HUD has proposed a new formula for determining the amount of funding that a public housing agency (PHA) receives to administer the Housing Choice voucher program. The new formula would be based on six variables: program size, a wage index, cost of benefits, percent of households with earned income, rate of new admissions, and percent of voucher households living more than 60 miles from a PHA’s headquarters. The fee would be calculated each year using these factors, plus a revised inflation factor. The proposed rule also makes room for HUD to provide supplemental fees, such as one-time additional fees for housing homeless households, establishing a HUD-VASH voucher program, or helping households move to areas of higher opportunity.
The administrative fee formula currently in use is based on the number of vouchers under lease and a percentage of the 1993 or 1994 local fair market rent, plus an annual inflation factor. HUD commissioned Abt Associates to conduct a study to measure the actual costs of operating a high-performing voucher program. The proposed new formula is based on the Abt report published on April 8, 2015 (see Memo, 4/13/15), and on comments HUD received in response to a Federal Register notice published on June 26, 2015.
The Abt study suggested that HUD consider providing supplemental fees to PHAs in addition to fees derived from the basic formula. The proposed rule states that HUD may provide supplemental administrative fees to address HUD priorities such as establishing or augmenting a HUD-VASH voucher program, serving homeless households, and providing PHAs incentives to expand voucher households’ opportunities in low-poverty areas. The preamble to the proposed rule discusses potential supplemental fees at length, poses suggestions, and seeks comments. For example:
- HUD anticipates establishing an additional fee for new homeless admissions from a PHA’s waiting list. A homeless admissions fee might be a one-time fee equal to 30% of a PHA’s administrative fee multiplied by 12 months for each new homeless admission.
- HUD anticipates establishing a one-time fee for new allocations of HUD-VASH vouchers amounting to 30% of a PHA’s annualized ongoing administrative fee multiplied by the number of HUD-VASH vouchers in the new allocation.
- HUD seeks comments on how to structure an incentive fee for improving locational outcomes for voucher households. Examples include a fee based on the number of families that initially lease in low-poverty areas or that move out of areas with high concentrations of poverty. Another proposed alternative is a fee based on the number of families that move from racially or ethnically concentrated areas of poverty (R/ECAPs) to less concentrated areas. Another option is a fee based on the extent to which the overall percentage of a PHA’s families residing in areas with high concentrations of poverty or R/ECAPs decreases from year to year.
The proposed rule would change the current voucher portability billing rule by eliminating billing between PHAs for administrative fees. The Abt study recommended that the receiving PHA (the PHA to which a household moves, or “ports,” from the PHA that initially provided a voucher) receive 100% of their own fee directly from HUD for any port-in vouchers. The initial PHA would receive a separate fee from HUD equal to 20% of its own fee for continued administrative responsibilities for the port-out voucher.
The proposed rule, published in the Federal Register on July 6, is at: http://bit.ly/29rHBHr