Proposed Cost Savings Do Not Account for $1.8135 Billion Cut to Public Housing Program

Released on Tuesday, May 23, President Trump’s proposed budget includes significant cuts to the Public Housing Program, especially regarding the Operating and Capital Funds. Although the budget also proposes a set of policies aimed at reducing costs of operating the Public Housing program, these policies would not account for the combined $1.8135 billion cut proposed to the program by the administration. These cuts would only increase the challenges already faced by PHAs across the country in ensuring low-income seniors, families, veterans, and disabled individuals continue to have to access to safe, secure, affordable housing.

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NAHRO’s Policy Points on the MTW Expansion Operations Notice

On May 4, HUD reopened the comment period of the January 23, 2017 Moving to Work (MTW) Operations Notice for an additional 30 days. NAHRO has put together a document discussing our policy points to help orient interested parties’ comment letters to HUD. The document focuses on NAHRO’s responses to the specific topics HUD inquired about in their solicitation of comments in January. Comments are due June 5, 2017.

NAHRO’s policy points can be found here, and NAHRO’s initial comment letter submitted to HUD in March can be found here.



The Continued Importance of Affordable Housing and “Poverty, Politics and Profit”

On May 9, PBS aired a Frontline and NPR investigation on federal dollars that are spent on affordable housing, examining why so few low-income Americans receive the help they need. Central themes of the investigation highlighted the urgency for additional resources needed to address the nation’s growing affordable housing crisis. Currently, one in four renter households spends more than 50 percent of their income on housing, and there is no state in the U.S. where a worker earning full-time minimum wage can afford a modest, one-bedroom apartment. NAHRO welcomes discussion on the importance of addressing our nation’s affordable housing needs, which continue to escalate, however, we would like to clarify a number of points in response to this program.

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Operating Fund Proration Increases as Funding Decreases

According to HUD, PHAs will see an increase in the proration for the Public Housing Operating Fund from 85 to 92.9 percent. This reflects funding included in the appropriations bill, or omnibus, recently passed by Congress. The 2017 omnibus provides $4.4 billion to support the operation and management of public housing. This is $100 million less than 2016 funding levels, $100 million less than what was proposed by the 2017 House Appropriations bill, and $175 million less than the Senate bill. Although 2017 Operating Fund levels are less than 2016 levels, the funding provided by the omnibus is sufficient to fund 92.9 percent of PHAs’ anticipated formula eligibility for 2017, higher than the 2016 proration. This is due to declines in Operating Fund formula eligibility from 2016 to 2017. The decline in formula eligibility was caused by high formula income inflation factors and utility expense level deflation due to declining oil and natural gas costs.

Although the proration in 2017 is higher than the proration in 2016, PHAs may still receive smaller subsidies in 2017 than 2016 due to the overall decline in Operating Fund formula eligibility. Less money will be made available to the Operating Fund overall due to the impact of these inflation and deflation factors on formula eligibility. As not all PHAs have seen increases in incomes or declines in utility expenses, some PHAs will experience declines in Operating Fund subsidies for 2017 as compared to 2016, even though the proration for 2017 is higher. PHAs need to be prepared since this issue will not disappear next year without changes to the subsidy eligibility formula. Any formula change would be a substantial process that would result in gainers and decliners for Operating Fund subsidy distribution, and will involve a lengthy process at HUD headquarters.

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HUD Releases Smoke-Free Fact Sheets

Recently, HUD released five new fact sheets relating to the “Instituting Smoke-Free Public Housing” Final Rule. The fact sheets include:

PHAs have until July 30, 2018 to implement smoke-free policies for their public housing properties. Policies must prohibit smoking within all public housing units and common spaces. Smoking must also be prohibited within 25 feet of all public housing buildings, including administration buildings.

HUD released additional guidance on instituting and enforcing smoke-free public housing policies in February.

HUD Releases Guidance on Smoke-Free Rule

On February 15, HUD Released Notice PIH-2017-03 “HUD Guidance on Instituting and Enforcing Smoke-Free Public Housing Policies.” The Notice provides regulatory guidance to PHAs regarding the implementation of the “Instituting Smoke-Free Public Housing(members only) Final Rule, issued in December, 2016. PHAs have 18 months after the effective date of the final rule to implement smoke-free policies. The effective date has currently been pushed back due to the Administration’s regulatory freeze.

