Transforming Rental Assistance, Take 4

As part of its FY12 budget request, HUD is seeking $200 million for what department officials are now calling a “rental assistance demonstration.” HUD rolled out a $350 million Transforming Rental Assistance (TRA) proposal as part of its FY11 request in March 2010 and subsequently circulated a draft legislative proposal for a Preservation, Enhancement, and Transformation of Rental Assistance (PETRA) program in mid-2010. Legislation in the form of the Rental Housing Revitalization Act was introduced by Representative Keith Ellison (D-MN) in December 2010 (see Memo, 12/3/10).

The FY12 request includes some significant differences compared to its FY11 request counterpart.

The FY12 proposal focuses on a “demonstration” to convert public housing and privately-owned properties with contracts under the rent supplement program, the rental assistance program, and the Section 8 moderate rehabilitation program, to long-term project-based rental assistance or to project-based vouchers. The FY11 request was not a demonstration, but was put forth as the first of several phases to convert most HUD rental assistance programs into a new, streamlined project-based subsidy. The FY11 request also included the conversion of Section 8 project-based contracts to the new subsidy.

The FY12 proposal does not include FY11’s language requesting resources for the “one-time expenses of combining administrative components of local” voucher programs. NLIHC supports the regionalization of voucher administration.

Additionally, the FY12 request does not include any of the $50 million included as a set-aside from the $350 million FY11 proposal “for services to promote resident mobility.” The FY12 request’s narrative describes the proposal as keeping TRA’s resident choice component, which would have allowed public housing tenants in converted units to choose to move with a voucher. The budget language requested does not specifically provide public housing tenants with this right.

As the FY11 budget request language did, the FY12 request language also would give the HUD Secretary broad authority to waive any public housing or project-based assistance requirement if he deems the waivers necessary “for the effective conversion of the contracts.” In HUD’s narrative, not its actual budget language, HUD refers to assessing the impacts of the demonstration, “including rent setting.” There is no specific mention of rent changes in the budget language.

Under the FY12 demonstration, HUD anticipates that up to 263,000 units could be converted to project-based assistance. The FY11 TRA envisioned converting approximately 300,000 units to a new subsidy system.

For more on the rental assistance demonstration and its history, see