On March 25, HUD published a Frequently Asked Questions (F.A.Q.) on Section 3. HUD’s “Enhancing and Streamlining the Implementation of Section 3 Requirements for Creating Economic Opportunities for Low- and Very Low-Income Persons and Eligible Businesses” final rule was published on September 29 in the Federal Register. The rule updates Section 3 regulations and reporting requirements and clarifies the obligations of entities that are covered by Section 3. PHAs have until July 1, 2021 to implement their Section 3 activities pursuant to the rule and comply with new reporting requirements.

The final rule includes separate requirements for Public Housing Section 3 projects and Section 3 projects that use other HUD program assistance for housing rehabilitation, housing construction, and other public housing construction projects. All PHAs that receive funding for public housing are required to report on Section 3, however, agencies with fewer than 250 units are only required to report on qualitative efforts to meet Section 3 requirements and are not required to report on whether they have met specific Section 3 outcome benchmarks or not. Generally, any housing rehabilitation, housing construction, or other public construction projects that uses other HUD program assistance that exceeds a $200,000 threshold or any project that receives funding from HUD’s Lead Hazard Control and Healthy Homes programs, is required to report Section 3 activities to HUD. Section 8 program activities are excluded from the rule.

HUD’s F.A.Q. provides guidance for Section 3 funding recipients, subrecipients, contractors, subcontractors, workers, and other stakeholders. The F.A.Q. lacks the force and effect of binding law. The F.A.Q. is broken up into seven sections. The sections include general questions regarding Section 3, applicability, consistency with other laws, recipient responsibilities, Section 3 certification, economic opportunities numerical benchmarks, and Section 3 complaints. HUD plans for this FAQ to be a living and evolving document with new questions added for guidance as HUD receives them. If you would like to ask additional or clarifying questions, please feel free to contact the Section 3 team at Section3@hud.gov. The F.A.Q. can be found here.

The House Subcommittee on Housing, Community Development and Insurance held a hearing on Wednesday, March 24^th titled, “Preserving a Lifeline: Examining Public Housing in a Pandemic.” In his opening statement, Chairman Emanuel Cleaver (D-MO) reflected on the history of public housing and his own experience growing up in a public housing unit.

House Financial Services Committee Chairwoman Maxine Waters (D-CA) and Subcommittee Ranking Member Steve Stiver (R-OH) also provided opening statements in recognition of the growing affordable housing needs in the United States.

NAHRO’s Director of Policy and Program Development, Georgi Banna, was the first witness to testify. He explained how public housing serves as a community hub and a community asset, highlighting the efforts of several NAHRO members throughout the COVID-19 pandemic. Mr. Banna emphasized Congress’s responsibility to address the $70 billion Public Housing Capital Fund backlog, stating, “Public housing must be protected. Public housing must be expanded.”

Four additional witnesses testified at the hearing. Tamir Ali Mohamud, a public housing resident and member of the Minneapolis High-Rise Representative Council, spoke about finding a safe home in public housing as a Somalian refugee. The Executive Director of Akron Metropolitan Housing Authority, Brian Gage, testified about his agency’s efforts to support residents during the pandemic and advocated for additional HUD waivers and flexibilities. Another PHA Executive Director, Oscar Duran of the Municipal Housing Agency of Council Bluffs, supported many of the same points and defended the essential role of public housing within the network of affordable housing programs.

The final witness was Michael Hendrix, the Director of State and Local Policy for the Manhattan Institute. He spoke about the challenges faced by the New York City Housing Authority (NYCHA) and mentioned an expansion of the Housing Choice Voucher (HCV) program as a possible solution.

Subcommittee members then questioned the witnesses on several pieces of their testimonies. For example, Congressman Al Lawson (D-FL) asked about the human costs of the long-term disinvestment in public housing. Congressman Van Taylor (R-TX) discussed the need for more physical, affordable housing units and potential zoning law changes with Mr. Banna and Mr. Hendrix. Congresswoman Joyce Beatty (D-OH) asked Mr. Gage about the pros and cons of Rental Assistance Demonstration (RAD) conversions.

