News

A. J. Johnson to Conduct Live Webinar on Liability Protection Policies for Affordable Housing Properties

A. J. Johnson will be conducting a webinar on August 23, 2023, on Liability Protection Policies for Affordable Housing Properties. The Webinar will be held from 1:00 PM to 3:30 PM Eastern Time. As important as it is to understand the program rules for affordable housing programs, it is equally as important to have sound protection and liability policies in place. This 2.5-hour live webinar reviews the critical protection policies that every affordable housing property should have. A full discussion of the following policies is included: Sexual Harassment Policy, Criminal Screening, Reasonable Accommodations, VAWA, and Fraud Prevention & Detection. The training is intended for site staff as well as supervisory and compliance personnel. Written course material with sample policies will be provided to participants. Those interested in participating in the Webinar may register on the A. J. Johnson Consulting Services website (www.ajjcs.net) under "Training."

A. J. Johnson to Conduct Live Webinar on Multifamily Occupancy Standards

A. J. Johnson will be conducting a webinar on August 29, 2023, on Occupancy Standards for Multifamily Housing. The Webinar will be held at 1:00 PM Eastern Time and will last approximately one hour. Owners and managers of multifamily housing developments must create and implement many types of policies, governing everything from how to collect the rent to the handling of work orders. One of the most important policies for any property is its "occupancy standard." In simple terms, an occupancy standard is a policy that outlines how many people may live in each unit at a property.Overcrowded housing is dangerous and unsanitary, as well as being hard on the building systems such as water, sewer, and HVAC. However, occupancy standards that are too strict may violate fair housing laws by limiting the ability of families with children to find housing. In short, occupancy standards must be "reasonable." But, determining what is reasonable can be complex. This training is designed to assist owners and managers in navigating this complex and difficult area of fair housing liability. Those interested in participating in the Webinar may register on the A. J. Johnson Consulting Services website (www.ajjcs.net) under "Training."

Rural Development Income Limits Released

The Rural Development Service of the United States Department of Agriculture has released the 2023 income limits for the Rural Development Multifamily Housing (Section 515) program. The limits were effective on July 13, 2023, and may be found at RD-MFHLimitMap.

A. J. Johnson to Conduct Live Webinar on Average Income Minimum Set-Aside

A. J. Johnson will be conducting a webinar on August 10, 2023, on Requirements & Best Practices Relating to the Average Income Minimum Set-Aside for LIHTC properties. The Webinar will be held at 1:00 PM Eastern Time. The Average Income Minimum Set-Aside Test ("AI") was added to the LIHTC program in March 2018. While it is being implemented successfully on many properties, there remains a good deal of industry-wide confusion about the use of the AI set-aside and the risks involved. This one-hour live webinar will review the requirements of AI, discuss the risks of this set-aside, and provide best practice recommendations for implementation of the Average Income test. We will also cover the final IRS guidance relating to the AI set-aside. The Webinar will be presented by A. J. Johnson, a nationally recognized expert on affordable housing who has already provided compliance oversight on multiple properties using the AI set-aside. Those interested in participating in the Webinar may register on the A. J. Johnson Consulting Services website (www.ajjcs.net) under "Training."

A. J. Johnson to Provide Live Webinar on Tenant-on-Tenant Harassment and Sexual Harassment in the Workplace

A. J. Johnson will be conducting a webinar on July 11, 2023, on Tenant-on-Tenant Harassment and Sexual Harassment in the Workplace. The Webinar will be held from 1:00 PM to 4:00 PM Eastern time. Dealing with tenant-on-tenant harassment is an evolving area of fair housing law. Landlords are generally familiar with how their actions can be construed as discriminatory. But how should landlords react when one resident is violating the fair housing rights of another resident?Title VII of the Civil Rights Act of 1964 prohibits discrimination based on sex in the workplace - including sexual harassment. The law applies to employers with 15 or more employees. In addition to having a written sexual harassment policy, companies should also have an effective complaint procedure.Many businesses in the United States have no policies regarding sexual harassment, and such harassment occurs in the highest levels of corporate management. However, the risk of not having such a policy far outweighs the effort required to implement one.These risks are greater now than ever before. Victims of sexual harassment may now recover damages (including punitive damages) and the Supreme Court has made it easier to prove injury.This three-hour training is designed to help property owners and managers understand the current legal state of these two issues and to establish policies to limit potential liability. The session will include a discussion of the three most relevant court cases relating to tenant-on-tenant harassment as well as cases that outline employer risk regarding harassment in the workplace. Participants will also be provided with recommended policies to limit potential liability. Those interested in participating in the Webinar may register on the A. J. Johnson Consulting Services website (www.ajjcs.net) under "Training Schedule."

