House Appropriators Agree to FY20 Funding Bill for HUD

On June 4, 2019, the full House Appropriations Committee agreed to and passed the FY20 funding bill for Transportation, Housing and Urban Development and Related Agencies (THUD) by a recorded vote of 29 to 21, with a manager’s amendment making technical changes to the bill offered by THUD Subcommittee Chairman David Price, as the only amendment agreed to by the committee.

The discretionary funding level for the Department of Housing and Urban Development (HUD) totals $50.1 billion, an increase of $5.9 billion above the FY19 enacted level, and $13.4 billion above President Trump’s request.

In a familiar pattern and reprise of repudiating Trump Administration budget proposals, the House THUD budget reflects Congress’ continuing commitment to fund critically important housing and community development programs the Administration proposed rescinding, cutting, or eliminating. Under the leadership of THUD Subcommittee Chairman David Price (D-NC) and Ranking Member Mario Diaz-Balart (R-FL), the THUD proposal increases – in several instances substantially increases – or level funds programs important to CLPHA members.

As Chairman Price noted during the committee markup, “What does this bill do? First and foremost, we’re investing in infrastructure. Whatever is going on elsewhere in government, our bill is investing in infrastructure, right here, right now. Transportation and housing infrastructure, infrastructure broadly conceived. We are a nation in the midst of an affordable housing crisis and this bill dedicates new resources to address it.”

In addition to robust funding increases, such as the doubling of Choice Neighborhoods to $300 million, the proposal also reflects priorities CLPHA vigorously advocated for with the appropriators, including legislative language to prevent HUD from evicting mixed-status immigrant families from public housing, and to prohibit HUD from unilaterally changing the public housing annual contributions contract without public input and following the administrative procedures act process. Importantly, the Administration’s “rent reform proposals” were singled out in the committee report as not included in the bill. Those proposals included mandatory rent increases and work requirements for public housing residents.

Below is an overview of the committee’s proposed FY20 funding levels for several programs of interest to CLPHA members, selected passages and rationale of policy directives and recommendations from the Committee Report (italicized and/or bolded for emphasis), along with CLPHA’s updated funding chart.

MANAGEMENT AND ADMINISTRATION

Sexual harassment in housing

The Committee supports the interagency task force between the Departments of Housing and Urban Development (HUD) and Justice (DOJ) to combat sexual harassment in housing that was announced in 2018. The Committee directs the Departments to submit a joint report to the House and Senate Committees on Appropriations no later than 90 days after enactment of this Act on activities of the task force. Specifically, the joint report shall address the development of a shared strategy between HUD and DOJ for combating sexual harassment in housing across the country, continued data sharing and analysis, joint development of training, evaluation of public housing complaint mechanisms, coordination of public outreach and press strategy, and review of Federal policies.

Violence Against Women Act (VAWA)

The Violence Against Women Reauthorization Act included critical housing protections for victims of domestic violence, dating violence, sexual assault, and stalking across HUD’s core housing and homelessness programs. The Committee provides additional resources for the Department to carry out these authorities. In particular, the Committee directs the Department to prioritize the creation of guidance and outreach to public housing authorities and private property owners participating in HUD programs on their responsibilities under VAWA including emergency transfers and record retention.

PROGRAM FUNDING

Public Housing Operating Fund: $4.753 billion

This is $647 million below CLPHA’s request of $5.4 billion, $1.89 billion above the Administration’s request of $2.863 billion, and $100 million above the FY19 enacted level.

Quality assurance of physical inspections – Citing concern with reports of deplorable living conditions spanning geographic regions, highlighting systemic problems, and questioning the effectiveness of REAC inspections, the committee “encourages the Department to work with the Congress on enforcement actions, including civil monetary penalties, that HUD can take to ensure PHAs and landlords maintain the physical quality of HUD-assisted units….The Committee directs the Department to solicit comments from stakeholders, including tenants, to identify ways the Department can improve its inspection protocols and oversight. The Committee will continue to closely monitor the Department’s efforts and progress and directs the Department to submit to the House and Senate Committees on Appropriations within 60 days of enactment of this Act a report identifying how HUD is improving the inspection process and related protocols, including quality assurance of inspections, identified actions yet to be implemented, the status of actions undertaken, and a timeline for completion of all actions.”

