HUD Releases Updated Guidance on Flat Rents

On November 15, HUD’s Office of Public and Indian Housing (PIH) released Notice PIH-2017-23 (HA), entitled “Updates to Flat Rent Requirements.” This Notice supersedes and replaces the guidance provided in Notice PIH 2015-13 and clarifies HUD’s interpretation of the statutory amendment related to flat rents.This notice also serves as supplemental guidance to the interim rule published on September 8, 2015 with an effective date of October 8, 2015.

The FY 2014 Appropriations Act requires PHAs to establish flat rents at no less than 80 percent of the applicable Fair Market Rent (FMR). However, if a new flat rent amount for a unit increased a family’s existing rental payment by more than 35 percent, then the new flat rent amount was required to be phased in as necessary to ensure that the family’s existing rental payment did not increase by more than 35 percent annually.

The FY 2015 Appropriations Act further amended the public housing rent requirements for flat rents. Specifically, the statute was amended to require that flat rents must be set at no less than the lower of 80 percent of the fair market rent or at the discretion of the Secretary if the Secretary determines a different amount more accurately reflects local market conditions. This can be done by a PHA applying for an exception waiver.  

Notice PIH-2017-23 provides guidance and clarification on using smaller geographic area FMRs to determine flat rents, applying for exception flat rents, incorporating utility expenses into flat rents, complying with flat rent policies on an annual basis, and conducting annual rent options.

How Will MTW “Accommodate Regionalization”?

On the Brookings website, there’s a joint post by Greg Russ, the Executive Director and CEO of the Minneapolis Public Housing Authority, and Robin Snyderman, a Nonresident Senior Fellow of Brookings’s Metropolitan Policy Program, which discusses the new Moving To Work (MTW) Expansion. The post focuses on the MTW expansion enabling legislation which allows HUD to “accommodate regionalization” in its MTW expansion plans.

What this legislative language specifically means is unclear, but the opportunity exists to use the MTW Expansion and its single-fund flexibilities to create a “a variety of public housing initiatives to operate in a regional market across agency boundaries.” Regional MTW approaches may be particularly relevant in Baltimore, Chicago, and the Twin Cities, where MTW agencies are located in high-poverty areas surrounded by other PHAs in lower-poverty jurisdictions.

In fostering a regional MTW approach, agencies will still need to properly balance the greater cost of mobility initiatives with the tradeoff of potentially serving fewer families. The post notes that one of the benefits of a regional MTW approach may be “the cost-savings associated with reduced administrative burdens of cross-jurisdictional activity.”

The post explores other concepts of what MTW regionalization may look like.

The entire post can be read here.