U.S. Department of Housing and Urban Development
Office of Public and Indian Housing
Office of Public Housing Investments
Physical Needs Assessment
and Energy Audits for Public
Housing
HUD Office of Public Housing Investments
Bruce Rieder bruce.d.rieder@hud.gov
May, 2014
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• The status quo in public housing is not
sustainable
• Public housing inventory is declining
• Maintaining the physical plant is becoming
more challenging
• Political environment is not conducive to a
return to an earlier model of public housing
• Risk Management-alternate structures and
funding
2
• Public Housing stands virtually alone in real
estate as PNA not being routine
• There is no strategy that can be pursued
without a PNA
– RAD, LIHTC, Demo, CFFP…
• Waiting to start reduces ability to respond and
creates lost opportunity
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• Accountability to the taxpayer
• Macro level risk management
• Capacity building for the PHAs
– Tools not reports
– Technical assistance
• 21st Century information expectations
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• Apr 10 2014
• Senate Unanimously Passes Warner-Portman
Transparency Legislation
• ~ Bipartisan DATA Act allows taxpayers to
track every dollar spent by federal agencies ~
~ ‘Most significant transparency legislation
since Freedom of Information Act' ~
• APRIL 28, 2014-UNANIMOUSLY PASSES IN
HOUSE
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• A Physical Needs Assessment (PNA) is systematic
review all of the major physical components of
property to result in a projection of future needs and
costs to meet those needs.
• PNA as proposed is a strategic planning tool. It is
not a budget but is a budget tool.
• A PNA can serve as documentation for a long term
grant or loan with more proscriptive protocols.
• It’s the beginning point for a number of other tools
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Inventory data (HUD uses PIC data)
Quantity of each physical component
Cost to replace each component
Estimated useful life-how long does it last
from the time it is “new”?
• Remaining useful life-how much longer before
the component I have in place will not longer
be useful and will need to be replaced?
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• An inspection is only a part of the
ASSESSMENT process-the assessment is
based on the inspection
• Not the same as the UPCS
• The PNA inspection is a sample but is more
representative of the inventory characteristics
than a UPCS sample
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• An Energy Audit (EA) is a systematic review of the
energy use and requirements for real estate that
seeks to identify opportunities for energy savings.
• While Energy Audits (EAs) and Physical Needs
Assessment (PNAs) often involve a review of the
same building systems, EAs have historically been
completed independently of PNAs.
• The broader real estate industry is moving
aggressively to integrate EAs and PNAs as has
HUD’s Mark to Market program.
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• The current EA rule at 965 (302) requires only that an
EA be performed to state standards but provides no
standards of expectation for the result.
• PHAs are exposed to energy audits of poor value and
little usefulness particularly in states that lack
standards.
• The 2005 Energy Policy Act encouraged the
integration of utility management and capital
planning to maximize energy conservation in Public
Housing.
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• Data points from an energy audit will be
inserted into the PNA form
– Identify ECMs, specify equipment and its cost and
estimated useful life
– Provide annual utility usage for the standard
component and for the ECM so that a usage
savings can be calculated
– Provide the current utility cost rate
– Can use EAs up to 3 years old
11
The Proposed PNA rule was published in the Federal
Register On July 20, 2011. The rule itself is 5 pages.
The rule and comments received can be reviewed at
www. Regulations.gov
The Proposed EA rule was published in the Federal
Register On November 17, 2011. The rule itself is 9
pages. The rule and comments received can be
reviewed at www. Regulations.gov
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PNA Rule
The PNA Rule will require:
– All PHAs regardless of size to perform a PNA once
every 5 years, to update annually, and to submit
to HUD in a format determined by HUD-THE
GPNA TOOL currently available
– The PNA will have a planning horizon of 20 years
– The PNA will be coordinated with and integrate
data from the required energy audit
– Minimum qualifications for a PNA provider, can
be performed by qualified PHA staff
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• Experience (5 years) performing physical
property inspections and cost estimating
• Demonstrated knowledge of applicable
building standards and codes
• Demonstrated knowledge of energy
efficiency practices
• Working knowledge of commonly used
computer technology (MS Excel, Office etc)
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• The EA Rule requires:
– Continuation of EA performance every 5 years
– Specific categories of “Core” ECMs to be
evaluated including water conservation
– An assessment of existing property conditions,
maintenance, and resident education
– Analysis of utility bills with comparison to a
benchmark if available (Portfolio Manager is an
example)
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• The EA rule requires (cont’d):
– Identification and recommendations on ECMs
that should be considered by the PHA
– Categorization of ECMs by payback period based
upon a simple payback calculation
– Cost of the recommended ECM’s in current $ and
expected useful life
– Annual consumption savings projection for each
ECM
– Identification of exposures and other opportunity
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• The EA does not require a specific form or
format
• The EA rule will establish minimum
qualifications for an energy auditor:
– Experienced in the performance of residential
energy audits
– Shall hold a valid certification from a recognized
state or national energy auditor certifying agency
– The energy auditor can be qualified PHA staff or
utility company providers
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• Does not require an investment grade energy audit
but encourages Life Cycle Cost Analysis (LCCA) for
ECMs that may warrant further investigation
• Does not require that ECMs recommended by the EA
be implemented by the PHA-remains the PHAs
business judgment
• Differentiates between “Core” ECMs and
“Advanced” ECMs
• Green assessment can be included but not required
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Status and Rollout
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Status and Rollout
• A working copy of the PNA tool is posted on
the HUD website.
