New requirements are on the way for how HUD Public Housing Authorities are to conduct Physical Needs Assessments and Energy Audits. The U.S. Department of Housing and Urban Development’s (HUD) Office of Public and Indian Housing is issuing a rule in summer 2012 to require synchronization of Energy Audits and Physical Needs Assessments into the Green Physical Needs Assessment (Green PNA), and will require measurement of the cost effectiveness of energy conservation measures.
Under current requirement 24 CFR 905 & CFR 965 Subpart C, Public Housing Authorities (PHAs) are required to have an Energy Audit performed every five years and Public housing Authorities greater than 250 units are also required to perform a Physical Needs Assessment every five years, with no minimum staff qualifications to perform either the Energy Audit or PNA. New requirements are requiring all Public Housing Authorities, regardless of size, to perform a Physical Needs Assessment in conjunction with an Energy Audit every five years.
HUD Physical Needs Assessment Requirements for Public Housing Authorities
Additional changes to the HUD Public Housing Physical Needs Assessment requirements include a twenty year planning period (previously was five years), requiring HUD Capital Planning Tool instead of PHA Capital Planning Tool, and establishing minimum qualifications for Physical Needs Assessment provider. Currently some Pubic Housing Authorities directly employ staff people to perform Physical Needs Assessments that are not qualified to do so. The proposed rule would establish minimum qualifications for the PNA provider, which standards would include experiential qualifications in property inspection and evaluation, cost estimating, energy efficiency and green capital upgrade and construction practices, and working knowledge of common information technology software.
HUD Energy Audit Requirements for Public Housing Authorities
Additional changes to the HUD Public Housing Energy Audit requirements include following 24 CFR 905 audit protocol instead of 24 CFR 965, establishing content and submission requirements, and establishing minimum qualifications for Energy Audit provider. Currently some PHAs directly employ staff people or hire auditors to perform Energy Audits that are not qualified to do so. The proposed rule would establish minimum qualifications for the auditor, which standards would include state or national qualifications, including Professional Engineer or Certified Energy Manager.
Goals for the HUD Green Physical Needs Assessment
The primary goals of the Public Housing Green PNA are:
- Enable HUD to measure the impact of the annual Capital Fund appropriations on the physical needs of the public housing inventory
- Evolving the Management practices of PHAs toward project-based capital planning
- Furthering the objectives of 2005 Energy Policy Act
- Producing data on green activities for the Capital Fund in support of HUD’s High Priority Performance Goal to create energy efficient housing
- Enabling PHAs to better assess the position of their portfolios to take advantage of potential opportunities
Currently capital planning requirements only address short or moderate term needs of Public Housing Authorities and do not provide PHAs a mechanism to complete long term capital planning. The new Green Physical Needs Assessment tool allows PHAs to address the life cycle needs of their portfolios by requiring 20 year projections. The project-based PNAs, in conjunction with HUD’s new focus on the project-based Asset Management Program, bring PHAs closer to standard industry practices for efficient capital planning.
Over $2 billion Capital Funds are provided annually to PHAs to modernize or develop public housing. Currently HUD has no assessment tool to measure the impact of these funds on the public housing portfolios, and only as directed by Congress approximately every 10 years conducts a statistical sampling of PHAs to estimate the accrual and backlog needs of PHAs. As an alternative to this study, the PNA will enable HUD to aggregate the needs data at any point in time with every project in the public housing portfolio. The needs number will be updated annually to reflect the Capital Fund appropriations.
The 2005 Energy Policy Act amended the Capital Fund section of the U.S. Housing Act of 1937 to integrate “utility management and capital planning to maximize energy conservation and efficiency measures.” The PNA tool will aggregate this information and, for the first time, provide HUD with data to measure the cost effectiveness of replacing building systems with green components at the end of their useful life as well as the cost effectiveness of early replacement of building components.
Final rules are to be released in Summer 2012. Twelve months from final rule PHAs will be required to complete a Physical Needs Assessment and an Energy Audit. For more information about Green PNA studies, feel free to reach out to me.