**Notes from July 31, 2007 Meeting of Development and Asset
Repositioning II**

**Project Based Voucher Program**

-   There should be no competition required for PHA-owned units. Even if
    there is a minor ownership of PHA owned units, 1% or less, this
    should count as a PHA owned unit. 983.51

-   For a private developer, the time elapsing since a competition (i.e.
    tax credit competition, HOME competition, competition to become the
    developer) should be extended beyond the current 3-year cutoff to 5
    or 7 years. 983.51

-   For site and neighborhood standards, additional flexibility should
    be provided in meeting these standards. Self-certification and not
    requiring a waiver was suggested. 983.57

-   For PHA-owned units, the requirement to have a licensed state
    certified appraiser provide an assessment of rents should be
    eliminated for PHA-owned units. Instead, the committee recommended
    that only an independent 3^rd^ party be required to review rent
    reasonableness. 983.59

-   On the subsidy layering requirement, housing authorities should be
    allowed to self-certify. Alternatively, this responsibility should
    be delegated to HFAs. 983.55

-   The standard for the minimum number of units to be constructed
    before Davis-Bacon kicks in is different for PBV(9), HOME (12), and
    CDBG (8) programs. An effort should be made to make the number the
    same.

-   AHAP: Delete prohibition against a PHA attaching PBV to units that
    they have an interest in.

-   Change the term of the PBV contract to conform with the tax credit
    compliance period---from 10 to 15 years. 983.205

**Mixed-Finance**

-   Simplify Part 58 and environmental review. Need statutory reform.
    Allow grantees to self-certify?

-   Develop a consolidated application for the following programs so
    that an applicant can apply for one or all three programs at the
    same time:

    -   Mixed-finance (m-f)

    -   Capital Fund Financing (CFFP)

    -   Demo-dispo

-   Certification---soften the penalty for commiting perjury. The bar is
    too high.

-   Flexibility is good, but there is a lack of substantive requirements
    that comes along with flexibility. This flexibility may get PHAs in
    trouble from the IG side.

-   Requirement for the DOT in the first position---is there any
    flexibility here?

-   Allow operating subsidy for debt without HUD approval. At a minimum,
    have m-f review as the only requirement. Do not require that PHAs go
    through a separate review process.

-   Look at how the PBV subsidy layering process overlaps with the m-f
    subsidy layering process. PBV limits rents anyway.

-   Limit m-f review if HUD funds are less than 20% of the entire deal.

-   For site plan and accessibility review by HUD architects, eliminate
    review for additional phases if the plans are basically the same as
    the first phase.

-   Recordkeeping requirements, especially those for regulatory barriers
    are too broad.

**Fees**

-   Page 34 of the Financial Supplement states that PHAs can negotiate
    with HUD. This creates too much uncertainty.

-   What is the basis for management fees in the table at the back of
    Supplement\--the derived---80% Percentile of Property Management
    Fees in FHA Housing by Field Office for Unlimited Dividend, Limited
    Dividend and Non-Profit Ownership Types (2005 data). Why not 100%?

-   Transition to asset management is being required too quickly. Many
    projects, due to their distressed condition, will not be able to
    produce cashflow. This will reduce fees to the COCC and will force
    PHAs to go out of business. PHAs do not want to go out of business.

-   Will HUD provide funds for portfolio retooling?

-   Because of how rents are calculated in the public housing program,
    the amount of rent that a housing authority can count on will
    fluctuate, particularly in a city with fluctuations in its economy.
    Will HUD consider increasing the minimum rent?

-   Project-based budgeting is good, but PHAs need more flexibility in
    transferring income between AMPs during any given year. In Seattle,
    50% of rent is from tenant rents, 50% is from subsidy. This is good
    as it shows that there is much economic self-sufficiency among
    residents. But lower-income residents are the first to get laid off
    with fluctuations in the Seattle economy, leading to fluctations in
    income and thus the ability to produce cashflow. Don't punish PHAs
    for having achieved a high level of self-sufficiency.

-   Distressed properties need more time to transition to asset
    management.

-   Examples of the impact of asset management on the COCC are needed.
    Ed, Angel and Ruth will produce "a balance sheet" for their PHAs.

**Subcommittees**

PBV---Julie

Ann-Marie

Maria

Marcie

Michael Flores

M-F---Sharon

Tom

Sue

Sharon Wilson Geno

Fees---Ed

Angel

Carlos

Ruth

Kathi

Subcommittees will work on producing issues paper for their area. Work
of the subcommittee will be presented at our next meeting on September
6.