On January 6, HUD published proposed rules to codify statutory changes made by the FY14 Appropriations Act relating to certain elements of the public housing and Housing Choice Voucher (HCV) programs. HUD also proposes changes to streamline some regulatory requirements in order to reduce burdens on public housing agencies (PHAs). Eight proposed changes pertain to both programs. An additional five changes are proposed just for public housing, and another six would affect the HCV program.
The FY14 Appropriations Act requires PHAs to establish public housing flat rents equal to no less than 80% of the area’s Fair Market Rent (FMR) (see Memo, 5/23/14). The proposed rule implements this provision and provides additional details. For example, PHAs must adjust the flat rent amount downward by the amount of a utility allowance that a household might otherwise be eligible to receive. The proposed rule would also provide more information about rent options that PHAs must provide to a household paying a flat rent. For instance, in order for households to make an informed choice about whether to pay an income-based rent or a flat rent, the PHA must provide information about the dollar amounts a household would pay under each option, and it must inform the household about the PHA’s policy for switching the type of rent in circumstances of financial hardship.
The FY14 Act also authorizes PHAs to inspect Housing Choice Voucher (HCV) units every other year, rather than annually, and to use inspections conducted to comply with other programs such as the Low Income Housing Tax Credit program.
HCV regulations require PHAs to establish utility allowances based on unit size (number of bedrooms) and unit type (apartment, row house, town house, single-family, detached, manufactured home). HUD proposes that utility allowances be based on the size of the unit and either the type of the unit or a “unit type,” which would be a HUD determined “attached” or “detached” unit value. Regarding unit size, current HCV regulations require PHAs to use utility allowances based on the size of the dwelling unit actually leased by a household. The FY14 Act requires that the amount of the utility allowance to be based on household size. Ultimately, the housing allowance must be the lesser of the amount based on the size of the unit or the family size, as well as type of unit.
Currently, PHAs are required to annually review and determine whether a public housing family complies with the community service requirement. HUD proposes to allow a tenant to self-certify compliance with the requirement.
HCV regulations currently require a PHA to request a waiver from the HUD Field Office for a voucher exception payment standard above 110% of the FMR. HUD proposes to allow PHAs to approve a payment standard of no more than 120% of the FMR without HUD approval if required as a reasonable accommodation for a family that includes a person with a disability.
Three of the proposed provisions have drawn preliminary concerns from advocates.
Current regulations provide for an earned income disregard (EID) that permits certain tenants of public housing and persons with disabilities participating in the voucher program to accept jobs without having their rent increase immediately due to their increased income. The EID is available for a total of 24 months, but those months may be spread across 48 months to account for intermittent job losses. PHAs are required to fully exclude income for the first 12 months of EID, and to exclude only 50% for the last 12 months. HUD proposes to limit EID to 24 consecutive months. For the second 12 months, HUD proposes to allow PHAs the discretion to phase in a rent increase, excluding at least 50%.
HUD states in the preamble to the proposed rule that many portions of the tenant grievance process are repetitive or overly prescriptive for PHAs. Therefore, HUD proposes to streamline procedures relating to informal settlements, grievance procedures for failure to request a hearing and requiring escrow deposits, as well as matters relating to transcripts, copies, and the conduct of a hearing. HUD also proposes to permit PHAs to establish expedited grievance procedures and eliminate a separate category of hearing panel by redefining “hearing officer” to include the possibility of more than one person hearing a complaint.
Current regulations define “annual income” to be income projected for the upcoming 12 months. HUD is proposing to allow PHAs and multifamily owners to define annual income as either actual past income or projected income. Whichever is selected, it must apply to all families.
HUD proposes to allow PHAs and owners the option to conduct streamlined annual reexamination of income for households when 100% of the household’s income consists of fixed sources, such as Social Security. PHAs and owners will recalculate income by applying a published cost-of-living adjustment. If this streamlined option is used, then the PHA or owner must determine annual income using the projected, not actual, income method.
Comments are due on March 9. The proposed rule is at, http://www.gpo.gov/fdsys/pkg/FR-2015-01-06/pdf/2014-30504.pdf