Reform Summary

Summary of the Quality Housing and Work Responsibility Act of 1998
(Also known as the Public Housing Reform Act)

Protects Access to Housing Assistance for the Poorest Families

Tenant-Based Section 8 (Vouchers). 75 percent of newly available vouchers at a PHA must go to families with incomes at or below 30 percent of area median income.

Public Housing. 40 percent of newly available public housing units at a PHA generally must go to the families with income at or below 30 percent of area median income.

Project-Based Section 8. 40 percent of newly available units in each project must go to families with income at or below 30 percent of area median income.

Reduces Concentrations of Poverty in Public Housing and Emphasizes Fair Housing

Admissions Plan for Deconcentration. Each PHA must adopt an admissions plan to place relatively higher income families in lower income developments and lower income families in higher income developments.

Fair Housing. Each PHA must affirmatively further fair housing in its program. Raises Performance Standards for PHAs

Mandatory Receivership. HUD must seek receivership within 2 years for troubled PHAs that do not improve enough to escape troubled status.

Physical Conditions. The physical condition of a PHA’s housing becomes a performance indicator. A PHA must offer acceptable basic housing conditions to be rated a "standard" performer.

Rewards Performance. The new Capital Fund formula is to contain an incentive for excellent performance.

Supports Families Making the Transition from Welfare to Work

Earned-Income Disregard. Prohibits a public housing family’s rent from being increased for one year, and limits rent increases for a second year, when a family member who was unemployed or on welfare gets a job.

Rent Reform. Allows PHAs to adopt other rent incentives, such as ceiling rents and income disregards, to reward residents who increase their incomes and so that families do not pay more than market rate for their public housing unit.

Welfare Reform. Provides that a family’s rent will not be decreased when its income goes down because of welfare agency sanctions.

Supportive Services. Requires efforts to establish cooperative agreements between PHAs and local welfare agencies to target supportive services. Authorizes a supportive services program principally for public housing residents.

Transforms the Public Housing Stock

HOPE VI. Authorizes the HOPE VI program through 2002. HOPE VI spurs the revitalization of the Nation’s most distressed public housing by providing for replacement of projects with lower-density, mixed-income projects that blend into the surrounding community.

Demolition and Replacement. In addition to HOPE VI, the Capital Fund may be used to demolish obsolete public housing and replace it with better quality, smaller scale projects. The "one-for-one" replacement requirement, which historically prevented the demolition of even the worst projects, is repealed.

Mixed-Finance Projects. PHAs may enter into agreements with private developers to combine public and private funds to develop mixed-income communities in which public housing units are part of projects with other affordable and market rate units.

Mandatory Conversion. Requires PHAs to tear down the most unlivable, expensive projects and instead provide tenant-based vouchers.

Supports HUD Management Reform Efficiencies

Deregulation and Streamlining. Reorganizes PHA reporting to emphasize one Annual Plan at the beginning of the fiscal year. Allows streamlined Plans for high-performers and small PHAs.

Consolidates Public Housing Programs. PHAs will receive most of their funds through either the Operating Fund or the Capital Fund. Encourages formula funding rather than labor-intensive competitions. This is done by program consolidations, absorption of the CIAP program for small PHAs into the Capital Fund, and authority for HUD to provide fixed funding amounts in the Drug Elimination Program.

Merges and Reforms the Section 8 Certificate and Voucher Programs

Merger of the Section 8 Certificate and Voucher Programs. Merges the two similar PHA-administered tenant-based subsidy programs. The merger program subsidy is based on a payment standard set by the PHA anywhere between 90 percent to 110 percent of Fair Market Rent (FMR).

Conformity with Private Market Real Estate Practices. Makes numerous reforms to expand owner participation by making the voucher program operate more like the private housing market. Reforms include the permanent repeal of the "endless lease," the owner termination notice to HUD, and the "take-one, take-all" requirements.

Anti-Crime Initiatives. Permits PHA screening of applicants, in addition to the traditional tenant screening by owners. Also permits PHA disapproval of owners who refuse to evict Section 8 families for drug-related or violent criminal activity.

Homeownership Vouchers. Allows PHAs to implement a Section 8 homeownership program. Makes needed statutory changes, such as elimination of the prior down-payment requirements, to make Section 8 vouchers a viable homeownership resource for low-income families.