This study was designed to estimate capital needs for the public housing stock as of 1998 and to support HUD in revising the allocation rules for distributing funds to public housing authorities under the new Capital Fund. The study focuses on two key measures of need: existing modernization needs and accrual needs. Existing modernization needs are the costs of repairs and replacements beyond ordinary maintenance required to make the housing decent and sustainable with modest amenities. Accrual needs are the costs necessary to cover expected ongoing repairs and replacements beyond ordinary maintenance, assuming that existing modernization needs are met. Estimates of need are based on physical inspections at a sample of 684 developments containing 229,973 units in 219 housing authorities, which represent the vast majority of public housing units nationwide.