BRUNSWICK

Brunswick Housing Authority is considering a program that would take its facilities off federal public housing rolls and switch them instead to a modified form of Housing and Urban Development’s Section 8 funding.

Federal public housing subsidies that are supposed to fund maintenance and improvement of the units are inadequate, declining and subject to congressional whims, BHA Executive Director John Hodge said.

Section 8 housing contracts — while less lucrative — are more stable.

“Nationally, there’s a $26 billion backlog in capital needs for public housing,” Hodge said. “The current budget allocates $1.2 billion for capital needs, so you’re looking at 20 years before (the government) can catch up to where we are right now.”

Figures obtained from the U.S. Department of Housing and Urban Development show the 2013 appropriation to be $1.7 billion — half of what it was four years ago.

Hodge said he has begun a cost-benefit analysis to determine the pros and cons of changing programs.

“It won’t give us more funding, which is what we really need, but it will make what funding we have more stable,” Hodge said. “It makes a ‘hard’ contract with the federal government, rather than a ‘soft’ contract, which (Congress) can cut anytime they want. If we decide to do this, we’ll have more cost certainty every year.”

Same owner, new options

Hodge said the move is not a transfer of ownership or an attempt to privatize federallysponsored affordable housing.

All of the units will remain BHA property, and the Authority will still receive its funding from the government.

However, acceptance into the Rental Assistance Demonstration, or RAD, program also removes an exclusion that currently prevents local housing authorities from using HUD-funded units as loan collateral.

Instead, BHA directors would be able to use them to get improvement loans from private banks, just as a private homeowner can do through an equity line of credit or a home improvement loan.

Although both are approved by Congress and administered by HUD, Public Housing and Section 8 are not the same.

Funding for public housing — under which Brunswick Housing Authority currently operates — is variable, while Section 8 allocations historically are more stable.

“Anyone who agrees to provide public housing signs an annual contribution contract, which is very much a oneway contract: ‘abide by all rules we establish and take whatever funding we give out,’” said Greg Byrne, a HUD project manager.

“But nothing in there guarantees any amount of money to the property owner,” he added. “The funding formula is subject to whatever Congress decides to give to it; there’s no obligation to fund it, whether at 100 percent, or even 80 cents on the dollar.”

But moving a RAD contract means BHA would sign a “housing assistance payment contract” — very similar to the Section 8 assistance contract — which HUD has never failed to honor, Byrne said.

Shrinking budgets

The local housing authority maintains 191 housing units in three buildings: Woodlawn Tower and Terrace on Water Street, and Perryman Village at Cook’s Corner.

All of them are 30 to 40 years old. While none is unsafe or uninhabitable, Hodge says that like any other house or apartment, frequent maintenance is required to keep them up-todate and comfortable.

However, the amount BHA receives every year has been shrinking steadily.

“Our annual appropriations aren’t enough for the local housing authorities to be able to do what they need to do to keep the units in good, livable condition,” said HUD spokeswoman Donna White. “Funding levels have been decreasing for a long time, and with this sort of funding cycle, that’s how you end up with this kind of backlog.”

There are about 3,200 local housing authorities throughout the United States. In 2010, all of them split $2.5 billion in funding.

By fiscal year 2012, however, capital needs funding had dropped to $1.8 billion; the appropriation for the current fiscal year is even less, at $1.7 billion.

Seventy-seven housing authorities in 24 states and Puerto Rico, representing thousands of housing units, already have applied for the RAD conversion. The conversion takes about a year and includes an extensive list of requirements.

BHA recently signed a contract with an engineering firm based in Hunt Valley, Md., to conduct energy audits and a physical-needs assesments for each property. Once the studies are done, Hodge said, BHA will have a better idea of whether it’s worth applying for the conversion.

If it is, the application has to be turned in during this calendar year — likely in either September or October, Hodge said.

An energy audit, as well as informational meetings with tenants, is scheduled for August. If the audit results and cost-benefit analysis works in BHA’s favor, Hodge plans to have an application ready to go by fall, either September or October, he said.

“We have to take a look at our current capital needs and determine if we’ll have sufficient cash flow to address them,” Hodge said. “Then we’ll make a decision about applying for the conversion.”

BHA had been considering purchasing the Daniel Stone Inn and No. 10 Water Street restaurant, which has been for sale for almost a year, for conversion to senior or assisted living purposes.

After further consideration, however, the agency decided not to pursue a sale.