Public Housing: Partnerships Can Result in Cost Savings and Other
Benefits (Letter Report, 10/17/96, GAO/RCED-97-11).

Pursuant to a congressional request, GAO provided information on
partnerships and other business-like arrangements that public housing
authorities (PHA) have made with public and private-sector groups to
provide residents with needed services and to supplement traditional PHA
funding sources, focusing on: (1) four types of such arrangements; and
(2) PHA officials' views on the benefits of these arrangements.

GAO found that: (1) to leverage their resources, enhance their ability
to deliver services, and reduce costs, PHA have estalished four basic
types of partnerships or arrangements; (2) PHA have worked with other
housing authorities to take advantage of economies of scale in
purchasing such items as large appliances or in consolidating their
management activities; (3) PHA have worked with their residents and
various community and nonprofit groups to provide social services such
as health and child care, job training, and employment; (4) PHA have
worked with state, local, and commercial entities to develop and finance
affordable housing for low-income families; (5) PHA have worked with
state and local governments to acquire goods and services, such as
insurance, at lower costs; and (6) although some PHA officials could
quantify the cost savings that have resulted from these arrangements,
most PHA officials agreed that such nonmonetary benefits as training,
improved quality of life, and social services were significant and would
not have been obtained without the shared experience of the partnership.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-97-11
     TITLE:  Public Housing: Partnerships Can Result in Cost Savings and 
             Other Benefits
      DATE:  10/17/96
   SUBJECT:  Housing programs
             Public housing
             Cost control
             Community development programs
             Employment or training programs
             Disadvantaged persons
             Low income housing
             Intergovernmental fiscal relations
             Proposed legislation
             Non-profit organizations
IDENTIFIER:  HUD Low Income Housing Tax Credit Program
             HUD Home Investment Partnership Program
             HUD Public Housing Drug Elimination Program
             Community Development Block Grant
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Housing and Community
Opportunity, Committee on Banking and Financial Services, House of
Representatives

October 1996

PUBLIC HOUSING - PARTNERSHIPS CAN
RESULT IN COST SAVINGS AND OTHER
BENEFITS

GAO/RCED-97-11

Partnerships in Public Housing

(385617)


Abbreviations
=============================================================== ABBREV

  CDBG - Community Development Block Grant
  FIC - Family Investment Centers
  FSS - Family Self Sufficiency
  HUD - Department of Housing and Urban Development
  PHA - Public Housing Authority
  PHDEP - Public Housing Drug Elimination Program

Letter
=============================================================== LETTER


B-274119

October 17, 1996

The Honorable Rick A.  Lazio
Chairman, Subcommittee on Housing and
 Community Opportunity
Committee on Banking and
 Financial Services
House of Representatives

Dear Mr.  Chairman: 

The Congress is deliberating legislation aimed at giving the nation's
more than 3,300 public housing authorities (PHA) greater flexibility
in managing their properties and in operating public and assisted
housing for over 4 million households.\1 If the legislation passes,
this greater discretion is expected to strengthen the long-term
viability of public and assisted housing and allow PHAs to operate
their housing more in line with the needs of the local community. 
The added flexibility also will be important because other factors,
such as increasing operating expenses for public housing and
residents' decreasing contributions toward their rent, are limiting
the financial resources available to housing authorities to manage
their properties effectively. 

Before the pending housing reform legislation was introduced, housing
authorities recognized the limits on their financial resources and
had begun establishing partnerships and other business-like
arrangements with public and private sector groups to provide
residents with needed services as well as supplement their
traditional sources of funds.  At your request, this report provides
information that describes four types of arrangements that public
housing authorities have established and provides the views of PHA
officials on the benefits of these arrangements.  The information is
based on our discussions with 29 housing authorities whose
partnership efforts were commended to us by Department of Housing and
Urban Development (HUD) officials and industry associations that
represent housing authorities. 


--------------------
\1 The House of Representatives passed H.R.  2406, The United States
Housing Act of 1996, and the Senate passed S.  1260, the Public
Housing Reform and Empowerment Act of 1995. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

In our discussions with housing authorities, we found that to
leverage their resources, enhance their ability to deliver services,
and reduce their costs, they have established four basic types of
partnerships or arrangements.  The authorities partnered and worked
with (1) other housing authorities to take advantage of economies of
scale in purchasing items such as large appliances or in
consolidating their management activities; (2) their residents and
various community and nonprofit groups to provide social services
such as health and child care, job training, and employment for
residents; (3) state, local, and commercial entities to develop and
finance affordable housing for low-income families; and (4) state and
local governments to acquire goods and services such as insurance at
lower costs. 

Although about one-third of the officials at the housing authorities
that we contacted could quantify the cost savings that have resulted
from their partnerships, in general PHA officials who we contacted
agreed that the nonmonetary benefits--including training, an improved
quality of life, and certain social services--were significant and
would not have been obtained without the shared experience of the
partnership.  (See app.  I for brief discussions of each of the
partnerships that we identified). 


   BACKGROUND
------------------------------------------------------------ Letter :2

PHAs are key players along with federal, state, and local governments
and other entities trying to address the housing needs of low-income
families.  PHAs contract with HUD to provide adequate housing for
low-income residents in return for federal grants and subsidies. 
Therefore, HUD is not only the primary source of public housing
funding but also has the primary responsibility for monitoring and
enforcing federal housing regulations.  Although the federal
government provides PHAs with funding for operating expenses and
repairs of public housing, state and local laws determine a housing
authority's organization and structure.  In many cities, the mayor
appoints the PHA's policy-setting body or board of commissioners,
which, in turn, hires the housing authority's executive director and
may approve other top management positions.  Housing authorities may
also receive funding from state and local sources. 