Representative Ritchie Torres (D-NY), a newly elected member of Congress, began his comments by stating, “I would not be in the United States Congress were it not for public housing and the stability it gave me and my family.” While questioning Mr. Banna, Rep. Torres expressed his frustration that Congress provides $100 billion in annual mortgage interest deductions for homeowners but has not yet addressed the $70 billion Public Housing Capital Fund backlog. Chairman Cleaver (D-MO) closed the hearing by thanking the witnesses for their time. The recorded hearing and all witness testimonies are available the House Financial Services Committee website at this link: https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=406267

The FY2020 Appropriations Act made $20,000,000 available for competitive grants to public housing agencies to evaluate and reduce housing-related hazards including carbon monoxide and mold in public housing through the Housing-related Hazards Capital Fund Program. HUD released its Grants Notice for the program today.

Applications are due to HUD by May 25 and should be submitted here. There is an award floor of $10,000 and an award ceiling of $4,000,000.

On Tues., March 16^th, the Senate Committee on Banking, Housing, and Urban Affairs held a virtual hearing called “Home = Life: The State of Housing in America”. The hearing covered a wide variety of housing topics, including affordable housing, housing finance, and access to homeownership.

Chairman Brown (D-OH) noted that it had been nine years since the committee held a hearing on housing for all Americans, especially, “homeowners looking to buy a lower cost home, seniors on a fixed income, and renters working a minimum wage job.”  

Five witnesses spoke about the areas of housing within their expertise. Dr. Chris Herbert from the Harvard Joint Center for Housing Studies explained how the public, private, and nonprofit sectors can work together to address major housing issues. Diane Yentel, President and CEO of the National Low-Income Housing Coalition (NLIHC) outlined the housing needs of extremely low-income households. She urged the committee to support the “Public Housing Emergency Response Act,” which would authorize $70 billion for the public housing capital needs backlog.

The remaining three witnesses covered affordable homeownership and housing finance. They included Nikitra Bailey from the Center for Responsible Lending, Edward J. Pinto from the AEI Housing Center, and Ed DeMarco from the Housing Policy Council.

After presenting their testimonies, each witness answered questions from committee Senators. Senator Ossoff (D-GA) asked about the best way to distribute emergency Housing Choice Vouchers (HCV) in response to COVID-19. Ranking Member Toomey (R-PA) spoke to the last two witnesses about housing market reform, including changes to Fannie Mae and Freddie Mac. Senator Smith (D-MN), chairwoman of the Subcommittee on Housing, Transportation, and Community Development, asked Dr. Herbert about increasing the stock of affordable housing in rural communities.

Senator Warren (D-MA) discussed public housing with Diane Yentel, stating, “through decades of underinvestment and unnecessary restrictions, Congress has helped create this crisis – that means that Congress can help fix it by making serious investments in increasing the supply of affordable housing and expanding public housing for the first time in decades.”  

The Senate Committee on Banking, Housing, and Urban Affairs will consider several pieces of housing-related legislation in the upcoming months.

On February 23, HUD released $2.7 billion to public housing agencies through the Public Housing Capital Fund program, included in the FY 2021 Appropriations Act. FY2021 included $19 million more in Capital Fund formula grants than FY 2020. NAHRO was pleased with the increase in funding as the Capital Fund is critical to ensure PHAs are able to build, renovate, and/or modernize their public housing properties.

HUD’s press release can be found here.

On February 11, HUD’s Office of Fair Housing and Equal Opportunity (FHEO) released a memo implementing President Biden’s Executive Order on preventing discrimination based on gender identity or sexual orientation. The Executive Order directs federal agencies to assess agency actions taken under federal statutes that prohibit sex discrimination and fully enforce those statutes to include prohibiting discrimination based on sexual orientation and gender identity. As a result of the Executive Order, FHEO will begin accepting for filing and investigating all complaints of sex discrimination including sexual orientation and gender identity. FHEO will also conduct all other activities involving the application, interpretation, and enforcement of the Fair Housing Act’s prohibition on sex discrimination to include discrimination because of sexual orientation and gender identity. The memo also impacts state and local agencies that enter agreements with HUD under the Fair Housing Assistance Program (FHAP) and the Fair Housing Initiative Program.