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The Richmond Redevelopment and Housing Authority is defending itself after a federal assessment scored the agency at 58 out of 100, according to WWBT 12 On Your Side - a rating that drops Virginia's capital-city housing authority into HUD's "troubled" category and has drawn concern from Richmond's mayor.
RRHA Chief Executive Officer Steven Nesmith called a press conference on October 23 to challenge what he described as the record on the agency's Public Housing Assessment System score, while acknowledging the agency will not appeal the result.
The score, from a HUD assessment covering 2024 and released in late September, marks a fall from the agency's previous standard-performer rating and lands as the authority is pursuing a slate of redevelopment projects that depend on federal approvals and financing.
The Public Housing Assessment System is HUD's management tool for scoring housing authorities across four areas: physical condition, financial condition, management operations, and the Capital Fund program. An overall score below 60 percent designates an agency as troubled.
RRHA's 58 put it two points under that line. The agency's weakest area was management operations, where it scored 7 out of a possible 25 points, according to reporting by WWBT 12 On Your Side.
Nesmith attributed the low scores to two linked factors: residents not paying rent, and the resulting low unit occupancy. Unpaid rent became a serious issue for the authority after the COVID era, he said, with some residents owing more than $10,000. Because rental income funds the staffing and contractors who turn vacant units, delinquencies translate directly into units that sit offline longer - which then deepens the occupancy and revenue problem.
The agency weighed appealing the score but chose not to. Nesmith said staff identified a path that might have recovered a single additional point, and he concluded the effort was not worth it: "If you're going to get one additional point, that isn't going to make 60."
Instead, Nesmith said he wants the record corrected on timing. The assessment reflects 2024 performance, and he argued corrective steps taken since then are not reflected in the number. RRHA is estimating it will score between 60 and 62 on the PHAS assessment for its next fiscal year - enough to climb back over the troubled line if the projection holds.
Nesmith also stressed that the troubled designation does not change the agency's current operations, ticking through the authority's ongoing functions at the press conference. Under federal rules, however, troubled agencies face closer HUD oversight and can be required to enter into recovery agreements with corrective action plans and timetables.
Richmond Mayor Danny Avula told 12 On Your Side in a statement that the designation worries his administration because of what it could mean for the authority's redevelopment pipeline.
"Redeveloping public housing remains one of my administration's highest priorities, which is why RRHA's troubled designation is concerning," Avula said. "It could make it more difficult for their authority to secure the federal approvals and financing needed to advance redevelopment efforts."
In an email to the city council obtained by the station, Avula said addressing the causes of the low rating should be among the "highest priorities" for his office and the council. RRHA's redevelopment agenda includes major repositioning of its public housing stock, work that typically requires HUD sign-off at multiple stages.
PHAS scores shape an agency's relationship with HUD long after the assessment year closes. High performers earn reporting relief and less frequent assessments. Troubled agencies face the opposite: closer monitoring, potential recovery agreements, and in the worst cases the possibility of administrative receivership. Between those poles, a score on the wrong side of 60 can complicate financing conversations, repositioning approvals, and local political support.
RRHA's situation also illustrates how the indicators interact. Management operations - the indicator where the agency scored worst - is sensitive to exactly the conditions Nesmith described: occupancy rates, rent collection, and the unit turnaround pipeline. An agency can look stable on physical condition and still fall under 60 on the strength of management and financial metrics alone.
For other authorities watching their own numbers, the case is a reminder that PHAS results lag reality by design - the assessment released in September covered 2024 - and that the remediation work an agency does today will not show up in federal scores for a year or more.
RRHA says it is targeting a score of 60 to 62 on its next assessment, which would restore standard-performer status. The agency's rent-collection and occupancy efforts will determine whether that projection holds.
At City Hall, the mayor's office has signaled it will stay engaged, treating the designation as a city-level problem because of its implications for redevelopment. For residents of RRHA's roughly 3,000 public housing units, the stakes of that recovery are direct: the troubled label is precisely what the agency's revitalization plans cannot afford to carry.
The assessment behind RRHA's designation is built from four weighted indicators. Physical condition carries 40 points and is driven by property inspections; financial condition and management operations carry 25 points each; the Capital Fund program indicator carries 10. The scores combine into a single percentage that sorts agencies into three designations.
