The U.S. Department of Housing and Urban Development has issued a revised figure of 103 percent proration for the Operating Fund for 2010. Congress provided an appropriation for the Public Housing Operating Fund for 2010 that exceeded the administration’s request, despite the fact that the administration described its request as sufficient to provide 100 percent of subsidy eligibility under the current Operating Fund formula. The final rule for the Operating Fund differs from the negotiated rule in two impactful ways:
- The inflation factor used to adjust the Project Expense Level (PEL) does not include the cost of benefits for employees; and
- The PEL Inflation Factor is based on the Producer Price Index (PPI) rather than the Consumer Price Index (CPI).
Taken together, the two factors have resulted in a cumulative shortfall of approximately $700 million between 2007 and 2010.
