In a letter to PHA Executive Directors on Wednesday, August 30, 2017, HUD announced that it had calculated each PHA’s Administrative Fee eligibility for the months of January to June and established an estimated proration factor. In March of 2017, the proration factor was slightly higher than 74 percent. HUD “[t]hrough the use of recaptured and carryover funds that were reprogrammed” was able to increase the national administrative fee proration to “be around 76%-77%.” The Department will provide a 77 percent proration from between January to June with a 76 percent proration for the final six months of the year. This is only an estimated proration factor. The final reconciliation will determine the final proration factor.
While NAHRO is pleased at the increase in the proration of the administrative fee, it is still far from the full funding that is needed to run the Housing Choice Voucher program. NAHRO continues to educate policy makers about the need for full funding to properly administer affordable housing programs.
9/6/17 update – HUD has sent an email on the administrative fee proration stating “[a]t this point, HUD has reprogrammed available carryover funds, which have increased the national proration to 77% through June 2017. However, the final administrative fee reconciliation (December 2017), which will account for the total number of units leased for CY 2017, will determine the final administrative fee proration.”
9/11/18 correction – typographical error for the old proration was corrected.
Today HUD published a notice, PIH 2017-17 (HA), titled “Registration of Interest for HUD-VASH Vouchers.” The notice instructs PHAs that HUD seeks to award tenant-based HUD-VASH vouchers to “self-identified, interested PHAs based on local need.” All awarded vouchers may be project-based. The 2017 Appropriations Act provides $40 million of for HUD-VASH vouchers for approximately 5,500 new HUD-VASH vouchers. The HUD-VASH program combines Housing Choice Vouchers (HCVs) with case management and clinical services provided by the Department of Veterans Affairs at its medical centers (VAMC) and community based outpatient clinics (CBOCs) for veterans. The registration deadline is midnight of the PHA’s local time on October 31, 2017.
There will be a two-step award process:
- PHAs will respond to the published notice with an email and a Department of Veterans Affairs (VA) Letter of Support (PHAs must respond to the notice to be considered for a HUD-VASH award); and
- Based on a need formula, registered PHAs that are selected will receive an invitation to apply for a specific number of HUD-VASH vouchers.
To register interest, PHAs must send an email to VASH2017@hud.gov. The subject line of the email should include the text “Registration of Interest” and include the PHA code. The body of the email should identify with which VAMC or CBOC the PHA will be partnering. The PHAs must also attach a signed letter of support from their partnering VA facility, and the letter must be signed by the Director of the VA Medical Center or Veterans Integrated Service Network. A separate email must be sent for each partnership with a VAMC or CBOC. Emails without the signed letter or support will not be considered for an award (this can not be fixed at a later date).
HUD may award remaining funds via an invitation to additional PHAs. All civil rights matters must be resolved prior to the invitation to apply for HUD-VASH vouchers.
The full notice can be read here.
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.
Earlier this week, HUD announced that the Department will expedite federal disaster assistance to the State of Texas and provide support to homeowners and low-income renters that are left without a home due to Hurricane Harvey.
Currently, President Trump has issued a disaster declaration for 18 counties in Texas: Aransas, Bee, Brazoria, Calhoun, Chambers, Fort Bend, Galveston, Goliad, Harris, Jackson, Kleberg, Liberty, Matagorda, Nueces, Refugio, San Patricio, Victoria and Wharton. More counties may be added at a later date.
HUD’s disaster assistance will include: Continue reading
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 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.
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.
HUD has revised the July 7, 2017 SPEARS Update that set a reporting deadline of July 31, 2017 for “past due” (2013, 2014, 2015, 2016, & some 2017 report years) reports.
On August 14, 2017, HUD issued a SPEARS Update that extended the reporting deadline for “past due” reports to December 31, 2017. The SPEARS Update is available at https://portal.hud.gov/hudportal/documents/huddoc?id=PHAReportDue8-14-17.pdf.
HUD’s Section 3 office is also aware of issues in submitting adjusted reports (6, 9, or 15 month reports) due to the reporting year switching to the PHA fiscal year. It is anticipated that HUD will update the SPEARS system to correct this issue in the very near future.
More information on Section 3 reporting is available at https://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/section3/section3/spears.
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.
On August 10 at 1:30pm, NAHRO Professional Development will present an e-Briefing on Reasonable Accommodation. NAHRO Faculty Member Dennis Morgan will answer many of questions – What is a “reasonable accommodation?” What are your responsibilities as a housing provider? What if a request would creat an undue financial burden, or fundamentally alter the nature of a program?
Reminder: Whether you're watching alone or with an audience of 100, only one registration per connected device is required, making NAHRO Professional Development's e-Briefings an outstanding value!
Register Online at www.nahro.org/training-calendar.