PHADA Seeks Feedback from Members on UPCS REAC Inspections

Over the last few months, a number of questions and concerns related to the Real Estate Assessment Center’s (REAC) administration of Uniform Physical Condition Standards (UPCS) in public housing have come to the attention of the Association. The following information lists and describes these concerns; we would like to encourage members to contact us if your housing authority (HA) has additional information related to these specific examples, or additional concerns that may not be listed.

  • In your opinion, has the implementation of Inspector Notice No. 2016-03 Uniform Condition Standards (UPCS) Deficiencies and Industry Standard Repairs adversely affected the results of a REAC inspection?
    Inspector Notice No. 2016-03 was issued on July 11, 2016, and effective on August 1, 2016. HUD REAC’s issuance of this notice was unusual. The guidance was originally issued as a Word document, not on HUD letterhead and unsigned. It was emailed to UPCS contract inspectors and was not originally available on the REAC website. HAs were made aware of this new guidance by inspection consultant groups, not by the Department. The notice was later published on HUD letterhead and made available online.

    Overall, it is PHADA’s understanding, after speaking with a number of inspection consultants, that HUD REAC staff has received a great deal of pushback from the industry on this notice, particularly from contract inspectors. Members have also expressed frustration and confusion related to this guidance. Concerns include, but are not limited to:

    • the notice is a vague and an ill-conceived policy change;
    • the notice places inspectors in the difficult position related to interpretation and could result in inconsistencies;
    • the notice follows a pattern of “guidance” to inspectors that are not only clarifications to the standard, but modifications and additional requirements to without application of the Office of Management and Budget’s Good Guidance Practices that requires public comment; and
    • the notice is a significant deviation from the current interpretation of the UPCS inspection standard, which generally focused on the existence of a deficiency, rather than an evaluation of the manner of repair and/or design.

A few agencies have seen precipitous decreases in inspection scores since the issuance of this notice, even as large as 20–45 points. This could be a result of rigorous enforcement of the new quality “workmanship” factor of “like quality with the original finish and material” in the guidance by some inspectors.

Based on a meeting in Washington, DC with contract inspectors and HUD REAC staff, it was asserted that some inspectors may be misinterpreting the guidance and that additional clarifications are needed and may be forthcoming. HUD REAC has confirmed that HAs may appeal, however, PHADA is concerned that this process is burdensome and only permitted if the correction would result in a significant change in the agency’s PHAS score and designation, per 24 CFR Part 902.63(b). A full copy of the notice can be found at: https://portal.hud.gov/hudportal/documents/huddoc?id=ia_notice2016-03.pdf

  • Has your agency observed an increase in “no shows” and last minute cancellations of REAC inspections by contract inspectors?
    PHADA has received feedback from members that there may be an increase in “no shows” and last minute cancellations of inspections. While the Association is reluctant to make assumptions, it has come to our attention that a greater number of REAC contract inspectors may have been de-certified for unknown reasons. As a result, the inspectors are unable to complete scheduled inspections. This causes confusion, frustration and undue burden on both agencies and residents who are forced to postpone and reschedule after much preparation.
  • Has your agency witnessed an increase in quality control inspections by HUD REAC staff?
    Additionally, some members and contract inspectors have observed an increase in the number of HUD quality control (QC) inspections on site. Further, these QC inspections usually occur at the same time as the REAC inspection. Concurrent QC inspections deviate from standard operating procedure for HA QC inspections, which occur at some reasonable timeframe following the original inspection. Concurrent QC inspections create anomalies and may ultimately result in lower scores at the time of the REAC inspection. This position is shared between both HAs and contract inspectors, based on comments and concerns expressed by inspectors at a recent HUD UPCS meeting.

Overall, the observed increases in questions and concerns related to guidance, processes and procedures connected with REAC inspections has resulted in confusion and frustration within the industry.

In response to some of these concerns, PHADA staff recently communicated with HUD REAC staff. HUD agreed that some improvements could be made to reduce confusion and potentially mitigate some of the adverse effects of the aforementioned concerns. Further, HUD acknowledged that UPCS guidance is not available in one designated location online, which could improve consistency and comprehension of the standard, as well as assist with information dissemination.

Based on the information already provided by members and any additional details provided as a result of this article, PHADA anticipates that it will reach out directly to the Department of Housing and Urban Development (HUD) to discuss the industry’s concerns more specifically and to provide recommendations for improvement. For example, the Association could recommend that:

  • The Department issue a clarification to Inspector Notice No. 2016-03, with stakeholder input, as soon as possible in order to safeguard any additional agencies from significantly decreased REAC inspection scores as a result of contract inspector’s misinterpretation of the guidance.
  • The Department institute a streamlined appeals process available to those agencies that appeal based on contract inspectors’ misinterpretation of Inspector Notice No. 2016-03, which results in unfair and inaccurate decreases in inspection scores.
  • HUD act expeditiously to compile all UPCS related guidance in one location on its website, preferably in one document (rather than an assortment of memos, notices, compilation bulletin, etc.) and update that information immediately when there is any new guidance.
  • HUD educate both contract inspectors and HA staff regularly on any new guidance and/or standard clarifications so that all stakeholders are informed and able to adequately prepare for inspections, as well as provide the opportunity to express questions and concerns directly to the Department.

Please contact Crystal Wojciechowski at: 202-546-5445 or via email: cwojciechowski@phada.org if you have any additional questions, concerns and/or recommendations related to any of the topics discussed in this article. Any future correspondence sent to the Department will be available in a future edition of the Advocate or online.


-Re-printed with permission from PHADA Advocate (Vol. 32, No.6) April 5, 2017-

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