NLIHC has developed a sample comment letter advocates can use to respond to HUD’s Federal Register request for comments regarding the 2015 Interim Rule implementing the national Housing Trust Fund (HTF) (see Memo, 4/26). In the preamble to the Interim Rule, HUD stated its intention to open the Interim Rule for public comment once funding was made available and the grantees gained experience administering the HTF. Comments are due June 25.
In addition to comments about the Interim Rule, HUD asks the public to comment on five issues that might inform its rulemaking:
- Income targeting requirements, including the requirement that 100% of HTF funds be used to benefit extremely low-income households, those with income at or below the federal poverty line (whichever is greater) when there is less than $1 billion for the HTF. The interim rule defines extremely low-income households as those with annual income that does not exceed 30% of the area median income (AMI).
- The rent limitations in the interim rule. For instance, for extremely low-income households, the rent (including utilities) an assisted household pays cannot be greater than 30% of the federal poverty line or 30% of the income of a hypothetical household whose annual income equals 30% of AMI, whichever is greater.
- The minimum 30-year period of affordability.
- Property standards, including environmental standards.
- The limitation on the use of HTF funds for operating cost assistance (including reserves) to one-third of a state’s annual grant. HUD also asks for about the definition of operating costs, which is limited to costs for insurance, utilities, real property taxes, and maintenance and scheduled payments to a reserve for replacement of major systems of an HTF-assisted unit.
NLIHC’s sample comment letter supports the income targeting requirement, urges HUD to extend the affordability period from 30 years to 50 years, supports the one-third limit on operating costs, and suggests expanding the definition of operating cost assistance to reflect regular industry standards.
Of particular concern has been the rent limitation in the Interim Rule. By using the threshold of “the greater of” 30% of the federal poverty level or 30% of the area median income (AMI), wherever the federal poverty guideline is higher than 30% of AMI, renters with household incomes at 30% of AMI will be housing cost-burdened by the maximum.
The vast majority of metropolitan and non-metropolitan Fair Market Rent (FMR) areas have maximum rents based on the federal poverty guideline for apartments larger than one bedroom. Absent rental assistance, households at 30% of AMI who rent units with at least two bedrooms will be cost-burdened by maximum HTF rents in most FMR areas. Maximum rents based on the federal poverty guideline are more common in non-metro FMR areas than in metro FMR areas. In addition, the poorest areas, where the federal poverty guideline is much higher than 30% of AMI, have the highest potential housing cost burdens. This is particularly concerning given the 30% standard of affordability already overestimates what poorer and larger households can afford in terms of housing costs. NLIHC explains the problem in a brief analysis.
Using the federal poverty guideline to set maximum rents for HTF units disproportionately impacts larger, poorer households who already have greater difficulty affording rents limited to 30% of their income. Therefore, NLIHC strongly recommends that HUD amend the Interim Rule to read:
The HTF rent plus utilities of an extremely low-income tenant shall not exceed the lesser of 30 percent of the federal poverty line or 30 percent of the income of a family whose annual income equals 30 percent of the median income for the area, as determined by HUD, with adjustments for the number of bedrooms in the unit. HUD will publish the HTF rent limits on an annual basis.
NLIHC’s Sample Comment Letter is at: https://bit.ly/3gMVjaq
NLIHC’s brief analysis of the Interim Rule’s tenant rent provision is at: https://bit.ly/3gBk8XM
A description of how to submit a comment using regulations.gov is at: https://bit.ly/3xulut8
The Federal Register notice is at: https://bit.ly/3iNPFHv
More information about the national Housing Trust Fund is on page 3-1 of NLIHC’s 2021 Advocates’ Guide.