On December 27, HUD issued a notice announcing allocations, common application, waivers, and alternative requirements for Community Development Block Grant-Disaster Recovery (CDBG-DR) to the state of Texas. The notice allocates $57,800,000 of CDBG-DR funds to the State of Texas in response to Hurricane Harvey. Funds must be used only for specific disaster recovery related purposes. The notice is applicable starting January 2, 2018.

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On December 23, the United States District Court for the District of Columbia ordered HUD to implement the mandatory components of the Small Area FMR rule on January 1, 2018 (preliminarily enjoined HUD’s suspension of mandatory FMRs). Those PHAs that are in one of the twenty-four designated metropolitan areas must implement Small Area FMRs. Previously, HUD had suspended the mandatory implementation of Small Area FMRs citing concerns about  the potential harm Small Area FMRs will have on vulnerable households from a recently published Interim Report on the Small Area FMR Demonstration (which was testing the efficacy of Small Area FMRs), among other reasons.

Moving forward, NAHRO will take a two-pronged approach on this issue. First, NAHRO will work with HUD to help PHAs implement Small Area FMRs as quickly as possible. Second, NAHRO will explore options to grant PHAs greater flexibility in serving vulnerable households with respect to this and other issues.

Additional information on the court’s reasoning can be found by clicking on the link below.

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On Friday, December 22, HUD will withdraw five proposed rules in an effort to reduce regulatory and financial burdens. As HUD is only withdrawing proposed rules that have yet to go into effect, PHA operations will not be impacted. PHAs are not required to follow proposed rules. However, NAHRO had previously expressed concerns with some of these proposed rules and is glad to see that HUD will not be moving forward with flawed final rules. HUD’s action is consistent with Executive Order 13771 that requires at least two prior regulations be identified for removal for every new regulation issued and Executive Order 13777 that established a Regulatory Task Force aimed at identifying agency regulations that should be repealed, replaced, or modified.

The five proposed rules to be withdrawn include:

• Demolition or Disposition of Public Housing Projects and Conversion of Public
  Housing to Tenant-Based Assistance (79 FR 62249, October 16, 2014);
• Streamlining Requirements Applicable to Formation of Consortia of Public Housing
  Agencies (79 FR 40019, July 11, 2014);
• Public Housing: Physical Needs Assessments (76 FR 43219, July 20, 2011);
• Floodplain Management Protection of Wetlands; Minimum Property Standards for
  Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard (81 FR 74967, October 28, 2016);
• Homeless Emergency Assistance and Rapid Transition to Housing Rural Housing
  Stability Program (78 FR 18725, March 27, 2013).

NAHRO has long advocated for reduced regulatory burden from HUD, and had serious concerns with  HUD’s demolition/disposition proposed rule, streamlined consortia proposed rule, floodplain management proposed rule, and HUD’s proposed changes to Physical Needs Assessments (PNAs) that would have required MTW agency PHAs, and PHAs with 250 units or less to perform PNAs.

Again, withdrawing these proposed rules will not impact PHA operations as PHAs are not required to comply with proposed rules.

NAHRO’s comment letters on the withdrawn proposed rules can be found here (members only).

NAHRO’s comment letter on reducing regulatory burden can be found here (members only). 

According to sources familiar with the on-going negotiations of the tax reform bill, including the Wall Street Journal, the final package will not repeal Private Activity Bonds (PAB), a huge potential win for NAHRO members who advocated strongly against the House-proposed elimination. There is no word yet on the status of New Market Tax Credits or the Historic Preservation Tax Credit.

While PAB appears to be preserved, it is possible that the bill will make changes to the program. We’re unsure at this point what the impact of potential changes to PAB would have on the Low-Income Housing Tax Credit and affordable housing production. NAHRO will continue to update its members as more information is available.

The tax reform conference committee is expected to approve the report tomorrow, at which point either the full text of the bill or the conference report summary will be publicly available. The Senate will begin consideration of the bill on Monday, aiming for final passage on Tuesday. The bill then goes to the House for final approval. If passed by both chambers, the President is expected to immediately sign the bill.

Meanwhile, the House introduced bill text for the third continuing resolution (CR) of FY 2018. The current CR expires on Friday, December 22. The House-proposed bill would provide funding for the government until Friday, January 19. It also includes the House’s FY 2018 Defense Appropriations bill and an extension of the Children’s Health Insurance Program (CHIP) and other health programs. The House is likely to pass the bill, but the Senate is not expected to adopt it with the Defense bill included. It’s unclear whether the Senate will simply pass the CR stripped of the Defense spending bill or if there are other concessions that Democrats will require in exchange for their procedural votes to move the bill forward. If Congress does not act quickly enough, the government will shutdown on Saturday, December 23 at 12:01 am ET.

Also expected to be released on Friday is a disaster relief supplemental package that could be considered in conjunction with the CR or as a stand-alone bill. Congressional leadership has prioritized approving the bill prior to the holidays. The administration released a $44 billion disaster package last month, a request that included the conversion of the Community Development Block Grant Disaster Relief (CDBG-DR) program into a competitive grant program to help communities that have experienced “major flood disasters” in the past four years. Congress is expected to ignore that request and increase the size of the package substantially. This will be the third disaster supplemental passed since September and lawmakers already recognize the necessity for a fourth supplemental in early 2018.

Today, HUD has made publicly available the rule implementing triennial recertifications from the Fixing America’s Surface Transportation (FAST) Act. HUD has also made available pre-publication copies of notices on EnVision Centers, Small Area FMR Designations, and a Family Self-Sufficiency (FSS) Performance Measurement System. Additionally, HUD published a PIH notice on the Operating Fund Subsidy Calculations for 2018. Additional information on each of these notices is listed below.

• Advanced Notice of EnVision Center Demonstration (pre-publication copy here) – HUD is seeking comments on a new Demonstration that is designed to test the effectiveness of collaborative efforts by government, industry, and nonprofit organizations on accelerating the “economic mobility of low-income households.” Ten communities are anticipated to participate in the Demonstration. The Demonstration is meant to test a “new service-delivery mechanism.” EnVision Centers will provide communities with a centralized hub for support in the following areas: 1) Economic Empowerment; 2) Educational Advancement; 3) Health and Wellness; and 4) Character and Leadership. There will be a 60 day comment period. Comment Due Date: February 12, 2018.
• FAST Act Triennial Recertifications (pre-publication copy here) – This interim final rule expands the Streamlining Final Rule—PIH 2016-05 (HA)–issued in 2016, that streamlined income determination for any fixed source of income, among other things. The current streamlining rule does not have a requirement that fixed income be a certain percentage of total income, however it requires a non-fixed income source to be recertified each year. This implementation of the FAST Act language allows any family with at least 90 percent of their income coming from a fixed-source to recertify all of their income every three years. There are certain other changes that this rule makes too. There will be a 30 day comment period and and an effective date of 90 days after tomorrow’s official publication in the Federal Register. Comment Due Date: January 11, 2018. Effective Date: March 12, 2018.
• Small Area Fair Market Rents (FMRs) Mandatory Implementation Suspension (pre-publication copy here) – Using the authority provided by regulation, HUD suspended the mandatory implementation of Small Area FMRs in most places this past summer in response to an Interim Evaluation of the Small Area FMR Demonstration. The evaluation found that while voucher holders were “slightly more likely” to live in high-rent zip codes, Small Area FMRs also caused a loss of affordable housing stock (fewer units were affordable with vouchers) and increased cost burdens on vulnerable households. Although not required by the Small Area FMR rule, HUD is seeking comments on the suspension of the mandatory aspects of the rule; the comment period will last for 30 days. Comment Due Date: January 11, 2018.
• Family Self-Sufficiency Performance Measurement System (pre-publication copy here) – this notice details a system to measure performance of FSS programs that receive program coordinator grants. The proposed system would involve three metrics: 1) Earning Performance Measurement (50%); 2) Graduation rate (30%); and 3) Participation Rate (20%). The Earning Performance Measurement would represent “the difference between the earnings growth of FSS participants and the earnings growth of other similar households within the PHA.” This would help control for differences in local economic conditions. The system would use data that HUD believes accurately captures performance and is already reported. There will be a 45 day comment period. Comment Due Date: January 26, 2018.
• Public Housing Operating Fund Subsidy Calculations for 2018 (PIH 2017-27) – The notice details the Operating Fund Calculations for PHAs for the 2018 calendar year. It is similar to prior notices detailing these calculations.

Additional information on all of these topics will be provided to NAHRO members.