With Spring comes new opportunities in housing that you certainly do not want to miss. On April 3rd – 4th, Ballard Spahr and CSG Advisors co-host the Ninth Annual Spring Housing Conference in Denver, Colorado.  This perennial favorite will help bring opportunities into focus and explore topics from Opportunity Zones to the intersection between health care and housing, alternatives to the LIHTC financing model to innovations in workforce housing, navigating features of scattered site portfolios to the latest out of Washington and other topics.  The conference expands the past 101 series by offering a full afternoon of training workshops on RAD and Section 18 dispositions on April 3rd, along with a networking reception that evening.  The two day event carries no registration fee, but we ask that attendees register using the links embedded in the Spring Housing conference agenda.  

Hope to see you there!

This week, HUD issued a new notice requesting letters of interest under its Moving to Work (MTW) program from PHAs with 1,001 or more total public housing and housing choice voucher (HCV) units. MTW participants are able to implement policies that vary from those required under HUD’s statutes and regulations, and also are able to use their funding in a more flexible manner than non-MTW PHAs.

Per Congressional mandate, 100 MTW PHAs will be added in 4 cohorts over a 7-year period. Each cohort will be required to implement a certain type of affordable housing policy, which HUD will study to identify successful MTW innovations that can be applied to all PHAs.  The letters of interest requested this week are for the second cohort of the MTW expansion, which will target larger PHAs who seek to implement alternative rent policies intended to increase resident self-sufficiency and reduce PHA administrative burdens.

As explained in more detail in the new MTW notice, PHAs interested in the second MTW cohort may implement rent policies that focus on one of the following areas:

  • Fixed rents within income-based tiers
  • Stepped rents: 5% annual increase, decoupled from income
  • Stepped rents: 3% annual increase, decoupled from income
  • PHA proposed alternative tiered or stepped rent that varies from the above

PHAs interested in the second MTW cohort must have 1,000 or more non-elderly, non-disabled public housing and/or HCV households that are eligible for the rent reform evaluation. Among other eligibility criteria, the PHA must also:

  • Be high performers under PHAS or SEMAP and not be designed “troubled” under either system
  • Be up-to-date in a number of HUD-required submissions
  • Be in compliance with Capital Fund obligation and expenditure deadlines for the past three years
  • Have no unaddressed findings from the OIG, annual audits, or other HUD reviews, nor have unresolved litigation with HUD or outstanding nondiscrimination or civil rights issues

Letters of interest for the second MTW cohort are due on or before June 12, 2019. All PHAs who submit a letter of interest timely and meet the other eligibility criteria in the new notice will be invited to apply to the second step of the application process, the full selection criteria for which will be published by HUD after the Department reviews the second cohort letters of interest.

HUD last year issued a notice for smaller PHAs (1000 or fewer units) to submit a letter of interest in the first MTW cohort, and last week extended the deadline for receipt of letters for that cohort from January 11, 2019, to May 13, 2019.  The MTW expansion may include no less than 50 PHAs with 1,000 or fewer total public housing and HCV units; no less than 47 PHAs with 1,001 – 6,000 total public housing and HCV units; and no more than 3 PHAs with 6,001-27,000 total public housing and HCV units.

 

Earlier this week HUD released a draft section for the next revision of the RAD Notice for review and comment. This draft section addresses the implementation of “RAD for PRAC”, the conversion of conversion of properties assisted by Section 202 Project Rental Assistance Contracts (PRACs). There are approximately 125,000 units assisted by the Section 202 PRACs and could take advantage of this expanded conversion option.

The draft section is available for review at the Multifamily Housing Policy Drafting Table. Comments are to be submitted via e-mail to rad2@hud.gov by Tuesday, March 12th.

Please find below the text of the RADBlast on this topic.

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RAD for PRACs Notice Published on the Drafting Table for Public Feedback

The FY 18 Appropriations Act authorized the conversion of properties assisted by Section 202 Project Rental Assistance Contracts. HUD is in the process of revising the RAD Notice to include a new Section 4 that would provide implementation instructions for the conversion of Section 202 PRACs under RAD. Prior to implementation, a draft Section 4 has been posted to HUD’s Office of Multifamily Housing’s “Drafting Table” where HUD will be accepting public feedback for the next two weeks. Following consideration of public feedback received, the Office of Recap will proceed toward incorporation of the new Section 4 into a revised RAD Notice.
We encourage all interested parties to review and provide feedback on this draft, including on the following:
• Is this document well organized?
• Is the guidance set forth in this document clear? Are there sections that are unclear?
• Are the proposed terms of the Use Agreement reasonable and adequate?
• Are there unique features of 202 PRACs or the elderly population that the properties serve that HUD has not adequately accounted for in this Notice?
• The draft Section describes an option to convert to Section 8 Project-Based Rental Assistance (PBRA) or to Project Based Vouchers (PBV) What is the degree of interest in PBV conversions? Please note that while HUD has developed the framework for a process for seamlessly funding a conversion from PRAC to PBRA, funding a conversion from PRAC to PBV is likely to be more complex.
• Does HUD provide adequate avenues for stakeholders to provide feedback on the direction of the RAD program and, if not, what additional measures for public feedback should HUD consider?
Please send written comments via e-mail to rad2@hud.gov by Tuesday, March 12th.

On Monday, the IRS will publish final utility allowance regulations for low-income housing tax credit (LIHTC) properties under Section 42 of the Internal Revenue Code (Code). Under section 42(g)(1) and (2) of the Code, a residential rental unit may qualify as a low income unit eligible for LIHTCs only if it is “rent-restricted.” For purposes of determining if a unit is rent-restricted, gross rent includes any “utility allowance” if the cost of any utility for a residential rental unit is paid directly by the tenant, reducing the amount of rent that the building owner may collect. Under current regulations, a building owner of a submetered building may be required to reduce its maximum gross rent by the utility allowance because under certain circumstances a tenant is treated as having made the utility payments directly to the utility company even though the payments pass through the building owner.

