HUD Sets Permanent Cap on PHA Executive Salaries

On June 5, HUD announced that it's clamping down on excessive pay at public housing authorities, setting caps that extend and expand limits imposed by Congress. The action comes as HUD revealed that the top official at the Atlanta housing agency received a compensation package of $644,214, the highest in the country.

According to data from a national compensation survey conducted by HUD, Atlanta Housing Authority President and Chief Executive Renee Glover and top executives at housing authorities in Los Angeles, Philadelphia, and Chelsea, Mass., received excessive salaries in 2010. The Los Angeles' housing authority paid its executive director $606,320 in 2010, while executive directors at the Philadelphia Housing Authority and Chelsea Housing Authority earned $417,688 and $357,635 respectively. These compensation packages included salaries, bonuses, and other benefits.

In response, HUD announced a $155,500 cap on top executive salaries at larger PHAs for the 2012 fiscal year. The recently announced plan would make the limits permanent and apply them to all forms of compensation paid for with federal money.

These highly compensated officials highlighted in the report appeared to be outliers. The national survey of 2010 salaries found that most local public housing officials were compensated in amounts at or under the new limit. HUD modeled its information collection on the way that the Internal Revenue Service collects similar information from not-for-profits. And HUD determined that 97 percent of housing authority executives earn less than $155,500 in total cash compensation annually, and 93 percent earn less than $125,000 annually.

Additionally, HUD found that the average compensation for a housing authority director was $82,299. HUD said that while the housing authority executives are state employees, they are responsible for a significant amount of federal money and should be held to federal standards of fiscal responsibility. Therefore, HUD is proposing to align compensation with the federal government pay system.

Since the survey, the Los Angeles housing agency has lowered its top compensation to $260,000 and the Philadelphia agency has set its top compensation at $225,000. Chelsea, Mass., a suburb of Boston with a population of about 35,000, has lowered its top compensation to $135,000.

While the top limit planned by the Obama administration would be $155,500 for agencies managing more than 1,250 public housing units, HUD set lower limits for smaller public housing agencies. Housing authorities with between 250 and 1,250 units could pay a maximum of $125,926, and agencies handling fewer than 250 units could pay no more than $88,349.

According to HUD, the salary caps apply only to the portion of executives' compensation that comes via federal funding and they are limits on all cash compensation. This includes bonuses that executives may receive. HUD added that it would like to work with Congress to implement the compensation caps, but said that if Congress fails to act, HUD will take executive action to implement the caps for fiscal year 2013.