42 USC 1437w - Transfer of management of certain housing to independent manager at request of residents

(a) Authority 
The Secretary may transfer the responsibility and authority for management of specified housing (as such term is defined in subsection (h) of this section) from a public housing agency to an eligible management entity, in accordance with the requirements of this section, if
(1) a request for transfer of management of such housing is made and approved in accordance with subsection (b) of this section; and
(2) the Secretary or the public housing agency, as appropriate pursuant to subsection (b) of this section, determines that
(A) due to the mismanagement of the agency, such housing has deferred maintenance, physical deterioration, or obsolescence of major systems and other deficiencies in the physical plant of the project;

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(B) such housing is located in an area such that the housing is subject to recurrent vandalism and criminal activity (including drug-related criminal activity); and
(C) the residents can demonstrate that the elements of distress for such housing specified in subparagraphs (A) and (B) can be remedied by an entity or entities, identified by the residents, that has or have a demonstrated capacity to manage, with reasonable expenses for modernization.
(b) Request for transfer 
The responsibility and authority for managing specified housing may be transferred only pursuant to a request made by a majority vote of the residents for the specified housing that
(1) in the case of specified housing that is owned by a public housing agency that is designated as a troubled agency under section 1437d (j)(2) of this title
(A) is made to the public housing agency or the Secretary; and
(B) is approved by the agency or the Secretary; or
(2) in the case of specified housing that is owned by a public housing agency that is not designated as a troubled agency under section 1437d (j)(2) of this title
(A) is made to and approved by the public housing agency; or
(B) if a request is made to the agency pursuant to subparagraph (A) and is not approved, is subsequently made to and approved by the Secretary.
(c) Capital and operating assistance 
Pursuant to a contract under subsection (d) of this section, the Secretary shall require the public housing agency for specified housing to provide to the manager for the housing, from any assistance from the Capital and Operating Funds under section 1437g of this title for the agency, fair and reasonable amounts for the housing for eligible capital and operating activities under subsection (d)(1) and (e)(1) of section 1437g of this title. The amount made available under this subsection to a manager shall be determined by the Secretary based on the share for the specified housing of the aggregate amount of assistance from such Funds for the public housing agency transferring the housing, taking into consideration the operating and capital improvement needs of the specified housing, the operating and capital improvement needs of the remaining public housing units managed by the public housing agency, and the public housing agency plan of such agency.

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(d) Contract between Secretary and manager 

(1) Requirements 
Pursuant to the approval of a request under this section for transfer of the management of specified housing, the Secretary shall enter into a contract with the eligible management entity.
(2) Terms 
A contract under this subsection shall contain provisions establishing the rights and responsibilities of the manager with respect to the specified housing and the Secretary and shall be consistent with the requirements of this chapter applicable to public housing projects.
(e) Compliance with public housing agency plan 
A manager of specified housing under this section shall comply with the approved public housing agency plan applicable to the housing and shall submit such information to the public housing agency from which management was transferred as may be necessary for such agency to prepare and update its public housing agency plan.
(f) Demolition and disposition by manager 
A manager under this section may demolish or dispose of specified housing only if, and in the manner, provided for in the public housing agency plan for the agency transferring management of the housing.
(g) Limitation on PHA liability 
A public housing agency that is not a manager for specified housing shall not be liable for any act or failure to act by a manager or resident council for the specified housing.
(h) Definitions 
For purposes of this section, the following definitions shall apply:
(1) Eligible management entity 
The term eligible management entity means, with respect to any public housing project, any of the following entities:
(A) Nonprofit organization 
A public or private nonprofit organization, which may
(i) include a resident management corporation; and
(ii) not include the public housing agency that owns or operates the project.
(B) For-profit entity 
A for-profit entity that has demonstrated experience in providing low-income housing.
(C) State or local government 
A State or local government, including an agency or instrumentality thereof.
(D) Public housing agency 
A public housing agency (other than the public housing agency that owns or operates the project).

The term does not include a resident council.

(2) Manager 
The term manager means any eligible management entity that has entered into a contract under this section with the Secretary for the management of specified housing.
(3) Nonprofit 
The term nonprofit means, with respect to an organization, association, corporation, or other entity, that no part of the net earnings of the entity inures to the benefit of any member, founder, contributor, or individual.
(4) Private nonprofit organization 
The term private nonprofit organization means any private organization (including a State or locally chartered organization) that
(A) is incorporated under State or local law;
(B) is nonprofit in character;
(C) complies with standards of financial accountability acceptable to the Secretary; and
(D) has among its purposes significant activities related to the provision of decent housing that is affordable to low-income families.
(5) Public nonprofit organization 
The term public nonprofit organization means any public entity that is nonprofit in character.
(6) Specified housing 
The term specified housing means a public housing project or projects, or a portion of a project or projects, for which the transfer of management is requested under this section. The term includes one or more contiguous buildings and an area of contiguous row houses, but in the case of a single building, the building shall be sufficiently separable from the remainder of the project of which it is part to make transfer of the management of the building feasible for purposes of this section.