NLIHC Submits Comments on Proposed HOTMA Implementation Regulations

NLIHC submitted comments regarding HUD’s proposed changes to the regulations for the public housing, Housing Choice Voucher, and Section 8 project-based rental assistance programs implementing income-calculation and income-review changes required by the “Housing Opportunity Through Modernization Act of 2016” (HOTMA). Comments were due November 18.

The proposed changes, published in the Federal Register on September 17, would implement HOTMA Sections 102, 103, and 104. Section 102 changes the requirements regarding income reviews for public housing and HUD’s Section 8 programs (the Housing Choice Voucher program and the Project-Based Rental Assistance [PBRA] program that assists privately owned multifamily properties). Section 103 modifies the continued occupancy standards of public housing residents whose incomes have grown above the thresholds for initial occupancy. Section 104 sets maximum limits on the assets of households living in public housing and Section 8 housing.

Various provisions of HOTMA were implemented by other HUD actions. For example, a Federal Register notice published on October 24, 2016, announced provisions that were effective immediately, and a Federal Register notice published on January 18, 2017, implemented multiple voucher program provisions unrelated to Sections 102, 103, and 104.

NLIHC signed on to a detailed comment letter submitted by the National Housing Law Project and Housing Justice Network. NLIHC also expressed support for the comments submitted by the Consortium for Citizens with Disabilities.

NLIHC’s comment letter emphasized key features in both letters, including:

When a household’s income decreases by 10% or more, HOTMA requires a public housing agency (PHA) or owner of a private multifamily property assisted with Section 8 Project-Based Rental Assistance to carry out an income review if a household requests one. HOTMA also allows a PHA or owner to establish a threshold lower than 10%. For households with incomes far below 30% of the area median income (AMI), a 10% threshold is too high; 10% of a meager income can cause extreme hardship, affecting a household’s ability to meet other critical daily needs. Therefore, NLIHC suggested lowering the threshold to 5% for households with incomes less than 20% of the AMI, roughly the average income for recipients of Supplemental Security Income (SSI).

When a household’s income increases by 10% or more, HOTMA requires a PHA or owner to carry out an income review. This 10% threshold, however, can be especially burdensome for households with incomes far below 30% of the AMI. For example, a rent increase due to a 10% increase in income for a household with an income at 15% of the AMI can be a much greater financial hardship than for a household with an income at 60% of the AMI. HOTMA allows HUD to establish a different threshold.

NLIHC cited HUD’s Multifamily programs, which do not require an interim income reexamination until a household’s income increases more than $200 per month (Handbook 4350.3 REV-1, Chapter 7, Section 2, Subsection 7-10). Therefore, NLIHC urged HUD to use the existing Multifamily threshold, adjusted annually for inflation. Such a threshold would not only ease the rent increases for extremely low-income households, it would also lessen the burden on PHAs and owners of more frequent income redeterminations that also entail a full rent recalculation.

HUD proposes using TANF, SNAP, EITC, and Medicaid as safe harbor substitutes for determining income in order to streamline the process for residents and owners. NLIHC accepted SNAP and Medicaid as suitable safe harbors, and suggested HUD study SSI as a potential safe harbor. NLIHC opposed EITC as a safe harbor because it would unduly infringe upon a household’s privacy, given other personal information contained in a tax return. NLIHC also expressed doubts about using TANF as a safe harbor because of uncertainties regarding the formula used to determine incomes in this program.

NLIHC’s comment letter is at:

Final versions of the NHLP/HJN and CCD letters were not available before this edition of Memo was distributed.

NLIHC’s summary of the proposed changes are at: