Senate Banking Hearing on the Legacy of Racial Discrimination in Housing

Today, the Senate Banking, Housing, and Urban Affairs Committee held a virtual hearing titled “Separate and Unequal: The Legacy of Racial Discrimination in Housing.” In their opening statements, Chairman Sherrod Brown (D-OH) and Ranking Member Pat Toomey (R-PA) both acknowledged the broad history of housing discrimination in the United States.

Chairman Brown explained the purpose of the hearing, stating, “On this Committee, we have an opportunity to address the legacy of housing discrimination. And we have an obligation, under the law that this body passed 53 years ago” (the Fair Housing Act of 1968).

Richard Rothstein, author of The Color of Law and Senior Fellow Emeritus of the NAACP Legal Defense and Education Fund, was the first witness to testify. He outlined the history of government-sponsored discrimination in housing and homeownership. For example, he mentioned the role of redlining, racially restrictive covenants, and segregation in federal public housing.

Ms. Lisa Rice, President and CEO of the National Alliance for Fair Housing, and Dr. Jason Reece, Assistance Professor of City and Regional Planning at The Ohio State University explained how America’s legacy of housing discrimination continues through current practices. Ms. Rice cited 2019 Home Mortgage Disclosure Act (HDMA) data showing that 19.01% of Black applicants were denied mortgage loans compared to only 10.15% of White applicants. Dr. Reece pointed out that the legacy of housing discrimination has produced neighborhoods with concentrated poverty and a lack of recourses, which are largely populated by people of color.

Two witnesses from the American Enterprise Institute (AEI) also joined the hearing. Mr. Howard Husock, AEI Adjunct Fellow and Contributing Editor for the Manhattan Institute’s City Journal, proposed changes to the Community Reinvestment Act (CRA) and the Affirmatively Furthering Fair Housing (AFFH) rule. Mr. Tobias Peter, Research Fellow and Director of Research at the AEI Housing Center, pointed to racial discrimination in residential zoning policies and foreclosure-prone affordable housing polices as two major causes of racial disparities in housing.

Following the testimonies, several Senators discussed these housing issues with the witnesses. Senator Tim Scott (R-SC) asked whether additions to credit reporting, including reports on utility payments, would help to qualify more Black households for homeownership. Ms. Rice said she believes that those changes would help and that the GSEs (Fannie Mae, Freddie Mac, etc.) could help to collect that information.

Senator Van Hollen (D-MD) asked Mr. Rothstein about the “race neutral” policies he mentions in his book. Mr. Rothstein described how policies that are superficially race neutral can still have a disparate impact due to the history of racial discrimination. An example of that phenomenon is exclusionary zoning laws that, at least on the surface, do not explicitly mention race.

Senator Warnock (D-GA) asked how to address ongoing discrimination in the appraisal market. Ms. Rice responded that Congress and the administration should enforce the Fair Housing Act, fund fair housing organizations, and re-staff the Office of Fair Housing and Equal Opportunity at the Dept. of Housing and Urban Development (HUD).

Several other Senators from both parties attended the hearing to question the witnesses. All witness testimonies and a recording of the hearing are available at www.banking.senate.gov/hearings

2019 Public Charge Rule No Longer Applicable

The U.S. Department of Homeland Security (DHS) announced they will no longer defend the 2019 Public Charge rule and have withdrawn their appeal of an Illinois court decision invalidating the 2019 Public Charge rule. The result of DHS’s action is that the court’s decision striking down the 2019 Public Charge rule will become final and the previous 1999 interim field guidance (the immediate past policy) will apply.

Under the 1999 interim field guidance, DHS will not consider a person’s receipt of Medicaid (except for Medicaid for long-term institutionalization), public housing, or Supplemental Nutrition Assistance Program (SNAP) benefits as part of the public charge inadmissibility determination.  In addition, medical treatment or preventive services for COVID-19, including vaccines, will not be considered for public charge purposes.

DHS Statement on Litigation Related to the Public Charge Ground of Inadmissibility, March 9, 2021

DHS has pre-published a final rule, Inadmissibility on Public Charge Grounds; Implementation of Vacatur, that removes the 2019 Public Charge rule text from the Federal Register. The rule will take affect when published which is scheduled for March 15, 2021.

New, Updated Emergency Rental Assistance Guidance Issued

The U.S. Department of Treasury (Treasury) has released new and updated frequently asked questions (FAQs) on the Emergency Rental Assistance Program (ERAP) that was created by the December 27, 2020 omnibus appropriations act. These new February 22, 2021 dated FAQs replace in their entirety the previously issued January 19, 2021 FAQs.