• A contract for training and providing technical
assistance to PHAs and field offices is in place.
• Web based trainings have been prepared and
are available to access at HUD.gov
• HUD is accepting voluntary submissions
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• HUD has delayed the commencement of
implementation.
• Capital Fund final rule published 10/24/2013.
• First due date will not be earlier than early
2015.
• Due dates will be established in an
Implementation Notice published concurrently
with or shortly after publication of the final
rule-6 months minimum advance notice
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GPNA submission due dates are planned to be
120 days prior to the end of the PHA’s fiscal
year. The initial submittal schedule may change depending
upon when the final rule is published.
– June 2 for fye 9/30
– September 1 for fye 12/31
– December 1 for fye 3/31
– March 2 for fye 6/30
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• Regardless of when a final PNA rule is
effective:
• PHAs with a current requirement need to
decide if they are going to proceed based
upon the proposed rules. This is entirely
voluntary.
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• PHAs may now proceed on a voluntary basis
prior to final implementation of the rules.
• PIC data available by emailing request to
PHAPNA@hud.gov; function migrating to
EPIC
• A blank tool, prototype tool, and other
resources are available at the HUD website
• Support available through field offices
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• Should a PHA proceed in advance of rule?
– Risk of final rule change
– Assess the PHA’s capacity and resources to
proceed
– Need to proceed (CFFP, EPC etc)
– Advantage of better availability of contractors
– Early submittals are being accepted by HUD and
are not intended to change future due dates
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• The tool will pre-populate with PIC data and
will be validated at receipt against PIC data so
it is critical that PIC data be current.
• The tool will rely upon the creation of sample
sets of like kind buildings and units at each
site. The PHA has the best knowledge to
create these sets in advance-what are you
going to inspect?
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Sampling Size
– Protocol substantially the same as the existing
protocol.
– For dwelling spaces, survey a minimum of 10% of the
number of units per project of similar condition;
– not just a straight 10% sampling if more are required to
obtain a diversity of unit characteristics.
– For non-dwelling spaces, survey up to 100% but at
least 50% if conditions are known to vary; or if all
spaces are known to be in the same condition,
survey at least 20% of the total.
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• Acquaint yourself with the GPNA tool
• Begin preparing RFP documents
• Consider what new improvements you may
want to include in projections
• Any PNA relies upon a review of existing
documentation as a starting point. Collating
the likely documentation that will be needed
for a PNA in advance will save time, and can
save money if you are using a contractor.
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• At least one year of energy bills for all PHA
held accounts (tenant held accounts if
available); 3 years is recommended.
• Copies of any previous energy audits, PNAs,
EPC documentation, 504 assessments, and
other similar property assessments
• Maintenance log or summary, preventative
maintenance plan
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• Building drawings if available
• Current bids for major work if available and
local cost records and database if developeddetermine if a standard or customized cost
index will be used
• Capital Fund P&E reports for up to 5 years
• UPCS Annual inspection reports
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PNA Tool
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• The primary purpose in creating a tool rather than
another report was to provide a project based
strategic planning tool.
• By creating a tool HUD hopes to make more
sophisticated and effective planning techniques
available to smaller PHAs.
• The tool makes use of current accessible technology
in order to organize large amounts of data and
automate as many of the routine calculations as
possible
• The tool will be pre-populated with the PHA’s data
from PIC and adjusts calculations for non-ACC units
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• The PNA Tool is a standalone Microsoft Access
based application installed on PHAs desktop,
notebook, or network computers. Not
necessary for the user to have Access
software
• Internet based distribution of the PNA tool
• The inspection based tool leads the user
through a series of inputs and automatically
calculates and produces the 20 year projection
as well as a number of useful printable
reports.