Public Housing Over-Income Rule Must be Fully Implemented by July 14

On March 13, 2023, HUD s Office of Public and Indian Housing (PIH) issued Notice PIH-2023-03, which provides supplemental guidance on the implementation of HOTMA Section 103. This section of HOTMA applies only to public housing agencies (PHAs) with 250 or more public housing units. Section 103 became effective on March 16, 2023, and PHAs must fully implement over-income policies no later than July 14, 2023. According to the statute, after a household s income has exceeded the over-income (OI) limit for 24 consecutive months, a PHA must either terminate the household s public housing tenancy within six months or allow by PHA policy the OI household to continue to live in a public housing unit by charging the household an alternative rent. The alternative rent must equal the greater of the Fair Market Rent (FMR) or the amount of monthly subsidy provided for the unit as determined by the amount of Operating and Capital Funds apportioned to a unit. Over-Income Limit The over-income limit is established by multiplying the very low-income level for the applicable area by a factor of 2.4, a limit equal to approximately 120% of the area median income (AMI). Falling Below OI Limit If the PHA determines (in an interim or regular reexamination) that a family s income has fallen below the OI limit at any time during the 24-month grace period, the family will remain public housing eligible and return to regular income reexamination periods. If the family becomes OI again, a new 24-month grace period begins. Notices Once a family is determined to be over-income, a PHA must notify the household. Notice PIH-2023-03 requires three written notices, while PIH-2019-11 required only two. Each notice must be given within 30 days of the income examination that determines the family is, or remains, OI - at the initial determination of OI status, following the reexamination at the conclusion of the first 12 months of the grace period, and at the conclusion of the 24-month grace period. Policies PHAs must have a "continued occupancy policy" detailed in its Admissions & Continued Occupancy Policy (ACOP) that either requires OI families to execute a new non-public housing over-income (NPHOI) lease within 60 days of notification and charge the family the alternative non-public housing rent or terminate the tenancy of the family no more than six months after the notification. Bottom Line PHAs that have not fully implemented the HOTMA requirements relating to over-income public housing residents must do so no later than July 14, 2023.

HUD Provides Funding for Green Retrofits

A new HUD program will simultaneously invest in utility efficiency, renewable energy generation, and climate resilience strategies in HUD Multifamily Assisted Housing. The funding for the program is provided by the Inflation Reduction Act of 2022 and provides HUD with $837.5 million in grant funding and $4 billion in loan authority for the program. The funding will allow owners to invest in technology such as solar panels, heat pumps, wind-resistant roofing, and other technologies that will reduce greenhouse gas emissions. HUD has published three Notices of Funding Opportunity (NOFOs) for the Green and Resilient Retrofit Program (GRRP), along with implementation guidance in Housing Notice H 2023-05. The funding is available for multiple HUD programs, including Section 8 Project-Based, Section 202, and Section 811.  The program has three funding options: Elements Awards: provides funding to owners to add energy efficiency, electrification, and renewable energy measures for in-progress rehabilitation. These awards are intended for sites with renovation planning already in progress. An example would be an owner who is well advanced in planning and financing a rehab and, as a result of the award, the owner can replace the in-unit HVAC system with higher efficiency electric HVAC systems. Approximately $140 million in grants and surplus cash loans are available and the funding is capped at $40,000 per unit or $750,000 per property. Applications are due March 28, 2024. This option has excellent potential for HUD-assisted projects that have been purchased and are being layered with Low-Income Housing Tax Credits. Leading Edge Awards: this provides funding for retrofit activities designed to achieve ambitious outcomes, including net zero emissions, renewable energy generation, low-carbon building materials, and climate-resilient investment. For example, this will allow owners to do a complete renovation and achieve a passive house certification. Approximately $400 million in loans and grants is available with funding capped at $60,000 per unit or $10 million per property. Applications are due April 30, 2024. Comprehensive Awards: This is the widest-ranging option and will include properties that are not yet in the planning process. It will prioritize sites with a significant need for energy efficiency, emissions reductions, and climate resilience. An example of an applicant for this award is a site with high REAC scores and low capital needs but has older, fossil fuel-dependent equipment. Owners utilizing this funding will be assisted by HUD-procured Multifamily Assessment Contractors in developing the scope of work. It is intended to provide whole-building retrofits and resilient design elements. $1.47 billion is available for this option and is capped at $80,000 per unit or $20 million per property. Applications are due May 30, 2024. Owners interested in applying for these funds through the Office of Recapitalization within the Office of Multifamily Programs in the Office of Housing. Owners may apply in one category only for a site, but there is no limit to the number of sites an owner, or its affiliate, can submit across all award categories. The required application materials can be found at Grants.gov under the funding opportunity number cited within HUD s NOFO. The NOFos can be found at www.hud.gov/grrp. Questions may be emailed to GRRP@hud.gov.

