HUD’s Office of Public and Indian Housing (PIH) along with the Office of Policy Development and Research (PD&R) published a Request for Information (RFI) in the Federal Register on July 23. The stated purpose of the RFI is to gather feedback regarding the possibility of conducting a pilot project that would provide “direct rental assistance” (DRA) in place of a Housing Choice Voucher. The RFI states that HUD is not currently developing a direct rental assistance demonstration or pilot but may do so in the future under the Moving to Work (MTW) Demonstration program or under other new legislative authority if provided by Congress. Comments are requested by August 30. However, the RFI does not reflect the current thinking or actions of PIH or PD&R.
Prior to the RFI’s publication, NLIHC and two other advocacy organizations were invited to meet with PD&R and PIH’s MTW staff. As revealed during that meeting, held on July 17, HUD has progressed far beyond the text of the RFI. MTW and PD&R have met with public housing agencies (PHAs) and public housing industry groups to discuss a possible pilot project to explore DRA. PIH had already decided to use MTW PHAs for a pilot project and, as of July 17, 37 MTW PHAs had expressed interest. Fewer MTW PHAs might ultimately choose to participate after future meetings with PIH and PD&R. Of the 37 MTW PHAs expressing interest, roughly one half were from the original group of 39 MTW PHAs, while the other half were among the 100 Expansion MTW PHAs. PIH/PD&R continue to meet with the 37 MTW PHAs and public housing interest groups to design a DRA pilot program.
During the July 17 meeting, PIH clarified that the pilot would be carried out using the MTW “Local Non-Traditional” (LNT) authority. For the MTW Expansion PHAs, the amount that could be used is limited to 10% of an Expansion MTW PHA’s HCV Housing Assistance Payment (HAP) budget (although such a PHA could use more by requesting a “safe harbor waiver request”). For the original 39 MTW PHAs, there is no such limit; these MTW PHAs can combine their public housing Capital Fund and Operating Fund and Housing Choice Voucher funds to provide housing assistance or use them for other non-public housing or voucher activities.
The RFI states that PIH/PD&R aim to align the pilot with the HCV program by:
- Requiring the DRA to be used for housing only.
- Limiting the DRA to a tenant’s total gross rent (rent + utilities).
- Limiting the amount of the subsidy to “roughly” the equivalent of the HCV subsidy.
- Ensuring tenants are drawn from an MTW PHA’s waitlists.
- Including housing quality requirements “of some type” to ensure DRA tenants occupy decent, safe, and sanitary housing.
While the RFI does not explicitly state that rigorous research will be conducted to compare DRA and HCV, a June 20 email to industry groups does indicate interest in a rigorous research comparison, and PD&R staff on July 17 did imply an intent to gather rigorous research to compare DRA with HCV. However, the study would not be a randomized study, and PD&R does not have the capacity to conduct a rigorous study on its own, or resources to contract with an outside third-party research entity. PD&R appears to hope universities will voluntarily conduct such rigorous research.
During the July 17 meeting, PIH stated that a DRA household selected from an MTW PHA’s waitlist could be returned to the HCV waitlist if a household was not able to use its DRA. PIH also stated that it wanted to ensure participating MTW PHAs had a workable hardship policy for households suffering a severe loss of income during the pilot program.
NLIHC stated that a DRA pilot should not allow a “shallow subsidy” that would provide a DRA household with an amount of assistance less than the amount of assistance provided to a regular HCV household. For years, some PHAs have expressed interest in providing shallow HCV amounts in order to assist more households, regardless of whether households with a shallow subsidy consequently pay more than 30% of their adjusted income for rent – that is, whether they experience “rental cost burden.” In response, PIH stated that it did not think it had the legal ability to “fight too much against” an MTW PHA that sought to use a shallow DRA amount. PD&R, however, noted that if a shallow DRA subsidy is allowed, it would not enable an instructive comparison between DRA and HCV.
NLIHC also raised concerns about a lack of clarity regarding the amount of DRA assistance a household would be receiving. The verbal description of the amount provided by PIH only referred to use of a formula based on the Fair Market Rent (FMR) in an MTW PHA’s area. However, the amount/value of an HCV is based on a PHA-determined “payment standard,” which can be between 90% of an FMR and 110% of an FMR. NLIHC commented that the amount of the DRA assistance should not be roughly the same as the HCV assistance (as stated in the RFI) but rather exactly the same to be fair to the DRA-assisted household and to enable a comparison between DRA and HCV. If an MTW PHA is using a Small Area FMR (SAFMR) for HCVs, then a DRA-assisted household should have an SAFMR-equivalent amount of DRA assistance.
During the July 17 meeting, PIH/PD&R stated that the model being considered would not require an MTW PHA to inspect a unit before a DRA-assisted household chose a unit to rent or during its DRA tenancy. Instead, PIH/PD&R indicated that they would probably have an MTW PHA provide a DRA-assisted household with a checklist of inspection items that a household could use when considering renting a unit.
NLIHC acknowledges that many landlords do not participate in the HCV program because many PHAs take too long to conduct a Housing Quality Standards (HQS) inspection of a potential unit after a tenant indicates an interest in it. Such delays prevent a landlord from collecting rent while waiting, perhaps for weeks on end, for a PHA to conduct an HQS inspection. Therefore, eliminating HQS inspections might be a benefit of DRA, increasing a household’s chances of success in using their DRA assistance to rent a home.
NLIHC wonders, however, whether a checklist for tenants will be adequate, as well as about other questions. For example, might there be electrical or plumbing issues not readily apparent to an untrained eye? Should the pilot program rely on the checklist but provide a means for a DRA-assisted household to effectively engage the MTW PHA if physical conditions show up several months after the household moves in? Could the pilot use a variation on a Housing Opportunity Through Modernization Act (HOTMA) provision allowing a DRA-assisted household to move in without inspection, but requiring an MTW PHA HQS inspection sometime later? To what extent is there an obligation to ensure HQS with DRA because it is “public money”? How can the pilot be rigorously evaluated if there is no means to assess HQS?
One of the other advocacy organizations engaged during the July 17 meeting, the National Housing Law Project, raised a number of additional concerns, including:
- The status of tenant protections, given that DRA households would not be covered by HCV tenant protection regulations.
- Whether DRA households would receive the same tenant briefing that HCV tenants receive.
- Which protections would be in place to prevent or minimize landlord abuses such as demand for side payments.
- How households with accessibility needs would be protected and whether they would have help finding accessible units.
- How DRA tenants would be shielded from losing SSI assistance, Medicaid assistance, or other income-based assistance if DRA were considered “income” by other federal or state programs.
The RFI poses six questions to the public:
- What policies or procedures should be in place to ensure that direct rental assistance payments are used by recipients for rental housing costs?
- What steps should be taken to ensure that direct rental assistance is not treated as income for the purposes of taxes and other public benefit programs?
- How would the behaviors or engagement of housing providers, tenants or other stakeholders be expected to respond to direct rental assistance?
- How should direct rental assistance subsidies be calculated?
- How could a direct rental assistance program ensure that recipients have decent, safe, and sanitary housing, without creating a burden on landlords that might deter them from accepting tenants with the direct rental assistance subsidy?
- What aspects of existing rental assistance programs, beyond those noted above, should be preserved in a direct rental assistance pilot or demonstration?
Read the RFI at: https://tinyurl.com/yute58s6
More information about Housing Choice Vouchers is on page 4-1 of NLIHC’s 2024 Advocates’ Guide.
More information about the Moving to Work Demonstration is on page 4-76 of NLIHC’s 2024 Advocates’ Guide.