Over time, costs for PHAs have begun to exceed the financial
resources available to them, while at the same time the demand for
low-income housing offered by PHAs has increased.  Although HUD
calculates and provides an operating subsidy to supplement the rent
paid by residents, the subsidy and rent have not been always
sufficient to cover PHAs' costs.  In fiscal year 1996, the federal
subsidy of $2.8 billion and the total rent paid by residents covered
almost 90 percent of housing authorities' operating expenses, leaving
a gap of about 10 percent of expenses that are not funded by the
subsidy or rent.  Moreover, residents' rent has also declined. 
Currently, residents' rent is based on their annual income minus
certain deductions.\2 Generally, if residents' incomes decline, the
rent they pay declines as well.  And a steady decline in the average
income of public housing residents has occurred over the last decade: 
Average income has decreased from 33 percent of the local geographic
area's median income in 1981 to 17 percent in 1995.  All the while,
according to HUD, the demand for low-income housing has increased,
with the number of low-income households with worst case housing
needs\3

increasing by 1.5 million between 1978 and 1993 to an all-time high
of 5.3 million households in 1993.\4

One purpose of the pending housing legislation is to provide greater
flexibility to housing authorities in their operations.  The
legislation does this by consolidating many public housing grant
programs and subsidies into two funds\5 and eliminating statutory
requirements such as the "one-for-one" requirement for replacing
housing units and the federal preferences for admission\6 that
limited housing authorities' management discretion.  Another of the
pending legislation's purposes is to provide for more flexible use of
federal assistance to PHAs, allowing them to leverage and combine
assistance with funds obtained from other sources. 

In addition to the pending legislation, HUD and the public housing
industry have also begun to foster partnerships in public housing. 
In May 1996, HUD issued an interim rule to allow housing authorities
to combine their funds with private financing to develop public
housing or a mixture of public housing and nonpublic housing.  HUD
has also established an Office of Public Housing Partnerships to
oversee financial partnerships that PHAs establish with other
entities to leverage federal funding to develop or rehabilitate
public housing.  Also, the National Association of Housing and
Redevelopment Officials, an industry group representing over 2,100
housing authorities, annually highlights innovative management
practices. 


--------------------
\2 HUD's regulations permit PHAs to exclude from annual income
certain allowances, such as those for dependents under the age of 18
and medical expenses for the handicapped or elderly. 

\3 HUD defines households with worst-case housing needs as households
in rental units with incomes below 50 percent of the median family
income in their area (as adjusted by HUD) and who do not receive
federal housing assistance and pay over 50 percent of their income
for rent or live in severely inadequate housing. 

\4 Rental Housing Assistance at a Crossroads, a Report to Congress on
Worst Case Housing Needs, Department of Housing and Urban
Development, Office of Policy Development & Research (Mar.  1996). 

\5 The two funds are the operating fund, which covers the costs of
operation and management, and the capital fund, for the development
and modernization of housing units. 

\6 Under federal admission preference rules, PHAs must first select
for admission, into at least half of their public housing units,
persons who are involuntarily displaced, living in substandard
housing, and paying more than half of their family income for rent. 


   HOUSING AUTHORITIES PARTNERED
   AMONG THEMSELVES AND WITH OTHER
   GROUPS
------------------------------------------------------------ Letter :3

Because federal funding and residents' rent have been insufficient to
fully fund PHAs' operating expenses, PHAs have begun to search for
new ways to make their resources go further.  PHAs have formed
partnerships with private developers as well as state and local
governments and entities to take advantage of such federal programs
as the Low-Income Housing Tax Credit and HUD's HOME Investment
Partnerships Program.\7 On the basis of information provided to us by
HUD headquarters and field office officials, as well as officials
from public housing associations and professional organizations, we
contacted 29 housing authorities across the country.  We found a
broad array of sharing and partnering.  PHAs have partnered or
entered into business-like arrangements with

  -- other PHAs to share resources or to consolidate management in
     which one PHA manages several others;

  -- residents, social service agencies, and community groups to
     provide employment and other services to residents;

  -- nonprofit organizations and state governments to develop
     low-income housing and affordable housing; and

  -- state and local governments to obtain lower cost goods and
     services. 

These four types of partnerships or arrangements are summarized
below. 


--------------------
\7 Under the Low-Income Housing Tax Credit Program, housing
developers, such as PHAs and private profit and nonprofit
organizations, form partnerships with private investors to
rehabilitate or construct low-income housing.  In return for tax
credits, an investor contributes to the partnership cash that the
developer uses to develop housing units.  Under the HOME Investment
Partnerships Program, HUD provides funds to state and local
jurisdictions for housing rehabilitation, new construction, or the
development of tenant-based assistance. 


      PARTNERSHIPS AMONG PHAS TO
      REDUCE OPERATING OR
      MANAGEMENT COSTS
---------------------------------------------------------- Letter :3.1

Our study of 29 PHAs found eight instances of PHAs' working together
to jointly purchase goods and services or consolidate management and
thereby achieving cost savings or increased efficiency.  By
purchasing items together, PHAs can share the costs of the goods and
services rather than bearing the costs separately.  For example, one
group of PHAs split the costs and use of consultants to help comply
with regulations governing services for handicapped residents.  In
another case, a group of over 80 PHAs jointly purchased items such as
major appliances--which, according to PHA officials, has increased
the efficiency of operations by reducing the administrative burdens
of time and paperwork in the purchasing process.  Similarly, two
housing authorities estimated that they saved $25,000 in staff and
travel costs by jointly operating a community development program. 