Temporary regulations extended this principle to situations in which a building owner sells to tenants energy that was produced from a renewable energy source. The final regulations adopt the temporary regulations and clarify that the rate the building owner charges for such energy cannot exceed the highest rate at which the tenants might have obtained energy from a local utility company. Further, the owner may rely on the rates published by local utility companies to make this determination. In addition, the final regulations provide that although whether energy is produced from a renewable energy source is determined by cross reference to the definitions of a “facility” and “energy property” in sections 45 and 48 of the Code, respectively, the building owner does not need to otherwise qualify or receive energy-related credits.

 

Earlier this week, the U.S. Department of Housing and Urban Development announced it will be rescinding the form of Annual Contributions Contract (ACC) that HUD had released to housing authorities this past May with instructions that the form of ACC would automatically become effective for housing authorities as each housing authority drew down their first installment of 2018 Capital Funds.

Housing Authority coalitions and lawyers within the affordable housing bar raised significant concerns with HUD over the summer concerning this new form and the lack of transparency that accompanied its development and release.  Some of the concerns are set forth in an alert recently posted by the Public Housing Authorities Directors Association.  Ballard Spahr lawyers, Amy Glassman and Courtney Hunter, participated in meetings with HUD leaders on these issues, as well.

This is a significant development for housing authorities and those who work with housing authorities in revitalizing the nation’s public housing stock. HUD has indicated they will initiate a process for updating the form of ACC and will seek comments from the public as part of that effort.  Ballard Spahr will continue to monitor the issue and keep you informed through the Housing Plus Blog.

 

 

HUD’s Moving to Work (MTW) Office has been busy! Earlier this month, HUD published for public comment a revised Operations Notice that will govern an expanded MTW program. Just a few days ago, HUD published the much-awaited notice inviting the first round of new applicants for the expanded MTW program. Continue Reading HUD Publishes MTW Operations Notice and Request for First Round of New MTW Applicants

Most websites for housing providers and other businesses should be accessible to individuals with disabilities. But how is this enforced? On September 25, 2018, the U.S. Department of Justice issued a letter to a member of the U.S. House of Representatives in which it took the position that “noncompliance with a voluntary technical standard for website accessibility does not necessarily indicate noncompliance with the ADA.” The DOJ’s position, significantly, does not require conformance with the voluntary Web Content Accessibility Guidelines (WCAG) 2.0 to comply with the ADA in all instances. The DOJ expressly allows for flexibility in how individuals with disabilities are provided access to digital and online content, but does not provide guidance in the implementation of such flexibility.

The DOJ’s letter responds to a June 2018 inquiry from members of the House of Representatives from both parties, which asked the DOJ to “state publicly that private legal action under the ADA with respect to websites is unfair and violates basic due process principles” absent clear guidance from the DOJ on website accessibility. In its response, the DOJ noted that for more than 20 years, the DOJ has interpreted the ADA to apply to websites of places of public accommodation. The DOJ’s response also clarified that the absence of a specific regulation does not mean that websites are not subject to the ADA’s accessibility requirements. The DOJ indicated in its letter a willingness to work with Congress on legislative action to address the increased website accessibility litigation risk faced by businesses.

The flexible approach to website accessibility expressed by the DOJ provides businesses with additional opportunities to review ADA accessibility compliance programs, as well as responses to increased litigation risk regarding the accessibility of websites.

Attorneys in Ballard Spahr’s Accessibility Group regularly assist housing providers and other clients in defending against website accessibility demand letters and litigation, and advise clients on ADA accessibility policies and procedures.

 

The Census Bureau, in conjunction with researchers from Harvard and Brown Universities, this week published a national “opportunity atlas” that tracks outcomes for children in adulthood based on nationwide data. The atlas can be used to find, down to the census tract level, information on positive and negative outcomes for children, with information such as earnings, incarceration rates by parental income, race and gender. See also the New York Times discussion of how the Seattle Housing Authority is using the atlas to allow higher housing choice voucher rents in certain neighborhoods.  Pretty interesting data as we start to implement Opportunity Zones, revise the affirmatively furthering fair housing rule, consider small area FMRs for the voucher program, and plan for new affordable housing developments.

A pending lawsuit against HUD challenging its suspension of its local tool for affirmative fair housing assessments has been dismissed.  Earlier this year, HUD first extended the deadlines for, then withdrew, its Affirmatively Furthering Fair Housing (AFFH) Local Government Assessment Tool, which had been the subject of some controversy related to the reporting burden associated with the tool and other criticisms.  The Local Government Assessment Tool is to be used by cities and other entities that receive Community Development Block Grants, HOME Investment Partnerships Program, Emergency Solutions Grants, or Housing Opportunities for Persons with AIDS formula funding from HUD.  Advocates challenged HUD’s actions in a lawsuit.

Last week, the court granted HUD’s motion to dismiss the case. The court found that HUD had authority to withdraw the tool.

The dismissal comes as HUD has reopened the 2015 AFFH regulations for public comment.  Comments are due October 15, 2018, and we encourage all who are interested in this topic to submit comments.

 

As indicated earlier this week, HUD is seeking comments to inform revisions to its Affirmatively Furthering Fair Housing rule. We have been waiting for official publication of the advance notice of proposed rulemaking (ANPR) in the Federal Register to determine when these comments will be due. HUD today published the ANPR.  We now know comments are due October 15, 2018.