2014 Appropriations Act Makes Changes to Program Rules

The President signed the 2014 Omnibus Appropriations Act into law on January 17, 2014. In addition to funding for the Nation’s various housing programs, the Act also made some substantive changes to the law relative to Housing Choice Vouchers and Public Housing. Some of the more important changes include:

• Public Housing Agency (PHA) inspection of units occupied by Voucher recipients may now be biennial instead of annual. This will not only reduce the administrative burden for PHAs, but will make life easier for residents and landlords. In addition, alternative inspection methods may also be relied upon by the PHA, including federal, state and local housing programs. This means that owners with tax credit properties that have a state tax credit review during a particular year could request that the PHA accept the results of that inspection for any voucher units that may have been inspected. HOME program inspections could also suffice.
  • Interim inspections of voucher units may still be required if a resident or government official believes that a unit does not comply with Housing Qualify Standards (HQS). In such instances, if the condition is life threatening, the PHA must inspect the unit within 24-hours. Otherwise, the inspection must be conducted within a reasonable timeframe.
  • New potential sanctions for owners whose properties have low REAC scores apply to properties in the following categories:
    • Score less than 30;
    • Score between 31 and 59, and that fail to certify in writing to HUD within 60-days  that all deficiencies have been corrected; or
    • Consecutive inspections with a score of less than 60.
    • Owners will have 60-days to offer a Compliance, Disposition & Enforcement Plan. Failure to comply with the plan could lead to a variety of sanctions:
      • Abatement or partial abatement of the Section 8 Contract;
      • Civil money penalties;
      • Transfer of Section 8 Contract to another owner; or
      • Judicial receivership.
      • Public Housing Rent changes
        • There will be a flat rent floor of 80% of FMR for higher income public housing residents.
          • This will be phased in with a deadline of June 1, 2014;
          • A family’s rent cannot be increased by more than 35% annually.
          • The definition of Extremely Low-Income (ELI) has been changed to the higher of the federal poverty level or 30% of area median income.
          • Family size and not number of bedrooms will determine utility allowances for the voucher program.
            • The change also requires a PHA to approve a higher allowance for a household with a disabled family member if needed as a reasonable accommodation.

Note that the changes regarding flat rents, ELI definition, and utility allowance provisions all require HUD notices followed by rulemaking before they can be implemented.