NAHRO commends Treasury for the new FAQs, as they provide much-needed clear and reasonable guidance on the ERAP. NAHRO has been in contact with Treasury on numerous occasions to ensure that PHAs and their residents are served by the ERAP. On January 25, 2021, NAHRO sent a letter to the Treasury and U.S. Department of Housing and Urban Development outlining our concerns with the January 19, 2021 FAQs, and the new FAQs address many of NAHRO’s concerns. These new FAQs are a major step forward for PHAs in meeting their COVID-19 housing needs of HUD-assisted residents.  

Below are a number of the key guidance points provided by the February 22, 2021 FAQs:

  • Federally assisted tenants (Public Housing, Housing Choice Voucher, & Project-Based Rental Assistance) are eligible for ERAP assistance for the tenant-owed portion of rent and utilities that are not subsidized. 
  • Tenants may document their financial hardship due to COVID-19 (unemployment benefits, reduction of income, significant costs, or other COVID-19 financial hardship) by written attestation signed by the tenant that one or more household members meet this eligibility criteria. 
  • Tenant household income is defined by using either HUD’s “annual income” definition in 24 CFR 5.609 or adjusted gross income reported on an Internal Revenue Service Form 1040 series. 
  • “Other expenses related to housing” examples are provided. The examples include but are not limited to: 
    • relocation expenses and rental fees (if a household has been temporarily or permanently displaced due to the COVID-19 outbreak);  
    • reasonable accrued late fees (if not included in rental or utility arrears and if incurred due to COVID-19); and  
    • Internet service provided to the rental unit. 
  • Outreach to landlords and utility providers must be done before providing the funds directly to the tenant. Outreach can be done using the following methods: 
    • a request for participation is sent in writing, by mail, to the landlord or utility provider, and the addressee does not respond to the request within 14 calendar days after mailing;  
    • the grantee has made at least three attempts by phone, text, or e-mail over a 10 calendar-day period to request the landlord or utility provider’s participation; or 
    • a landlord confirms in writing that the landlord does not wish to participate. 
  • PHAs, non-profit organizations, and local governments may operate ERAP programs through contractor, subrecipient, or intergovernmental cooperation agreements with the primary grantee at the state or local jurisdiction level. These agreements must meet monitoring and management requirements of 2 CFR 200.331-200.333 and procurement standards of 2 CFR 200.317-200.327. 

These are just a few of the answers in the new FAQs. The full FAQs are available on the NAHRO website’s Emergency Rental Assistance Program page. The Emergency Rental Assistance Program, including these FAQs, will be a focus of the 2021 NAHRO Online Washington Conference’s Treasury Affordable Housing Program and Washington Report sessions on March 2, 2021. Click here to register for the 2021 NAHRO Online Washington Conference

NAHRO & NLC Webinar on Eviction Prevention and Emergency Rental Assistance Program – Feb 18 @ 12:30pm ET

NAHRO and the National League of Cities are teaming up to bring their members critical information on eviction prevention strategies and the Treasury Department’s Emergency Rental Assistance Program (ERAP). The complimentary webinar will take place on Thursday, Feb. 18 at 12:30 pm ET. Registration information can be found here.

The webinar will also discuss the upcoming reconciliation process the new COVID-19 relief package will take through Congress, as well as an overview of eviction prevention strategies cities and community partners are implementing in the midst of COVID-19, and highlights of resources to prevent housing instability.

Information on ERAP is changing rapidly, and it is important for PHAs that want to partner with their State and/or local jurisdiction to be up to date. Join the NAHRO and NLC teams to hear the latest information on ERAP, including information on family eligibility and eligible use, along with an update on how the new administration plans on implementing the program. We will also be joined by a PHA that will share how their housing authority has partnered with the local jurisdiction to provide local emergency rental assistance.

The NARHO and NLC teams look forward to sharing this important information! Register Now for the important webinar.

$20 million NOFA for Competitive FUP Vouchers Published

Yesterday, HUD released a Notice of Funding Availability (NOFA) for $20 million of competitive funding for Family Unification Program (FUP) vouchers. These vouchers are for youth aging out of foster care. The appropriations acts of 2020 and 2021 each contained $10 million in competitive FUP funding for youths aging out of foster care. This notice would distribute the competitive FUP allocations for youth aging out of foster care for both of those years. The Department expects to make approximately 40 awards from the funds. No award will be for less than 3 vouchers, while the maximum award will vary depending on the size of the PHA’s program (25 vouchers for programs with fewer than 500 vouchers; 50 vouchers for programs between and including 500 and 1.999 vouchers; and 75 vouchers for programs with 2,000 or more vouchers). The application deadline is March 22, 2021.

The full NOFA can be found here.

