HUD IG's Flawed Over-Income Report Was Just More Of The Same


The HUD Inspector General’s report on over-income families was just the latest example of the IG delving into areas beyond its scope.

After the IG’s report this summer that more than 25,000 families in the nation’s public housing were over-income the inevitable negative news media coverage ensued.

HUD’s initial response was thoughtful and accurate. The agency noted, correctly, that there are justifiable reasons for, and no prohibitions against, housing "over-income" families. HUD cited the importance of reducing concentrated poverty while not creating disincentives to self-sufficiency. The agency also warned that losing revenues from such tenants would require housing authorities to seek an additional $116.5 million in federal subsidies.

Some news media editorial writers even actually started to echo HUD’s defense, noting that all the over-income families, most of whom barely exceeded income thresholds, were just 2.6 percent of the nation’s public-housing households.

Aside from those defenses, there were other valid arguments to be made. The IG’s position, for instance, undermined the trend toward federal regulators pushing more public-housing decision making to the local level. Also, there has long been bipartisan support in Congress for greater income mixing, largely for the reasons stated previously.

Furthermore, it was another example of overreach by the IG where it appeared to go beyond its mandate, delving into the arena of policy making.

It should be noted that HUD’s IG has a history of this. Take its report on public housing asset-management issued last year. That was another case in which HUD’s IG cherrypicked data, drew erroneous conclusions and overstepped its proper role, as CLPHA, PHADA and NAHRO pointed out in joint letter.     

Despite having so many good arguments on its side on the over-income issue, and despite its initial strong defense, HUD backtracked, promising it would review the situation and issue new guidance if needed.

As part of its promised response, in a letter earlier this month, HUD Principal Deputy Assistant Secretary Lourdes Castro Ramirez reminded housing authority Executive Directors that they already have the power to “remove extremely-over-income families from public housing.”        

Castro Ramirez urged EDs to consider steps they could take locally to limit the “most egregious” instances of over-income families remaining in public housing.

One Castro Ramirez suggestion squarely aimed at placating critics was for housing authorities in high income cities to consider using their local area median income instead of the lower national area median income to set rents.

That would narrow the difference between the rent over-income families pay for their public housing versus the market rates. Her other suggestions acknowledged the complexity of many of these situations and the relative vulnerability of many over-income families.

For instance, Castro Ramirez asked EDs to consider giving over-income families a preference to return to public housing if their financial circumstances changed for the worse after they vacated their PHA apartments.  

Castro Ramirez signaled that there may be more HUD recommendations to come. “HUD is reviewing data and related information to understand the impact of potential national policy changes, whole continuing to provide a balance between achieving the core program goal of serving low income families and encouraging families to become self-sufficient.”

Neither Castro Ramirez or the critics of over-income tenants residing in public housing, some of whom went so far as to call for a general eviction of residents above the threshold, made any suggestions for where public-housing authorities should make up the estimated $116.5 million HUD told the IG housing authorities would lose if such evictions took place.

In any event, CLPHA would like to hear from our members about how the over-income issue affects you.

Return to: CLPHA Report-Sept. 16, 2015