Operating fund adjustment factors – Noting that HUD’s current methodology for calculating formula income and utility expenses for PHAs does not always accurately reflect local reality especially for large elderly and disabled populations, or areas of the country with higher utility costs than other areas, the Committee “appreciates that the Department takes seriously concerns raised by PHAs and is reviewing its data and evaluating alternative approaches.” The Committee directs HUD to report within 60 days of enactment “on alternative methodologies for calculating PHA formula income for purposes of Operating Fund eligibility.”

Enterprise Income Verification —The Committee directs the Department, through its Enterprise Income Verification system, to ensure that all public housing authorities have automated access to upfront income verification tools that provide current employment and income information available through payroll data providers in addition to data already provided via data matching agreements with the Social Security Administration and the Department of Health and Human Services. The Committee directs the Department of Housing and Urban Development to enter into legal agreements with payroll data providers to provide current employment and income information to housing agencies.

Public Housing Capital Fund: $2.855 billion

This is $2.145 billion below CLPHA’s request of $5.0 billion, $2.855 billion above the Administration’s request of $0, and $80 million more than the FY19 enacted level. Since the proposal moves the Jobs-Plus Program and the Resident Opportunities and Self-Sufficiency (ROSS) program to a new account, the net increase to the Capital Fund is around $50 million.

There is a set-aside of $30 million for emergency capital needs with no less than $10 million for safety and security, equal to CLPHA’s request and $20 million more than the Administration’s request. There is a new set-aside of $25 million for competitive grants to housing authorities to evaluate and reduce lead-based paint hazards; and an additional $25 million for competitive grants to housing authorities for activities authorized under the Healthy Homes Initiative including addressing carbon monoxide poisoning, mold, and other household hazards.

There are additional set-asides of $28 million for ongoing financial and physical assessment activities, including to pilot a new physical inspection process and implement recommendations made in the March 2019 GAO report (GAO–19–254); and up to $16 million is provided for the cost of administrative and judicial receiverships.

The report notes the Committee recommendation “does not include the request to eliminate this account and direct unobligated balances to the Public Housing Operating Fund, nor does it provide for competitive grants to demolish public housing. The Committee continues to support a significant Federal commitment to public housing and rejects multiple proposals included in the budget intended to facilitate a reduction of the public housing portfolio.”

Tenant-Based Rental Assistance

Housing Choice Voucher (HCV) Renewals: $21.4 billion.

This is $200 million above CLPHA’s request of $21.2 billion, $1.284 billion above the Administration’s request of $20.116 billion, and $1.087 billion above the FY19 enacted level.

HCV Administrative Fees: $1.925 billion.

This is $575 million below CLPHA’s request of $2.5 billion, $187 million above the Administration’s request of $1.738 billion, and $39 million above the FY19 enacted level.

Tenant Protection Vouchers (TPV): $150 million.

This is $20 million above CLPHA’s and the Administration’s request of $130 million, and $65 million above the FY19 enacted level. “The Committee rejects proposals included in the budget to reduce public housing, but includes this increase to address anticipated closures of certain public housing properties unrelated to any reductions proposed by the Administration.”

HUD-VASH Vouchers: $40 million.

This is $35 million below CLPHA’s request of $75 million, $40 million more than the Administration’s request of $0, and equal to the FY19 enacted level. The report also notes that “no less than $723,000,000 in voucher renewal appropriation is available to renew approximately 100,000 eligible VASH vouchers funded in prior years. Since 2008, the Committee has provided more than $755,000,000 in targeted funding to increase the number of VASH vouchers available to address veteran homelessness and billions of dollars have been made available to renew HUD–VASH vouchers over the same period.”

Family Unification (FUP) Program: $40 million

This is $20 million above CLPHA’s request of $20 million, $40 million above the Administration’s request of $0, and $20 million above than the FY19 enacted level. The report indicates the increase is “to provide housing vouchers on demand for at-risk youth who have ‘‘aged out’’ of foster care.”

Section 811 Mainstream Vouchers: $225 million

This is $34.5 million below the Administration’s request of $259.5 million, and equal to the FY19 enacted level. The report states this amount is sufficient to renew previously awarded eligible Section 811 tenant-based vouchers.

Section 8 Management Assessment Program

In fiscal year 2019, the Committee directed the Department to analyze whether differences in scoring PHAs created inequities and to report to the Committee. The Committee looks forward to receiving the results of the report.

Housing for the reentry population

The Committee is encouraged by the actions that HUD has taken to reduce the barriers that the reentry population faces in securing housing. Recognizing that a firm foundation including safe and reliable housing is a critical part of reducing recidivism, the Committee urges HUD to further explore other initiatives to reducing barriers.

