Out of Control Policy Blog

City Housing Authority Severs Ties with HUD

How often do you hear about a local government agency that has traditionally survived on federal funding actually step up and say, "we'd rather be independent from the feds, so why don't we just go our separate ways"? Basically never? Well...better grab your seats, because today's the day.

The Housing Authority in the City of Dalton, GA has become the first local housing authority to completely sever it's relationship with the U.S. Department of Housing and Urban Development (HUD):

    "The Dalton Housing Authority severed ties with the U.S. Department of Housing and Urban Development Wednesday, and HUD officials said it was first housing authority in the nation to do so.

    Dalton's independence is an example of what HUD has been trying to do nationally, said Michael Liu, assistant secretary for Public and Indian Housing.

    "This is a template. This is the future of public housing," Mr. Liu said. "To be considered the first is quite a feat."

    Pat Johnson, executive director of the Dalton Housing Authority, said the development is "wonderful, and it's groundbreaking. We're on our own and can do as we please. People should always be independent if they can, and we could. We're a work in progress.

    . . . .

    Freedom from HUD's thousands of pages of regulations, such as penalties for missing deadlines, is just one benefit of being independent, Ms. Johnson said.

    Mr. Liu said the authority now also can leverage assets without HUD's approval and use its assets to get loans without HUD being first in line.

    Ms. Johnson said the housing authority does not depend on HUD for funding and receives virtually all of its revenue from the rent its more than 600 residents pay. With its independence will come greater flexibility for the authority to maintain its properties, officials said."

The full article is here, and the official HUD press release is available here. It adds the following:

    HACD will have the flexibility to set its own rents based on local market conditions; raise additional capital to improve the physical condition of the existing units; use its valuable real estate assets to leverage additional capital to expand its affordable housing goals; and create its own local incentives to encourage current residents to become self sufficient.

    The transfer of these properties offers HACD the opportunity to become an entrepreneur and true affordable housing provider for residents of Dalton. In order to seek private sources to finance large-scale modernization and capital improvements of its developments, HACD needed to assume full control of its assets. This approach will allow the housing authority to maximize the value of its assets and target its affordable housing resources, to better meet the need for affordable housing in Dalton.

Can you smell that breath of fresh air? It's still early, but not too soon to hope that Dalton's example will get the ball rolling for housing authorities nationwide to start weaning themselves from the federal dole. And this process could spur all sorts of innovations that will make the road easier for others to follow.

This is exciting news, and something to keep an eye on in the future.

(Hat tip: Planetizen.com)

Leonard Gilroy is Director of Government Reform


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