Today, the HUD Office of Community Planning and Development (CPD) published a new notice (CPD-17-01) that provides guidance on how Emergency Solutions Grants (ESG) Program funds can be sub-awarded to Public Housing Agencies (PHAs) and Local Redevelopment Authorities (LRAs). On July 29, 2016, President Obama signed into law the Housing Opportunity Through Modernization Act of 2016 (HOTMA) which included language, first proposed by NAHRO, that amended the McKinney-Vento Homeless Assistance Act (42 U.S. 11373(C)) to permit local governments receiving ESG funding to sub-award their ESG funds to PHAs and LRAs for eligible ESG activities. This change saves grantees from having to go through a costly and time-consuming procurement process if they wish to devolve their funds to any PHA or LRA. This change became effective upon enactment of HOTMA last year and required no regulatory rulemaking. This new notice provides additional guidance on the allowable sub-awards to PHAs and LRAs and the key requirements (e.g. consistency with the Consolidated Plan) that apply to sub-awarded funds
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A NAHRO Professional Development e-Briefing
Tomorrow, Tuesday, April 11, 2017
1:30 – 3:00 pm EDT
On July 29, 2016, President Barack Obama signed into law the Housing Opportunity Through Modernization Act of 2016 (HOTMA), legislation that received unanimous, bipartisan support from Congress.
As HUD has begun the process of implementing the provisions in HOTMA, many local agencies are wondering how they will be impacted. Join National NAHRO’s in-house policy experts as they review the key provisions included in HOTMA, discuss HUD’s implementation notices and timeline, and explain what NAHRO is doing to help HUD move forward with implementation of this critically important reform legislation.
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!
Online registration closes TONIGHT (Monday, April 10) at 11:59 p.m. EDT.
Last week, HUD published new guidance (notice CPD-16-17) for Housing Opportunities for Persons With AIDS (HOPWA) grantees explaining the changes to the HOPWA program that resulted from the passing and signing of the Housing Opportunity Through Modernization Act (HOTMA) on July 29, 2016. The passage of HOTMA was a huge victory for NAHRO and its members because it provided housing authorities with the effective tools and mechanisms to improve the operation of their programs. The new law also provided long-awaited amendments to the HOPWA statue that modernizes the program’s allocation formula, and addresses administrative provisions and adds program definitions. HUD’s new notice describes how the HOTMA provisions will effect HOPWA formula allocations for FY 2017 and beyond. The notice also details the program changes that became effective on July 29, 2016 versus the program changes that must be implemented by HUD through future rulemaking.
On September 26, Principal Deputy Assistant Secretary Lourdes Castro Ramirez sent an e-mail to PHA executive directors identifying the self-implementing provisions of the Housing Opportunity Through Modernization Act of 2016 (HOTMA). All the other Housing Choice Voucher or Public Housing provisions will require HUD promulgated notices or regulations.
Five HOTMA Self-Implementing Provisions
- Reasonable Accommodation Payment Standards – PHAs may establish, without HUD approval, a payment standard of up to 120 percent of the Fair Market Rent (FMR) as a reasonable accommodation for a person with a disability. The Streamlining Rule already provided this flexibility.
- Establishment of Fair Market Rent –
- HUD may publish FMRs directly to their website, skipping the Federal Register, but must publish a notice in the Federal Register that they are published. Changes how interested stakeholders comment on FMRs and requests that HUD reevaluate the FMRs in a jurisdiction before those rents become effective.
- PHAs will no longer be required to reduce payment standards as a result of a FMR reduction for families continuing to reside in a unit under a housing assistance payment (HAP) contract at the time of the FMR reduction. The regulation at 24 CFR 982.505(c)(3) requiring the new decreased payment standard be applied to program participant families at their second regular reexamination is no longer applicable. PHAs must “adopt policies in their Administrative Plans that further explain this provision.” HUD will issue additional guidance in the future.
- Family Unification Program (FUP) for Children Aging out of Foster Care –
- FUP-eligible youth may receive FUP assistance up to 36 months. Applies to current as well as new FUP-assisted youth.
- Expands eligibility requirements for FUP-eligible youth. Expanded eligibility applies to the following:
- Youth aged 18 to 24 that are homeless or at risk of being homeless, and
- for those that left foster care at age 16 or older, or those that are within 90 days of leaving foster care.
- “At risk of being homeless” is defined at 24 CFR 576.2.
- Preference for U.S. Citizens or Nationals in Guam – Only applies to Guam. Establishes a preference for U.S. Citizens or Nationals in receiving financial assistance.
- Exception to PHA Resident Board Member Requirement – provides an exception for certain jurisdictions from resident board member requirements. Provision has been in effect through multiple appropriations acts.
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.
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.” 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.
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.
 – 80 Fed. Reg. 77,124 (December 11, 2015).
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.
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).
- 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.
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.