FY 2017 FMRs Published

HUD has published its FY 2017 FMRs on its website. While we are still in the process of going through the notice announcing the publication of the FMRs, here are some of the main takeaways:

  • After the passage of the Housing Opportunity Through Modernization Act of 2016 (HOTMA), HUD is no longer required to publish FMRs in the Federal Register, but may now publish them on its website, while announcing the postings in the Federal Register.
  • After HOTMA, FMRs shall be effective no earlier than 30 days after the date of publication of the announcement notice in the Federal Register.
  • HOTMA requires that HUD publish proposed “material changes” to the methodology for comment. The notice asks for public comment on “defining the scope of material changes that will trigger notice and comment in future calculations of FMRs.”
  • The methodology for calculating the FY 2017 FMRs will remain the same as the methodology used to calculate the FY 2016 FMRs, except that updated data will be used.
  • There are no geography changes, but “several areas have been renamed to avoid confusion.”
  • The effective date of the FMRs will be October 1, 2016.
  • HUD has established a procedure “for PHAs and other interested parties to comment on such fair market rentals and to request, within a time specified by [HUD], reevaluation of the fair market rentals in a jurisdiction before such rentals become effective.”

Read the full pre-publication notice here.

[8/26/16 UPDATE: The Federal Register publication can be found here. Comments are due by September 26, 2016.]

The FY 2017 FMRs can be found here (scroll to FY 2017). The PDF tables can be found here.

FMRs, SAFMRs, and Volatility

Our friends at the National Housing Conference (NHC) and the Public Housing Authorities Director’s Association (PHADA) have written a blog post with a series of beautiful maps on historical Small Area Fair Market Rent (SAFMR) volatility on NHC’s Open House Blog. Here’s a map from the blog post on the Washington-Arlington-Alexandria HUD Metro Fair Market Rent (FMR) area.

https://nahropolicyblog.files.wordpress.com/2016/08/d5a51-washington-arlington-alexandria252c2bdc-va-md2bhud2bmetro2bfmr2barea.jpg

I recommend looking at the blog post to read their take on SAFMRs and volatility and to see the other maps.

Here are a couple of points that I would like to note to further this conversation.

The methodology for calculating Fair Market Rents (and SAFMRs) is changing

In calculating the final FY 2016 FMRs HUD switched from a “historical-based annualized change in gross rent trend factor [to] a forward-looking forecast . . . [that] uses a model that forecasts national rent and utility [Consumer Price Index] indices based on economic assumptions used in the formulation of the President’s Budget.”[1] Since the methodology has changed, we need a time horizon of a few years to see if the volatility remains as bad a problem as before the methodological change.

Additionally, Peter Kahn, the Director of HUD PD&R‘s Economic Market Analysis Division, has stated the following:

We are looking at ways throughout the proposed ’17 FMR process of addressing that . . . variability in general. When the proposed ’17 FMRs are out, the . . . you can read that preamble and see that we are trying to take steps to address that variability. (See the YouTube clip where he said that here.)

Will HUD be successful in addressing this volatility? I don’t know, but it’s good that they’re aware of the problem and are taking steps to address the issue.

The passage of the Housing Opportunity Through Modernization Act of 2016 (HOTMA) may give PHAs a tool in managing volatility of payment standards based on both FMRs and SAFMRs

HOTMA has a provision that allows PHAs to hold harmless households that live in areas that receive lower FMRs. Section 107(b) of HOTMA states that “no public housing agency shall be required as a result of a reduction in the fair market rental to reduce the payment standard applied to a family continuing to reside in a unit for which the family was receiving assistance . . . at the time the fair market rental was reduced.” It is NAHRO’s understanding that this provision will apply to payment standards based on FMRs and SAFMRs.

The chart below shows how if a provision allowing for payment standards to be held harmless was in place between 2010 and 2016, then volatility may have been reduced in some instances. The blue line shows the actual Washington-Arlington-Alexandria FMR for 2 Bedroom units. The orange line shows what a payment standard based on that FMR would have been, had it been held harmless.

