Zoning You Don’t Control, Funding You Can’t Replace
This week, CLPHA urged HUD to withdraw a change that would adjust the local inflation component of FY27 Renewal Funding Inflation Factors (RFIFs) and reduce Housing Assistance Payment (HAP) funding for families already under lease based on decisions made by units of local government that PHAs neither control nor influence. CLPHA objected to this proposed land use penalty in our comments to HUD on the notice establishing FY26 RFIFs for the Housing Choice Voucher program. The notice also asks whether HUD should refine the local inflation component of the RFIF for FY27 to discount the local inflation adjustment in areas where housing supply appears constrained by land use, permitting, or development approval policies. CLPHA strongly opposed this proposal in our comments.
We recommend that HUD publish RFIFs a year in advance and incorporate private-sector rent data and VMS-reported per unit cost data into the local factor and compare assigned factors against realized cost growth annually. Most importantly, a change of this consequence should not be adopted through the annual RFIF notice. HUD should publish the specific methodology for a full comment period, and should not implement it in the same year it is proposed.
Local Inflation Adjustment Reaches the Wrong Parties
CLPHA’s central objection is that the adjustment reaches the wrong parties. Zoning ordinances, permitting timelines, impact fees, and development approval processes are set by city councils, county boards, planning commissions, and state legislatures—not by PHAs. Most PHAs have no vote and no formal role in those decisions, and many of our members wait in the same permitting queues as private developers when they build or rehabilitate housing.
Geography compounds the problem, since RFIFs are calculated at the FMR area level and a single metropolitan area routinely spans dozens or hundreds of land use jurisdictions, so a central city that has already reformed its zoning could be penalized for its suburbs’ rules.
Data Sources Supporting Inflation Adjustment Does Not Exist
The comments also make the case that HUD has no data source capable of supporting the adjustment. The data sources cited in HUD’s notice include building permits and housing completions. These housing metrics fluctuate based on buyer and renter demand, interest rates, labor availability, and rising material and insurance costs as much as they do from regulatory shifts.. National permit authorizations fell to their lowest evel since May 2020 as the federal funds rate rose above 5 percent, a movement that likely has little to do with zoning.
The outcome measures HUD also lists, such as rent-to-income and price-to-cost ratios, are confounded in the same way. If HUD nevertheless proceeds, we ask that any such factor be applied only as an upward adjustment, never reducing an area’s factor below what the current methodology would produce, and that the methodology and area-level data be published for full notice and comment at least one funding cycle before taking effect. CLPHA also strongly opposes the suggestion that HUD target the change to PHAs above a voucher threshold, which would concentrate the loss on the large agencies serving the most assisted families.
On the current methodology, the comments document a gap members are living with now. Fifty-one members, approximately 60 percent of CLPHA membership, are in areas that received a 0 percent FY 2026 inflation factor. They include one member reporting an approximately 80 percent increase in average HAP payment over three years and another operating at 102 percent budget utilization. For these reasons, we recommend that HUD publish RFIFs a year in advance, incorporate private-sector rent data and VMS-reported per unit cost data into the local factor, release the underlying area-level calculations, and compare assigned factors against realized cost growth annually.
Eliminates the 50-Voucher Cap
Recently, HUD announced it is making $38.2 million available for Foster Youth to Independence (FYI) vouchers and replacing the 50-voucher annual cap with a need-based limit. A PHA may now request as many vouchers as it has referrals, minus any FYI or FUP vouchers already on hand from turnover. Requests may be as small as one voucher. HUD will accept and process requests on a rolling basis until the funding is exhausted.
The notice supersedes PIH Notice 2023-04. Requests for FYI vouchers already submitted under that notice do not need to be resubmitted, although HUD will review any that are not yet funded under the new requirements.
FYI is not a new initiative and has been operating since 2019. Congress renamed it the Melania Trump Foster Youth to Independence Initiative last year, but the acronym FYI remains unchanged. Notice PIH 2026-19 does, however, make substantive changes to how the program operates:
- Revised definition of "at risk of becoming homeless." The definition now pairs a 50 percent AMI income test with one of six housing conditions and covers youth who are homeless under McKinney-Vento and other federal statutes. It applies to all vouchers awarded under this notice and, upon turnover, to FYI noncompetitive vouchers from Notices PIH 2020-28, 2021-26, and 2023-04, but not to FUP or competitively awarded FYI vouchers.
