The House Financial Services Subcommittee on Insurance, Housing and Community Opportunity is scheduled to mark up the Affordable Housing and Self-Sufficiency Improvement Act of 2012 on February 7. A new draft of the bill, dated January 31, was posted to the Committee on Financial Services website February 2. The new bill makes major revisions to the previous draft’s provisions to increase minimum monthly rents for public housing, voucher and project-based residents.
The new bill would require the HUD Secretary to set minimum monthly rents for public housing, voucher, and project-based Section 8 assisted households at $69.45, and index this minimum rent to inflation. The previous version of the bill, circulated on January 13 (see Memo, 1/20), would have required the HUD Secretary to set minimum monthly rents of at least $69.45, with no upward limit, and would have allowed public housing agencies and private owners to seek permission to go above the HUD minimum rent with no upward cap.
Since its release, advocates have worked hard to oppose the minimum rent provisions in the January 13 draft. On January 31, NLIHC and several other national organizations wrote to each House Committee on Financial Services member, urging them to withhold support for the overall bill until the minimum rent and Moving to Work provisions are improved.
While an improvement over the January 13 draft, the new bill would mean significant rent increases for lowest income households. The Center on Budget and Policy Priorities estimates that, if rents were set to $69.45 a month, more than 490,000 of the lowest income households would see rent increases. Higher income households would not be impacted by minimum rent policies because 30% of these households’ adjusted monthly income, the basis for determining rents in HUD assisted housing programs, is more than $69.45.
Furthermore, 27% of housing authorities have never adopted the current allowable $50 minimum rent, either because they understand such a rent’s impact on the lowest income households or because they do not wish to develop and administer a hardship exemption policy, which any housing authority that adopts a minimum rent above $0 must have. Thus, the January 31 draft of the bill mandates that these housing authorities have a minimum rent of $69.45 and develop and administer a hardship exemption policy.
The bill does nothing to strengthen hardship exemption requirements for housing authorities or owners, which are underpublicized and underutilized.
The new bill does not make any changes to the controversial section on expanding and making permanent the Moving to Work (MTW) demonstration program. MTW provides about 35 housing authorities with the ability to merge their voucher and public housing funding as well as freedom from key tenets of affordable housing law, e.g., income targeting and affordability. MTW agencies can also impose time limits on assistance, establish work requirements, and require residents to participate in any manner of self improvement programming as a condition of continued assistance. NLIHC has long opposed any expansion of MTW as the demonstration has never been evaluated so that lessons learned can be incorporated into any expansion.
NLIHC is working with HUD and several national stakeholder groups in an attempt to reach agreement on an MTW program that could be included in the bill. The bill’s current placeholder language would allow any PHA to become an MTW agency. Proposals under consideration address a similar set of questions: how many new agencies could be admitted, possible evaluation scenarios, income targeting standards, affordability levels for rents, what to do with the existing MTW agencies, resident participation and capacity, among other issues.
The January 31 bill makes some additional changes. The bill would decrease the standard deduction for elderly and disabled households to $525. In the January 13 draft, this deduction was $550. In early versions of the voucher reform bill, the deduction was increased from the current $400 to $675. The increase in the standard deduction is a trade off for a closely related provision in the bill, which simplifies the calculation for the deduction of unreimbursed medical expenses and other similar costs. Today, any such out-of-pocket costs equaling more than 3% of household income can be deducted from the income of elderly and disabled households; the bill would limit such deductions to expenses exceeding 10% of income.
In the bill’s section on improvements to the project-basing of vouchers, the bill adds “elderly persons,” in addition to persons with disabilities, when describing circumstances in which a housing authority could project-base an additional 5% of its vouchers in supportive housing.
The bill would also require HUD to conduct a study of “legacy vouchers,” which the bill defines as rental assistance vouchers used by any member of the household of the person to whom the voucher was originally issued for rental of a dwelling that is not occupied by that original person as a primary residence. After the study is completed, HUD would be required to issue guidance regarding use of legacy vouchers, subject to public comment.
The February 7 mark up will be at 10am in room 2128 of the Rayburn House office building. The mark up will be webcast via: http://financialservices.house.gov/
Read the January 31 draft of the bill at: http://financialservices.house.gov/UploadedFiles/BILLS-112hr-PIH-AHAdd.pdf
Read the January 31 national sign on letter on minimum rents and Moving to Work at: www.nlihc.org/doc/AHSSI_National_Letter_1-31-12.pdf
Access the CBPP fact sheet on minimum rents at: www.cbpp.org/files/2-3-12hous-minimum-rent-fact-sheet.pdf
Access HUD’s Study of Rents and Rent Flexibility at: www.huduser.org/portal/publications/affhsg/srrf_2011.html