On July 31, Representative Aaron Schock (R-IL) introduced H.R. 5374, which would restrict Public Housing Agencies (PHAs) participating in the Moving to Work (MTW) demonstration from instituting payment standards of more than 120% of Fair Market Rent (FMR). Payment standards are used to calculate the housing assistance payment that a PHA makes to a private owner on behalf of a household leasing a unit under the Housing Choice Voucher program.
Following his successful amendment to the House FY15 HUD appropriations bill to prohibit any exception payment standard above 120% of FMR (see Memo, 6/13), Mr. Schock introduced H.R. 5374 to directly impact the practice of the Chicago Housing Authority (CHA), an MTW agency, of allowing payment standards of up to 300%.
Mr. Schock also sent letters to HUD Secretary Julián Castro and HUD Inspector General David Montoya on July 28 seeking data and an investigation into what Mr. Schock refers to as CHA’s “new supervoucher program.”
“The rapid growth of Chicago’s supervoucher program – both in the number of recipients and the dollar amount of monthly payments – warrants a comprehensive audit,” Mr. Schock wrote to HUD. “As Congress seeks to meet the needs of our nation’s poor amid tightened budget constraints, it is dispiriting to know that HUD and CHA willingly award to a single voucher recipient living in a high-rise Chicago condominium enough rent assistance to help three whole families living in poverty somewhere else in the city.”
Currently, PHAs can request HUD approval for an exception payment standard above 120% of FMR for three reasons: as a reasonable accommodation for households with a person with disabilities, to help families find housing outside areas of high poverty concentrations, or because voucher holders have trouble finding housing to lease. However, CHA instituted its exception payment standard by using the broad flexibilities provided under the MTW demonstration, not by seeking an exception from HUD.
H.R. 5374 specifically prohibits MTW housing agencies from having payment standards above 120%, but includes exemptions for elderly and disabled households as well as those residing in a disaster area. Neither this bill nor Mr. Schock’s June amendment alter HUD’s current authority to make exception payment standards as reasonable accommodations for persons with disabilities.
Outside of exception payment standards adopted by MTW agencies, HUD has approved only 14 exception payment standard requests since 2011. All but one of these requests were due to increased rents in areas affected by heightened demand for housing where fracking is taking place. Fracking, short for hydraulic fracturing, is a controversial method for extracting oil and natural gas from rock. Of the exception payment standards granted in fracking areas, all of which were in North Dakota or Pennsylvania, one was up to 135% of FMR with the rest at 125% of FMR.
H.R. 5374, was referred to the House Financial Services Committee.
The press release and related documents from Mr. Schock to HUD on July 28 are at http://1.usa.gov/WWbI1D.