WashDCHoldharmlessFMRChart-2010-2016

The HOTMA provision has the ability to reduce volatility in certain instances, though holding FMR payment standards harmless may have budget implications. Another point to remember is that when the payment standard starts being held harmless matters. In the chart above, if the payment standard starts being held harmless in 2013, then the volatility that results from increases in the FMR will still occur.

Although the chart above shows a payment standard based on a FMR being held harmless, the same principle would apply to payment standards based on SAFMRs.

[1] – 80 Fed. Reg. 77,124 (December 11, 2015).

NAHRO meets with HUD PIH Leadership

Georgi John HUD 16-8-9

NAHRO’s Acting CEO, John Bohm, and the NAHRO Policy Team members; Georgi Banna, Eric Oberdorfer and Tushar Gurjal; along with PHADA and CLPHA met with HUD’s Public and Indian Housing Principal Deputy Assistant Secretary (PDAS), Lourdes Castro-Ramierz, and many of the PIH department leadership.

Among the topics discussed were the priorities for implementing the Housing Opportunities Through Modernization Act (HOTMA/HR 3700); upcoming HUD rules such as Smoke-Free Housing, Small Area Fair Market Rents (SAFMRs), HCV Administrative Fee Formula; Moving to Work (MTW) Expansion; and Triennial Recertifications; and the current priorities of NAHRO, PHADA, CLPHA and HUD. NAHRO and CLPHA were also thanked for their current and continued work in affordable housing and education and the improvement of educational outcomes for the children our members serve.

NAHRO is committed to keeping open and productive lines of communication and will continue to share the thoughts and concerns of our members with HUD.

HR 3700 Sent to President for Signature

In a huge victory for NAHRO and its members, the Senate today approved the Housing Opportunity Through Modernization Act (HR 3700) unanimously by a voice vote, sending the bill to the President for his signature.
The bill was approved using a process known as “hot-lining”, a procedure to quickly pass non-controversial legislation. It was passed by the House unanimously on February 2, 2016.

“NAHRO commends the House and the Senate for their work on this critical legislation. With the President’s signature, housing authorities across the country will be able to do their jobs more efficiently and serve their residents and communities better,” said NAHRO President Steve Merritt.

NAHRO thanks everyone involved in the passage of this important legislation, including legislators and their staff, NAHRO membership, and partner housing advocacy groups.

“This is a big deal. The passage of HR 3700 marks the culmination of years of work by members of Congress and their staff, NAHRO members and staff, and the housing community at large. It demonstrates that housing reform is a priority and can be accomplished, and that the legislative process does still work,” said NAHRO’s Acting CEO John Bohm.

S. 3083 Introduced in Senate – Take Action Now!

Senate Banking, Housing and Urban Affairs committee members Tim Scott (R-S.C.), Robert Menendez (D-N.J.), along with Senators Roy Blunt (R-Mo.), and Christopher Coons (D-Del.) took a big step this week by introducing S. 3083, which is companion legislation to the House-passed H.R. 3700.  Substantially, the bills are the same.

This is a huge victory, but our work is just beginning in the Senate – contact your Senators today to urge them to take action immediately on S. 3083 – send a letter to your senators and tweet at them (your Senators’ Twitter handles can be found on their websites).

Sample tweets:

  • TY @RoyBlunt @SenatorTimScott @ChrisCoons @SenatorMenendez for #S3083 – I will help you pass this critical legislation @NAHRONational
  • #PHAs hit hard by budget cuts, over regulation – S 3083 protects residents, helps #PHAs serve comm better- @SENATOR pass #S3083
  • House passed #HR3700 unanimously 4 months ago. @SENATOR please act on #S3083

NAHRO has supported many of the reforms within the bill since it was originally drafted in the House; NAHRO President Steve Merritt testified at a hearing on H.R. 3700 in October 2015 and NAHRO has been working with a coalition of housing stakeholders pushing for the passage of the bill. In April, NAHRO joined the coalition on a letter to Senators urging the quick passage of the legislation.

