Project Basing CBPP [Center on Budget and Policy Priorities]

Project - basing. CENTER ON BUDGET AND POLICY PRIORITIES October 19, 2000 Revision of the Project-Based Voucher Statute by Barbara Sard Section 232 of H.R. 4635, the FY 2001 VA-HUD appropriations bill approved by the House and Senate today, revises the statutory authority for public housing agencies (PHAs) to project-base vouchers (section 8(o)(13) of the U.S. Housing Act, 42 U.S.C. §1437f(o)(13)). The key features of the new Section 8 PHA project-based assistance program are briefly described below and compared with the superceded statutory and regulatory provisions.¹ Background For about 10 years, public housing agencies that administer the Section 8 tenant-based rental assistance program have had the option to contract with private owners to use up to 15 percent of their subsidy funds in particular buildings. This is known as "project-basing" what are otherwise tenant-based vouchers. Few PHAs have used this option, because it could only be used if an owner used other funds to rehabilitate the property, the procedures were cumbersome, and there were no incentives for owners to commit units to the program. When Congress revamped the low-income housing programs in 1998, no significant changes were made in this provision. The conference report accompanying the appropriations act (H. Rpt. 106-988) acknowledges that the project-based option has never worked effectively. The revision of the statute is aimed at redressing the barriers to PHA use of the project-based option. Key Provisions 1. The maximum percent of funds that a PHA may project-base is increased to 20 percent of its total tenant-based section 8 funds. The prior limit was 15 percent. 2. Purposes - A PHA may project-base voucher assistance without any requirement that the owner invest other funds in the property. This change allows PHAs to decide whether to link project-basing to new construction or rehabilitation or simply to use project-basing 1 The relevant regulations concern the project-based certificate program, 24 C.F.R. Part 983. This program was superceded by the certificate/voucher merger enacted by the Quality Housing and Work Responsibility Act of 1998 but HUD has instructed PHAs 1 SPare 386, 20002 are issued. Tel: 202-408-1080 Fax: 202-408-1056 [email protected] http://www.cbpp.org