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• PHA Inputs
– Cost, Estimated useful life, quantity, and remaining useful
life are the minimum entries required for each applicable
component.
– The PHA divides its sites, buildings, and units into
representative sets from which a 10% inspection sample is
performed.
– The PHA enters costs from an index or supportable local
data set for replacement or refurbishment of each
applicable building component and enters this
information in the cost library page.
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• PHA Inputs (cont’d):
-The PHA enters an estimated useful life in the cost library
for each of the items from a national index or its local
supportable data set.
-The PHA enters quantity and remaining useful life for each
component item on tool created inspection sheets for a
sample set of each class of components-site, building
exterior, building systems, units, and common areas if
applicable. (same classifications as PASS)
-The tool (cost library and inspection sheet)is pre-populated
with most commonly applicable components but is fully
editable by the PHA to reflect their actual components
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• From the minimum inputs above the tool can
calculate the 20 year projection for all applicable
property components and create the reports.
• Once this 20 year projection is created, it is fully
editable by the PHA so that various scenarios of
timing, cost, and quantity adjustments can be
modeled.
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PNA Tool
• Once the basic 20 year projection of replacement
needs is in place the PHA can consider the addition
of components that do not currently exist:
– Sustainability Needs-this is where the energy audit
information is used to add energy conservation measures
to the projection-the tool automatically calculates simple
payback based upon the entries
– Marketability Needs-comp0nents that the PHA would like
to have to improve livability, security etc
– Accessibility Needs-components that the PHA needs to
put in place to achieve accessibility
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• Additional Features
– Allows a need to be reflected as “immediate” or
“critical” and can create separate reporting for
those categories.
– Allows for markup to be added as well as a local
multiplier adjustment
– Cost libraries and inspection forms are
exportable to excel spread sheet format so they
can be worked with outside of the tool
– Documents and Photos can be stored within the
tool to provide documentary backup
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• Additional Features (cont’d):
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–
–
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Allows refurbishment to be shown instead of
replacement reflecting actual experience of PHAs
“New PNA” creates a new form which can be blank
so that the user can create a PNA for other property
types it may have, such as section 8 property-user
would manually input inventory data
The tool has functionality to use the above feature
to create a PNA for an individual development
within a Development/AMP
Pre-existing PNAs can be directly entered into the
20 year spreadsheet
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Reporting to HUD
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–
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Once the PNA is completed to the PHAs satisfaction, the
reporting function is found on the bottom of the Reports
Page. With one selection the tool creates an XML file for each
AMP which is emailed as an attachment to HUD by the user. T
HUD does not retrieve the entire tool, only an extract of data
so it is important that the PHA maintain the integrity of their
reporting version for future reporting.
Submittals can be updated at any time by resubmitting, the
latest received is entered.
Annually, PHAs will “update” the PNA which simply involves
recording in the form on the Annual Update report which
items where completed during the year and submitting to
HUD –the tool will automatically move incomplete items to
the next year.
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PNA Tool
• HUD will collect summary level data from the
PHAs:
– Replacement Needs for Site, Building Exterior, Building
Systems, Common Areas, and Unit gross numbers plus
major historical component cost items such as roofs,
windows, HVAC, plumbing, and electrical.
– Sustainability Needs within 23 designated measures and
“other ”
– Marketability Needs Capital Improvements
– Accessibility Needs Capital Improvements
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How Will HUD Use the Submitted Data?
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–
Each submittal will be reviewed for anomalies that may
result in inquiry from HUD and possible need for
correction. The review is intended to identify
information that looks erroneous or falls so far outside
the norm as to raise a question. The review is intended
to correct error.
The PHA data will be aggregated nationally for analysis
by HUD to inform policy and, if determined practical to
provide some extracts that PHAs can use to assess their
operations within their peer group of PHAs.
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Thank You
QUESTIONS?
Contact your HUD field office
PIC data files available by email
request to:
PHAPNA@hud.gov
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LINKS
PNA :
http://portal.hud.gov/hudportal/HUD?src=/program_offices/
public_indian_housing/programs/ph/capfund/physicalassess
ment
The GPNA Tool and prototype is located on HUD’s GPNA
Resource webpage at:
http://portal.hud.gov/hudportal/HUD?src=/program_offices
/public_indian_housing/programs/ph/capfund/gpnatool
Rules: www.regulations.gov
search on HUD proposed rules published in federal register
on July 20, 2011 and November 17, 2011
PIH Energy Conservation Resources:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/
public_indian_housing/programs/ph/phecc
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