HUD Updates Demolition and Disposition Notice

Earlier today, HUD published PIH 2021-07, titled “Demolition and/or disposition of public housing property, eligibility for tenant-protection vouchers, and associated requirements.” This notice updates PIH 2018-04, which was the prior demolition and disposition notice.

The new notice makes several non-substantive and substantive revisions to the prior notice. Non-substantive revisions include clarifying headings, adding spacing between paragraphs, re-numbering paragraphs, and correcting citations to regulatory provisions, which make for a clearer document. Substantive changes in this notice include the following:

  • HUD’s Special Applications Center (SAC) no longer claims to return a SAC application that is substantially incomplete or deficient, while informing a PHA of its deficiencies (previously, SAC would “return” the application by changing the status of the application to DRAFT in the Inventory Management System/PIH Information Center [IMS/PIC]);
  • The Department clarifies that PHAs must not just make resident consultation accessible, but rather that “PHAs must ensure that communications and materials are accessible to individuals with disabilities and take reasonable steps to provide meaningful access to persons with Limited English Proficiency (LEP)”;
  • Use of proceeds is no longer a material term of the SAC application, so if a PHA’s plan on the use of proceeds changes after HUD approval of an application, a PHA would no longer have to request an amendment to the application;
  • Includes new RAD/Section 18 blends;
    • RAD/Section 18 Construction Blend – the percentage of units eligible for disposition is based on hard construction costs for new construction or rehabilitation of the covered project. Transactions that use the 9 percent Low-Income Housing Tax Credit are not eligible.
      • If hard construction costs equal 90 percent of the Housing Construction Costs (HCC) as published by HUD for a given market area, the PHA may dispose of up to 60 percent of the units of the converting project under Section 18;
        • For high-cost areas (HCC exceeds 120 percent of the national average), a PHA may dispose of up to 80 percent of the units of the converting project under Section 18;
      • If the hard construction costs equal or exceed 60 percent, but are less than 90 percent, of HCC, the a PHA may dispose of up to 40 percent of the units of the converting project under Section 18;
      • If the hard construction costs equal or exceed 30 percent, but are less than 60 percent, of HCC the PHA may dispose of up to 20 percent of the units of the converting project under Section 18;
    • RAD/Section 18 Small PHA Blend – for any PHA with 250 or fewer public housing units under its Annual Contributions Contract (ACC), up to 80 percent of the units in a converting project may be disposed of under Section 18;
  • The Department clarifies that tenant-protection voucher (TPV) requests first go to the field office for a threshold review before being sent to HUD’s Financial Management Division (FMD), while HUD’s Financial Management Center (FMC) notifies PHAs of the final TPV awards.

The full notice can be found here.

Mobility Demonstration Updates

The Department has made several updates to the mobility demonstration website. The mobility demonstration will provide funding to PHAs to research the efficacy and cost of providing mobility-related services to voucher participants.

  • On Jan. 14th, HUD updated their Questions and Answers document.
  • On Jan. 6, HUD held a third webinar on the demonstration. The webinar “provided a deeper dive on the application requirements to help PHAs better understand how to submit a proposal to HUD.” A recording can be found here. Slides from the webinar can be found here.
  • Finally, as mentioned before, HUD has also restricted MTW participation in the mobility demonstration in certain ways.

The Department’s application deadline is Feb. 1, 2021.

Additional information on the mobility demonstration can be found on HUD’s website.

MTW Expansion Applications for Cohorts #3 and #4 Posted

Earlier today, HUD published applications to apply for additional cohorts in the Moving to Work (MTW) Expansion. The Moving to Work program allows PHAs additional regulatory flexibilities to implement innovative strategies to house families. The MTW Expansion incorporates a research component with every new cohort of MTW agencies.

The applications can be found here:

NAHRO members will receive additional information about both applications in the coming days.

HUD Restricts MTW Participation in the Mobility Demonstration

Tomorrow, HUD will publish a notice titled “Section 8 Housing Choice Vouchers: Implementation of the Housing Choice Voucher Mobility Demonstration, Restrictions on Participating in the Mobility Demonstration and the Moving to Work Demonstration Expansion.” To maintain the “Congressionally mandated rigorous evaluation” of the Moving to Work (MTW) Demonstration expansion and the mobility demonstration expansion, HUD is restricting the overlap between MTW agencies and agencies that can participate in the mobility demonstration.

In general, PHAs that participate in MTW Expansion cohorts 2, 3, or 4 may not participate in the mobility demonstration program. Housing agencies that participate in MTW Expansion cohorts 1 or 5 may participate, but will have their MTW flexibilities curtailed.

The restrictions are noted below.

Continue reading