While public housing is a federally created and funded program, administered at the federal level by the Department of Housing and Urban Development (HUD), the properties are owned and managed at the local level by quasi-governmental public housing authorities (PHAs) under contract with the federal government. Given this unique federal-local relationship, the program is governed in part by federal rules and regulations and in part by policies set at the local level. Today's roughly 1.2 million units of public housing are home to some of the poorest families in the nation, including persons who are elderly, persons living with disabilities, and other families with and without children. This report is meant to serve as an introduction to the federal public housing program. It provides information on the history of the program, how it is administered and funded, and the characteristics of public housing properties and the households they serve. While it introduces current policy issues, a full analysis of those issues and discussion of current legislation is not included in this report. Several new programs were developed to subsidize privately owned rental properties, as opposed to publicly owned properties, including the Section 236 rent supplement program serving low-income families and seniors; the Section 202 program serving the elderly; and the Section 221d(3) program serving families with incomes too high for public housing but too low to afford housing in the private market. In recent years, there has been an increase in the number of smaller PHAs that have merged or formed consortia. Specifically, the annual plan must include information regarding, among other things,
housing needs in the PHA's community; the PHA's policies that govern eligibility, selection, and admissions (as described in the agency's Admissions and Continued Occupancy Plan); the PHA's financial resources, as well as its most recent audit; the PHA's rent determination policies; the PHA's operation and management, including rules, standards, and policies that govern maintenance and management of housing owned, assisted, or operated by the PHA; the extent of capital improvement needs at the PHA's properties; any public housing developments designated as housing for the elderly or disabled; any plans to demolish or dispose of public housing, or convert any public housing to vouchers; the PHA's community service and self-sufficiency programs; and the PHA's safety and crime prevention measures. Public Housing Homeownership

PHAs are permitted to promote public housing resident homeownership in three ways: (1) by selling portions of public housing properties to residents, (2) by using some of their public housing capital funds to provide assistance to public housing residents wishing to become homeowners, or (3) by using some of their public housing capital funds to purchase homes to resell to public housing residents. The public housing program peaked at just over 1.4 million units in the mid-1990s, and the number of units has declined fairly steadily since. Because the incomes of families living in public housing are quite low, the rents paid by those families are also quite low. As previously noted, operating funds are meant to supplement the funds that PHAs receive from tenant rents, their own investments, and other sources. The program initially provided competitive grant funding to PHAs, and later provided formula grants to PHAs, to be used for a variety of safety and security activities. The sharp rise in funding per unit in FY2009 is primarily attributable to the $4 billion in capital funding provided in the economic stimulus legislation. The declining physical state of the public housing stock may be due in part to federal funding levels that, paired with federal rent collection rules, left PHAs with inadequate budgets to meet their properties' capital needs. The Role of Public Housing

In light of the decline in the number of public housing units over time and the lack of authority to construct new units, the future role of the public housing program in federal housing policy is uncertain.
"Public housing" is often used as a generic term to refer to all publicly assisted housing, but the term "public housing" actually refers to a specific federal program. Created in 1937, the low-rent public housing program was the first major federal rental housing assistance program. The program initially subsidized the construction, and later the ongoing operation and maintenance, of multifamily rental housing properties for low-income families. While public housing is a federally created and funded program, the properties are owned and managed at the local level by quasi-governmental public housing authorities (PHAs) under contract with the federal government. Given this unique federal-local relationship, the program is governed in part by federal rules and regulations and in part by policies set at the local level.
The public housing program serves some of the poorest families in the nation, including persons who are elderly, persons who are living with disabilities, and other families with and without children. Families who live in public housing generally pay rent equal to 30% of their adjusted gross income; average rents paid by public housing families lag substantially behind private market rents paid by similar families.
Public housing properties themselves can be high-rise buildings, low-rise buildings, scattered site properties, and even part of mixed-income housing developments. Construction and acquisition of new public housing units effectively ended after the federal government stopped funding new development in the mid-1990s, although they began significantly decreasing much earlier as other models of providing housing assistance grew in popularity. As public housing properties have fallen into disrepair and been demolished, the number of public housing units has begun to decrease. Today, there are roughly 1.2 million units under contract and receiving federal funding, down from over 1.4 million units at the program's peak. Federal funding comes from two main formula grants—the Public Housing Capital Fund and the Public Housing Operating Fund—which are meant to supplement the rents collected by PHAs to meet the operation, maintenance, and capital needs of public housing. There have also been several competitive grant programs that provide additional funding to PHAs, including the HOPE VI program. In recent years, regular annual appropriations for public housing have generally been in the range of $6 billion to $7 billion per year, with an additional $4 billion provided by the 2009 economic stimulus legislation.
In response to concerns about the adequacy of federal funding levels—paired with federal restrictions on tenant rents—to meet the capital needs of public housing, proposals have been introduced to promote private investment in public housing in order to preserve the existing stock. An increasing number of PHAs have pursued private financing to meet their capital needs in recent years. However, recent proposals calling for an expansion in the role of private finance in public housing have been met with concerns about the potential for the "privatization" of public housing and a loss of affordability. As the program continues to decline in terms of the number of families it serves, questions are arising about the role the program plays, and should play in the future, in terms of federal housing policy.
This report is meant to serve as an introduction to the federal public housing program. It provides information on the history of the program, how it is administered and funded, and the characteristics of public housing properties and the households they serve. While it introduces current policy issues, a full analysis of those issues and discussion of current legislation is not included in this report.