HUD’s Office of Public and Indian Housing (PIH) posted Notice PIH 2020-19 on August 21 modifying the standard for determining whether a unit is considered “assisted” in the Housing Choice Voucher (HCV) or Project-Based Voucher (PBV) programs when assessing whether the rent paid by a public housing agency (PHA) to an owner is “reasonable.” The notice extends the “assisted unit” standard from limited “Housing Conversion Actions” in earlier Notice PIH 2011-46 to all projects undergoing any conversion action that triggers eligibility for a Tenant Protection Voucher (TPV).
“Rent reasonableness” for the HCV and PBV programs means the rent a PHA pays to the owner is not greater than the rent paid to the owner for comparable, unassisted units in the property. Generally, units for which an owner charges rents that are below that charged to other households, or market-rate rents, are considered “unassisted units” when determining rent reasonableness. Rents for these particular units in a property must be considered when determining whether rent charged by an owner to the PHA for an HCV- or PBV-assisted unit is reasonable.
Sometimes owners choose to charge below market rents to protect households from a rent increase due solely to a “conversion action.” These households are often long-time tenants who had been paying below market rents prior to the conversion action, and in many cases are elderly. Under these specific circumstances such units would be considered assisted and excluded from a PHA’s rent reasonableness calculation.
Conversion actions occur when a private owner with a HUD Multifamily Section 8 Project-Based Rental Assistance (PBRA) contract decides to opt-out of (not renew) the contract, or a private owner with a HUD-insured mortgage decides to prepay it, among other actions.
The notice considers a unit “assisted” if it is in the Multifamily program and undergoes any of the conversion actions listed above, or if in Notice PIH 2019-01/H2019-02, “Funding Availability for Set-Aside Tenant Protection Vouchers” (see Memo, 2/25/19) for which the property has received TPVs. A unit is “assisted” if a public housing development is demolished or disposed under Section 18, voluntarily converts to vouchers under Section 22, is required to convert to vouchers under Section 33, (see the NLIHC public housing webpage) or is removed through the Choice Neighborhoods Initiative (CNI).
The notice also considers a unit “assisted” if on certain dates it is occupied by a household who did not receive a TPV when a conversion action occurred, or if an owner provides a below-market rent or other rent concessions to a household who did not receive a TPV. In addition, a unit is assisted if there are rent restrictions placed on the unit capping the rent at below-market levels.
Notice PIH 2020-19 is at: https://bit.ly/2Yz9qrq
PIH’s updated rent reasonableness chapter in the Housing Choice Voucher Guidebook is at: https://bit.ly/3aUIzep
More information about Housing Choice Vouchers is on page 4-1 of NLIHC’s 2020 Advocates’ Guide.
More information about Project-Based Vouchers is on page 4-8 of NLIHC’s 2020 Advocates’ Guide.
More information about Tenant Protection Vouchers is on page 4-12 of NLIHC’s 2020 Advocates’ Guide.
More information about Section 18 demolition/disposition, Section 22 voluntary conversion of public housing to vouchers, and Section 33 required conversion is on page 4-50 of NLIHC’s 2020 Advocates’ Guide and on NLIHC’s public housing webpage, https://bit.ly/3lkoqmE
More information about Multifamily Project-Based Rental Assistance is on page 4-61 of NLIHC’s 2020 Advocates’ Guide.