The Notice describes required PHA plan and lease amendments, flexibilities afforded to PHAs while creating their smoke-free policy, signage requirements, funding, and designated smoking areas. The Notice further discusses tools that PHAs may use to enforce and monitor their smoke-free policies. These include graduated enforcement approaches, intensified compliance monitoring, lease terminations or transfers, and evictions.

The final rule also requires PHAs to provide reasonable accommodation when needed. Although reasonable accommodation cannot include allowing an individual to smoke in a restricted area, reasonable accommodations can be made if individuals have trouble accessing designated smoking areas. Reasonable accommodations must be made on a case-by-case basis.

Lastly, the Notice encourages PHAs to work closely with residents in the development on the smoke-free policies, and provides resources for best practices, smoking cessation, and PHA and resident training.

Urban Institute Releases MTW Mobility Report

The Urban Institute recently released a report titled “Moving to Work and Neighborhood Opportunity” that examines how MTW agencies have been able to use their status to promote mobility for their residents to “opportunity-rich” neighborhoods. These policies include “changes to the tenant-based Housing Choice Voucher (HCV) program or policies that increase the affordable housing supply in opportunity neighborhoods through the project-based voucher (PBV) program.”

The report examines 45 mobility-related initiatives in place, proposed but not implemented, or closed out as of 2015, implemented by the existing 39 MTW agencies. The report specifically looks at four key MTW policy interventions that promote mobility: comprehensive mobility services (including mobility counselling and case management), incentives and supports for landlords, supports for tenants, and project-basing vouchers in “high-opportunity neighborhoods.” The report also examined MTW interventions that limit mobility. The reported notes that PHAs provided the following reasons for limiting mobility, “fairness, administrative burden, avoiding tenant evasion of work requirements, and limiting the amount of housing dollars leaving their jurisdiction.”

The report notes the limitations that come from relying solely on MTW plans and reports to catalog mobility-related efforts, however it justified the need to focus specifically on MTW agencies due to the “policy and funding flexibility that allows them to explore new approaches to providing housing assistance.”

Operating Fund Obligations for February Released

HUD has released their explanation of FY17 Operating Fund obligations for February on HUD’s 2017 Subsidy Processing website. The Department is providing an interim proration of approximately 85 percent for the Operating Fund. This proration may change later in the year to reflect the difference in the amount of the actual eligibility for final approved PHA subsidy requests and the FY17 Appropriation Bill. Congress has yet to pass a FY17 appropriations bill and is currently working off of a Continuing Resolution (C.R.) of FY16 appropriation levels.

HUD Releases Triennial Recertifications Interim Final Rule

On January 19, HUD published in the HUD Portal website the “Streamlining Administrative Regulations for Multifamily Housing Programs and Implementing Family Income Reviews under the Fixing America’s Surface Transportation (FAST) Act” Interim Final Rule. Due to a backlog at the Office of Management and Budget (OMB), the Interim Final Rule has not yet been published in the Federal Register. There will be a 30-day comment period and a 90-day effective date once published in the Federal Register. NAHRO will be tracking the Federal Register closely to inform members when the Interim Final Rule is published.  

Under this interim final rule, families with fixed-incomes are only required to undertake a full recertification every 3 years. However, if less than 90 percent of the family’s unadjusted income comes from a fixed-income, PHAs and owners must still verify and adjust non-fixed income sources annually. PHAs are not required to do this if 90 percent or more of their income comes from a fixed-source. PHAs may determine a family’s fixed income by applying a verified cost of living adjustment (COLA) to the individual sources of fixed income. In the case of a family with at least 90 percent of the family’s unadjusted income from fixed income, a PHA or owner using streamlined income verification may, but is not required to, adjust the non-fixed income.

This interim final rule also explicitly allows owners to make utility reimbursements of $45 or less (per quarter) on a quarterly basis, in order to eliminate the burdensome process of processing and mailing monthly reimbursement checks.

This interim final rule also allows PHAs to accept a family’s declaration of assets if they have net assets equal to or less than $5,000 without third-party verification. However, PHAs will be required to use third-party verification of all family assets every 3 years.

HUD is encouraging as many agencies as possible to adopt triennial recertifications. HUD will also put out guidance before the effective date on the rule and specifically defining “fixed-income” and COLA adjustments.

This interim final rule has not yet been published in the Federal Register. However, once published, it will go into effect 90-days after being published – continue checking the NAHRO blog for updates on its publication date.