Understand the asset management life cycle
Connect the PHA’s mission and overall strategic plan
to asset management plans for each property
Review roles and functions of board, management,
and HUD in long term planning
Examine basic information required for long term
Asset Management Lifecycle
The PHA’s mission is critical to making
organizational design as well as long
investment decisions. Major mission questions for
Who to serve?
Quality of housing desired?
Standard of affordability?
Housing or services?
Financial viability of properties vs portfolio?
Let’s discuss these………..
What if a Goal is to Attract More Working
May affect the types of
May affect the number of
properties that are desirable
based on location (near
May require a more
organized marketing effort
May affect office hours (may
need evening or weekend
hours for leasing)
What if a Goal is to Provide the Highest
Possible Quality of Housing?
May affect the way
maintenance staffing is
May affect marketability to
wider range of incomes
May affect priority of capital
spending and financing
May affect priorities in
What if a Goal is to Provide an Expansive
Range of Resident Services?
May affect number of
households served (and
revenues) at properties
(e.g. using a unit for
services, sharing with
May affect marketability
May affect prioritization of
for bricks and mortar
What if a Goal is for Each Property to Be
Financially Viable On Its Own?
May require repositioning
of one or more properties
May affect staffing levels
May affect delivery of
services at properties
May affect how capital
spending is prioritized
Learning Activity #1
What is the PHA’s mission?
Does the PHA have goals that guide the
accomplishment of its mission?
Would more specific goals be helpful in
attaining the objectives of asset
management? What would they be?
Creating an Asset Management Plan for Each
Long term plan
(sometimes called an
investment plan) with link
to mission and goals
Hold and defer
Repair and hold
Upgrade (rehab) and hold
Tie plan to physical needs
Immediate plan (next 3 to
5 years), including
Link to annual budget
A Look at Entitles, Roles and Function
The following information is essential to making
good investment decisions:
Physical needs assessment (PNA)
Possible funding sources
A “good” PNA will identify and provide cost estimates for:
Immediate physical needs
Physical needs over the expected building viability term
Also consider “as
is” versus “upgrade” options
Washington Park PNA
Years 1 - 5
Years 6 - 20
Learning Activity #2
The Karson Housing Authority receives $500,000/year
under the Capital Fund program. It spends 10% on
“administration” (management fee). Assume the rest is
spent directly on capital work. Also assume that the agency
provides about an equal proportion of its Capital Funds to
Washington Park and Chapin Street, on a per
Approximately how many years will it take for Washington
Park to meet current needs with available Capital Funds?
Learning Activity #2
Approximately how many years will it take for
Washington Park to meet current needs with
available Capital Funds?
Why Collect Comparable Market Data?
Establish flat rents
Better know the
What Type of Market Data is Most Useful?
Information on the
Washington Park Market Data
Learning Activity #3
Consider the market data for Washington Park.
In their present condition, 2
brm units at Washington
Park could rent for $500. With
, the units could
command $525. With
rents could increase to
$560. What does the relationship of these numbers
As an income producing asset, Washington Park is
currently valued at $1.2 million ($8,000/unit). In contrast,
is land value is $900,000. What is the significance
of these two numbers? How important is market value to
The following are the main sources of funding
to address public housing capital needs.
Financing proceeds (CFFP, OFFP, other)
Energy service contracting
Capital Fund Financing Program (CFFP)
Allows PHAs to leverage their Capital Fund (CF)
grant (i.e., “grant acceleration”)
PHAs can use one
third of the CF grant to pay for
debt service payments,
with HUD approval
Loan terms can extend to 20 years
Proposed rule published July 18, 2007, but
applications currently being approved on
Learning Activity #4
The Karson HA's yearly CFP grant is $500,000 of
which 1/3rd can be used for debt service under the
CFFP, thus $166,667 is available
How much could the Karson HA leverage under the CFFP if
they were to obtain a loan for 6% interest for the following
periods using the amortization factors that have been
10 years (.13323)
15 years (.10126)
20 years (.08597)
the loan amount can be obtained by dividing the CFP funds available
by the amortization factor.
Additional information on the Capital Fund, Capital
Fund Financing Programs, Operating Fund
Financing Programs, Physical Needs Assessments,
etc., are available through Public Housing’s Office
of Capital Improvements at:
What questions do you
have regarding any of
the materials we have