HUD Study Finds Small Area FMRs Have Mixed Results

Last week, HUD published a report titled “Small Area Fair Market Rent Demonstration Evaluation: Interim Report,” which provides preliminary findings from HUD’s Small Area Fair Market Rent (FMR) Demonstration. The Small Area FMR Demonstration is a Demonstration of seven PHAs that have implemented Small Area FMRs in a variety of housing markets to test their effectiveness. The potential adverse impacts to Housing Choice Voucher (HCV) program participants that this report identifies is one of the reasons that HUD suspended implementation of mandatory Small Area FMRs.

While NAHRO is still in the process of reading through and analyzing the report, the key takeaways from it on the imposition of Small Area FMRs are the following: different housing markets are impacted differently; there are more families moving into areas of opportunity; there is a loss of affordable units; and there is an aggregate higher cost burden for families.

The evaluation looks at the effects of Small Area FMRs on 1) potential access to opportunity; 2) actual access to opportunity; and 3) costs and rents. Additionally, the study looks at costs to PHAs. Click below for a brief summary of the evaluation findings.

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HUD Suspends Mandatory Implementation of Small Area FMRs

Earlier this morning, HUD sent letters to PHAs suspending the mandatory implementation of Small Area Fair Market Rents (FMRs) for 23 of the 24 metropolitan areas which were originally designated as areas in which PHAs would have to use Small Area FMRs. Small Area FMRs are FMRs calculated by zip code, instead of a wider metropolitan area. Among other concerns, there was widespread concern among industry groups and PHAs that the mandatory imposition of Small Area FMRs would mean that new program participants would receive lower voucher subsidy amounts and without appropriate wrap-around services would be unable to find units in neighborhoods which would receive higher subsidies.

NAHRO has long stressed that the quick imposition of mandatory Small Area FMRs would lead to adverse consequences for program participants and is pleased that HUD listened to NAHRO’s concerns and made implementation of Small Area FMRs voluntary. HUD has only suspended the mandatory imposition of Small Area FMRs. PHAs may still choose to voluntarily apply them, if it is the appropriate action for their program participants and community. All other aspects of the Small Area FMR rule remain in place. The suspension will last until October 1, 2019 (for a 2020 implementation), unless the Small Area FMR rule is changed. The Small Area FMR mandatory implementation remains in effect for the Dallas-Plano-Irving, TX Metro Division.

In a letter to HUD, NAHRO previously suggested suspending the Small Area FMR designation using authority under 24 CFR § 888.113(c)(4)(iii). HUD followed NAHRO’s suggestion and suspended the mandatory imposition of Small Area FMRs using the NAHRO-suggested provision. NAHRO is pleased that HUD recognized the potential adverse impacts to program participants and is following the NAHRO-suggested steps to avoid those consequences. NAHRO looks forward to continuing to work with HUD collaboratively to find solutions to tackle tough problems.

NAHRO’s letter to HUD recommending suspending the mandatory imposition of Small Area FMRs can be found here.

NAHRO’s comment letter to HUD on the Small Area FMR rule can be found here.

HUD Announces $38 Million for Fair Housing Grants

In a press release on Wednesday, HUD announced that it was making $38 million available in fair housing grants to fight housing discrimination. The grants are a part of the Fair Housing Initiatives Program (FHIP), which provides funding to non-profits and other fair housing organizations to help people who have encountered housing discrimination. The due date for these notices of funding availability is September 18, 2017. The grants announced are listed below.

  • Education and Outreach Initiative grants (EOI) – grants for organizations that educate the public about their rights under federal law and other organizations that enforce certain local fair housing laws. $7,450,000 available by searching FR-6100-N-21-A on Grants.gov.
  • Fair Housing Organizations Initiative (FHOI) – grants to build “the capacity and effectiveness of non-profit fair housing organizations.” $500,000 available by searching FR-6100-N-21B on Grants.gov.
  • Private Enforcement Initiative grants –  grants for organizations that “conduct intake, testing, investigation and litigation of fair housing complaints.” $30.35 million available by searching FR-6100-N-21C on Grants.gov.