According to several PHA officials with experience in consolidating
management, consolidation enables PHAs to obtain the benefits of
sharing the use and costs of employees and services.  For small
housing authorities, this partnering can greatly reduce the cost of
additional staff and overhead.  For example, one large housing
authority in our study took over the management of three nearby small
housing authorities without increasing the size of its staff.  The
executive director of the large housing authority said that the
consolidation has resulted in reduced overhead and maintenance costs,
reduced staff costs, higher productivity, and greater satisfaction by
residents at the three smaller authorities.  Another official at the
large authority said that the smaller housing authorities benefit
from the large housing authority's knowledge of and experience with
HUD's rules and regulations.  In commenting on a draft of this
report, the Deputy Director of HUD's Office of Urban Revitalization
concurred in this view and said that a tremendous opportunity exists
for greater efficiency of operations and cost savings if there is
consolidation among smaller PHAs.  The Deputy Director said that
because executive directors of smaller PHAs may be part-time
managers, the PHAs often are not able to remain abreast of public
housing regulations.  Thus, this economy of management through
consolidation can allow the PHAs to maximize the use of their
operating subsidies. 

The Deputy Director also recognized the issue of political resistance
to consolidation--an issue that we have heard from PHA executive
directors and HUD field office officials--whereby a local mayor may
not support consolidation if it means losing control over the city's
housing authority.  The Deputy Director said that a way to gain the
support of local officials for consolidation may be to allow each PHA
to retain its local board of commissioners.  In this way, the board
would still have policymaking authority for its PHA.  In our study,
the board was retained in two instances of consolidation, while in a
third instance a single board was created for a regional PHA serving
60 cities in six counties.  This board consisted of representatives
from each of the six counties. 


      PARTNERSHIPS TO PROVIDE
      EMPLOYMENT AND SOCIAL
      SERVICES TO RESIDENTS
---------------------------------------------------------- Letter :3.2

Through partnerships and other business-like arrangements with labor
unions and residents, four PHAs that we contacted have had some
success in providing employment opportunities for some residents. 
The residents hired through these arrangements engaged in repairing
vacant units, maintaining the grounds, and performing janitorial
services.  By employing residents, PHAs provide them with an income,
enable PHA staff to do higher-priority work, and can give residents,
as one executive director said, "a sense of pride in their housing
developments." In addition, officials at one of the PHAs that hired
residents said that this practice was less costly than hiring private
firms to do similar work; officials at another PHA said that the
average time that units have been left vacant has been reduced
because of residents' work on the units. 

For example, one PHA formed a partnership with a local union to
provide four residents with union jobs through a 4-year
apprenticeship program.  Union workers trained and supervised
residents in renovating the PHA's housing units.  The PHA pays each
apprentice on a sliding wage scale that increases with training and
experience.  By the end of the 4-year program, residents become
members of the union and are paid the same wage as fully trained
union workers.  In addition to a salary, the residents in the program
obtain medical and health insurance, which they may not have had
previously.  According to the PHA executive director, union
officials, and residents, all parties to this partnership benefit: 
The union increases its membership and work for union members, the
housing authority obtains an employed resident and can renovate its
units at less cost than using a contractor, and the resident begins a
path to self-sufficiency. 

In addition, eight PHAs in our study took part in partnerships with
social service organizations to supply such services as child care
and health care to residents and with local colleges to teach college
credit courses to residents.  These partnerships often made use of
programs and grants from HUD and state and local governments.  For
example, PHAs used the social service agencies to operate programs
funded under grants from HUD, such as the Public Housing Drug
Elimination Program.  Social service agencies provided staff to
operate the program and saved the PHAs the cost of hiring staff and,
in some cases, provided services at no cost to PHAs.  In return for
space provided to social service agencies, one housing authority
estimates that it has received $400,000 worth of services at no
charge over a 2-year period.  In another example, a housing authority
developed a partnership with a local university to operate a health
care clinic for residents.  The university provides its faculty and
graduate student nurses to staff the clinic, while doctors volunteer
their time to provide health services. 

According to an executive director, an added benefit of partnerships
with social service agencies is that the housing authority is
connected to a network of services and funding sources that were not
previously available.  Social service partners have expertise in
areas such as providing counseling or health care that PHA employees
may not have.  Three PHA executive directors told us that they could
not have offered services to residents if it were not for the
partnerships that were formed. 


      PARTNERSHIPS WITH STATE,
      LOCAL, AND COMMERCIAL
      ENTITIES TO DEVELOP
      AFFORDABLE HOUSING
---------------------------------------------------------- Letter :3.3

To meet the local need of housing for low-income people, public
housing authorities are increasingly working with banks, cities,
nonprofit groups, and state and local governments to develop
affordable housing.  To do this, PHAs use proceeds from the sale of
bonds, Community Development Block Grant funds, and state and local
funds.  One authority that we contacted uses a combination of HUD's
HOME program funds, tax-exempt bond funding, and state funding to
develop affordable housing for persons with moderate, low, and very
low incomes.  To develop affordable housing in another partnership, a
housing authority worked with two local nonprofit organizations to
operate a handicapped-accessible building for very-low-income
persons.  The nonprofits owned the building and provided supportive
services for persons with disabilities.  The housing authority earned
income by charging a fee to manage the building.  In addition, one
authority developed a nonprofit entity that obtained tax credits to
develop affordable housing that is not public housing.  The housing
authority's executive director said that having public and nonpublic
affordable housing allows the housing authority to spread its
administrative costs over both types of housing. 


