Economies of Scale

Housing authorities throughout the United States currently are facing the challenge to increase the supply of quality, affordable housing units with far less reliance on federal funding. In this time of economic uncertainty, the St. Petersburg Housing Authority (SPHA) believes that it is imperative to develop forward-thinking, cost-saving strategies to provide affordable housing to our growing community, while maintaining excellent levels of service.

Nationally recognized as a leader and innovator in the field of affordable housing, SPHA introduced our Economies of Scale (EOS) program in 2004 as a means to maximize efficiency of service while minimizing budget impacts. The program is a collaborative effort between several local municipal housing authorities, including the SPHA, the Clearwater Housing Authority (CHA) and the Dunedin Housing Authority (DHA).

The genesis of the EOS initiative came from the Pinellas Realtor Organization, which combined two local realtor groups in order to reduce costs and improve overall cost efficiency. Using the EOS approach, the participating housing authorities have adopted efficiency strategies, realizing significant savings since the program began.

In order to determine which areas of service fall under EOS agreements, the housing authorities first examine their resources, abilities and skill sets, and then jointly make the decision as to which agency is in the best position to provide the service. Independent board action by resolution is required by the respective Boards of Commissioners in order to enact EOS agreements.

Current areas of EOS implementation include:

• Executive Management
• Management Information Services
• Personnel Services
• Financial Management Services
• Public Housing Property Management

Through the implementation of the EOS agreements, the housing authorities are able to save significantly by cost sharing, while providing a higher quality of service to residents. By using the strongest element of each participating authority, we can operate more efficiently with less staff and save much-needed dollars. The money saved by SPHA through the EOS agreements is used to offset loss of federal funding, to improve assets and programs, and as capital in the acquisition or development of affordable housing.

Proven benefits of the EOS model include:

• More effective delivery of housing services
• Efficiency through a reduction in costs
• Ability to maintain higher service level in many areas with reduced funding
• Similar service needs resulting in pooled expertise
• Higher Performer status resulting in increased capital fund grant dollars and less regulatory requirements
• Savings in training dollars spent across agencies