The V.I. Housing Authority has moved out of HUD’s “Troubled” designation after eight months and is now classified as a Substandard Performer, marking a significant improvement for the agency even as low occupancy, thousands of work orders and more than $1.2 million in tenant receivables remain obstacles to further progress.
The designation change applies specifically to the V.I. Housing Authority, or VIHA, and should not be confused with the separate federal matter involving the V.I. Housing Finance Authority, or VIHFA. The two are distinct agencies. VIHA operates the territory’s public housing portfolio and is assessed under HUD’s Public Housing Assessment System, while VIHFA administers housing-finance, community-development and major federal grant programs.
HUD announced an immediate funding suspension involving VIHFA on July 20 pending an investigation. VIHFA responded the following day that it was reviewing HUD’s correspondence and working with the department to address outstanding concerns. VIHA’s improved PHAS designation does not represent a resolution of that separate VIHFA matter.
VIHA Executive Director Dwayne Alexander outlined the Housing Authority’s progress during a meeting of the Senate Committee on Housing, Transportation and Telecommunications. VIHA achieved a PHAS score of 62, lifting it out of Troubled status but leaving the authority short of the requirements for Standard Performer status.
Alexander said VIHA accomplished the transition in eight months despite being given three years to satisfy the requirements of a Recovery Agreement. The authority has now entered into a Performance Improvement Action Plan containing measurable actions and deadlines designed to move it first to Standard Performer status and eventually to High Performer.
The plan calls for VIHA to improve physical conditions, increase occupancy, reduce vacancies and work-order backlogs, strengthen unit and inventory controls, manage operational and financial risks, advance major redevelopment projects and protect essential resident services.
Occupancy remains among the authority’s most pressing challenges. Alexander said VIHA must move leasable vacant units through rehabilitation and turnover more quickly while resolving the status of units associated with redevelopment or disposition.
VIHA currently has 1,716 of 2,046 units occupied, representing a territory-wide occupancy rate of 83.9 percent. The St. Thomas-St. John District has an occupancy rate of 93.7 percent, while St. Croix stands at 71.6 percent. On St. Croix, many of the vacancies are concentrated at John F. Kennedy Terrace and Williams Delight Villas, where Alexander said units are “undergoing modernization, rehabilitation, demolition, disposition, or other repositioning.”
The occupancy rate has a direct effect on VIHA’s PHAS performance. Under HUD’s scoring framework, occupancy below 90 percent earns no points under the applicable management occupancy measure, while an occupancy rate below 93 percent receives no occupancy points under the Capital Fund indicator.
VIHA is targeting an occupancy rate of 88 percent by December 31, 2026, followed by 94 percent by December 31, 2027. At the authority’s current portfolio size, that would require approximately 85 additional occupied units to reach the first target and 208 additional occupied units to reach the second.
The authority is also pursuing the removal of 244 units considered unsuitable for habitation from its portfolio. Alexander said doing so would “give a more accurate picture of the Authority’s occupancy performance,” since removing units approved for demolition would reduce the number of units counted in the portfolio.
At John F. Kennedy Terrace, 144 units are located within what VIHA describes as a propane blast zone and meet HUD criteria for Section 18 demolition. Alexander said the authority is preparing an application seeking HUD approval. Another 100 units at Williams Delight Villas also meet demolition criteria, with the necessary environmental review being pursued.
Modernization and rehabilitation are another major component of VIHA’s improvement effort. Vacant-unit rehabilitation and hurricane-related repairs are among the authority’s immediate priorities, with Alexander emphasizing the connection between restoring deteriorated apartments and increasing occupancy.
“Improving physical conditions cannot be separated from improving occupancy,” he said.
VIHA is simultaneously confronting a work-order system containing 4,170 outstanding requests, a figure Alexander acknowledged “is too high and requires sustained corrective action.”
He cautioned, however, that the number does not necessarily represent 4,170 repairs that remain physically unfinished. Some work may have been completed without the corresponding work order being closed in VIHA’s system, while other orders may relate to units that have since undergone full rehabilitation.
Director of Asset Management Chasity Jackson said the database contains work orders dating back as far as 50 years, underscoring the extent of the record-cleanup challenge.
Despite the overall backlog, VIHA reported that all 96 emergency work orders received during its latest reporting period were completed within the required 24-hour period.
The Performance Improvement Action Plan also requires preventive maintenance schedules for each property and the “timely correction of life-threatening and severe deficiencies,” Alexander said.
The authority is working to strengthen its maintenance operation on St. Thomas, where the outstanding work-order count increased from 3,484 to 3,551. Estate Bovoni alone accounts for 1,418 open work orders.
Financial performance presents another challenge. VIHA is attempting to improve revenue collection through tenant recertification and income verification.
“Where income was underreported, VIHA adjusts the rent and, when appropriate, sets up a repayment agreement for the amount owed,” Alexander said.
Tenant accounts receivable currently total $1.247 million across 545 households. Of that amount, $734,181 — nearly 59 percent — consists of balances more than 90 days old.
“A high receivable balance can lower VIHA’s management score, weaken its overall PHAS performance, and slow the Authority’s progress from Substandard to Standard performer and, ultimately, High Performer,” Alexander warned.
VIHA must also meet spending deadlines associated with its Capital Fund grants. Under the Performance Improvement Action Plan, at least 90 percent of an applicable grant must be obligated within 24 months, while 100 percent must be expended within 48 months.
The authority’s progress out of Troubled status represents one step in that recovery effort, but Alexander’s testimony made clear that achieving Standard Performer status will depend on sustained improvement in occupancy, property conditions, maintenance operations, financial controls and capital spending.