The entire press release can be read here.

TPV Allocation Differences in 2017 HCV Implementation Notice and TPV Survey

As mentioned earlier on this blog, HUD has published its Housing Choice Voucher (HCV) Program 2017 Funding Implementation Notice. According to HUD, the difference in how Tenant Protection Vouchers (TPVs) are allocated between 2017 and prior years is that in 2017–for Public Housing TPV actions–the number of TPVs that will be awarded will be considered at the time of the Special Applications Center (SAC) approval of the demolition or disposition application. This is in contrast to prior years, where HUD considered the number of vouchers to be awarded at the time of the TPV funding application to HUD.

Additionally, the Housing Voucher Financial Management Division has sent out an email discussing a survey on anticipated needs for tenant protection action for July to December of 2017. HUD notes that this data collection is important for “new increment leasing projections and needs for CY 2017 and HAP renewal for 2018 and 2019.” Questions about the survey can be directed to PIH_Conversion_Actions@hud.gov. The survey is due by August 24, 2017 at 5 pm ET.

The survey instructions can be found here.

The survey spreadsheet can be found here.

HCV Shortfall Funding Deadline This Friday (7/28/17) at 5 pm ET

As previously mentioned on this blog, the deadline for applying for Shortfall Prevention Team (SPT)-confirmed shortfalls in September, October, or November 2017 is July 28 by 5 pm ET.

Shortfall Funding – There are the two scenarios under which a PHA can apply for shortfall funding. In Scenario 1, HUD’s Shortfall Prevention Team (SPT) has confirmed the shortfall, while in Scenario 2, PHAs have managed their budget in a reasonable and responsible manner, but are later confirmed to be in a SPT-confirmed shortfall position. PHAs with questions related to the calculation of HUD-confirmed shortfall should contact the SPT at 2017ShortfallInquiries@hud.gov.  The subject line should include the PHA’s number. There are certain submission requirements that must be met. While Category 1 shortfall set-aside funding will remain available throughout CY 2017, PHAs with SPT-confirmed shortfalls in September, October, or November 2017 must submit an application no later than 5 pm ET Friday, July 28. For PHAs with SPT-confirmed shortfalls for December 2017, the application deadline is 5 pm ET, Monday, January 22, 2018. Requests can be be made via email (2017Set-AsideApplications@hud.gov2017Set-AsideApplications@hud.gov) or via mail.

More information about applying for shortfall funding can be found in PIH 2017-10 (HA).

FY 2017 HCV Implementation Broadcast Posted

Following quickly on the heels of publishing the FY 2017 Housing Choice Voucher Funding Implementation Notice, HUD has posted a video on YouTube to review the notice.  The video briefs stakeholders on the Consolidated Appropriations Act, 2017 as it relates to HCV Program funding provisions.

The video of the webcast can be found here.

The PowerPoint slides from the webcast can be found here.

HUD to Publish Technical Corrections to Certain HOTMA Voucher Provisions

Tomorrow, June 14, HUD will publish in the Federal Register a notice titled “Housing Opportunity through Modernization Act of 2016: Implementation of Various Section 8 Voucher Provisions; Corrections.” This notice makes technical corrections to the prior notice published by HUD implementing certain HOTMA voucher provisions. The effective date for the original notice and the corrections remains April 18, 2017.

Corrections in this notice include the following:

