Under intense pressure to stretch resources, both healthy and distressed public housing authorities (PHAs) increasingly are exploring private management of their properties. To help PHAs weigh the many issues involved, HUD's practical new Private Management of Public Housing: A Guidebook draws on the experiences of PHAs that have used private management and on the insights of private owners, managers, and financiers of multifamily dwellings.
Seven percent of all public housing is under private management today. However, no single approach to using private management services fits all situations: Instead, the Guidebook outlines key choices and the principles that guide them. Case studies of PHAs in Boston (Massachusetts), Dade County (Florida), and Haddon (New Jersey) document some of the variations among PHAs currently using private management. The book also offers practical guidance on issues such as obtaining private management services, organizing the transition, and administering contracts.
PHAs choose private management for a variety of reasons, including the desire for greater legal flexibility and improved performance. Before choosing private management, suggests the guide, PHAs should answer four questions:
- Can the property's performance be improved with better management? Private management cannot solve problems of insufficient capital funding or physical obsolescence, but it may be more efficient at property maintenance, tenant selection, or fiscal control.
- Is there a competitive market among the private property management services that would give the PHA a choice of firms? Such a market exists in most cities. Competition is dampened, however, if private firms are not interested because they think managing public housing is drastically different from other housing or if past experience suggests that working with the PHA is undesirable.
- Can the service(s) the PHA plans to request from private firms be measured easily? Accurate measurement is essential to managing for intended results, such as reduced vacancy rates, up-to-date rent collection, or reduced work-order backlogs.
- Can contractors be disciplined and replaced in case of poor performance? Most benefits of using the private market are lost if firms are not held accountable for performance through carefully prepared contracts and appropriate monitoring systems.
Private Management of Public Housing: A Guidebook, designed as a supplement to HUD's Procurement Handbook for PHAs and IHAs (Handbook 7460.8 REV-1), is a valuable resource for any PHA considering using private management and for managing the services after an affirmativedecision.
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