Assessing Capital Needs of Public Housing

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July 27, 2011 Assessing Capital Needs of Public HousingHUD has released Capital Needs in the Public Housing Program, a study that estimates the nation’s 1.2 million public housing units need $25.6 billion in large-scale capital improvements to make the housing decent and economically sustainable. This study updates a 1998 analysis and covers the costs of addressing overdue repairs, accessibility improvements for disabled residents, lead abatement, and water and energy conservation that would make the homes more cost and energy efficient. The capital needs estimates included two types of measures: 1) existing or “backlog” needs for repairs and replacements beyond ordinary maintenance, such as roof replacements or building and mechanical systems to increase energy efficiency, and 2) accrual needs for ongoing repairs and replacements beyond usual maintenance requirements once existing needs are met.
· The total capital needs estimate, commonly referred to as the “backlog,” is $25.6 billion, or approximately $23,593 per unit. · With normal use and aging, the units accrue an additional $3.4 billion in capital repairs and replacements each year, or roughly $3,155 per unit, exclusive of routine maintenance and assuming the backlog is met. · The estimated existing capital need fell between 1998 ($36b) and 2010 ($26b.), in part because there were 9% fewer public housing units in 2010 and a decrease in average backlog amount per unit. · Looking forward, the total estimate of capital needs over the next 20 years is $82,125 per unit, or $89 billion.

 

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