HUD’s Office of Public and Indian Housing (PIH) issued Notice PIH 2023-20, inviting public housing agencies (PHAs) with 1,000 or fewer combined units of public housing and Housing Choice Vouchers (HCVs) to apply for the fifth cohort of the so-called Moving to Work (MTW) Demonstration Expansion. This fifth cohort, called the MTW Flexibility II Cohort, will test the overall effects of Expansion PHAs using various MTW “flexibilities,” with a focus on “administrative efficiencies.” Notice PIH-2023-20 allows Expansion PHAs to use any MTW waivers and associated activities allowed in the MTW Operations Notice, which enables Expansion PHAs to impose work requirements, time limits, and increased rents on residents – policies that do not address the three MTW statutory objectives of increasing housing choice, promoting self-sufficiency, and reducing PHA costs. (See NLIHC’s summary and critique of the MTW Operations Notice.)
The first MTW Expansion Cohort is also evaluating overall MTW flexibilities for 30 PHAs with 1,000 or fewer combined units of public housing and Housing Choice Vouchers (see Memo, 10/22/18 and 7/15/19). PIH anticipates adding another 30 PHAs through the MTW Flexibility II Cohort and evaluating the effects over a five-year period of the MTW flexibilities that were chosen.
PHAs applying to participate in the new cohort must prepare an MTW Plan and application package that are subject to a public engagement process. Specifically, a PHA must publish a notice that a hearing will be held on the full MTW Plan and application package. The draft MTW Plan and “Administrative Efficiencies Information” (see below) must be available for public inspection for at least 30 days before a PHA submits an MTW Plan and application package to PIH. The PHA must conduct a public hearing to discuss the MTW Plan and Administrative Efficiencies Information and invite public comment. A PHA’s Board of Commissioners must then approve the MTW Plan and application package by resolution no fewer than 15 days after that public hearing.
NLIHC is concerned about the lack of specificity regarding the timing of the public hearing within that 30-day period. If a PHA Board must approve an MTW Plan and application package no fewer than 15 days after the public hearing, within the 30-day minimum public inspection time frame, residents may be left with only 15 days to obtain and assess an MTW Plan in order to submit comments at the hearing.
An applicant’s MTW Plan must describe how it relates to the three MTW statutory objectives: giving households incentives to achieve economic self-sufficiency, increasing housing choice, and reducing costs. NLIHC observes that with the possible exception of the asset building and landlord incentives cohorts, it is not at all clear how MTW will help residents achieve economic self-sufficiency or greater housing choice.
An MTW Plan must also discuss how a PHA plans to continue to engage residents and the broader community in the development and implementation of its local MTW program. A PHA must describe any planned engagement efforts with the local community, including any outreach to racial and ethnic minorities, persons with limited English proficiency, persons with disabilities, families with children, and groups representing such persons.
An MTW Plan must describe the types of initiatives a PHA seeks to implement in its local MTW program and why. However, PIH does not require a PHA to list discrete activities. The discussion should be organized under the three statutory objectives of the MTW Demonstration: self-sufficiency, housing choice, and cost effectiveness. In addition, a PHA must list or describe its proposed uses of MTW Funds, describing whether or how it plans to mix public housing and HCV funds to be used for other activities. An MTW Plan must discuss any major plans affecting a PHA’s public housing stock due to its participation in the MTW Demonstration.
To address Administrative Efficiencies Information, a PHA must list which MTW waivers and associated activities it would be interested in implementing from a list of eight, including the following: eliminating income deductions, changing the standard deduction, altering income reexamination schedules, altering physical inspection schedules, altering utility allowances, and allowing self-certification of household assets.
Brief MTW Background
In 1996, Congress established MTW, initially authorizing HUD to admit up to 30 PHAs into the demonstration. Congress later increased that limit to 39 by 2011. Under MTW, HUD can waive nearly all provisions of the “United States Housing Act of 1937” and its accompanying regulations. This includes most of the main rules and standards governing public housing and HCVs, with some exceptions such as civil rights, labor, and environmental laws. MTW agencies are also allowed to shift public housing Capital and Operating Funds and HCV assistance (including Administrative Fees and Housing Assistance Payment (HAP)) to purposes other than those for which they were originally appropriated – a process referred to as “fungibility.”
In addition to the three MTW statutory objectives, the statute requires MTW agencies to: (1) serve the same number of low-income households as they would have without MTW funding flexibility; (2) serve a mix of families by size comparable to the mix they would have served if they were not in MTW; (3) ensure that 75% of the families they assist have income at or less than 50% of area median income; (4) ensure that assisted units meet housing quality standards; and (5) establish a reasonable rent policy.
The “Consolidated Appropriations Act of 2016” authorized HUD to expand the MTW Demonstration to an additional 100 high-performing PHAs over a seven-year period to end in 2022. PHAs were to be added to the MTW demonstration in groups (cohorts), each of which will be overseen by a research advisory committee to ensure the demonstrations are evaluated with rigorous research protocols, quantitative analysis, and comparisons to control groups. Each cohort of MTW sites will be directed by HUD to test one specific policy change.
The MTW Expansion cohorts initially were numbered, but with the withdrawal of the work requirements cohort (Cohort 3) PIH is dropping the numbering system in their titles. However, the PIH Notices associated with them had those original numbers. The numbered cohorts and their aims are as follows:
- Cohort 1 evaluates the overall impact of MTW flexibilities on PHAs with fewer than 1,000 units.
- Cohort 2 (focusing on rent reform) evaluates the impacts of different rent structures (see Memo, 5/17/21). NLIHC has published a detailed summary and critique of Cohort 2.
- Cohort 3 was to evaluate the impacts of work requirements; however, PIH withdrew work requirements (see Memo, 6/1/21).
- The landlord incentives cohort, initially called “Cohort 4,” will evaluate incentives to landlords to participate in the Housing Choice Voucher (HCV) program (see Memo, 2/7/21).
- The asset building cohort will evaluate policies and practices that help residents build financial assets or build their credit assessments (see Memo, 5/2/22, 10/11/22, and 10/31/22) and a detailed summary.
Read Notice PIH-2023-20 announcing MTW Flexibility II Cohort at: https://tinyurl.com/43bw7tuy
Explore PIH’s MTW Expansion website at: https://bit.ly/3vGMMNy