  • Clarifies that in the “Units Owned by a PHA” section, the threshold for control should be “more than 50 percent” rather than “50 percent or more”;
  • Units receiving assistance under section 201 of the Housing and Community Development Amendments of 1978 (the Flexible Subsidy program) are now excepted (i.e., not counted towards the limitation) from the Project-based voucher (PBV) general cap and income-mixing cap;
  • For PBV new construction units that qualify as replacement housing for covered units and are exempt from the general cap, one of the requirements should read “site of the original development” instead of “site of the original public housing development”;
  • Clarifies that PHAs may not rely solely on a supportive services program that would require a family to engage in the supportive services once the family enrolls (e.g., Family Self-Sufficiency), for the unit to meet the supportive services exception (which excepts families eligible for supportive services, instead of receiving supportive services from the PBV income-mixing cap);
  • Clarifies that projects in a census tract with a poverty rate of 20 percent or less are subject to a alternative income mixing requirement of the greater of 25 units or 40 percent of the units (the original notice implied that these projects were completely excluded from the income-mixing cap);
  • Corrects an incorrect definition of new construction units that qualify for the exception as replacement housing for the income-mixing PBV cap–the definition in C.3.D(2)(b) (describing projects not subject to the income-mixing cap) is supposed to match the definition in section C.2.C(2)(b);
  • Clarifies that in those instances where a PHA is engaged in an initiative to improve, develop, or replace a public housing property or site to attach PBVs to projects that a PHA has an ownership or controlling interest without following a competitive process, the requirement that rehabilitation or construction on the project must have a minimum of $25,000 per unit in hard costs is not applicable in a situation where the PHA is replacing a public housing property or site with existing housing owned or controlled by the PHA; and
  • Makes numerous typographical corrections.

The pre-publication notice making corrections can be found here.

The original notice implementing certain HOTMA voucher provisions can be found here.

NAHRO’s prior blog post on the effective date of these certain HOTMA voucher provisions can be found here.

HUD Publishes FY 2017 HCV Funding Implementation Notice

HUD has published a notice (PIH Notice 2017-07) titled “Implementation of the Federal Fiscal Year (FFY) 2017 Funding Provisions for the Housing Choice Voucher Program.”

The notice lists the funding that the appropriations bill has allocated for tenant-based rental assistance:

  • HAP Renewal Funding – $18.355 billion;
  • Tenant Protection Vouchers – $110 million;
  • Administrative Fees – $1.650 billion;
  • Mainstream 5 Year Program – $120 million;
  • Veterans Affairs Supportive Housing – $40 million; and
  • Family Unification Program – $10 million.

The notice also notes how Housing Assistance Payments (HAP) are rebenchmarked using validated leasing and cost data for calendar year (CY) 2016. HUD states that that it will perform a “small offset” to prevent termination of rental assistance for families as the result of insufficient funding. Additionally, the $75 million set-aside in HAP funding provided by the budget, which is used to perform PHA allocation adjustments, will most likely be used only for shortfall funding. If there are any funds remaining after the set-aside, they will be distributed on a prorated basis to all agencies.

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REAC adds Industry Days on the West Coast in late July

Following earlier industry days in Phoenix and Jacksonville, HUD’s Real Estate Assessment Center (REAC) is adding  two additional events in Los Angeles (July 25 and 26) and Portland (July 27 and 28). At these events, HUD would like to discuss the technical details of PIC-NG, VMS, and UPCS-V, while receiving technical feedback. Updated materials from previous industry days in Phoenix and Jacksonville will be presented.

At this time, the topics include the following:

  • PIC-NG;
    • Updated Schedule (vendors will be able to test sooner);
    • Demonstration of future FRS tool (current VASH portal);
    • Updated API;
  • UPCS-V;
    • Release of data collection software version 2.5 to fix bugs, improve reliability, enhance user experience, and incorporate protocol revisions;
    • Soliciting feedback for revision 3;
    • Incorporating PHAs to the Agile Development Teams; and
    • HUD web services Agile Development Team formed and soliciting PHA suggestions to guide the UPCS-V program.

Registration for either the Los Angeles session (July 25 and 26) or the Portland session (July 27 and 28) can be done here.

New Link to HCV Forecasting Tool

HUD has changed the link to the Housing Choice Voucher Forecasting Tool and the Payment Standard tool. To use it, PHAs should make sure that they are logged into the Web Access Security System (WASS), then go to the webpage. If you have been unable to access the tool, it may be because you are trying to access it with the old link.

The forecasting tool now has 2017 set as the first year and has a likely-to-be-accurate estimate of the amount to be sent out to PHAs.

The HCV tools page can be accessed here.