- Voluntary recapture now available. A PHA that determines, in consultation with its partnering PCWA, that it no longer needs some or all its FYI noncompetitive vouchers may return them and the associated funding to HUD at any time by emailing [email protected], [email protected], and its FMC Financial Analyst.
- HUD-initiated recapture is directed but not yet in effect. The FY26 Act requires HUD to review utilization and recapture assistance that is no longer needed. HUD will implement this through separate guidance at a later date and will reallocate recaptured funds through this notice rather than a new competition.
Two items carry over from prior guidance:
- MTW Agencies: Moving to Work agencies must administer FYI vouchers consistent with this notice, and FYI funds remain ineligible for MTW funding fungibility.
- Special Fees: PHAs awarded new FUP/FYI vouchers in 2026 also receive a one-time Special Fee of $750 per voucher as outlined in Notice PIH 2026-12. HUD provides these funds automatically with the award, and no separate application is required. These funds may be used for landlord recruitment, housing search assistance, and landlord/tenant mediation, or for FYI expenses such as owner incentives, retention payments, and security deposits.
How to Apply
A PHA cannot request vouchers until it has received a referral of an eligible youth from its partnering PCWA, so requests cannot be made in anticipation of need. Funding is awarded on a rolling basis until exhausted. PHAs should enter into a partnership agreement with a PCWA and amend their Administrative Plans now, before a referral arrives. The notice sets out the application process and required documentation. Direct questions to [email protected].
Notify HUD of Your PHA’s Transition Date by September 30, 2026 • Comply by February 1, 2027
HUD has finalized the administrative procedures and implementation guidelines for National Standards for the Physical Inspection of Real Estate for the Housing Choice Voucher (HCV) and Project-Based Voucher (PBV) Programs (NSPIRE-V). While PHAs already use NSPIRE standards for public housing, this notice specifically applies to HCV and PBV units and replaces housing quality standards (HQS). PHAs are not required to comply with the NSPIRE-V inspection protocols until February 1, 2027, but HUD encourages all PHAs to begin making the transition.
The biggest change from HQS to NSPIRE standards is the focus on the condition of the dwelling units, prioritizing tenant health and safety. NSPIRE-V eliminates the "site and neighborhood" inspection requirement to remove subjective opinions about the appearance or aesthetics of a unit and property in the inspection process.
Notably, HUD had previously stated it was developing its own app for PHAs to use when completing NSPIRE-V inspections, but this notice states that HUD is no longer creating that app. PHAs can choose to use HUD’s checklist or any tool, software, or application that works best for them and their program as long as they comply with the latest version of the NSPIRE standards (currently 3.0).
In April 2025, CLPHA and industry partners urged HUD to delay their October 1, 2025, deadline for compliance with NSPIRE-V. Our efforts were successful, and in September 2025, HUD announced the new compliance date would be February 1, 2027.
What do members need to do now?
- If you previously gave HUD a transition date and are now delaying, send your new one. Notify HUD of your transition date by September 30, 2026. Email [email protected], copying your field office representative, with your PHA name, PHA code, and either the date you transitioned to NSPIRE-V or, if you haven't yet, the date you plan to — no later than February 1, 2027. PHAs that implemented NSPIRE-V and notified HUD are not required to provide further notification. If you previously gave HUD a date and are now delaying, send your new one.
- Resubmit any variations or alternative inspection methods for re-approval. Prior approvals do not carry over to NSPIRE-V. Re-analyze each one against NSPIRE standards and resubmit it to the email address above. You cannot use a variation or alternative inspection method until HUD approves it. If HUD denies your request, revise your inspection standards to meet the NSPIRE standards by February 1, 2027.
- Update your Administrative Plan with the NSPIRE-V inspection protocol and any approved variations or alternative inspection methods.
- Inform participating families and property owners of the changes to the inspection standards under NSPIRE-V.
Additional training resources including presentations, instructional videos, and webinars for PHAs implementing NSPIRE-V can be found on HUD Exchange and on the NSPIRE webpage. For questions about NSPIRE-V implementation guidance, contact Dana Kitchen, Office of Public Housing and Voucher Programs, at [email protected].
CLPHA's IT Coalition meets weekly on challenges related to HUD data system upgrades. PHA program managers and directors dealing with NSPIRE-V technical issues are welcome to join; contact Madeline Morris at [email protected].
