HUD’s Office of Public and Indian Housing (PIH) posted Notice PIH 2022-30 on September 26, extending the deadlines for public housing agencies (PHAs) to request expedited PIH review of two key Housing Choice Voucher (HCV) regulatory waivers. These waivers were originally allowed in Notice PIH 2021-14 and Notice PIH 2022-04 (see Memo 12/20/21 and 3/7/22) as authorized by the “CARES Act” (see Memo, 5/10/21). Notice PIH 2022-30 retains two of the same provisions as the previous notices regarding expediting waiver approvals for PHAs that choose to provide higher HCV payment standards. The intention of the waivers is to help PHAs respond to the ongoing fluctuations and disruptions in the rental market by providing more flexibility to establish and apply payment standards.
The two HCV expedited waivers are for:
- Allowing a PHA to increase a household’s voucher payment standard at any time, rather than being required to wait for a household’s next regular income reexamination; and
- Allowing a PHA to have a payment standard above the usual maximum of 110% of the Fair Market Rent (FMR) up to 120% of FMR. If PIH approves, in general this increased payment standard only applies to fiscal year (FY) 2023 FMRs. PHAs may also seek approval to establish an alternative payment standard up to 120% of the Small Area FMR (SAFMR) for a ZIP code.
For PHAs that had previously received PIH approval for one or both waivers, those waivers will expire by December 31, 2022. If a PHA needs to extend one or both of these previously approved waivers, the PHA must send an email to PIH by December 31, 2022, certifying that there are “good cause reasons” that still exist. Upon receipt of the email, the waivers will be automatically extended to December 31, 2023, and will apply throughout calendar year 2023.
PHAs that want to take advantage of one or both of the expedited waivers for the first time must submit a request by September 30, 2023. Section 5 of Notice PIH 2022-30 states a PHA must explain why a waiver is needed, indicate the negative effect on voucher applicants if a waiver is not allowed, and state how long the PHA expects the waiver to be needed. The waiver duration should be limited to the time necessary for a PHA to resume normal operations but may not go beyond December 31, 2023.
The notice offers two examples of “good cause” for allowing an increase in the payment standard during the HAP contract: increases in household rent burdens and potential negative impacts on residents or the onset of housing instability.
If a PHA seeks to establish a payment standard from 111% to 120% of the FMR, it must certify that it meets one of three “good cause” reasons:
- HUD has identified the PHA’s FMR area as one with significant rental market fluctuations. An attachment to the notice lists 227 such areas.
- A PHA has a voucher utilization rate less than 98% for the current year-to-date or had more than a 5% reduction in the utilization rate between 2019 and 2021. (The utilization rate is the greater of HCV unit-months leased divided by unit-months available or total Housing Assistance Payment (HAP) spent divided by a PHA’s HCV budget authority.)
- Fewer than 85% of the vouchers a PHA has issued have been leased over the last six months.
Previous expedited waiver notices allowed a PHA to grant a household one or more extensions of the initial voucher term regardless of the policy described in the PHA’s Administrative Plan if the PHA requested a waiver by September 30, 2022. (The voucher “term” is the time available to a household with a new voucher to lease a unit, generally 60 days.) Notice PIH 2022-30 clarifies that this expedited waiver is no longer available; however, a PHA may still seek a waiver through the regular waiver process. PIH explains that few PHAs sought this expedited waiver review before September 30, 2022.
Background
The amount of the HCV subsidy for a household is capped at a “payment standard” set by a PHA, which, without the waiver, must be between 90% and 110% of the FMR (that is, the rent in the metropolitan area for a modest apartment). HUD sets FMRs annually. Normally, a PHA may request HUD Field Office approval of an “exception payment standard” up to 120% of the FMR for a designated part of an FMR area. In addition, an exception payment greater than 120% of the FMR can be requested but must be approved by the PIH Assistant Secretary. For either, a PHA must demonstrate that the exception payment is necessary to help households find homes outside areas of high poverty, or because households have trouble finding homes within the 60-day time limit allowed to search for a landlord who will accept a voucher. Notice PIH 2022-30 can speed up this process.
SAFMRs reflect rents for U.S. Postal ZIP Codes, while traditional FMRs reflect a single rent standard for an entire metropolitan region. The intent of SAFMRs is to provide voucher payment standards that are more in line with neighborhood-scale rental markets, resulting in relatively higher subsidies in neighborhoods with higher rents and greater opportunities, and lower subsidies in neighborhoods with lower rents and concentrations of voucher holders.
Notice PIH 2022-30 is at: https://bit.ly/3LVk3vW
Read more about Housing Choice Vouchers on page 4-1 of NLIHC’s 2022 Advocates’ Guide.