On September 13, the U.S. Census Bureau released two new annual reports (Income and Poverty in the United States: 2015 and Health Insurance Coverage in the United States: 2015) that offer the public some unmistakably positive news. According to the reports, the U.S. has experienced the largest decline in poverty rates in the last 16 years, with 13.5 percent of Americans (43.1 million people) living in poverty in 2015, compared to 14.8 percent in 2014. This decline coincides with the nation’s continued decrease in the number of people without health insurance coverage, which decreased from 10.4 percent of the population (33 million people) in 2015 to 9.1 percent in 2014. Additionally, real median household income increased to $56,516 in 2015, constituting a 5.2 percent gain from 2014 – the first annual increase since 2007, right before the most recent recession.

To complement the national-level reports, the Census Bureau also recently published local-level income, poverty, and health insurance statistics from the American Community Survey. According to the new data, between 2014 and 2015, real median household income increased in 39 states plus the District of Columbia and not one state experienced a decrease in real median household income. Additionally, between those same years,  poverty rates declined in 23 states (largely for metropolitan areas) and not one state experienced a poverty rate increase.

Journalists and experts have been quick to note the effect of this income growth and poverty decline on our housing market. Dan McCue from the Harvard Joint Center for Housing Studies points out that demand for housing, especially among young adults gaining independence, may grow. The income growth will likely work against the nation’s declining homeownership rates and help alleviate the stresses felt by housing cost-burdened households.

Kriston Capps from The Atlantic points out the number of people in poverty (43.1 million) is still higher than where it was before 2007, and households in the third, second, and lowest quintiles have yet to recover. Real median household income in 2015 was 2.4 percent lower than the peak in 1999, Capp writes, the economy is recovering, but Americans would feel it more profoundly if they weren’t putting all their money toward the rent.

On September 23, 14 members of Congress, including Chairman of the Subcommittee on Housing and Insurance Blaine Luetkemeyer, submitted a letter to HUD requesting additional information about HUD guidance on the application of Fair Housing Act standards regarding the use of criminal records when admitting tenants. According to the guidance, if a policy or practice that restricts access to housing on the basis of criminal history results in a disparate impact on individuals of a particular race, national origin, or other protected class, such a policy or practice may be unlawful under the Fair Housing Act, even if the provider had no intent to discriminate.

The letter explicitly states that the members of Congress agree that discrimination against individuals with criminal histories should be eradicated, however the letter notes concerns stemming from legal and operating questions for property owners, managers and tenants. Specifically, members of Congress request that HUD provide them with additional information on

• HUD’s steps to reconcile the guidance with judicial decisions, most specifically Texas Department of Housing and Community Affairs v. the Inclusive Communities Project.
• HUD’s efforts to ensure uniformity in FHA compliance efforts pursuant to the rule.
• Research, analysis and data sources used by HUD in conceiving, drafting, and finalizing this guidance, along with information that HUD will use to support criminal screening policies and practices in HUD supported housing.

NAHRO’s Community Revitalization and Development and Housing Committees will meet at NAHRO’s National Conference in New Orleans to begin a white paper highlighting best practices that PHAs can follow to comply with the HUD guidance. NAHRO’s past coverage of HUD’s guidance can be found here.

On September 21, HUD released an interim report, conducted by Econometrica Inc., that examines how the Rental Assistance Demonstration (RAD) program is performing. According to the report, by October 2015, public housing agencies (PHAs) that participated in the program successfully generated $2.5 billion in new investment to preserve and improve the public housing stock, leveraging $9 in capital for every $1 of public housing funds. In HUD’s press release, Secretary Castro noted that “[t]he early returns are in and RAD is proving itself to be an exciting new tool that allows us to ensure safe, quality housing for low-income Americans. As we continue to evaluate this demonstration, it’s already clear that RAD is helping to preserve an important piece of our nation’s affordable housing stock.”

NAHRO is pleased to see the success of RAD program in helping PHAs leverage needed dollars. However, more administrative capacity is required from HUD to ensure successful, streamlined RAD transactions. 

RAD is not a panacea to fix our public housing properties. Although it works for some PHAs, it will not work all PHAs. It is imperative that policymakers renew their commitment to adequate funding for the program, and RAD remains just one tool that PHAs can use to modernize their public housing units.

HUD’s press release can be found here. 

On September 20, HUD’s Office of Public and Indian Housing Issued HUD Notice PIH-2016-13 entitled Guidance on Property and Casualty Insurance Issues. The Notice provides guidance on the procedures, restrictions, reporting requirements and eligible uses related to casualties for Operating or Capital Funds. The Notice also modifies existing guidance on the eligibility of units that have been subject to a casualty for continued Operating Funds.

