Federal Regulation

HUD Updates Industry Groups on Hurricane Assistance

~ Tushar Gurjal ~ 1 Comment

Earlier today, NAHRO, along with industry groups PHADA and CLPHA, joined HUD on a conference call to discuss updates on the HUD’s Hurricane Assistance for Hurricanes Harvey, Irma, and Maria. HUD noted that Hurricane Harvey impacted 1,100 properties, while Hurricanes Irma and Maria impacted 1,400 properties. The exact number of households impacted is still growing as additional information becomes available.

To facilitate quick responses to the on-the-ground situation, HUD will be issuing a notice detailing expedited waiver procedures for PHAs in the affected areas. The notice will be published in the Federal Register early next week. According to HUD, the notice will allow PHAs to apply for waivers through an expedited process, which HUD anticipates taking no more than a few business days. There will be an attachment with the notice, which PHAs can use to check off the waivers that they are requesting and provide very general and basic documentation of the need for the waiver. The waiver requests will still be submitted to the field offices.

During the call, HUD also indicated that they will provide additional guidance on how other agencies can update their disaster-related preferences so that disaster-impacted families may be able to utilize the services of other agencies. At this time, HUD believes that updating a PHA’s administrative plan for disaster-related preferences is not a “significant amendment,” making the update less burdensome for those agencies which may decide to do it.

NAHRO remains committed to providing all housing authorities in disaster-related areas with the most up-to-date information as it becomes available and assisting in any way possible.

Update: Additionally, HUD’s Office of Inspector General (OIG) has published an integrity bulletin warning “everyone affected by Hurricanes Harvey, Irma, and Maria to be alert for fraud schemes that commonly occur following a disaster.” Schemes include scam housing inspectors, scam contractors, fake relief programs, flood-damaged cars being offered for resale, and mortgage rescue scams. Additional information can be found here.

HUD Publishes FY 2018 Fair Market Rents

~ Tushar Gurjal ~ Leave a comment

Today, HUD released its fiscal year (FY) 2018 Fair Market Rents (FMRs) and published notification of the release in a notice titled “Fair Market Rents for the Housing Choice Voucher Program, Moderate Rehabilitation Single Room Occupancy Program, and Other Programs Fiscal Year 2018 and Adoption of Methodology Changes for Estimating Fair Market Rents.” In addition to providing notification of the release of the FY 2018 FMRs, the notice also adopts the previously proposed tweaks to the FMR methodology, describes how the FY 2018 FMRs are calculated, lists how to request reevaluations of FMRs, and responds to previously submitted comments on the previously published notice on methodology changes.

Changes to law and regulation have created some differences in the notification about FMRs. Due to a change in the Housing Opportunity Through Modernization Act of 2016, HUD may now post FMRs on their website without having to publish them in the Federal Register as long as interested stakeholders are given opportunity to comment on material changes in methodology and are given the opportunity to request a reevaluation of a specific FMR. A change from the Small Area FMR rule is that both FMRs and Small Area FMRs may be no less than 90 percent of the prior year’s FMRs (i.e., Small Area FMRs and FMRs may only decrease by a maximum of ten percent from the previous year).

HUD previously announced proposed changes in the methodology, which HUD is adopting with this notice. In NAHRO’s comment letter, we did not object to any of the changes and expressed cautious optimism that the changes may lead to marginal improvements in the accuracy of FMRs.

In the notice, HUD notes that it will “continue to accept public comments on the methods HUD uses to calculate FY 2018 FMRs, including Small Area FMRs and the FMR levels for specific areas.”

The published FY 2018 Fair Market Rents can be found here.

The notice announcing the publication of the FY 2018 Fair Market Rents can be found here.

Interim Evaluation Illustrates Why Small Area FMRs Should be Voluntary

~ Tushar Gurjal ~ Leave a comment

In mid-August, HUD published an interim evaluation which showed mixed results for the efficacy of Small Area Fair Market Rents (FMRs). Fair Market Rents are calculated by HUD on the county or metropolitan area level. HUD states that the FMR is the amount of money that would be needed to pay the gross rent (shelter rent plus utilities) of privately owned, decent, and safe rental housing of a modest nature. Fair Market Rents help determine the amount of rent covered by the voucher (i.e., the higher the FMR, the higher the potential value of the voucher). Small Area FMRs are FMRs calculated by zip code. The intended effect of Small Area FMRs is to decrease subsidies in low-opportunity (low-rent) neighborhoods and increase subsidies in high-opportunity (high-rent) neighborhoods to incentivize families to move from low-opportunity neighborhoods to high-opportunity neighborhoods.