      USE OF STATE AND LOCAL
      PROGRAMS TO REDUCE COSTS
---------------------------------------------------------- Letter :3.4

Five PHAs in our study joined state and local insurance programs to
provide coverage for such things as the PHAs themselves, health care,
workers' compensation, and unemployment benefits for their employees. 
In most cases, the executive directors of the PHAs involved said that
the use of state programs resulted in cost savings for the housing
authorities.  For instance, by joining a state unemployment insurance
program instead of being self-insured, one housing authority
estimated savings of $20,000 per year.  In addition, by joining the
local county's health insurance program, one housing authority
reduced its cost to fund employees' family insurance plans by about
50 percent (from $400 per month to $198 per month per employee). 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :4

We provided a draft of this report to HUD for its review and comment. 
We discussed the draft report with HUD's Director of Project
Management Staff, Office of the Deputy Assistant Secretary for Public
and Assisted Housing Operations, and HUD's Deputy Director of Urban
Revitalization, Office of the Deputy Assistant Secretary for Public
Housing Investments.  In commenting on our draft report, these
officials concurred that partnerships are beneficial to PHAs in
providing cost savings and other benefits.  The Deputy Director of
Urban Revitalization said that consolidation, in particular, offers a
high potential for small PHAs--those with under 100 housing units--to
share expertise and key staff and to jointly purchase goods and
services.  We incorporated these and other clarifying comments into
the report, as appropriate. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :5

To identify PHAs that were engaging in beneficial partnerships, we
conducted interviews with officials at HUD headquarters and field
offices and the major industry groups representing PHAs, including
the Council of Large Public Housing Authorities, the National
Association of Housing and Redevelopment Officials, and the Public
Housing Authorities Directors Association.  These officials and
representatives identified PHAs that they believed were engaging in
partnerships that would illustrate effective leveraging and other
beneficial uses of their resources.  We judgmentally selected 29 of
these PHAs and conducted telephone and face-to-face interviews with
their executive directors and other officials; however, we did not
independently verify the information provided by PHA officials in
this report.  We conducted our work from December 1995 through July
1996 in accordance with generally accepted government auditing
standards. 


---------------------------------------------------------- Letter :5.1

As arranged with your office, unless you publicly announce its
contents earlier, we plan no further distribution of this report for
30 days.  At that time, we will send copies of this report to the
appropriate Senate and House committees; the Secretary of HUD; and
the Director, Office of Management and Budget.  We will also make
copies available to others on request. 

If you or your staff have any questions, please call me at (202)
512-7631.  Major contributors to this report are listed in appendix
II. 

Sincerely yours,

Lawrence J.  Dyckman
Associate Director, Housing and Community
 Development Issues


DESCRIPTIONS OF PARTNERSHIPS IN
PUBLIC HOUSING
=========================================================== Appendix I

We contacted 29 public housing authorities (PHA) about their use of
partnerships and other business-like arrangements with state and
local governments and entities.  We found that the partnerships and
arrangements could be grouped according to four purposes, which were
to (1) share resources or consolidate management among public housing
authorities; (2) provide services, training, and employment to
residents; (3) develop affordable housing by leveraging staff and
financial resources; and (4) obtain goods and services at lower costs
by taking greater advantage of state and local programs. 


   PARTNERSHIPS TO COMBINE OR
   SHARE RESOURCES AMONG PUBLIC
   HOUSING AUTHORITIES
--------------------------------------------------------- Appendix I:1

Eight PHAs in our study formed partnerships with one another to share
use of employees, make joint purchases, and consolidate management. 
By sharing an employee and making joint purchases, PHAs told us they
reduced their expenses and avoided bearing higher costs individually. 


      RED WING, MINNESOTA
------------------------------------------------------- Appendix I:1.1

The Red Wing Housing and Redevelopment Authority reported that it
reduced administrative costs for the Department of Housing and Urban
Development's (HUD) Family Self Sufficiency (FSS) Program, which
provides residents with services to promote economic independence and
self-sufficiency, by sharing one program coordinator with three other
small authorities.  According to the executive director, sharing this
employee saves the authorities about $50,000 over a 2-year period. 
Also, by jointly operating a community development program with
another authority, the two housing authorities obtained estimated
savings of $25,000 in travel and staff costs.  In addition, by
jointly using state funds and issuing bonds, the two housing
authorities reduced the cost of bond issuance fees by $12,000 and
provided affordable mortgage financing to low- and moderate-income
households. 

Contact:  Richard Grabko, Executive Director, (612) 388-7571. 


      COMPREHENSIVE PURCHASING
      CONSORTIUM (NORTH AND SOUTH
      CAROLINA)
------------------------------------------------------- Appendix I:1.2

In 1992, the Carolinas Council of Housing and Redevelopment and Codes
Officials, which represents PHAs located in both North and South
Carolina, formed a voluntary organization called the Comprehensive
Purchasing Consortium.  According to the Council's president, the
consortium has increased the efficiency of housing authorities'
operations by reducing the administrative burden of time and
paperwork associated with purchasing expensive value items such as
major appliances.  Since 1992, sales totaled over $12 million for
items, including nearly 7,000 ranges and refrigerators. 

Contact:  Carolyn Beaman, Comprehensive Purchasing Consortium
Chairperson, (910) 226-8421. 