The Notice specifies that costs of repairing or rebuilding public housing projects due to damage or destruction caused by casualties, emergencies or natural disasters are eligible Capital Fund expenses. Costs may eventually be covered with insurance proceeds or, if approved by HUD, in a separate grant from the annual appropriations set-aside funds for emergency and natural disasters. PHAs are not required to repay the Capital Fund unless  the proceeds cover the same work funded by an Emergency or Disaster grant.

PHAs are also allowed to use Operating Funds for emergency work due to unforeseeable and unpreventable emergencies that include damage to the physical structure of a PHA’s housing stock. PHAs must reimburse their operating account for any expenses that were initially covered with Operating Funds. PHAs must use insurance or disaster proceeds to reimburse their operating account up to the amount received.

The Notice further discusses steps PHAs must take in the event of rebuilding or demolishing damaged properties from unforeseeable and unpreventable emergencies.

HUD has released its list of PHAS High Performers for Federal Fiscal Year (FY) 2017 Capital Fund calculations. For the Department’s preparations for calculating the Capital Fund formula for FY 2017, the Department is using the FY 2015 PHAS designations to determine which PHAs are on the High Performer bonus for the 2017 formula calculations. PHAs should validate whether they are on the High Performer list by reviewing the Capital Fund Calculation spreadsheet (available on the Office of Capital Improvements website).

PHAs that believe there is an error in the calculation of their PHAS score for FY 2015 must email an explanation of the error to the Real Estate Assessment Center (REAC) at PHAS@hud.gov no later than October 31.

On September 15, HUD released a Press Release noting that the Office of General Council issued new guidance on the application of the Fair Housing Act to a housing provider’s consideration of a person’s limited ability to read, write, speak or understand English. The guidance “specifically addresses how the disparate treatment and discriminatory effects methods of proof apply in Fair Housing Act cases in which a housing provider bases an adverse housing action – such as a refusal to rent or renew a lease – on an individual’s limited ability to read, write, speak or understand English.”

The guidance notes that:

• Using a person’s LEP to intentionally discriminating against someone because of race, national origin, or another protected characteristic is considered in violation of the Fair Housing Act.
• Intentional discrimination may involve imposing restrictions, targeting individuals for unfair or illegal housing-related services, or failing to comply with the requirement to provide housing-related language assistance services to LEP persons.
• Housing providers may also be in violation of the Fair Housing Act if the provider’s policy has an unjustified discriminatory effect, even when the provider had no intent to discriminate.
• Three steps are used to analyze claims that a housing provider’s use of LEP results in an unjustified discriminatory effect: assessing the discriminatory effect; evaluating whether the challenged policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest; and evaluating whether there is a less discriminatory alternative.

On September 15, HUD sent out an email reminding recipients of HUD funds that FY 2009 grant funds are expiring at the end of this month. Grantees must submit drawdown approvals for these funds by September 16, 2016. The email also notes that “[f]or other funds not approaching expiration, grantees can continue to enter draw down requests to September 28th and the draw will be processed before HUD’s accounting system closes. If a disbursement is received by the Line of Credit Control System (LOCCS) (directly, or via IDIS or DRGR) after September 28th, the request will not be processed until HUD’s accounting system is reopened. HUD’s accounting system is expected to reopen in early October.”

This week HUD’s Office of Inspector General (OIG) released a report that found HUD did not always accurately verify Operating Fund calculations. Although the report found HUD did not always verify the calculation of Operating Fund subsidies, it did note that HUD recaptured the funds once it determined that excess subsidies were provided to PHAs. According to the OIG, more than $12 million in operating funds disbursed to PHAs was not adequately supported, and $116,218 was ineligible.

The report recommends that HUD officials:

• determine whether any of the overpayment of $3.6 million was ineligible and recover the ineligible payments;
• recapture from PHAs the $116,218 ineligibly disbursed for the units that exceeded the limit;
•   obtain documentation of the utility expense level amounts and verify the accuracy of the computation of $9 million of Operating Fund subsidies and recapture ineligible amounts;
• enhance controls to ensure that verification procedures for Operating Fund calculations are followed by field office staff;
• continue implementing the reconciliation software application to provide greater assurance that operating fund subsidies are accurately calculated based on correct data, and;
• strengthen controls over record keeping.

Housing America Month is a celebration of affordable housing each October where housing and community development agencies in the U.S. host events to highlight their work. NAHRO encourages all PHAs and community development organizations to host events that showcase the important work that you do. Next month, tweet your events and stories about the impact that affordable housing has for Americans across the country to #WHAAT and #HousingAmericaMonth.

NAHRO wants to hear your stories! If there is anything you would like to share regarding Housing America Month, please e-mail Carmen Smith, NAHRO’s Public Affairs Coordinator and Assistant Editor, at csmith@nahro.org.

Housing America is a campaign that raises national awareness of the need for and importance of safe, quality, affordable housing through education, advocacy, and empowerment. Housing America celebrates education, advocacy, and empowerment.