AMP. THE BUDGET AND ACCOUNTING PROGRAMS WILL APPLY TO ALL REVENUE SOURCES. 6
HUD ASSET MANAGEMENT PROGRAM THERE ARE THREE COMPONETS OF PROJECT BASED OR ASSET MANAGEMENT. 1.---PROPERTY MANAGEMENT 2.---INDIVIDUAL PROPERTY/AMP BUDGETS 3.---SITE/AMP ACCOUNTING AND REPORTING 7
WHY PROJECT BASED? DECISIONS WILL BE MADE AT THE AMP/ PROPERTY LEVEL. THERE WILL BE BETTER CONTROL OF AMP/ PROPERTY ASSETS. PROJECT BASED WILL CREATE A BETTER POSITION FOR FUTURE INVESTMENT-PUBLIC/PRIVATE. PROJECT BASED MANAGEMENT WILL IMPROVE EFFICIENCY AT THE AMP/ PROPERTY LEVEL. 8
HUD ASSET MANAGEMENT PROGRAM PROJECT BASED MANAGEMENT EACH AMP/ PROPERTY WILL BE MANAGED TO THE UNIQUE NEEDS OF THAT AMP/ PROPERTY, GIVEN THE RESOURCES AVAILABLE TO THAT AMP/PROPERTY. 9
CENTRAL MANAGEMENT VS. SITE MANAGEMENT CENTRAL MANAGEMENT AND OPERATIONS ONE BUDGET FOR THE TOTAL AGENCY COST ALLOCATION TO PROGRAMS ABILITY TO HIDE LOW PREFORMING PROPERTIES AND PEOPLE SITE/AMP DECISION MAKING AND MANAGEMENT BUDGET FOR EACH SITE/AMP MANAGEMENT AND FEES FOR SERVICES PROPERTY/AMP PERFORMS ON ITS OWN MERITS CLEAR INDICATORS OF THE BOTTOM LINE 10
HUD ASSET MANAGEMENT PROGRAM LIMITED VACANCIES HUD WILL PAY OPERATING SUBSIDY AT A 97% OCCUPANCY RATE AT EACH AMP/PROPERTY.(future? 98%) ALL OPERATING SUBSIDY AND INCOME WILL BE ALLOCATED AT THE AMP/ PROPERTY LEVEL. 11
HUD ASSET MANAGEMENT PROGRAM CALCULATION FORMULA INCOME WILL BE FROZEN AT A 2004 LEVEL. MANY PUBLIC HOUSING AUTHORTIES HAVE/ WILL EXPERIENCE A SUBSIDY REDUCTION. 12
CHANGES IN ORGANIZATION PUBLIC HOUSING AGENCIES MUST HAVE AN ORGANIZATIONAL STRUCTURE WHICH SHIFTS THE MANAGEMENT OF THEIR PROPERTIES TO INDIVIDUAL AMP/ PROPERTY MANAGERS. AMP/PROPERTY MANAGERS MAKE THE DECISIONS FOR THEIR PROPERTIES. ALL RESIDENTS,STAFF,COMMISSIONERS,AND LOCAL LEADERS, MUST BE EDUCATED, HOW THE NEW WAYS OF PROVIDING PUBLIC HOUSING WILL AFFECT THEM, AND THERE COMMUNITY. NEW JOB DESCRIPTIONS AND A NEW ORGANIZATIONAL CHART WILL BE A PART OF THE NEW ASSET MANAGEMENT MODEL. 13
CHANGES IN STAFF AGENCIES WILL NEED TO FIND UNION OR NON-UNION STAFF THAT WILL FIT THE NEW ASSET MANAGEMENT PROGRAM. STAFF POSITIONS WILL CHANGE,JOB DESCRIPTIONS WILL CHANGE, SOME STAFF WILL NOT BE ABLE TO FIT THE NEW ASSET BASED MANAGEMENT PROGRAM. 14
PROPERTY MANAGEMENT KEYS FOR SUCCESS 1. DOES THE AMP/ SITE HAVE TOO MUCH CRIMINAL ACTIVITY? 2. WHAT ARE THE DELIQUENT RENT NUMBERS? 3. HOW MANY VACANCIES,HOW OFTEN,HOW LONG? 4. WHAT ARE THE CHARGES TO RESIDENTS? 5. DO WE CHARGE RESIDENTS OUR COSTS? 6. DO RESIDENTS COMPLY WITH THE LEASE? 7. DO YOU KNOW WHO LIVES ON THE PROPERTY? 15