      COLUMBUS, GEORGIA
------------------------------------------------------- Appendix I:1.3

The Housing Authority of Columbus manages the public housing units of
three other housing authorities located in Georgia:  Buena Vista (79
units), Ellaville (40 units), and Harris County (43 units).  The
three housing authorities have their own board of commissioners that
formulate policy decisions for their housing authorities.  The
executive director said that as a result of the consolidation, the
housing authorities have reduced staff costs, improved residents'
satisfaction, and improved performance. 

Contact:  Stanley Keene, Executive Director, (706) 571-2807. 


      EASTERN IOWA REGIONAL
      HOUSING AUTHORITY
------------------------------------------------------- Appendix I:1.4

The housing authority provides 170 units of public housing and
provides assistance to 684 families in its Section 8 assisted housing
program in 60 cities covering a 6-county area in Iowa.  Instead of
several housing authorities managing the low-income housing in this
area, one executive director and his staff manage the housing
authority.  The housing authority is governed by a commission
composed of two commissioners from each local government.  The
commission elects a 18-member board of directors, which contains 3
members from each county. 

The Eastern Central Intergovernmental Association, an organization of
local governments in Iowa served by the housing authority, provides
staff and administrative support for the housing authority. 
According to the housing authority's executive director, the
association can combine resources from various programs to reduce
overhead and personnel costs for the housing authority. 

Contact:  William Baum, Executive Director, (319) 556-4166. 


      BREMERTON, WASHINGTON
------------------------------------------------------- Appendix I:1.5

At the request of HUD and the state of Washington, the Bremerton
Housing Authority manages other housing authorities.  Specifically,
the housing authority provides management services to the Mason
County Housing Authority and manages Section 8 housing in Lewis
County, Washington.  Before this arrangement in Lewis County, which
does not have a housing authority, the state managed the Section 8
housing.  However, according to the Bremerton Housing Authority's
executive director, state management of Section 8 housing was a more
costly option than having his authority do it. 

Contact:  Merrill Wallace, Executive Director, (334) 774-8210. 


      MONROE, GEORGIA
------------------------------------------------------- Appendix I:1.6

The Monroe Housing Authority manages three other housing authorities
in Georgia--Social Circle, Loganville, and Madison--that have 70, 66,
and 20 housing units, respectively.  The Monroe Housing Authority has
383 units.  According to the executive director, the combined PHAs
have reduced operating costs because of a centralized maintenance and
administrative staff. 

Contact:  Al Braddock, Executive Director, (706) 267-6591. 


      DECATUR AND DEKALB, GEORGIA
------------------------------------------------------- Appendix I:1.7

One staff of 84 persons operates both the Decatur and Dekalb Housing
Authorities.  Yet each authority is governed by its own board of
commissioners.  A benefit of this arrangement highlighted by housing
authority officials is that consolidated management produces greater
economies of scale by spreading administrative costs across two
authorities instead of one.  For example, when private contractors
provide services and goods to both of the housing authorities, the
fixed costs of hiring a contractor are spread out among the two,
instead of having one authority bear the cost. 

Contact:  David Smotherman, Executive Director, (404) 377-0425. 


      YARMOUTH, MASSACHUSETTS
------------------------------------------------------- Appendix I:1.8

The Yarmouth Housing Authority has joined a consortium of five PHAs
that collectively purchase consultant services for studies on sites's
compliance with the Americans With Disabilities Act (ADA) and other
goods and services whenever feasible.  In addition, the Yarmouth
Housing Authority and two other housing authorities are filing a
joint application under HUD's FSS Program to fund a single FSS social
service coordinator to manage the use of social service agencies for
the three PHAs. 

Contact:  Marilyn E.  (Penny) Tanner, Executive Director, (508)
398-2920 ext.  13. 


      ST.  LOUIS COUNTY, MISSOURI
------------------------------------------------------- Appendix I:1.9

The Housing Authority of St.  Louis County has joined an organization
of 80 housing authorities in Missouri called the Missouri Housing
Authority Risk Management Pool that has resulted in cost savings. 
According to the housing authority, by joining the organization, the
authority was able to obtain insurance that reduced the annual
insurance costs per car from $1,000 to $750.  The housing authority
also obtains property and casualty insurance from its membership in
the group.  In addition, the housing authority is examining the
possibility of joining a recently developed state government health
insurance pool. 

Contact:  Neil Molloy, Executive Director, (314) 428-3200. 


   PARTNERSHIPS TO PROVIDE
   SERVICES, TRAINING, AND
   EMPLOYMENT TO RESIDENTS
--------------------------------------------------------- Appendix I:2

PHAs in our study frequently entered into partnerships and
business-like arrangements for the benefit of their residents.  PHAs
worked with social service organizations, community groups, and other
local entities to provide child care, health care, and educational
opportunities to their residents.  Also, to give residents job
opportunities in housing unit repair, janitorial services, and
grounds maintenance, PHAs partnered with residents and labor unions. 


      MACON, GEORGIA
------------------------------------------------------- Appendix I:2.1

The Macon Housing Authority uses funds from HUD's programs, such as
the Family Investment Centers Program and Public Housing Drug
Elimination Program,\8 to form partnerships with local agencies and
the city of Macon Police Department.  For the Family Investment
Centers Program, local agencies have pledged that they would provide
social services worth $2 million per year to the authority. 
Partnering with the local police and other agencies also enabled the
authority to operate its Public Housing Drug Elimination Program
without having to hire additional staff.  The housing authority also
receives funding from the departments of Health and Human Services
and Labor to run a program that assists residents seeking employment. 