Bipartisan Bill with LIHTC Expansion Introduced in Congress

On May 11, 2023, the Affordable Housing Credit Improvement Act (AHCIA) was introduced in both the House and Senate by bipartisan groups of legislators. If passed, the legislation would finance an additional 1.94 million affordable rental units over a ten-year period. Key Elements of the Bills Increase the Amount of Credit: The bills would expand the 9% LIHTC by restoring the 12.5% cap increase that expired in 2021 and would increase allocations by an additional 50% over a two-year period. Make the Average Income Test Available to Tax-Exempt Bond Projects: This would align the tax-exempt bond and LIHTC programs and permit all three set-asides (20/50/40/60{25/60 in New York City}/Average Income). Simplify the Student Rule: The bills align the LIHTC and HUD student rules by essentially adopting the HUD rule for both programs. It would still ensure that households occupied entirely by full-time students under the age of 24 would be ineligible, with certain exceptions. These exceptions would be (1) single parents; (2) formerly homeless youth; (3) persons aging out of foster care; (4) victims of domestic violence and human trafficking; and (5) veterans. Limit the Rent for Housing Choice Vouchers to No More than the LIHTC Rent: Under current law, owners may collect the full value of a Housing Choice Voucher - even if it exceeds the LIHTC maximum rent level. The bills would limit the rent charged to the maximum permitted LIHTC rent for properties using the Average Income Set-Aside or benefitting from the basis boost for extremely low-income households (contained elsewhere in the bills). Increase the Credit Amount for Projects Serving Extremely Low-Income Households: The bills provide up to a 50% basis boost for sites serving extremely low-income households in at least 20% of the units. The boost would apply only to the percentage of the property reserved for extremely low-income households. Clarify VAWA Protections for LIHTC Properties: The bills require all LIHTC Extended Use Agreements to include VAWA protections, clarify that owners should treat victims with a bifurcated lease as an existing resident and not require requalification, and exempt domestic violence victims from the general public use provisions of Section 42. Prohibit Local Approval and Contribution Requirements: The bills remove the provision of the current law that requires state agencies to notify the chief executive officer of the local jurisdiction of the proposed project and specify that the selection criteria in the Qualified Allocation Plan (QAP) cannot include consideration of any support for or opposition to a development from local or elected officials or local government contributions to a development. Increase of Population Cap for Difficult Development Areas (DDAs): Currently, sites are eligible for up to a 30 percent basis boost if they are located in a DDA, meaning areas with high construction, land, and utility costs relative to area median gross income. No more than 20 percent of the aggregate population of the entire country may be located in census tracts that are eligible to receive the DDA designation. The bill would increase the DDA population cap from 20 to 30 percent, and, therefore, enable sites in more high-cost areas to receive additional LIHTC equity if necessary to make the property financially feasible. Basis Boost for Indian & Rural Areas: Most Tribal and rural areas do not currently qualify for the 30% boost. The bills would modify the definition of a DDA to automatically include properties in these areas. Bottom Line - While it is unlikely that the AHCIA will pass as a stand-alone piece of legislation, it is hoped that many of the provisions will be included in other major housing-related bills. None of the provisions are controversial, and there is broad support for all of them. As we approach the end of 2023, there is at least a decent chance that some of the provisions will become law.