HUD ASSET MANAGEMENT PROGRAM PUBLIC HOUSING AUTHORITIES SHALL (WILL/MUST*) MANAGE THEIR PROPERTIES ACCORDING TO AN ASSET MANAGEMENT MODEL, CONSISTENT WITH THE MANAGEMENT NORMS IN THE BROADER MULTI-FAMILY MANAGEMENT INDUSTRY. 16
SITE/AMP MANAGEMENT RESPONSIBILITIES MARKETING/LEASING RESIDENT SERVICES ROUTINE AND PREVENTIVE MAINTENANCE LEASE ENFORCEMENT PROTECTIVE SERVICES DAY-TO-DAY OPERATIONS FEE-FOR-SERVICE APPROACH NO MORE 8-5 MONDAY-FRIDAY MANAGEMENT--- NEW MANAGEMENT 24/7 KNOW YOUR PROPERTY AND WHO LIVES ON IT FORWARD YOUR OFFICE PHONE CALLS WHEN YOU ARE OUT OF THE OFFICE 17
MAINTENANCE COSTS HUD HAS ESTABLISHED STRICT GUIDELINES AS IT APPLIES TO CENTRALIZED MAINTENANCE.{FOR MAINTENANCE NOT ASSIGNED TO THE SITE} HUD HAS LIMITED ONLY A FEW WAYS THAT A AGENCY CAN CHARGE CENTRALIZED MAINTENANCE TO THE SITE. 18
MAINTENANCE COSTS IF YOU SHARE MAINTENANCE,THE COSTS MUST BE PRO-RATED IN A WAY THAT CAN BE JUSTIFIED IN A SITE FINANCIAL AUDIT. FOR AGENCIES THAT BID OUT THEIR MAINTENANCE, THEY MAY CHARGE THE BID PRICE PLUS SUPERVISION. 19
MAINTENANCE COSTS IF YOUR CENTRAL MAINTENANCE DEPARTMENT CAN DO THE JOB FOR LESS THAN THE PRICE OF THE LOCAL MARKET, YOU MAY CHARGE THE MARKET PRICE FOR THE WORK OF YOUR MAINTENANCE DEPARTMENT. 20
TRACKING SERVICES CAN YOUR COMPUTER SOFWARE TRACK LABOR AND MATERIALS FOR EACH OF YOUR UNITS ON EACH OF YOUR SITES? IF YOU CAN TRACK YOUR LABOR AND MATERIALS, WHAT HAS BEEN THE COST OF YOUR WORK ORDERS FOR THE LAST TWELVE MONTHS? DO WHAT YOU CHARGE RESIDENTS FOR RESIDENTS CREATED WORK ORDERS? WHAT WOULD HAVE BEEN YOUR COST, IF YOU HAD CONTRACTED THE WORK OUT? DO YOU HAVE ENOUGH WORK FOR YOUR MAINTENANCE STAFF? 21
MAINTENANCE MANAGEMENT DO YOU HAVE AN ANNUAL MAINTENANCE PLAN? DO YOU NEED EMEGENCY MAINTENANCE OR A SECOND SHIFT? DO YOU HAVE A WORK ORDER SYSTEM WORK? DOES IT WORK? DO YOU KNOW YOUR LOADED LABOR COSTS? (SALARY-UNIFORMS-TRUCK- HEALTH INSURANCE-RETIREMENT-PAYROLL TAXES-DISABILITY-LIFE INSURANCE-TRAINING DO YOU DO HAVE A PREVENTIVE MAINTENANCE PROGRAM? WHAT ARE YOUR EMERGENCY MAINTENANCE COSTS? HOW DO YOU SCHEDULE ROUTINE MAINTENANCE? HOW FAST CAN YOU DO VACANT UNIT TURNAROUNDS? HOW BIG IS YOUR INVENTORY OF SUPPLIES? DO YOU INVENTORY TOOLS AND EQUIPMENT? DO YOU CHARGE RESIDENTS THE CORRECT PRICE FOR THEIR COSTS? [LABOR AND MATERIALS] WHAT IS YOUR COST FOR UNIT TURNAROUNDS? 22
