HUD published a notice in the Federal Register on February 14 asking for stakeholder input before implementing amendments to the United States Housing Act of 1937 that primarily pertain to small public housing agencies (PHAs) predominantly operating in a rural area. Another amendment requires HUD to make available one or more software programs to facilitate the voluntary use of shared waiting lists by PHAs (not just small PHAs) as well as by private owners of HUD-assisted housing.
On May 24, 2018, President Trump signed into law the “Economic Growth, Regulatory Relief, and Consumer Protection Act” (see Memo, 5/29/18). Before enactment, the bill was referred to as S. 2155. NLIHC sent a letter to the Senate on December 7, 2017, outlining our concerns about S. 2155 that the final law did not address. Section 209 of the act added section 38 to the Housing Act of 1937 regarding small public housing agencies. Section 209 defines a “small public housing agency” as a PHA that administers 550 or fewer public housing units and Housing Choice Vouchers, combined, and that predominantly operates in a rural area.
Two of the provisions in Section 209(a) could undermine the physical integrity of many small PHAs, putting the health and safety of residents at risk and potentially destabilizing communities.
Physical Inspections Limited to Once Every Three Years
One of those provisions reduces the frequency of physical inspections at small PHAs to once every three years for public housing and for units occupied by households using a voucher. If HUD designates a small PHA to be “troubled,” however, it must be re-inspected within a year. In addition, there is unclear language that seems only to require public housing units to meet the physical condition standards of the voucher program’s Housing Quality Standards (HQS) instead of the more rigorous Uniform Physical Condition Standards (UPCS) currently used by HUD’s Real Estate Assessment Center (REAC).
Prior to Section 209, only the highest performing small PHAs were allowed a three-year window between physical inspections. Small PHAs deemed “standard” have been inspected every two years, and “troubled” small PHAs have been inspected every year. Given Congress’ severe underfunding of the public housing Capital Fund for many years, significant physical deterioration can take place over the course of three years, placing the health and safety of residents at risk.
The statute emphasizes that small PHAs must still conduct lead safety inspections or assessments according to the procedures in Section 302 of the Lead-Based Paint Poisoning Prevention Act.
HUD’s Federal Register notice about these provisions states that HUD cannot provide guidance yet due to the lack of clarity in the statute’s text that implies public housing would only need to comply with HQS.
Troubled Small PHAs
The other problematic provision gives HUD discretion in designating a small PHA as “troubled.” Such a designation may be made if HUD determines that the PHA has failed to maintain public housing units in a “satisfactory physical condition,” or if HUD determines that the PHA’s voucher program has failed to comply with Housing Quality Standards (HQS). The statute also sets out requirements for a small PHA to enter into a corrective action agreement within 60 days of being designated troubled, and for addressing the failure of a troubled small PHA to comply after one year. HUD’s Federal Register notice states that HUD is developing regulations about these provisions.
Small PHAs “Predominantly Operating in a Rural Area”
The definition of “rural area” is not open for comment because it is codified in Regulation Z of the Bureau of Consumer Financial Protection’s Truth in Lending provisions. What is open to public input is the interpretation of “predominantly operating” in a rural area. HUD offers three potential means of interpretation and invites others:
- The PHA’s physical address is in a rural area.
- More than 50% of the buildings occupied by voucher households and public housing residents are in rural areas.
- More than 50% of the residents served live in rural areas.
HUD also asks for input regarding how often HUD should assess the rural nature of a PHA.
Consortia
Section 209(c) requires HUD to develop and use by November 20, 2018, electronic information systems to enable full reporting by any PHAs (not limited to small PHAs) that want to form a consortium of PHAs. HUD’s Federal Register notice states that HUD is still working on it.
Shared Waiting Lists
Section 209(d) requires HUD to make available one or more software programs that will enable PHAs (not limited to small PHAs) and private owners of HUD-assisted housing to share waiting lists. HUD’s Federal Register notice states that HUD is exploring software program options. It mentions the Massachusetts Section 8 Housing Choice Voucher Centralized Waiting List, but also describes limitations of that model. HUD poses four questions and solicits feedback.
The February 14 Federal Register notice is at: https://bit.ly/2SAs9Sw