U.S. Senator Robert Menendez (D-NJ), Ranking Member of the Housing, Transportation and Community Development Subcommittee of the Senate Banking, Housing and Urban Affairs Committee, is leading an effort in the Senate to boost FY19 funding for public housing. His office has asked CLPHA for help in encouraging other Senators to sign onto the letter to the Appropriations Committee requesting full funding of the Public Housing Operating Fund at 100 percent proration, $5 billion for the Public Housing Capital Fund, and $200 million for the Choice Neighborhoods program.
The following messages are being sent to other U.S. Senators by Senator Menendez’s office:
PUBLIC HOUSING:
“Sen. Menendez invites your boss to sign the attached letter in support of the Public Housing Operating Fund and the Public Housing Capital Fund. The letter requests full funding of the Public Housing Operating Fund at 100 percent proration and $5 billion for the Public Housing Capital Fund. The Operating Fund provides the subsidies necessary to cover the difference between the rents paid by residents and the operating costs of the property. Due to federal funding cuts, public housing agencies have been subject to significantly prorated operating subsidies. In fiscal years 2015 and 2016, operating subsidies were prorated at 86 percent and 84 percent, respectively. Public housing agencies have not received full funding since fiscal year 2010. The Capital Fund is the primary source of funding to preserve the 1.1 million units in our public housing inventory. In 2010, HUD estimated that the public housing inventory has a capital needs backlog of $26 billion, increasing by an average of $3.4 billion each year. Due to repeated underfunding, HUD estimates that we lose approximately 10,000 units of public housing every year due to physical obsolescence and disrepair.
“If your boss would like to sign, please contact Rebecca Schatz at Rebecca_Schatz@menendez.senate.gov. Deadline to sign is COB Monday, April 16.
“FY18 signers: Menendez, Brown, King, Van Hollen, Durbin, Cantwell, Kaine, Blumenthal, Cortez Masto, Hirono, Duckworth, Hassan, Warren, Sanders”
QUICK ACTION NEEDED:
Please reach out to your U.S. Senators and strongly urge them to sign onto the Dear Colleague letters circulated by Senator Menendez boosting funding for the Public Housing Operating Fund, Public Housing Capital Fund and the Choice Neighborhoods program
Dear Colleague Letter - Choice Neighborhoods
On January 17, the Senate Committee on Banking, Housing, and Urban Affairs once again met in Executive Session to vote on the nominations of Robert Hunter Kurtz to be HUD Assistant Secretary for Public and Indian Housing (PIH); and Brian Montgomery, to be HUD Assistant Secretary for Housing – Federal Housing Commissioner. The nominations were resubmitted to the Senate by the Trump White House after failing to receive a floor vote for confirmation before the end of the first session of the 115th Congress in December and failing to be carried over into the current second session.
The nominations were approved by voice vote and reported favorably to the full Senate. However, Senator Elizabeth Warren (D-MA) is recorded as voting no on both nominations, and Senators Jack Reed (D-RI) and Catherine Cortez Masto (D-NV) are recorded as voting no on the Montgomery nomination.
Since a “hold” was placed on the Kurtz nomination during the first session—preventing the nomination to be brought up for a floor vote by an unnamed senator for an undisclosed reason—it is highly probable another hold may be once again placed on the Kurtz nomination. CLPHA and other stakeholders have asked Senate leadership to move the Kurtz nomination to a floor vote for confirmation as quickly as possible.
On January 17, the U.S. House of Representatives, after suspending the rules and bringing the bill to the floor the previous day, passed H.R. 4258, the Family Self-Sufficiency Act, by an overwhelming vote of 412 to 5.
The bipartisan H.R. 4258 was introduced on November 6, 2017 by Chairman Sean Duffy (R-WI) and Ranking Member Emanuel Cleaver (D-MO) of the Housing and Insurance Subcommittee of the Financial Services Committee, following subcommittee hearings on the Family Self Sufficiency Program (FSS) of September 27, 2017 (see CLPHA Report 10/5/17).
The bill would combine the two separate FSS programs administered by HUD into one program; would broaden the supportive services that FSS can provide to a participant; and would allow tenants who currently reside in privately-owned properties with HUD project-based assistance to participate in the FSS program. According to the committee, the FSS program “helps families in public housing and the voucher program make progress toward economic self-sufficiency by combining stable affordable housing with work-promoting service coordination and a rent incentive in the form of an escrow account that grows as the families’ earnings increase.”
Similar legislation, S. 1344, the Family Self Sufficiency Act, was introduced in the U.S. Senate by Senator Roy Blunt (R-MO) during the first session of the 115th Congress.
CLPHA participated in a call this morning with HUD to discuss next steps in the implementation of the Small Area Fair Market Rent Rule (“Rule”) in light of the preliminary injunction was granted in the Open Communities Alliance litigation challenging HUD’s suspension of the Rule (see CLPHA Update 1/3/18). Participants on the call included officials from HUD’s Offices of Policy Development and Research (“PD&R”), Public and Indian Housing (“PIH”), Housing Choice Vouchers, and General Counsel. Below are the major takeaways from the call:
- Effective date of April 1, 2018: HUD announced that full implementation and compliance with the Rule and the to-be-issued guidance will be effective as of April 1, 2018.
