HUD announced on July 27 that it will undertake a series of new actions to protect tenants. The White House signaled its support for these actions in a fact sheet while also proposing three additional initiatives. Meanwhile, in a separate media release, HUD announced two other actions the agency will undertake to promote housing supply, and the White House announced a series of additional housing-related actions not involving HUD in another fact sheet.
The tenant-focused actions outlined in the fact sheets and announcements would (1) provide $10 million for tenant education and outreach at certain privately owned Section 8 Project-Based Rental Assistance properties; (2) propose a rule clarifying that the “Coronavirus, Aid, Relief, and Economic Security Act” (CARES Act) 30-day notice provision is still in effect; and (3) encourage public housing agencies (PHAs) and private owners of multifamily properties to explain in writing why tenant applicants were denied admission to a property due to issues flagged on tenant screening reports; and (4) increase resident engagement requirements when public housing is converted under the Rental Assistance Demonstration (RAD). The housing supply actions would involve creating an $85 million competitive grant program for communities to address restrictive zoning and land use policies and releasing a supplemental RAD notice providing more flexibilities for housing providers, as well as promoting water- and energy-efficiency investments.
Renter Protections and New Funding for Tenant Education and Outreach
HUD announced that it will make $10 million available for tenant education and outreach by releasing funding that has been authorized by Congress each year since 1997 but that has seldom been made available by HUD. Funds will support a new Tenant Education and Outreach (TEO) program, which HUD suggests will be developed from a set of previously underfunded programs (known as the TRN, OTAG, ITAG, and VAHPP programs) and that will help build the capacity of residents of properties assisted through the Section 8 Project-Based Rental Assistance (PBRA) program.
The $10 million annual authorization was created by Section 514 of the “Multifamily Assisted Housing Reform and Affordability Act of 1997” (MAHRAA). The funds were intended to help residents of those properties gain the organizing and technical capacity to preserve homes threatened by private owners considering opting out of their PBRA Housing Assistance Program (HAP) contracts, or by or owners considering prepaying their HUD-insured mortgages. A link in both the HUD and White House announcements briefly explains TEO and links to a lengthy and detailed Notice of Funding Opportunity (NOFO). It is important to know that this NOFA does not apply to public housing, Housing Choice Vouchers, or any other HUD programs. A cursory look at the 58-page NOFO indicates that HUD will make an award to an intermediary organization that in turn will administer funds to sub-grantees that are each eligible for up to $300,000 to cover a three-year period.
Proposed Rule Clarifying 30-Day Notice CARES Act Provision
A Notice of Proposed Rule Making (NPRM) that has been under review by the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) since July 6 should clear OIRA review soon. The NPRM would codify in regulation the CARES Act requirement that PHAs and properties assisted through various HUD project-based rental assistance programs (as well as other programs) must provide tenants with at least 30 days of advance notice prior to terminating their lease for nonpayment of rent. The 30-day notice requirement is a permanent provision, even though it was included in the CARES Act enacted during the height of the COVID-19 pandemic. Although the 30-day notice requirement remains in effect, HUD’s intent to codify it in regulation is meant to make the provision more effective. A 2022 survey of housing law attorneys conducted by the National Housing Law Project (NHLP) found that 88% of those responding reported that courts inconsistently enforced or did not enforce the requirement at all. A detailed NHLP memo explains the 30-day notice provision, including a list on page 7 of the federal programs that trigger compliance with the 30-day notice requirement.
HUD issued an Interim Rule on October 7, 2021, while the pandemic was still a major concern. A failing of that Interim Rule was that it did not include the Housing Choice Voucher (HCV) program. NHLP asserts that the HCV program is subject to the 30-day notice requirement because a “covered project” is any project covered by the “Violence Against Women Act” (VAWA), which includes the HCV program. It will be interesting to review the NPRM when it has cleared OIRA and is published in the Federal Register.
Increasing RAD Resident Engagement Requirements
On the same day of the HUD and the White House announcements, HUD’s Office of Recapitalization (ReCap) announced joint Notice H-2023-08/PIH-2023-19, “Supplement Notice 4B,” to the basic RAD Notice. Among other provisions, Supplement 4B intends to expand resident engagement for public housing properties converting under the Rental Assistance Demonstration (RAD) to Project-Based Vouchers (PBV) or Project-Based Rental Assistance (PBRA). Section II of Supplement 4B (page 6) covers the resident engagement provisions. It deletes Section 1.8 of the basic RAD Notice and replaces it with a new Section 1.8 (pages 6-12). NLIHC will provide a detailed description of the resident engagement provisions highlighting the new features in a future Memo to Members & Partners article.
Ensuring Fair Tenant Screening Practices
HUD’s Office of Public and Indian Housing (PIH) sent a message to PHA executive directors on July 27 to remind them of their obligations and to share best practices for informing applicants rejected for housing assistance of the reasons why they were turned down. The HUD media release has a link for a similar message from the Office of Affordable Housing Programs; however, that link is not currently functioning. The PIH message recognizes that landlords increasingly rely on tenant screening reports as part of their selection criteria. These reports often include inaccurate information, like inaccuracies regarding criminal and eviction records as well as credit history. If prospective renters are not given the opportunity to review and correct the information in these reports, they may be repeatedly denied housing due to inaccurate information in tenant screening reports.
$85 Million PRO Housing Competitive Grants
HUD also announced an $85 million Pathways to Removing Obstacles to Housing (PRO Housing) competitive grants initiative that will provide communities with grants ranging from $1 million to $10 million to identify and remove barriers to affordable housing production and preservation. PRO will be targeted to communities with acute demand for affordable housing that want to identify, address, and remove barriers to housing production. The funds could be used for planning and policy activities that allow for higher-density zoning, rezoning for multifamily housing, reducing requirements related to minimum parking spots, and other land use restrictions. HUD published on July 28 an advance version of a Federal Register notice anticipated to be published on July 31 that is simply a preview of the PRO Housing NOFO that will be published on Grants.gov.
On the same day of the HUD and the White House announcements, HUD’s Office of Recapitalization (ReCap) announced joint Notice H-2023-08/PIH-2023-19, “Supplement Notice 4B,” to the basic RAD Notice. Among other provisions, the HUD and White house releases characterize some of the changes as designed to provide PHAs and multifamily owners with additional tools that will enhance their ability to support repairs. A RadBlast on July 27 mentions expanding “Faircloth-to-RAD” tools and removing barriers to utilizing RAD/Section 18 blends. NLIHC will provide a detailed description of the resident engagement provisions highlighting the new features in a future Memo to Members & Partners article.
Read the White House fact sheet regarding proposed renter protections at: https://tinyurl.com/5a9ux5n5
Read HUD’s renter protections media release at: https://tinyurl.com/4ucztzbu
Read the White House fact sheet regarding “Actions to Lower Housing Costs and Boost Supply” at: https://tinyurl.com/mspuusk4
Read HUD’s Removing Barriers to Building Housing media release at: https://tinyurl.com/33netz7v