HUD Publishes MTW Waivers Appendix, NLIHC’s Preliminary Assessment Reveals Serious Issues

The Appendix that was missing from the modified Moving to Work (MTW) Demonstration Operations Notice published on October 5 (see Memo10/9) was included in a “Republication” on October 11. The Operations Notice establishes requirements for implementing the MTW demonstration for public housing agencies (PHAs) applying for one of the 100 new MTW slots. Comments are due November 26.  Based on an initial assessment of the Appendix, NLIHC has serious concerns.

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. PHAs will be added to the MTW demonstration in annual 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 year’s cohort of MTW sites will be directed by HUD to test one specific policy change.

As Memo reported last week, a major change in the current Operations Notice from that published for comment on January 23, 2017, is that HUD has removed what that 2017 draft called “Conditional Waivers,” which would have required HUD approval (listed in Appendix B of the draft), as well as “General Waivers” (listed in Appendix A of the draft). In their place, HUD will have “MTW Waivers” and “Cohort Waivers.”  In addition, a PHA can seek HUD approval for “Agency-Specific Waivers” seeking to waive a statutory or regulatory requirement or to implement an activity not listed in the Appendix.

The newly available Appendix lists the available waivers and associated activities of the new “MTW Waivers” category. The Appendix also includes “safe harbors” that identify additional requirements a PHA must follow to carry out MTW activities without needing HUD approval.

Based on a preliminary review of the Appendix, under the new “MTW Waivers” category, MTW PHAs will be able to use harmful practices without having to secure HUD approval, practices previously in the “Conditional Waivers” category that did require HUD approval. For example, any MTW PHA could impose work requirements, term limits of 4 years, stepped rents (which are term limits by another name), minimum rents of $250 per month for non-elderly/non-disabled households and $100 per month for elderly and disabled households, rent burdens of 35% for non-elderly/non-disabled and 30% for elderly and disabled households, and rent burdens at initial occupancy of more than 40% - even for elderly and disabled households.

In short, many MTW PHAs could undertake these and other potentially harmful policies without the rigorous evaluation required by the expansion statute. And, because new MTW PHAs have to be part of one of the four cohorts, it is unclear how evaluators will discern whether one or more “MTW Waivers” have clouded a given cohort’s policy.

The Operations Notice indicates that the first cohort will evaluate “The Impact of MTW Flexibility on Small and Medium PHAs.” The initial cohort will be limited to PHAs with fewer than 1,000 public housing units and vouchers combined. During a meeting of the MTW Research Advisory Committee on October 10, HUD indicated that approximately 30 small PHAs would be selected for this cohort. A PIH Notice requesting PHAs to apply for MTW status as part of the first cohort is expected to be issued next week. Such a Selection Notice will describe the requirements to participate in that cohort.

A second cohort will evaluate rent reform policies. That Selection Notice is in Departmental clearance and is expected to be issued later in 2018. Currently, HUD is anticipating accepting ten PHAs for that cohort. A third cohort will evaluate work requirements, and a fourth will evaluate incentives to increase landlord participation in the voucher program.

NLIHC will continue to carefully review and assess the latest Operations Notice.

The republished MTW Operations Notice, complete with the Appendix, is at:

An easier-to-read version is at: