HUD Explains How It Proposes to Implement New Public Housing Income Limits

HUDHUD published a notice in the Federal Register informing the public about how HUD proposes to implement the new public housing income limit provision of HOTMA, the Housing Opportunity Through Modernization Act of 2016 (see Memo, 9/28). HUD issued an advance notice of proposed rulemaking (ANPR) on February 3 (see Memo, 2/8). If a household’s income exceeds 120% of the area median income (AMI) for the most recent two consecutive annual income reviews, the new law requires public housing agencies (PHAs) to either:

  • Terminate the household’s public housing tenancy within six months, or
  • Charge rent equal to the greater of the fair market rent (FMR) or the amount of monthly subsidy for the unit.

HOTMA requires PHAs to notify a household of the potential rent change after the first year a household’s income exceeds 120% AMI.

The law also requires PHAs to submit an annual report to HUD indicating the number of households with incomes exceeding applicable limits, as well as the number of households on the waiting list. These reports are to be made available to the public.

HUD has the authority to adjust the 120% limit because of prevailing construction costs, unusually high or low incomes, or unusually high or low vacancy rates. The notice explains how HUD makes adjustments for high housing costs and low housing costs, and indicates that it will apply those adjustment formulas to the 120% AMI limit where necessary. For example, in the Los Angeles metropolitan area where housing costs are high, the income limit would be 167% of AMI.

HUD will accept comments until December 29.

The notice is at: