INTRODUCTION TO THE PROJECT-BASED VOUCHER PROGRAM

The Project-Based Voucher (PBV) program allows a Housing Authority that already administers a tenant-based voucher program under an Annual Contributions Contract (ACC) with the Department of Housing and Urban Development (HUD) to take up to 30 percent of its authorized units and attach the funding to specific units and pay rental subsidy to a property owner on behalf of eligible tenants rather than using it for tenant-based assistance [24 CFR 983.6].

Housing Authorities have a Project-Based Voucher Program Cap:

• 20 percent Program Limit: up to 20 percent of ACC authorized units may be project-based.
• 10 percent Exception: up to an additional 10 percent of ACC authorized units (above the 20 percent program limit) may be project-based provided the additional units fall into an eligible exception category:
  1. homeless;
  2. veterans;
  3. supportive services;
  4. units are in a census tract with a poverty rate of 20 percent or less.

Project basing gives developers a guarantee of a future source of stable income for a development, which can be integral to the financing package that makes constructing or rehabilitating affordable housing possible. Combining PBVs with tax credits and other funding allows properties to rent units at deeply affordable rates to low-income tenants, while still providing market-rate revenue to the owner, thus ensuring these properties and their surrounding neighborhoods are maintained well for generations to come. The commitment of PBVs is a vital part of affordable housing financing.

The Housing Authority of the County of Santa Cruz (HACSC) may provide PBV assistance for units in existing housing or for newly constructed or rehabilitated housing developed under and in accordance with a PBV Agreement to Enter into Housing Assistance Payments Contract (AHAP) that was executed prior to the start of construction.

How Families Benefit from Project Based Vouchers

Deeper Subsidy. PBVs allow a deep level of subsidy, ensuring that housing is truly affordable even to the lowest income families. With tax credits or other funding sources alone, even so-called “affordable” units in a project can be out of reach to extremely low-income households, persons on fixed incomes, or persons experiencing homelessness.

Units Designated for Voucher Families. Many families with tenant-based vouchers struggle to find a unit in the private rental market due to an extreme scarcity of rental housing and landlord reluctance to participate in the voucher program.  Scarcity of rental units leads to tenant-based vouchers often expiring before a household can secure a unit, and results in loss of voucher assistance.  Committing vouchers to affordable properties through the PBV program ensures those units will be available exclusively to voucher households.  PBVs also help to facilitate production of housing for vulnerable populations including veterans, persons with disabilities, seniors, and persons experiencing homelessness who often are the most challenged when attempting to access housing in the open market.

Better Access to Good Neighborhoods. Since the PBV program promotes construction of affordable housing in high opportunity low poverty neighborhoods, increasing the PBV cap allows more low-income households, often including children, to benefit from good neighborhoods that are likely to have better schools, parks, healthcare, jobs, transportation, and other assets that improve outcomes for low-income families.

FOR OWNER/DEVELOPERS INTERESTED IN APPLYING FOR PROJECT-BASED VOUCHERS

The Housing Authority of the County of Santa Cruz (“HACSC”) has published a FY 2022-2023 Request for Proposals for project-based vouchers (“PBV”) under the Section 8 Housing Choice Voucher Program (HCV) and is currently accepting applications from property owners and developers.

The Housing Authority has also published “HACSC FY 2022-23 Project Based Voucher Program Guidance for Owner/Developers.”  Applicants are encouraged to utilize the guide to familiarize themselves with the PBV program and applicable regulations.

Proposals for project-based vouchers may be submitted at any time during the year. All proposals will be scored against the written criteria established in the most recent RFP.

Please note that HACSC is close to the limit on the 10 percent Exception category and may only be able to approve units in excess of 25 units or 25 percent of the units in a project if HACSC has not exceeded its 10% Exception Program Cap for excepted units.

Click this link for HACSC’s Project-Based Voucher Request for Proposals webpage.

PROJECTS UTILIZING PROJECT-BASED VOUCHERS

HACSC currently has a total of 328 Project Based Voucher units located in 15 Apartment Complexes throughout Santa Cruz and Sen Benito Counties.  Additionally, HACSC has committed 575 Conditionally Awarded Project Based Vouchers to 15 new affordable housing projects throughout Santa Cruz and San Benito Counties.

Click this link for information about the Projects Utilizing Project-Based Vouchers.

WAITING LIST AND ELIGIBILITY

In most cases, the Project Based Voucher (PBV) Program utilizes the same waiting list as the Housing Choice Voucher (HCV) Program. However, some project-based voucher sites may have site-based waiting lists. Click this link to view all waiting lists.  Units in all other Project Based Voucher developments are offered based on referrals from a qualified service provider or referrals from the homeless Coordinated Entry System.  Existing Housing Choice Voucher holders may transfer into a Project-Based Unit in developments that utilize a combined waiting list.

When a Project Based unit becomes available, the Housing Authority will send a letter to the top families on the HCV Waiting List. The letter will instruct interested families to contact the owner directly. Families on the HCV waiting list who reject an offer of a PBV unit or who are rejected by the owner will not be penalized. They will retain the same position on the HCV waiting list that they would have had if they had not been offered PBV assistance. Families on a site-based waiting list that are determined ineligible, decline the unit or fail to respond to a mailing will be cancelled from that site-based waiting list.

The eligibility and screening policies under the HCV program also apply to the PBV program. The owner may apply their own admission standards to eligible families referred by the Housing Authority.

SPECIAL PROGRAM RULES

In most ways, the PBV program operates just like the HCV program, with households paying roughly one third of their income towards housing, and the Housing Authority paying the remainder of the rent directly to the landlord on the tenant’s behalf. However, there are some rules that differ slightly in the PBV program. The following are some of the key differences. This list is not comprehensive and is only intended to highlight the biggest differences between the two programs.

• In the PBV program, tenants do not pay more than 30% of their income on housing towards rent. In the HCV program, tenants may pay between 30% and 40% of their income towards rent at the time of moving into a unit and may pay even more if the landlord increases the contract rent.”

• In the HCV program, assistance is tied to the family, and families can move to any eligible unit in the community at any time. In the PBV program, assistance is tied to the unit, so there are restrictions on moves. However, after one year of participation in the PBV program, households may transfer their assistance to another unit in the community, if they are in good standing and if there is a voucher available.

ADDITIONAL INFORMATION ABOUT PROJECT BASING UNITS

More information about HACSC’s Project Based Voucher program and project selection process is available in HACSC’s Administrative Plan.