On November 4, NAHRO staff attended a Central Office Cost Center (COCC) Listening Session at HUD Headquarters in Washington, DC. The listening session provided PHAs an opportunity to learn about HUD’s initial thoughts on how they plan to refederalize Section 8 and Section 9 dollars placed into COCCs and how HUD plans to determine fee reasonableness for fees paid by AMPs into the COCC. The session also allowed participants to provide feedback, discussion, and ask questions. HUD’s listening session does not constitute rulemaking, and HUD may continue changing their approach depending upon feedback received from the listening sessions.
HUD’s decision to refederalize COCC dollars stemmed from a 2014 OIG report that questioned the underpinning and validity of asset management in public housing. Among other things, the report recommended that HUD “refederalize” fee revenues from the Operating and Capital Funds that COCCs have earned since they began implementing asset management and eliminate the asset management fee. HUD is planning to implement a rule by December, 2017.
Important takeaways from the listening session included:
- HUD plans to continue to allow COCCs to charge existing fees, including the asset management fee, with some modifications.
- HUD’s actions will not impact Section 8 and 9 fees entered into the COCC before the implementation of a final rule.
- HUD plans to allow non-section 8 or 9 funds placed into a COCC to remain de-federalized. Section 8 and 9 fee income would remain federalized, with identified and specific expanded uses. Section 8 and 9 fees earned by COCC fee income would become fungible between Section 8 and 9 approved expenses and allowed to be used for other “expanded uses.”
- HUD may create two COCCs, one for Section 8 and 9 funding that would remain federalized, and one for non-Section 8 and 9 funding that would be de-federalized.
HUD is still trying to determine how to define “expanded use” for the Section 8 and 9 COCC. HUD does not want to limit PHAs’ ability to use COCC dollars as revenue for the development of other low-income projects. HUD is looking for feedback from PHAs to better understand what they use their COCC dollars for to help define “expanded use”. Please Email email@example.com to inform HUD of how your PHA uses your COCC dollars. This will ensure that their definition of “expanded uses” is as flexible as possible.
Principal Deputy Assistant Secretary Lourdes Castro Ramirez spoke to the session attendees noting that HUD’s Office of Public and Indian Housing (PIH) may reopen conversations with OIG and the Office of Management and Budget (OMB) on the matter.