Fair market rents

The Committee is aware of the concerns regarding the data used to calculate fair market rents and directs the Department to work with its authorizing Congressional Committees to develop statutory flexibilities for operating the voucher program in such a way that vouchers will be usable in rapidly rising rental markets.

Purchasing power of vouchers

The Committee directs the Department to report to the Committee on the impacts that rising rental market prices have had on the purchasing power of rental assistance vouchers administered by public housing authorities (PHAs), including Moving To Work (MTW) agencies and HUD–VASH vouchers. The Committee directs the Department to develop recommendations regarding funding levels necessary to ensure that PHAs, including MTW agencies, are able to continue serving the same number of households. The Committee is aware that an MTW expansion cohort will study landlord incentive programs and looks forward to the results of that study.

Hardship exemptions

The Committee directs the Department to submit a report to the Committee within 120 days of enactment of this Act that provides the Department’s plan and associated timeline for increasing tenant awareness of hardship exemption policies. This plan must include HUD’s strategy and timing for conducting additional outreach on hardship exemptions, including but not limited to, notice about the availability of hardship exemptions and the applicable process to each family paying or notified of the obligation to pay minimum rents. The plan should also update relevant guidance documents for the covered programs.

Evictions data

The Committee directs the Department to explore what it would take to collect, analyze, and make publicly available data on evictions from all of its federally-assisted housing properties, including tenant characteristics such as the age, gender, race, and ethnicity of all tenants residing on the property, and report on its findings within 120 days of enactment of this Act.

Administration ‘‘rent reform’’ proposals

The Committee does not include language implementing any of the Administration’s ‘‘rent reform’’ proposals and funds accounts accordingly. The Committee believes these proposals would harm America’s most vulnerable populations and do nothing to address the issues of poverty they face.

Choice Neighborhoods Initiative (CNI): $300 million.

This is equal to CLPHA’s request of $300 million, $300 million above the Administration’s request of $0, and $150 million above the FY19 enacted level. No less than $150 million may be made available to housing authorities; and up to $5 million of the funds may be provided as comprehensive local planning grants. HUD is directed to make funds available within 120 days of enactment and issue awards no later than one year from enactment.

Self Sufficiency Program: $150 million

This is a new program account encompassing the Family Self Sufficiency (FSS) Program, the Jobs-Plus Pilot Program, and the Resident Opportunities and Self-Sufficiency (ROSS) program. FSS is $100 million, $10 million below CLPHA’s request of $110 million, $25 million below the Administration’s request of $75 million, and $20 million above the FY19 enacted level; Jobs-Plus is $15 million, equal to CLPHA’s and the Administration’s request; and ROSS is $35 million, equal to CLPHA’s request, and $35 million more than the Administration’s request.

Since the Family Self-Sufficiency Act streamlines the FSS program and expands it to PBRA properties and HUD has not yet proposed regulations to implement these changes, the Committee directs HUD to complete and release revisions to the FSS regulations within 90 days of enactment.

Promoting upward mobility

The Committee directs the Department to explore opportunities for stronger interagency collaboration to effectively promote and execute upward mobility and economic empowerment for HUD-assisted households through education and workforce development, including enhancement of current Department initiatives such as FSS, Jobs Plus, and ROSS. A report on proposed interagency collaboration projects shall be submitted to the House and Senate Committees on Appropriations within 270 days of the enactment of this Act.

Rental Assistance Demonstration (RAD): $0 million

This is $100 million below CLPHA’s and the Administration’s request of $100 million.

GENERAL PROVISIONS

SEC. 214

Allows housing authorities with less than 400 units to be exempt from asset management requirements in the operating fund rule.

SEC. 215

Restricts the Secretary from imposing any requirement or guideline relating to asset management that restricts or limits the use of capital funds for central office costs, up to the limit established in QWHRA.

SEC. 221

Restricts the amount of Section 8 (under the tenant based rental assistance program) and Section 9 funding that public housing agencies can use to pay employees above the annual rate of basic pay for a position at level IV of the Executive Schedule in FY19.

SEC. 223

Prohibits funds to be used to require or enforce the Physical Needs Assessment (PNA).

SEC. 230

Prohibits the use of funds to direct a grantee to undertake specific changes to existing zoning laws as part of carrying out the final rule entitled, "Affirmatively Furthering Fair Housing" or the notice entitled, "Affirmatively Furthering Fair Housing Assessment Tool".