Contact:  John Hiscox, Executive Director, (912) 752-5070. 


--------------------
\8 The Family Investment Centers program provides grants to PHAs to
provide families with better access to education and job
opportunities to achieve self-sufficiency and independence.  The
Public Housing Drug Elimination Program aims to combat drug-related
crime in public housing. 


      HENRY COUNTY, ILLINOIS
------------------------------------------------------- Appendix I:2.2

The Henry County Housing Authority hired a "Unit Turnaround Crew" of
two residents and one maintenance staff person.  The housing
authority pays residents $6 per hour, and they work 20 hours per
week.  The crew members prioritize the vacant units they work on
according to the units' conditions.  The crew repairs units in the
best condition first to minimize the time between occupants.  The
executive director said that, as a result of the crew, the time that
units have been left vacant has dropped significantly. 

Contact:  Kathleen Barton, Executive Director, (309) 852-2801. 


      ST.  CLAIR, ILLINOIS
------------------------------------------------------- Appendix I:2.3

The St.  Clair Housing Authority hires resident-owned businesses to
cut grass and pick up trash.  The executive director said that having
the groups perform these tasks is not less expensive than other
methods, but it gives the residents a sense of pride in their housing
developments, provides residents with some extra income, and frees up
housing authority maintenance staff to respond to work orders that
need the expertise of professional maintenance workers. 

Contact:  David Wagner, Executive Director, (618) 277-3290. 


      SAVANNAH, GEORGIA
------------------------------------------------------- Appendix I:2.4

The Housing Authority of Savannah contracts out janitorial service to
its resident association.  According to the executive director, the
residents clean the buildings better than other janitorial firms have
in the past.  The housing authority excludes from the residents' rent
calculation the income that the residents earn from their employment. 
Residents give a portion of their revenue to community projects, such
as distributing Thanksgiving and Christmas food baskets. 

Contact:  Richard Collins, Executive Director, (912) 235-5800. 


      MINNEAPOLIS, MINNESOTA
------------------------------------------------------- Appendix I:2.5

The Minneapolis Public Housing Authority joined Head Start--a program
under the Department of Health and Human Services that provides
funding for education, health, and social services for low-income
children--to operate a daycare facility within the authority.  To
finance the construction of the daycare building, the housing
authority used funding from HUD's Comprehensive Grant Program, which
provides funds to repair, improve, and construct public housing
units.  Head Start, in turn, pays the cost to operate the facility. 
The executive director said that the housing authority could not have
developed the facility without Head Start as a partner. 

Contact:  Cora McCorvey, Executive Director, (612) 342-1439. 


      FARGO, NORTH DAKOTA
------------------------------------------------------- Appendix I:2.6

The Fargo Housing Authority uses partnerships to operate HUD's Single
Room Occupancy Program, which provides housing to homeless persons
who benefit from a single-living environment.  The executive director
said that because residents in its single room occupancy building
frequently have mental and physical health problems, the housing
authority formed partnerships with several state agencies to provide
services to the residents.  The executive director believes that this
relationship with state agencies, which has expanded to his public
housing program, eliminates the need for him to hire additional staff
with expertise in social work. 

Contact:  Ken Donarski, Executive Director, (701) 293-6262. 


      SALT LAKE CITY, UTAH
------------------------------------------------------- Appendix I:2.7

The Housing Authority of Salt Lake City has partnership arrangements
with the Salt Lake City School District, community colleges, and
local universities to operate education programs.  For example, in
one program, residents are taught to build cabinets, sheds, and
wrought iron fencing.  The housing authority provides funding to buy
raw materials and uses the finished product within the grounds of its
properties, thereby guaranteeing a market for the program's products. 
According to the executive director, the housing authority is able to
obtain these products through the program at about half the cost of
the finished product on the private market. 

Contact:  Rosemary Kappes, Executive Director, (801) 487-2161, ext. 
1202. 


      HUNTINGTON, WEST VIRGINIA
------------------------------------------------------- Appendix I:2.8

The Huntington Housing Authority is working with a group of 34
health, education, and social service agencies called the Family
Resource Network to provide services such as substance abuse
counseling, emergency housing, and domestic violence counseling to
residents.  The executive director said that over a 3- to 4-year
period, the Network has served 4,000 to 5,000 people.  Except for the
executive director's unpaid position on the Network's committee,
Network staff are not public housing staff.  The Network staff are
funded by the state Governor's cabinet on children and families and
federal funding through the federal Enterprise Community/Empowerment
Zone program that provides funds for community development. 

The executive director explained that by using the Network, the
housing authority is able to collaborate with many agencies by using
one point of contact--the Network--which is more efficient and
cost-effective than having to contact each agency separately.  The
executive director estimated that using the Network has saved the
authority $10,000 per year in staff time and has enhanced
applications for federal and state funding that require evidence of
collaboration. 

Contact:  William Dotson, Executive Director, (304) 526-4439. 


      MERCER COUNTY, PENNSYLVANIA
------------------------------------------------------- Appendix I:2.9

When expectations for funds from HUD's Public Housing Drug
Elimination Program were not met, the Mercer County Housing Authority
developed a service center as a place for social service agencies to
reside and bring local services to residents.  In this partnership,
the housing authority pays the cost of maintenance to the building
and the cost of some materials, and the social service providers do
not charge the housing authority for their services.  The executive
director estimated that over a 2-year period, the housing authority
received $400,000 worth of services at no direct cost to it. 

Contact:  Dewitt Boosel, Executive Director, (412) 342-4000. 


