PIH Notice 2013-2, issued on January 10, 2013, describes a numerical indicator that HUD will use to make an annual determination of an MTW PHA’s compliance with one of the five statutory requirements for participation in the Moving to Work (MTW) demonstration. The specific requirement is that MTW PHAs must continue to assist substantially the same total number of low income families as would have been served if the PHA was not part of the MTW demonstration.
Since MTW was implemented in 1996, HUD has merely accepted a PHA’s certification of compliance with this requirement. The notice applies to all 39 existing MTW PHAs.
PHAs selected for the MTW demonstration can seek waivers from most of the existing statutes and regulations governing the public housing and Section 8 voucher programs. For example, they can seek HUD approval to merge public housing and operating funds with voucher funds. Waivers of some regulations, such as allowing PHAs to divorce rents from incomes by charging rents that are unaffordable, serve higher income residents even though the lowest income households have the greatest need, or impose work requirements and time limits, can be harmful to residents.
To verify compliance with the statutory requirement, the notice indicates that HUD will compare the number of families served in an MTW PHA’s fiscal year to an adjusted “baseline” estimate of the number of families that would have been served absent the MTW designation. This comparison will begin with an MTW PHA’s 2012 fiscal year.
To determine the numerator of the calculation, at the end of each MTW PHA’s fiscal year, HUD will determine how many families were served by summing the number of occupied public housing units and the number of vouchers utilized. To determine the denominator, the “baseline,” HUD will add the number of public housing units occupied plus the number of vouchers utilized in the month prior to the date that a Standard MTW Agreement was fully executed. A Standard MTW Agreement is a formal document detailing which regulations HUD has agreed to waive, along with the statutory and reporting requirements.
Every year the baseline will be adjusted according to a set of variables described in the notice. One troubling variable would subtract from the baseline any public housing units demolished or disposed of. This could have the effect of reducing the number of families served because an MTW PHA may have had a significant number of funded but vacant units the month before entering MTW.
The notice identifies various levels of compliance and non-compliance. For example, if an MTW PHA falls more than 5% below the adjusted baseline in a given year or dips below the baseline for two or more years, it will be considered “substantially compliant” but have to create a “baseline plan” that results in a percentage of 100% or higher. An MTW PHA that is found to be “non-compliant” will have to enter into a corrective action plan. Sustained non-compliance constitutes a breach of the Standard MTW Agreement and my result in the loss of the MTW designation.
The other four MTW statutory requirements are:
- At least 75% of the families served must have incomes below 50% of the area median income.
- A comparable mix of families (by family size) must be maintained.
- There must be a reasonable rent policy.
- Housing Quality Standards must be maintained.