NLIHC signed a letter from the National Preservation Working Group (PWG) to HUD commenting on HUD notices Housing 2012-15 and PIH 2012-39, which revise withdrawn Notice PIH 2012-19. The notices implement a provision of the FY12 Appropriations Act that sets aside $10 million of tenant protection vouchers for previously ineligible low income households in low-vacancy areas that may have to pay more than 30% of their income for rent at three types of HUD-assisted multifamily properties (see Memo, 9/28).
PWG is a coalition of tenants, nonprofit owners, advocates and state and local housing agencies including NLIHC dedicated to the preservation of existing federally assisted multifamily affordable housing.
While endorsing the improvements made by the revised notices, in order to ensure that the maximum number of rent-burdened tenants are helped with tenant protection assistance, PWG offered suggestions regarding three issues: the artificial 40% rent burden eligibility threshold, inadequate notice to tenants, and the need for a back-up to relying on owners to apply.
HUD intends to limit tenant protections to those paying more than 40% of their income for rent and utilities. PWG commented that this high eligibility threshold is inappropriate because it means these tenants are subject to more onerous eligibility criteria than that of tenants who go through other housing conversion actions triggering enhanced voucher eligibility, such as prepayments or opt-outs. PWG noted that if HUD is concerned about a possible shortage of funds and is using the 40% threshold to limit eligibility, then such a high rent burden should be used only for an initial eligibility determination. There should be some method to provide lower rent burdens (down to 35% and then to 30%) for these families if funds intended for this purpose remain available after the initial determination using any higher threshold until the full $10 million is obligated.
The notices would require owners to inform tenants at least 30 days prior to applying for tenant protections. PWG commented that if owners know affordability restrictions are expiring, HUD should require them to notify tenants at least 12 months in advance, as occurs under an expiring Section 8 contract. The failure to require accurate informational notices will be disruptive and may deprive some tenants of affordable housing because they move when the termination threatens and they do not have accurate information.
PWG stated its concern about leaving the process for applying for tenant protections up to owners. PWG urges HUD to create a back-up mechanism for delivering tenant protections. As is done in the case of HUD-subsidized mortgage prepayments or opt-outs of Project-Based Section 8 contracts, after an owner files a conversion notice, HUD should work with PHAs to ensure that eligible tenants receive the appropriate tenant protection assistance.
The comment letter, without signers, is attached to this page.