Specifically, NAHRO supports these provisions of HOTMA (H.R. 3700 and S. 3083):

  • Capital Replacement Reserves – Using NAHRO language also included in the Senate FY16  and FY17 Appropriations Acts, HOTMA would allow PHAs to voluntarily establish Capital Fund replacement reserves.
  • Subsidy Flexibility – HOTMA would allow for PHAs to transfer 20 percent of their Operating Funds to their Capital Fund, language NAHRO has advocated for strongly over many years.
  • Income Review Safe Harbors – HOTMA would allow PHAs to use other federal data to determine income including TANF, Medicaid, and SNAP.
  • Project-Based Voucher Program – PHAs would be able to calculate project-based vouchers (PBVs) based on authorized units instead of voucher funding. Additionally, those PHAs that have units targeting homeless individuals and families, veterans, elderly households, disabled households, or units in areas where vouchers are difficult to use, would be permitted to project-base up to 30 percent of those targeted units. In other instances, PHA project-based voucher (PBV) assistance may not exceed 25 percent of the units in a project or 25 units, whichever is greater. In areas where vouchers are difficult to use and in census tracts with a poverty rate of equal to or less than 20 percent, PHAs may provide project-based voucher assistance for up to 40 percent of the units in a project. HOTMA allows PBV contracts and extensions of up to 20 years; allows PHAs to permit site-specific waiting lists managed by owners; and clarifies that PHAs may project-base HUD-VASH and Family Unification Project (FUP) vouchers.
  • Extended Family Unification Vouchers – HOTMA would increase the age of eligibility for FUP vouchers from 21 to 24 and make youth who will leave foster care within 90 days and are homeless or at risk of homelessness eligible. S. 3083 contains provisions that would also expand FUP vouchers by allowing eligible youth “who have attained 16 or 17 years” and who have left foster care to remain in the program for up to 36 months.
  • PHAs and LRAs as ESG Subrecipients – HOTMA includes statutory language, supported by NAHRO, that would permit any state or local government receiving Emergency Solutions Grants (ESG) allocations to distribute all or a portion of its grant funds to PHAs and local redevelopment authorities (alongside private nonprofit organizations).
  • Special Assistant for Veterans Affairs and an Annual Supplemental Report – HOTMA would create a new position of Special Assistant for Veterans Affairs that reports directly to the Secretary of HUD and would be responsible for, among other things, ensuring veterans have access to housing programs and homeless assistance, coordinating veteran-related programs at HUD, and serving as a liaison between HUD, the VA, and the USICH, and officials of state, local, regional, and nongovernmental organizations. HOTMA would also require HUD to collaborate on and submit to Congress an annual supplemental report on veteran homelessness.

H.R. 3700 Introduced in Senate – Take Action Now!

Senate Banking, Housing and Urban Affairs Subcommittee on Housing, Transportation, and Community Development Chairman Tim Scott (R-S.C.), Ranking Member Robert Menendez (D-N.J), Sen. Roy Blunt (R-Mo.), and Sen. Christopher Coons (D-Del.) introduced companion legislation to the Housing Opportunity Through Modernization Act (H.R. 3700) in the Senate today. The Senate bill number is S. 3083.

“NAHRO commends Chairman Tim Scott and Ranking Member Robert Menendez, with Sen. Roy Blunt and Sen. Christopher Coons, on the introduction of the Housing Opportunity Through Modernization Act in the Senate. This common-sense legislation will help public housing authorities across the country do their jobs more efficiently and better serve their residents. NAHRO was honored to have the opportunity to testify at the House Financial Services Committee last fall about this bill and I am thankful to the senators for their commitment to moving it forward,” said John Bohm, Acting NAHRO CEO.

This is a huge victory, but our work is just beginning in the Senate. Send a letter to your senators today urging them to take immediate action on the Senate bill.

For more information, see NAHRO’s coverage of the introduction of H.R. 3700 and the revised version that was approved unanimously by the House in February.