$26 Billion Needed for Public Housing

June 30, 2011 (Brian Michael)

A study released by the Department of Housing and Urban Development (HUD) reports that the nation’s 1.2 million public housing units need an estimated $25.6 billion in repairs.

The study is an update to a previous report from 1998 which had been prepared to address the costs of overdue repairs and improvements at that time. The new report estimates the needs for large scale improvements required to make housing decent and economically sustainable which includes repairs such as replacing roofs, updating electrical systems, and energy and water conservation.

Despite such efforts such as HUD’s Capital Fund Financing Program, which provides loans and bonds for improvements, and Hope VI, which provides funding for severely distressed housing, HUD says several thousand public housing units are being lost every year.

The Recovery and Reinvestment Act of 2009 provided $4 billion to help renovate and develop nearly 380,000 units, but the need for a solution to preserve the housing stock remains great.

The new study found that the total capital needs estimate was approximately $23,365 per unit and that with normal use and aging, each year the units accrue an additional $3,144 per unit in needed repairs and replacements.

“The new capital needs estimate far exceeds our annual budget for these repairs and illustrates why America needs a long-term strategy to address the loss of thousands of public housing units annually,” said HUD Secretary Shaun Donovan. “At a time when budget deficits require the Federal government to tighten its belt, many of the nation’s public housing units are buckling under a severe backlog in capital needs. Public housing owners are forced to make tough choices between repairing roofs and replacing plumbing – or worse, demolishing units altogether – because there simply isn’t enough money to go around. That’s why we introduced Choice Neighborhoods and our new Rental Assistance Demonstration as part of our comprehensive strategy to keep these homes on firm financial footing.”

Tags: HUD, public housing, capital needs, large scale improvements, distressed housing

Source:
HUD