QUALITY AND QUANITY CONTROL DO YOU RANDOMLY SPOT CHECK TEN PERCENT OF YOUR WORK ORDERS, TO CHECK THE QUALITY AND THE TIME IT TOOK TO COMPLETE THE WORK ORDER? DO YOU CALL RESIDENTS TO ASK HOW THE WORK ORDER WAS COMPLETED? 23
QUALITY AND QUANITY CONTROL DO YOU USE MEANS TABLES TO COMPARE THE TIME THAT IT SHOULD TAKE TO COMPLETE THE TASK? ARE WORK ORDERS REVIEWED DAILY? ARE THE CORRECT AMOUNT OF SKILLED PEOPLE ASSIGNED TO THE WORK ORDER? DOES THE EMPLOYEE ASSIGNED TO DO THE JOB HAVE THE SKILLS TO DO THE JOB? ARE YOU SUPERVISING THE STAFF EFFECTIVELY? WHAT IS YOUR GOAL FOR VACANT UNIT TURN-AROUND? DOES YOUR MAINTENANCE STAFF HAVE TO WAIT FOR SUPPLIES? DO YOU PULL MAINTENANCE FROM THE JOB THEY HAVE STARTED, BEFORE THEY HAVE TIME TO COMPLETE THE JOB THE ARE TRYING TO COMPLETE? 24
TURNAROUND TIME TURNAROUND IS: THE NUMBER OF CALENDAR DAYS BETWEEN THE DAY THE UNIT WAS VACATED AND THE DAY A NEW LEASE WAS SIGNED. WE HAVE 14 CALENDAR DAYS TO DO THE TURNAROUND. 25
GET ER DONE OUR GOAL IS TO HAVE A UNIT READY FOR MOVE IN TO A QUALIFIED FAMILY IN LESS THAN 14 CALENDAR DAYS. WE ALSO KNOW THAT IN MOST PUBLIC HOUSING THROUGHT OUR NATION, RESIDENTS STAY IN OUR UNITS LESS THAT FIVE YEARS. WE ALSO KNOW, THE MORE BEDROOMS, THE MORE TIME IT TAKES FOR UNIT TURNAROUND. WE ALSO KNOW THE LONGER THE TIME OF LITIGATION, THE MORE DAMANGE IN THE UNIT. 26
STEPS FOR SUCCESS MONITOR WORK ORDERS FOR COMPLETION AND FOLLOW-UP.(new proposed rule-- 3 days for a tenant generated work order) QUICK VACANT UNIT TURNAROUND MUST BE ACCOMPLISHED. ALL WORK ORDERS MUST BE TURNED-IN DAILY. WE CAN NOT AFFORD TO HAVE A WORKER AND A WATCHER. STAFF ARE NOT ALLOWED TO WORK IN TEAMS, WITHOUT THE APPROVAL OF THEIR SUPERVISOR. WORK ORDER ACTIVITY LOGS MUST BE COMPLETED WHEN THE WORK ORDER IS COMPLETED. NOT AT THE END OF THE DAY. STAFF WILL BE HELD ACCOUNTABLE FOR THEIR DAILY ASSIGNED TASKS. TOOLS AND EQUIPMENT WILL BE CHECKED IN AND OUT. 27
CHANGE Change And Transition Can Be Easy Or Difficult; IT S UP TO YOU-------And How YOU Accept It-----------And How YOU Choose To Feel. One Fact Is Certain.CHANGE WILL HAPPEN!!!!!!! 28
HOW WILL WE REACT? ACCORDING TO DR. ERIC ALLENBAUGH: WE WILL REACT TO CHANGE THIS WAY 1. SHOCK 2. RESISTANCE 3. EXPLORATION 4. ADAPTION WHAT IS YOUR NEW ROLE? 29
ASSET MANAGEMENT Is Your Agency Ready For The New CHANGES? Are You Ready For The CHANGES? 30