Trendspotter: How PropTech Helps PHAs in Unpredictable Funding Landscapes

The world of Public Housing is no stranger to uncertainty, but the current landscape is especially challenging. Public Housing Authorities (PHAs) across the country are grappling with an unclear federal funding outlook, leaving many leaders questioning how to plan for the future. While PHAs remain committed to the mission of providing safe, stable, and affordable housing, the financial constraints they face demand a proactive approach.

Now, more than ever, PHAs must prioritize the most efficient and cost-effective strategies to ensure they can continue serving their communities. PropTech has a key role to play as PHAs seek to streamline operations, reduce expenses, and maximize their limited resources.

Preparing for the Future, No Matter What Lies Ahead

PHAs play an essential role in protecting vulnerable communities across the country, but they must be ready to adapt to changing and challenging financial conditions. While the federal funding landscape remains uncertain, agencies that invest in efficiency-enhancing technology will be better positioned to thrive.

As Warren Buffett astutely advised: “Predicting rain doesn’t count. Building arks does.”

Agencies everywhere should be asking themselves if now is the time to build their “arks” by investing in solutions that can help them better adapt to the challenges of a volatile market.

The Financial Reality for PHAs

PHAs typically navigate strict budget constraints while managing a growing demand for subsidized housing. According to the National Low Income Housing Coalition, the U.S. faces a shortage of approximately 7.3 million affordable and available rental homes for extremely low-income renters. Meanwhile, HUD funding levels fluctuate year to year and today, agencies anxiously await the next federal fiscal year (FY) budget, making long-term planning difficult.

Rising operating costs is another major challenge confronting PHAs. As housing providers deal with funding uncertainty (including the possibility of steep cuts in the next FY budget), they’re contending with a variety of other expense pressures and a mounting deferred maintenance backlog. The capital needs backlog of PHAs is estimated to be  $115 billion  when analyzing the approximately 300 RAD transactions that closed over the last three years.

What can PHAs do as they face these financial headwinds? While it may be tempting to tighten the purse strings, PHAs might be better positioned to weather the storm by making strategic investments in cost-saving technology, enhancing their efficiency and streamlining their operations.

Simplifying Public Housing & Voucher Management

Managing the complexities of HUD programs requires time, attention, and expertise. PropTech tools made specifically for the industry, such as MRI PHA Pro, simplify compliance, reporting, and financial management, reducing the administrative workload for PHAs. The best solutions combine ongoing tech innovation, guidance from industry experts, and development in lockstep with HUD leaders to support the rollout of new regulations, such as NSPIRE and HIP.

• Time Savings: With tenants completing work upfront and online, PHAs can cut processing times by up to 50% for Housing Choice Voucher (HCV) applications and recertifications.
• Regulatory Confidence: Built-in compliance tools and error-checking helps agencies maintain PIC scores above 95% and lower the risk of HUD audit findings, saving time and potential penalty costs.

Enhancing Tenant and Applicant Communication

Tenant and applicant communication can be a major administrative burden. Self-service online portals like the ones found in Assistance Connect enable residents to submit requests, update information, and receive updates without PHAs needing to dedicate staff time to every inquiry.

• Efficiency Boost: PHAs using these portals typically see a 40-60% reduction in call volume and in-person meeting time, freeing up staff for other critical tasks.
• Cost Reduction: Fewer in-person visits and phone calls can save PHAs thousands of dollars annually on administrative labor.

Streamlining Waitlist Management

Long lines, paper applications, and manual data entry make waitlist openings a stressful process for both PHAs and applicants. Certain PropTech tools like WaitListCheck move the process online, making it faster and more efficient.

• Time Savings: For every 83,000 applications processed, online waitlist solutions help PHAs reduce staffing expenses by at least $100,000, allowing agencies to handle high demand without overwhelming staff.
• Improved Organization: Automated tools prevent duplicate applications and ensure waitlists are always up to date.

Streamlining Income and Employment Verifications

Verifying income and employment is a necessary but time-consuming process for PHAs. Verification tools built specifically for public and affordable housing, like The Work Number, automate this process, reducing administrative burdens. They provide controlled access to a national database of almost 40 million employment and income records, providing quick and accurate employment and wage information.

• Faster Processing: PHAs using these tools reduce verification times by 50%, expediting the eligibility determination process.
• Lower Costs: Automated verification eliminates the need for manual outreach to employers, saving staff hours and reducing processing expenses.

Reducing Utility Expenses

Utility costs are a significant expense for PHAs, often accounting for 20% to 25% of operating budgets. Tools like MRI Energy help PHAs track, analyze, and reduce energy consumption. They allow PHAs access to data that allows them to implement targeted improvements to reduce energy consumption and costs by identifying areas of energy waste and inefficiency.

• Cost Reduction: A comprehensive approach to energy management, led by the use of energy management PropTech tools, can result in 15-30% savings in utility expenses for PHAs, freeing up funds for other critical needs.
• Sustainability Impact: By optimizing energy usage, agencies can align with green initiatives while lowering their carbon footprint.

Reducing Paper, Postage & Processing Costs

Traditional paperwork is costly and time-consuming. Electronic document signing solutions, including MRI Secure Sign, enable PHAs to move to electronic signatures, eliminating paper-based inefficiencies, and streamline document management and workflow.

• Lower Costs: Agencies can save up to $15-$20 per document on paper, printing, postage, and manual processing.
• Time Efficiency: Staff members can process signed documents up to 180% faster, reducing delays in lease signings and approvals.

Cost-Effective Capacity Expansion

Many PHAs struggle to maintain a full accounting staff while ensuring compliance with HUD financial regulations. Accounting Services provide expert third-party accounting support, allowing PHAs to maintain compliance while reducing headcount costs. A team of full-time CPAs and accountants helps with financial statement preparation, unaudited and audited electronic submission services, budget preparation, operating subsidy calculation, FDS preparation and submission to REAC, and VMS submission.

• Cost Savings: PHAs that leverage accounting services typically reduce their staffing costs by up to 30%, compared to handling this function in-house or using a consultant.
• Improved Accuracy: Expert support reduces accounting errors and improves financial reporting confidence.

At MRI Software, we are committed to helping PHAs navigate these challenges. Our suite of Public Housing, Voucher Management, and property management solutions is designed to help PHAs operate more effectively, optimize productivity, and make the most of their scarce resources. Our software solutions empower PHAs to focus on what matters most: providing quality housing to those in need. Together, we can ensure that Public Housing remains a foundation of stability for families in need.

If there’s anything we can do to support your mission and position your agency for long-term success, don’t hesitate to contact us.