In 2012, HUD began the Small Area FMR Demonstration (though the Demonstration uses PHAs which have been using Small Area FMRs since before 2012) which tested, among other things, the mobility incentive of Small Area FMRs across seven public housing agencies (PHAs) with varied and diverse characteristics. This new HUD interim evaluation titled “Small Area Fair Market Rent Demonstration Evaluation Interim Report” shows that Small Area FMRs have a mixed impact. Among other findings, the report has four key takeaways about the use of Small Area FMRs: 1) different housing markets are impacted differently; 2) there are more families moving into areas of opportunity; 3) there is a loss of affordable units; and 4) there is an aggregate higher cost burden for families. Understanding these findings illustrates why Small Area FMRs have both benefits and costs. Continue reading →

HUD PD&R Thoughts on Implementing Small Area FMRs

~ Tushar Gurjal ~ Leave a comment

HUD has published a short piece by Acting General Deputy Assistant Secretary for Policy Development and Research (PD&R) Todd Richardson in both HUD’s blog–the HUDdle–and on the HUDUser website as a piece titled “Message From PD&R Senior Leadership.” The piece notes that the decision to suspend the implementation of Small Area FMRs was a result of research. It goes on to note that “[w]e now have some preliminary results from a just-published interim evaluation that provides information on . . . program impacts such as changes to the availability of affordable units, average Housing [Assistance] Payments, and tenant rent burden.”

Additionally, the post offers great information on how to implement Small Area FMRs, for those PHAs which choose to implement Small Area FMRs now. The relevant information is reproduced exactly below except for some minor formatting changes.

  • Know your market.
    • Do your own market research. Does this change make more or fewer units available? Will this change cause you to have higher or lower average Housing Assistance Payments (HAP)? PHAs that operate only in high cost areas will experience a significant increase in their average HAP. PHAs that operate mostly in low cost areas may see a decrease in their average HAP, although the Housing Opportunity Through Modernization Act of 2016 (HOTMA) allows PHAs to grandfather payment standards for tenants that remain in place. The final rule implemented the HOTMA provision and provides additional flexibilities for PHAs in setting payment standards for families currently receiving assistance in areas where the FMR decreases.
    • Do the leg work to determine how you would set payment standards around the Small Area FMR before you have to do it. This is a major work item.
    • Think about recruiting new landlords.
    • Ideally you are ready to implement Small Area FMRs when market conditions are favorable. A soft rental market is your friend.
  • Get the back office ready.
    • This does increase your administrative costs — both one-time costs for information technology (IT) changes and the development of new procedures as well as ongoing operations costs. Start planning your administrative budget.
    • Upgrade your IT now.
    • Be prepared for a spike in moves among existing tenants. You may need to temporarily increase your capacity to conduct inspections.
    • Talk to your front-line staff about implementation before and during the process. Be quick to address misunderstandings and retrain as needed.

The Interim Small Area FMR report can be found here, while the final Small Area FMR rule can be found here.

The entire post can be found either here or here.

HUD Study Finds Small Area FMRs Have Mixed Results

~ Tushar Gurjal ~ Leave a comment

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.

Continue reading →

HUD Suspends Mandatory Implementation of Small Area FMRs

~ Tushar Gurjal ~ Leave a comment

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.

Past Due Section 3 Reports Due July 31, 2017

~ Georgi Banna ~ Leave a comment

On July 7, 2017, HUD’s Economic Opportunity Division of the Office of Fair Housing and Equal Opportunity issued a notice regarding Section 3 reporting due dates for PHAs. Reporting due dates for PHAs are now based on the PHA fiscal year end (FYE), and generally are due 60 days after the PHA FYE. Non-PHAs that are recipients of Section 3 funding will continue to submit annual reports as they have done so in the past.

However the notice did provide specific dues dates for past due reports. Past due Section 3 reports for 2013, 2014, and 2015 must be submitted by July 31, 2017. Also Section 3 reports for 2016 are due 60 days after the PHA FYE, if not already submitted. For 2017 and beyond, Section 3 reports are due 60 days after PHA FYE.

The process of for electronically submitting your Section 3 reports can be found on the HUD website.

FY 2017 HCV Implementation Broadcast Posted

~ Tushar Gurjal ~ Leave a comment

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

~ Tushar Gurjal ~ Leave a comment

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

~ Tushar Gurjal ~ Leave a comment

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.

Continue reading →