      STAMFORD, CONNECTICUT
------------------------------------------------------ Appendix I:2.10

The housing authority of the city of Stamford has a partnership with
a local union to employ residents in repairing deteriorated
conditions and abating lead-based paint hazards in the housing
authority's units.  Union workers provide training necessary for the
residents to perform the work, while the housing authority pays the
residents a salary that increases as they become more experienced. 
Currently, four residents are employed in the program.  After 4
years, the residents become members of the union and are paid at a
full-time union member's salary.  As residents graduate from the
program, new residents will be allowed to enter.  As a result of the
program, the union obtains the benefit of increasing its membership,
the housing authority has provided a resident with a job, and the
resident gains a salary along with medical and health insurance
benefits. 

The executive director said that the HUD field office was very
supportive and helped the housing authority determine how to use
HUD's "force account" regulation to justify using funding for the
Comprehensive Grant Program to pay the residents while they are in
the program. 

Contact:  Edward Schwartz, Executive Director, (203) 977-1400. 


      OMAHA, NEBRASKA
------------------------------------------------------ Appendix I:2.11

To emphasize education, the housing authority formed a partnership
with local schools to enforce school attendance by public housing
children.  Children who are absent on any day are not allowed to
participate in any housing authority recreational activity that day
or, if they are on a sports team, cannot play in the next sport
activity.  The Chief Executive Officer (and executive director) said
that the average absentee rate among students at the housing
authority has gone down from 3 days per month to 1 day per month.  In
addition, he explained that the cost of vandalism at the housing
authority has been reduced from $89,000 per year to $5,000 per year. 

The housing authority has partnerships with other local organizations
as well.  For example, a local college provides instructors to teach
classes to residents on the authority's property.  The housing
authority does not pay the instructors, and the college does not pay
rent for the space to teach.  In addition, local police have trained
residents in reporting crime. 

Contact:  Bob Armstrong, Executive Director, (402) 444-6900. 


      LEWISTON, MAINE
------------------------------------------------------ Appendix I:2.12

The Lewiston Housing Authority has developed an arrangement with its
local police department.  The department operates substations at
three public housing sites.  The housing authority provides an office
with a long distance telephone line, and the department pays the
remainder of the substations' operating expenses.  According to the
executive director, the department's visible presence deters crime
and improves the quality of life in the developments.  Another
benefit is that officers chaperon dances and referee hockey games,
providing children with what is often their first positive experience
with law enforcement, the executive director explained. 

In addition, the housing authority has entered into a partnership
with the St.  Mary's General Hospital in which the authority provides
space for an inner-city free medical clinic that is staffed by
physicians, nurses, and social workers from the hospital who
volunteer their time.  Also, the housing authority provides space for
the Lewiston Adult Education Literacy Project, a program that
provides literacy training and job counseling for the homeless, as
well as providing space for Head Start programs for child daycare,
education, and young teen parenting classes. 

Contact:  Sandra Knowles, Executive Director, (207) 783-1423. 


      DENTON, TEXAS
------------------------------------------------------ Appendix I:2.13

The Denton Housing Authority and Texas Woman's University created a
health care clinic and a dental clinic for low-income people.  The
housing authority provides the space for the clinics, and the
university provides faculty and graduate students who are registered
nurses.  Local medical doctors and dentists volunteer their time, and
a grant from the state health department pays for physicals, pap
smears, and mammograms to low-income women.  Dental surgeons and
other specialists volunteer to do procedures that are too complicated
for the clinic.  The United Way, the Community Development Block
Grant, and local organizations provide the funding for equipment and
supplies. 

Contact:  Marian Hamilton, Executive Director, (817) 383-3039. 


   PARTNERSHIPS TO DEVELOP
   AFFORDABLE HOUSING
--------------------------------------------------------- Appendix I:3

In partnership with state, local, nonprofit, and private
organizations, PHAs developed housing for low-income persons by using
funds from federal programs such as the Community Development Block
Grant (CDBG) and the HOME Investment Partnerships Program to finance
housing development.  In addition, PHAs used resources from outside
federal programs in partnership with state, local, and private
groups.  For example, PHAs issued bonds, obtained state funding, and
used tax credits. 


      KING COUNTY (SEATTLE),
      WASHINGTON
------------------------------------------------------- Appendix I:3.1

According to the executive director, the King County Housing
Authority issues bonds and uses state and local funding as well as
funds from the CDGB and the HOME Investment Partnership Program to
obtain, own, and manage housing.  Over the last 5 years, the
authority has used over $100 million in tax-exempt bonds, low income
tax credits, and other funds to purchase and rehabilitate apartments
that are 12 to 20 years old.  These developments primarily serve
low-income households between 40 and 60 percent of the area median
income.  The housing authority uses CDBG funds in conjunction with
bonds in the acquisition of manufactured homes, which are very
popular with the elderly.  The authority has five developments of
manufactured homes, ranging from 30 units to 165 units per
development. 

The authority also sets aside space in its buildings for local
service agencies such as the Boys & Girls Clubs and the YWCA.  For
example, the housing authority purchased a building and leased space
in it to a local mental health organization.  The executive director
believes that partnering with agencies such as these helps the
housing authority obtain additional funding because of the agencies'
access to private donations and other local sources of operating
funds. 

Contact:  Jim Wiley, Executive Director, (206) 244-7750. 


      BOULDER, COLORADO
------------------------------------------------------- Appendix I:3.2

The Housing Authority of the city of Boulder entered into a
partnership with a private entity, which resulted in the construction
of a building with 124 units.  According to the executive director,
this development is producing income that is used to help defray some
of the housing authority's expenses in its public housing program. 

