White House Orders Regulatory Freeze

The White House sent a Memorandum on January 20 to all federal executive departments and agencies directing them to stop submitting regulations to the Office of the Federal Register (OFR), withdraw regulations sent to the OFR but not yet published in the Federal Register, and postpone for 60 days the effective date of regulations already published but that have not yet taken effect. According to the author of a paper written by the Congressional Research Service, this practice is typical when there is a change in administrations from one party to another.

The Memorandum was from Reince Priebus, White House chief of staff and assistant to the president. The intent is to provide presidential appointees or designees the opportunity to review any new or pending regulations. The Memorandum also applies to guidance documents, which includes any agency statement of general applicability and future effect "that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue."

The White House Memorandum had several immediate ramifications for affordable housing and poverty-related rules and notices.

As reported in last week’s Memo (1/23), HUD published a notice in the Federal Register on January 23 requesting comments regarding how HUD should operate the expansion of the Moving to Work (MTW) Demonstration. On January 18, HUD indicated that it would publish Notice PIH 2017-01 seeking public housing agencies (PHAs) to apply for new MTW slots. HUD sent an email later on January 23 stating that it was “revisiting” the operating notice already published in the Federal Register and would postpone issuing Notice PIH 2017-01.

The Department of Health and Human Services published on January 19 its annual update of the federal poverty guidelines on the Federal Register public inspection webpage, which provides the text of regulations and other guidance the day before formal publication in the Federal Register. On January 23, that site indicated that the poverty guidelines were withdrawn.

Also on January 19, HUD presented on the Federal Register public inspection page an interim rule that would streamline administrative regulations pertaining to its Office of Multifamily Housing Programs, and would implement family income reviews authorized by the “Fixing America’s Surface Transportation Act” (FAST Act) which became law on December 2, 2015. The FAST Act allows private owners of HUD-assisted multifamily housing to conduct full income re-certifications every three years instead of annually for families with 90% or more of their income from fixed income. 

That interim final rule would also align existing regulatory flexibilities with those provided in the FAST Act by modifying earlier streamlining regulations, making the procedures for families meeting the fixed-income threshold as similar as possible to the procedures for families who do not have 90% of their income from fixed sources but who still have some fixed income.

In addition to streamlining fixed-income requirements, the interim final rule would also have allowed an owner to:

  • Make utility reimbursements of $45 or less on a quarterly basis ($15 a month).
  • Accept a family declaration of assets under $5,000.  Third-party verification of all family assets would be required every 3 years.

An NLIHC scan of other regulatory and guidance issuances since October 1 indicates that the following are in abeyance:

  • Final smoke-free public housing rule, published on December 5 but not effective until February 3 (see Memo, 12/5/16).
  • Final lead-based paint rule, published on January 13 but not effective until February 12 (see Memo, 1/7).
  • Final Freedom of Information Act (FOIA) amendments, published on January 12 but not effective until February 12 (see Memo, 1/17).
  • HOTMA implementation provisions regarding Housing Choice Vouchers and especially Project-Based Vouchers, published on January 18 but not effective until April 18 (see Memo, 1/23).
  • Interim rule, changes to HOME 24-month commitment requirements, published on December 2 but not effective until January 31 (see Memo, 12/19/16).
  • Proposed rule codifying existing Enhanced Voucher policies regarding eligibility criteria for receiving enhanced vouchers, the right of enhanced voucher households to remain in their apartments, procedures for addressing “over-housed” families, and the calculation of enhanced voucher housing assistance payments, published on October 26, with comments due December 27 (see Memo, 11/7/16).
  • Proposed rule that would require higher elevation requirements for properties applying for HUD assistance or Federal Housing Administration (FHA) mortgage insurance due to the increased risk of flooding caused by climate change and the associated rise in sea levels, published on October 28, with comments due December 27 (see Memo, 10/31/16).
  • Notice extending the criteria for transferring project-based rental assistance, published on January 19 but not effective until February 21 (see Memo, 1/23).

NLIHC assumes the following met the deadline and are not in abeyance:

  • Final Small Area Fair Market Rent rule, published on November 16, effective January 17 (see Memo, 11/21/16).
  • Final rule requiring broadband infrastructure to be included in new construction and substantial rehabilitation at HUD-assisted properties, published on December 20, effective January 19 (see Memo, 1/9).
  • Final rule requiring Consolidated Plans to address disaster resilience needs and broadband needs, published on December 16, effective January 17 (see Memo, 1/9).
  • Changes to the Rental Assistance Demonstration (RAD) program made in Notice PIH-2012-32/H-2017-03 REV 3 published on January 19, with most of its provisions effective on that date (see Memo, 1/17). There were a few provisions (waivers/alternative requirements and eligibility issues) that have a delayed effective date, as stated in the Notice. HUD assumes those sections are affected by the White House Memorandum.
  • Internal Revenue Service (IRS) Notice 2016-77, released on December 12 and published in the Internal Revenue Bulletin on December 27. The Notice states that the IRS Code does not require or encourage state agencies allocating Low Income Housing Tax Credits (LIHTCs) to reject proposals that do not obtain the approval of the locality where a project is proposed to be developed (see Memo, 12/10/16).
  • IRS Revenue Ruling 2016-29, released on December 12 and published in the Internal Revenue Bulletin on December 27. The Ruling states that LIHTC Qualified Allocation Plans (QAPs) may only give preference to projects in Qualified Census Tracts (QCTs) if there is a “concerted community revitalization plan” containing more components than just the LIHTC project (see Memo, 12/10/16).

A number of guidance issuances are probably also in abeyance:

  • The recently finalized AFH Assessment Tools for Local Governments and PHAs (see Memo, 1/17).
  • A HUD policy memorandum clarifying that certain noncitizens who are “battered or subject to extreme cruelty” by a spouse or parent who is a U.S. citizen or lawful permanent resident has the right to apply for and receive housing assistance (see Memo, 1/9).
  • HUD Office of General Counsel guidance on applying fair housing standards to the enforcement of local nuisance and crime-free ordinances, issued September 13 (see Memo, 9/19/16).
  • HUD Office of General Counsel guidance discussing how the Fair Housing Act applies to a housing provider’s consideration of a person with limited English proficiency, the limited ability to read, write, speak or understand English (see Memo, 10/3/16).
  • Multifamily Handbook and Section 8 Renewal Guide changes (see Memo, 1/17).

The White House Memorandum is at: http://bit.ly/2kkOVYV

The Congressional Research Service paper is at: http://bit.ly/2jBjuty