The National Housing Law Project sent letters on August 19 and September 3 to USDA’s Rural Housing Services Administrator Tony Hernandez urging the Rural Development (RD) office to “immediately (1) cease to advise owners who have exhausted their Rental Assistance contract funding that they can raise their rents to offset the loss of Rental Assistance; and, (2) publish an unnumbered letter to state [RD] offices and owners advising them that rents cannot be raised to offset loss of Rental Assistance. . . .”
According to NHLP, about 50 Section 515 Rental and Section 514/516 Farm Labor housing developments will exhaust their Rental Assistance funding prior to October 1, and another 780 such developments will exhaust their Rental Assistance funding in the first quarter of FY16, impacting at least 20,000 residents. RD has advised owners who exhaust their RA funding prior to the end of their 12-month funding contracts that they can raise rents on residents to make up for the shortfall.
In the August 19 letter, NHLP cites statutory text expressly prohibiting increases to Rental Assistance rents by more than 10% in any 12-month period. “Moreover,” the letter states, “no rent increases are authorized under RD regulations to residents assisted by the Rental Assistance program during the term of any lease unless the resident’s lease explicitly authorizes such a rent increase when the funding of a Rental Assistance contract is exhausted.” In the September 3 follow-up letter, NHLP describes cases in Tennessee, Iowa, and Texas in which owners have increased rents for residents upon exhaustion of Rental Assistance funds. “Their actions, which are in clear violation of the law, are causing resident displacement,” Gideon Anders, senior attorney for NHLP, said in the September 3 letter.
Read the NHLP letters at http://nlihc.org/sites/default/files/NHLP_LETTER_1.pdf and http://nlihc.org/sites/default/files/NHLP_Letter_2.pdf