The housing authority has another partnership with two local
nonprofit organizations to operate a 19-unit handicapped-accessible
building to house very low-income residents.  One of the nonprofits
owns the property, and the other nonprofit provides support services. 
The housing authority earns income by charging a fee to manage the
building. 

The authority also purchased one building for low-income housing,
using a $300,000 grant from the city government.  The city and the
housing authority entered into a formal agreement to ensure that the
rents remain affordable to residents whose incomes represent less
than 60 percent of the area's median income. 

Contact:  Kathy McCormick, Assistant Director of Housing, (303)
441-3157. 


      SALT LAKE CITY, UTAH
------------------------------------------------------- Appendix I:3.3

Twice, the Housing Authority of Salt Lake City has created nonprofit
agencies to develop affordable housing.  The nonprofits, in turn,
used tax credits to attract partnerships with other private entities. 
The housing authority now manages as many units developed in
partnership with private entities as it manages public housing units. 
Because both types of units are administered by the housing
authority, management costs are being spread over twice as many
units. 

Contact:  Rosemary Kappes, Executive Director, (801) 487-2161, ext. 
1202. 


      MONTGOMERY COUNTY, MARYLAND
------------------------------------------------------- Appendix I:3.4

The Montgomery County Housing Opportunities Commission operates
public and assisted housing and uses a variety of funding sources to
develop low- and moderate-income housing.  The commission has used
state and county funding, federal low-income tax credits, funds from
the HOME Investment Partnerships Program, and tax-exempt bonds to
finance a variety of affordable housing units.  In addition, to
develop low-income housing for its residents, the commission obtains
housing from the county's Moderately Priced Dwelling Unit Program,
which requires developers of most new communities to provide a number
of units that will be made available only to low-income persons. 

Contact:  Richard J.  Ferrara, Executive Director, (301) 929-2382. 


   USE OF STATE AND LOCAL PROGRAMS
--------------------------------------------------------- Appendix I:4

Housing authorities in our study joined in state and local programs,
including health, automobile, or workers compensation insurance
programs, to obtain goods and services at significantly reduced
costs.  Executive directors told us that in most cases cost savings
resulted from the PHA's belonging to these programs. 


      STUTSMAN COUNTY, NORTH
      DAKOTA
------------------------------------------------------- Appendix I:4.1

The executive director of the Stutsman County Housing Authority
persuaded the county to include the housing authority in a county
insurance pool, even though the housing authority's employees
technically are not employees of the county.  The executive director
told us that joining the insurance pool reduced the housing
authority's costs for a family health insurance plan from over $400 a
month to $198 per month per employee. 

Contact:  Cheryl Wegner, Executive Director, (701) 252-1098. 


      SANFORD, MAINE
------------------------------------------------------- Appendix I:4.2

The Sanford Housing Authority worked with its state insurance board
to develop separate workers' compensation rates for different
categories of the authority's employees instead of using a "blended"
rate.  The executive director said that this resulted in significant
savings for the authority because the blended rate was established on
a national basis and did not match the local market. 

Contact:  Mike Eisensmith, Executive Director, (207) 324-6747. 


      PORTLAND, MAINE
------------------------------------------------------- Appendix I:4.3

The Portland Housing Authority reports that it has achieved cost
savings as a result of an informal relationship with the city of
Portland.  For example, the authority's maintenance department
borrows equipment from the city's Public Works Department rather than
renting it.  Also, the authority buys fuel for its vehicles through
the city and, therefore, receives the discounts associated the city's
bulk-purchasing arrangement.  In addition, the authority uses the
city's nursing services to provide care for its elderly residents. 
Finally, the city's Recreation Department and the Boys Club pay for
the cost of summer recreation programs that the housing authority
funded in the past, but now cannot afford.  According to the
executive director, these partnering arrangements were established
informally and did not require amending the housing authority's
cooperation agreement with the city. 

Contact:  Peter Howe, Executive Director, (207) 773-4753. 


      HUNTINGTON, WEST VIRGINIA
------------------------------------------------------- Appendix I:4.4

The Huntington Housing Authority is a member of a West Virginia state
purchasing program.  According to the executive director, the housing
authority's use of the program to purchase five trucks saved $3,000
per truck.  The executive director said that the housing authority
will continue to solicit local vendors to provide bids for services,
but it will use the state buying program when it is cheaper than
local bids. 

Contact:  William Dotson, Executive Director, (304) 526-4439. 


      LAKE COUNTY, ILLINOIS
------------------------------------------------------- Appendix I:4.5

According to the executive director, the Lake County Housing
Authority assesses the cost and benefits of self-insurance versus
using the state insurance program.  After having its own unemployment
insurance for almost a decade, the housing authority determined that
participating in the state unemployment insurance program would save
the authority about $20,000 a year. 

Contact:  Alon Jeffery, Executive Director, (708) 223-1170, ext. 
201. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II

RESOURCES, COMMUNITY, AND ECONOMIC
DEVELOPMENT DIVISION, WASHINGTON,
D.C. 

Eric Marts, Assistant Director
Martha Chow, Evaluator-in-Charge
Johnnie Barnes, Senior Evaluator
Gwenetta Blackwell, Senior Evaluator
Janet Boswell, Senior Evaluator
Frank Taliaferro, Senior Evaluator
Sherrill Dunbar, Evaluator
Stephen Jones, Evaluator
Steven Westley, Evaluator


*** End of document. ***