- Comments due January 11, 2018: HUD encouraged all interested parties to submit comments in response to HUD’s December 12, 2017 “Notice for Suspension of Small Area Fair Market Rent (Small Area FMR) Designations; Solicitation of Comment” Docket No. FR-6070-N-01. Comments are due by January 11, 2018 and may be submitted by mail or electronically atwww.regulations.gov. We will be submitting comments accordingly. We request members to provide us information regarding adverse rental housing market conditions specific to your area so that we can, in turn, include in our comments to HUD.
- Substantive Issues Addressed
- Request for suspension of Small Area FMR designation – HUD noted that the Court in theOpen Communities Alliance litigation did not invalidate any portion of the Rule, but rather concluded that HUD did not properly suspend the Rule’s implementation. HUD went on to clarify, however, that HUD still has the discretion, on a case-by-case basis, to suspend a Small Area FMR designation for a particular area or temporarily exempt a PHA from using the Small Area FMRs based on documented findings of adverse rental housing market conditions. While HUD is working on guidance to instruct PHAs on how to request such a suspension or exemption, HUD is aware of the difficulties PHAs face given the short implementation timeframe and encourages PHAs not only to highlight these difficulties by submitting comments to its December 12, 2017 Notice, but also to submit these difficulties in any forthcoming suspension or exemption request for HUD’s consideration.
- Administrative fees – PIH was not able to provide feedback regarding whether PHAs will be provided increased administrative fees to assist in the implementation efforts, as was done for the demonstration project participants using extraordinary administrative fees.
- FMR “groupings” – While HUD will continue to issue Small Area FMRs at the zip code level, HUD also encourages PHAs to create Small Area FMR bands using the surrounding zip codes that fall within the 90%-110% FMR range. HUD acknowledged that such groupings are not specifically authorized under the Rule but noted that they will be addressed in the forthcoming guidance materials.
- Guidance forthcoming: HUD anticipates issuing implementation guidance materials by mid-January. This guidance will include:
- PIH guidance document(s)
- Technical assistance task order(s)
- A dedicated technical assistance page on HUD Exchange
- FAQs document(s)
- Guidance regarding the process for requesting Small Area FMR suspensions
The guidance materials will include information on best practices, outreach to tenants, managers, and owners, impact on current technical and organizational systems, and other similar information. HUD also committed to using the findings from the Small Area FMR demonstration project to inform such guidance materials.
If you have any questions about HUD’s Small Area FMR Implementation, you can email or call (202-638-1300) Research & Policy Analyst Nicole Barrett (nbarrett@clpha.org) or Deputy Director Deb Gross (dgross@clpha.org).
On January 17, 2018, HUD issued guidance “to help PHAs better understand their options” under the Final Rule but cautioned that HUD would likely “amend and extend this guidance once it has received and evaluated the complete results of the Small Area FMR Demonstration Evaluation.” Consistent with previous direction from HUD, the guidance states that full implementation and compliance is expected “no later than April 1, 2018.”
We have identified a number of issues with the guidance and plan to address these issues with HUD:
- Section (4)(d)(ii) – HUD has committed to issuing a separate notice addressing procedures for which designated and opt-in SAFMR PHAs may request approval for exception payment standards exceeding 110% of SAFMR. When will this notice be issued?
- Section (4)(e) – HUD has stated that a “PHA’s Administrative Plan must indicate how it will handle decreases in the payment standard” during the term of a HAP contract and has identified three policies PHAs to address such decreases. This raises timing concerns for PHAs, as formal PHA administrative plan review processes required to implement such changes may delay adoption of such changes past the April 1, 2018 compliance deadline.
- Section (6) – HUD has exempted MTW PHAs in mandatory SAFMR areas provided “that agency has an alternate payment standards policy in its HUD-approved Annual MTW Plan.” However, HUD referred to “alternate rent policies” in the Final Rule when it addressed exempting MTW PHAs. Is this a substantive change or is HUD using “alternate rent policies” and “alternate payment standards” interchangeably?
- Section (9)(b) – HUD has advised that PHAs may request either a suspension or a temporary exemption from SAFMRs by submitting a request to SAFMRs@hud.gov.However, HUD has not clarified what PHAs are required to do while the suspension/exemption request is pending; nor has HUD established review and approval timeframes for such requests.
- Section (9)(c) – HUD has provided a nonexclusive list of adverse rental housing market conditions to support a suspension/exemption request. However, HUD has not provided sufficient guidance on the type of documentation PHAs will be required to include in such requests.
Please advise if you have other issues or questions you would like for us to address with HUD as well.
Update on comments submitted through January 11, 2018 re: Docket No. FR-6070-N-01, Notice of Suspension of Small Area Fair Market Rent (Small Area FMR) Designations
In total, 47 comments were submitted (48 separate submissions with 1 duplicate). Comments in support of HUD’s suspension of the Final Rule were submitted by 4 PHAs and 7 trade/industry groups, including CLPHA. More than 50% of the comments submitted were by advocacy groups, civil rights groups, housing mobility entities, and academia all in opposition to HUD’s suspension.
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