High performers - agencies scoring at least 90 overall, with at least 60 percent of the available points in each of the physical, financial, and management indicators and at least half of the Capital Fund points - earn incentives including relief from some reporting requirements and less frequent assessments. Standard performers score at least 60 overall with the same indicator minimums. Anything below that line is troubled.
An agency can also land in troubled territory through a single indicator: scoring less than half of the Capital Fund points triggers the designation on its own. That structure means a balanced failure is not required - one weak pillar can pull the whole designation down.
Nesmith's explanation puts a spotlight on a challenge many mid-sized authorities share. When residents fall thousands of dollars behind, the authority loses the revenue it needs to employ the staff and contractors who prepare vacant units for new tenants. Units stay empty longer, occupancy falls, and the management operations indicator - which tracks exactly those metrics - deteriorates. The authority is then scored down for the operational symptoms of its revenue problem.
Post-pandemic rent delinquency has been stubbornly persistent across the public housing industry, and HUD has pointed to elevated tenant accounts receivable nationwide. Agencies that leaned on eviction moratoria-era repayment practices have been rebuilding collections slowly, and RRHA's candid account - residents owing more than $10,000 in some cases - shows how deep the hole can get at the individual household level.
The authority's choice not to appeal is itself notable. PHAS appeals can recover points when data errors or verifiable circumstances warrant, but Nesmith's calculation - that a likely single point was not worth the effort - reflects a management judgment that the agency's energy is better spent on the operational fixes that will drive the next score.
Richmond's redevelopment plans make the timing of the designation especially awkward. Repositioning public housing - whether through conversion tools, demolition and rebuilding, or mixed-finance partnerships - requires HUD approvals, and lenders and investors read assessment scores as a proxy for agency capacity. A troubled label does not automatically block a project, but it adds scrutiny at every step.
Avula's email to the council signals that City Hall understands the dependency: the city's affordable housing goals run through RRHA, and RRHA's ability to execute runs through its federal standing. The mayor's framing - treating the score's causes as a top municipal priority - is the response housing policy experts generally recommend, because the operational fixes (collections, occupancy, turnover time) are the same ones that determine whether redevelopment projects pencil out.
RRHA's press conference was unusual - housing authorities rarely call reporters in to discuss a failing federal grade - but the strategy reflects a reality of the PHAS cycle: the score being discussed publicly is always a year or more old, and agencies need room to show current progress. Nesmith's projection of a 60 to 62 score next cycle is a public commitment his staff will now have to hit, with the collections and occupancy numbers to prove it.
For other authorities, the case underlines three practices. Track the indicator-level math, not just the total: RRHA's 58 came with a 7-of-25 management score, and indicator thresholds can designate an agency even when the overall number looks close. Treat rent collection as an operations issue, not just a finance issue, because it drives occupancy and turnover metrics that PHAS measures directly. And plan public communication around the lag - local officials and lenders react to the designation in front of them, not the recovery already underway.
The next assessment cycle will show whether Richmond's fixes took hold. Until then, the agency operates under the designation it has, with its redevelopment agenda - and its residents - waiting on the recovery it has promised.
Federal housing officials have signaled in recent guidance and rulemaking that they view delinquency-driven vacancies as a management failure rather than an inevitability, and the PHAS framework bakes that judgment into scores. For an agency in Richmond's position, every point of occupancy recovered translates directly into indicator recovery, which is why Nesmith's timeline - corrective steps already taken, a projected return to standard performer next cycle - is both an operational plan and a political one.
Residents, meanwhile, sit at the center of the recovery math: aggressive collection restores the revenue that funds maintenance and turnover, but the households thousands of dollars behind are the same households the authority exists to serve. How RRHA threads that needle - repayment agreements, hardship policies, and eviction as a last resort - will shape both its next score and its standing with the community it houses.
The Richmond Redevelopment and Housing Authority scored 58 out of 100 on a HUD Public Housing Assessment System review released in late September, designating the agency "troubled."
RRHA's weakest indicator was management operations at 7 of 25 points; CEO Steven Nesmith blamed unpaid rent and the low occupancy it causes, noting some residents owe more than $10,000.
Nesmith called a press conference October 23 to correct the record - the assessment covers 2024 - but said the agency will not appeal, since the likely gain of a single point would not reach 60.
Mayor Danny Avula said the designation could complicate the federal approvals and financing behind the city's public housing redevelopment agenda, a top priority of his administration.
RRHA projects a score of 60 to 62 on its next assessment, which would restore standard-performer status; until then it operates under the closer HUD oversight that troubled status brings.
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