On June 1, 2017, U.S. Department of Housing and Urban Development (HUD) kicked off National Homeownership Month with the “New Era of Homeownership” panel discussion. Keynote speaker, Secretary Ben Carson, described homeownership as “security, certainty, a path forward, and a place to live with loved ones”. He stated, “after all we’ve been through, homeownership remains an American value and the cornerstone of our economy,” and noted that 63.6 percent of Americans are homeowners. Based on research from Harvard Joint Center for Housing Studies, homeownership has increased since 2016 and is projected to increase within the next eight years by 13.6 million households.
HUD to Investigate Perception of Small Area FMRs
Tomorrow, HUD will publish a notice in the Federal Register titled “30-Day Notice of Proposed Information Collections: Small Area Fair Market Rent Demonstration Evaluation.” The notice announces an information collection to determine perception of the shift from regular Fair Market Rents (FMRs) to Small Area FMRs among voucher holders and landlords.
For voucher holders, HUD will investigate whether new and current voucher holders understood how shifting to Small Area FMRs changed their housing options, whether voucher holders who moved searched in new neighborhoods, and whether voucher holders moved at a different rate.[1]
For landlords, HUD will investigate whether landlords were aware of the shift to Small Area FMRs, whether this affected their willingness to rent to voucher holders, and the level at which they set their rents.[1]
To investigate, HUD will interview 70 tenants and 35 landlords. Both groups will be interviewed in the areas served by the PHAs in the Small Area FMR Demonstration. Incentive payments of $20 for tenants and $40 for landlords will be made.
HUD seeks comments on the following: 1) Is the information collection necessary and does it have practical utility; 2) the accuracy of the information collection burden; 3) ways to enhance the quality of the information collected; and 4) ways to minimize the burden of the information collected. Comments will be due 30 days after the notice is published. The pre-publication notice can be found here.
[6/2/17 Edit – The notice has been published in the Federal Register, and comments are due on July 3, 2017. The notice can be found here.]
[1] – NAHRO notes that this information would have been useful to know before HUD mandatorily directed PHAs to implement Small Area FMRs in certain areas.
The Importance of CDBG and HOME Programs
On Wednesday, May 24, NAHRO attended the roundtable discussion: The Importance of the Community Development Block Grant (CDBG) and HOME Investment Partnership (HOME) programs. The House Committee on Financial Services Ranking Member Maxine Waters (D-CA), as well as Rep. Dan Kildee (D-MI) and Rep. Emanuel Cleaver II (D-MOS) led the roundtable to discuss the Administration’s proposed Fiscal Year (FY) 2018 budget, which currently eliminates both of these essential housing and community development programs. The Ranking Members facilitated conversations with community leaders to stress the significance of the programs in regards to housing, infrastructure, economic development, public health resources, and safety in various communities.
Panelist include:
- The Honorable Karen Freeman-Wilson, Mayor of the City of Gary, Indiana
- The Honorable David P. Helms, Mayor of the Town of Marion, Virginia
- Robin Hughes, President & CEO, Abode Communities: Los Angeles, CA
- Bonnie Moore, Director of Community Development, City of Shreveport, Louisiana and President, National Community Development Association
- The Honorable Ed Pawlowski, Mayor of the City of Allentown, Pennsylvania
- Renee Price, Commissioner of Orange County, North Carolina
- Bill Shelton, Director, Virginia Department of Housing and Community Development and Council of State Community Development Agencies
- Schroeder Stribling, Executive Director, N Street Village: Washington, D.C.
HCV Homeownership e-Learning – Tomorrow & Thursday
HCV Homeownership, a NAHRO Professional Development e-Learning, begins tomorrow and continues on Thursday. Register online at www.nahro.org/training-calendar.
ConnectHome to Expand to Over 100 Communities
Last week, EveryoneOn, in partnership with HUD, announced the expansion of the ConnectHome pilot. First unveiled in 2015 by the Obama Administration, ConnectHome was a White House initiative aimed at narrowing the digital divide within 28 pilot communities (which included participation from 23 NAHRO member agencies). ConnectHome tested the impact of cross-sector collaborators using non-government resources in order to accelerate the adoption and utilization of broadband technology by families living in HUD-assisted housing
Beginning this summer, the expansion of ConnectHome – which has been rebranded as “ConnectHOME Nation” – will launch a new cohort of communities with the goal of reaching over 100 communities and connecting 350,000 people living in public housing by 2020.
HUD Sends Letter Confirming Operating Fund Proration
Earlier today, HUD sent a letter explaining Public Housing Operating Fund obligations for June. In June, HUD is increasing the proration for the Operating Fund from 85 percent to a 92.89 percent proration.
The proration represents a cumulative amount for the year. Since PHAs received payments based on a lesser yearly proration for the first few months of the year, June’s payment will be greater to compensate for the initial underfunding. The July payment will more accurately represent the new monthly amount under the new proration. The letter notes that there may be minor proration fluctuations and that “[t]he final proration will be established after final eligibility is determined for all projects.”
A change in proration is only one reason that a PHA’s payment in absolute terms (i.e., actual amount received) may have changed. Another reason for a change in the absolute amount is a decline in formula eligibility for some PHAs. Read more about this formula eligibility decline in our previous post “Operating Fund Proration Increases as Funding Decreases.”
