ABSTRACT
Public housing operating subsidies are paid to approximately 2,700 public housing agencies, which administer nearly 97 percent of all public housing units. Subsidies typically account for 40 percent to 50 percent of the operating incomes of the local housing authority. The mechanism used by the Department of Housing and Urban Development (HUD) to establish the subsidy rate is the performance funding system, which estimates the operating costs of well-run projects. Operating subsidies are an appropriated account. Although rent increases were instituted under the aegis of the assisted housing programs, the increase in rents for tenants in public housing was a major change affecting operating subsidies. In addition to supporting the capital costs of public housing, the federal government pays operating subsidies to local public housing authorities (PHAs) to bridge the gap between operating costs and the rent received from tenants.