SEC. 233

Prohibits the use of funds to be used to establish and apply review criteria for participation in or coordination with EnVision Centers.

SEC. 234

Prohibits the use of funds to be used to implement, administer, enforce, or in any way make effective the proposed rule 19 entitled ‘‘Housing and Community Development Act of 20 1980: Verification of Eligible Status’’, issued by the Department of Housing and Urban Development on May 10, 22 2019 (Docket No. FR-6124-P-01), or any final rule based 23 substantially on such proposed rule.

SEC. 236

Prohibits the use of funds to be used to implement, administer, enforce, or in any way make effective any rule making any change to the rule entitled ‘‘Equal Access in Accordance With an Individual’s Gender Identity in Community Planning and Development Programs’’ published by the Department of Housing and Urban Development in the Federal Register on September 21, 2016 (81 Fed Reg. 64763) or to the rule entitled ‘‘Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity’’ published by such Department in the Federal Register on February 3, 2012 (77 Fed. Reg. 5662).

SEC. 237

The notice issued by the Department of Housing and 10 Urban Development on February 20, 2015 and entitled ‘‘Appropriate Placement for Transgender Persons in Single-Sex Emergency Shelters and Other Facilities’’ (Notice 13 CPD-15-02) shall have the force and effect of law.

SEC. 238

Prohibits HUD in this fiscal year or any fiscal year thereafter to implement, require, enforce, or otherwise make effective any change, amendment, or alteration to any term or condition of the Annual Contributions Contract between the Secretary and any public housing agency, as such contract was in effect as of January 1, 2018, unless such change, amendment, or alteration is made pursuant to a rule issued after notice and an opportunity for public comment and in accordance with the procedure under section 553 of title 5, United States Code, applicable to substantive rules.

OTHER SELECTED HUD PROGRAMS

Project-Based Rental Assistance: $12.590 billion

Of this amount, $345 million is set-aside for Performance-Based Contract Administrators (PBCA). According to the report, the Committee " remains concerned about HUD’s PBCA solicitation and awards procedures, which have resulted in litigation, as well as by the structure of the contracts, which increases costs and creates the potential for excessive profits. The fees earned by PBCAs are based on the area’s fair market rent and are unrelated to the costs of performing the contract. HUD spent hundreds of millions on incentive fees for performing required tasks on time and for providing customer service. A Committee analysis of the 2011 and 2012 PBCA bids indicates that competitive bidding of PBCA contracts could have saved $80 to $100 million in fiscal year 2017 alone.

The Committee recognizes that HUD is working to develop a new solicitation for PBCA contracts while balancing Court rulings, stakeholder comments and requirements under the Federal Acquisition Regulations and Competition in Contracting Act. The Committee looks forward to the process moving forward with a new contract structure that removes the potential for excessive profits. The Committee also directs HUD to ensure that affected stakeholders have sufficient time to submit comments and provide input regarding any proposed program changes.

Community Development Block Grant: $3.6 billion

HOME: $1.75 billion

Homeless Assistance Grants: $2.8 billion

Of this amount, set-asides include $290 million for emergency solutions grants program; $50 million for rapid re-housing of homeless and to assist survivors of domestic violence; and $7 million for a national homelessness data analysis project.

Research and Technology: $98 million

Of this amount, the Committee recommends $17,000,000 for new and continuing studies and demonstration evaluations, including the:

• Collaboration with Centers for Medicare and Medicaid Services: how Medicare and Medicaid funds can be used to support programs that use affordable senior housing as a platform for coordinating health, wellness, and supportive services and programs to help older adults remain healthy, age in their community, and reduce their use of costly health care services,

• Moving to Work Expansion,

• Disaster Recovery Research,

• Family Options: 10 Year Follow-up,

• Family Self-Sufficiency Long-term Program Tracking,

• Competitive Evaluation Grants: Assessing the Impacts of CDBG and HOME eligible activities,

• Evaluation of Section 202 Construction Activities,

• Evaluation of Programs in Response to Foreclosure Crisis,

• Impact of RAD on Children in Assisted Households,

• Qualitative study of how publicly available data on rental property health and safety violations impact landlord and renter behavior,

• Housing Search Assistance for People with Disabilities, and

• A study of alternative methods for calculating Fair Market Rents in rental markets with rapidly rising rents.

The recommendation does not include additional funding for the Envision Center technical assistance funded in fiscal year 2019 and directs the Department to provide a briefing and report to the Committee on the outcomes from fiscal year 2019 funding before seeking additional resources.

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