Specific June Operating Fund obligation letters grouped by state can be found here.
HUD’s letter explaining June Operating Fund obligations can be found here.
HUD to Propose FMR Methodological Changes
Tomorrow, HUD will publish, in the Federal Register, a notice titled “Proposed Changes to the Methodology Used for Estimating Fair Market Rents.” The Housing Opportunity Through Modernization Act of 2016 (HOTMA) requires HUD to seek comment for material changes to FMR methodology. Responding to NAHRO’s prior comment letter, HUD has agreed to an expansive definition of what constitutes a material change. This notice follows through on HUD’s agreement to seek comment on changes. Comments will be due 30 days after tomorrow’s publication. [5/26/17 Edit – Comments are due June 26, 2017.]
HUD currently calculates FMRs by assigning each area a two-bedroom standard quality base rent from a five year American Community Survey (ACS) tabulation. The base rent is then updated with a recent mover adjustment factor from the latest one year ACS data. The recent mover factor is adjusted “to be ‘as of'” the year which the FMRs are being calculated by using local or regional Consumer-Price-Index-measured changes in gross rents for two years and then a nationally forecasted trend factor measuring estimated expected growth for another two years.
HUD proposes three changes to the FMR methodological method. The first two changes apply to all FMRs, while the third applies only to Small Area FMRs.
- HUD is proposing to only use an ACS estimate, if each ACS estimate is based on at least 100 survey responses. This is in addition, to the current criterion, where HUD only uses the estimate if the error of the estimate is less than half the size of the estimate. If the data does not meet both criteria, then HUD will use an average of the three most recent years of data.
- HUD is proposing a change to the “recent mover factor” where HUD uses “all-bedroom” recent mover rents, when the two-bedroom recent mover rents are not statistically reliable.
- HUD is proposing moving away from the “ratio” method used to tabulate Small Area FMRs to using gross rent estimates calculated by ZIP Code Tabulation Areas.
HUD will make documentation of the impact of these methodological changes and hypothetical FY 2017 FMRs available. (If they are not posted, they should be posted within the next 24 hours.) NAHRO will continue to examine these methodological changes and discuss it with our membership before coming to any conclusions about their effectiveness in creating more accurate FMRs.
When posted, hypothetical FY 2017 FMRs calculated using the new methodology and hypothetical FY 2017 Small Area FMRs calculated using the new methodology can be found here and here respectively.
The pre-publication notice can be found here.
[5/26/17 Edit – The published document can be found here.]
Proposed Cost Savings Do Not Account for $1.8135 Billion Cut to Public Housing Program
Released on Tuesday, May 23, President Trump’s proposed budget includes significant cuts to the Public Housing Program, especially regarding the Operating and Capital Funds. Although the budget also proposes a set of policies aimed at reducing costs of operating the Public Housing program, these policies would not account for the combined $1.8135 billion cut proposed to the program by the administration. These cuts would only increase the challenges already faced by PHAs across the country in ensuring low-income seniors, families, veterans, and disabled individuals continue to have to access to safe, secure, affordable housing.
FY 2018 President’s Proposed Budget: Some HCV Thoughts
The following post is meant to offer a few thoughts on the treatment of the Housing Choice Voucher (HCV) Program in the FY 2018 President’s proposed budget. For a deeper analysis, please read NAHRO’s article, “FY 2018 President’s Budget Request: Section 8 Programs” (NAHRO members only). The proposed budget has the potential to affect the HCV Program in two important ways: by cutting funding and by making many policy changes.
Click on the link to read more.
FY 2018 Proposed Budget: Process and In-Depth Analysis
The Administration’s budget proposal, released on May 23, is the first step in a months-long journey. Now that the Administration has released its recommendations, this Direct News will provide in-depth coverage of how it would affect the Community Development, Section 8 and Public Housing programs administered by HUD.
The budget proposal requests cuts, which if implemented, would be devastating for communities. NAHRO strongly opposes the President’s budget proposal and will work to provide necessary and responsible funding for critical housing and community development programs. NAHRO will also fight for long-overdue program and regulatory reforms that can reduce costly administrative burdens.
Members should note that the President’s request is the beginning and not the end of the budget and appropriations process. The Administration’s budget request has over the years become a political document that reflects the fiscal goals and priorities of the Administration for the upcoming fiscal year. It does not carry the force of law. Congress, who controls the nation’s purse strings, can choose to accept the request wholesale, pick and choose parts of it, or reject it outright, which they frequently do. NAHRO will fight to ensure that work undertaken by our members to address critical housing needs for vulnerable families can be sustained.
NAHRO’s initial review can be found in The NAHRO Blog’s post, “President Officially Releases FY 18 Budget Proposal, Slashes Housing and CD Spending.” NAHRO members click on the links below to review the in-depth FY 2018 budget request analysis for Community Development, Section 8, and Public Housing:
Community Development (NAHRO Login Required)
Section 8 (NAHRO Login Required)
Public Housing (NAHRO Login Required)
The NAHRO Blog: Legislative & Policy Updates from Washington, DC 