National Housing Law Project Housing Law Bulletin

H.R. 2406 Calls for Repeal of the 1937 Housing Act

"A BILL to repeal the United States Housing Act of 1937..." So begins the 1995 housing authorization bill introduced by Representative Lazio, Chair of the House housing subcommittee.¹ It is pretty much downhill from there, with a few surprising exceptions, given the horrific nature of most of the bill's provisions.

It is tempting to describe the good provisions first, especially because of all the grim news we have been conveying this year. But the bad provisions are so bad that delaying the discussion of them would almost constitute misrepresentation. What follows, then, is a description of the bill, interspersing the good and the bad tidings.

New National Housing Policy Declaration

Unlike that Congress back in 1949 which proudly set the goal of a "decent home...for every American family,"² this Congress would issue a ringing declaration that the federal government "cannot…provide for the housing of every American citizen, or even a majority of its citizens…."³ And it would back that up with the additional declaration that the federal government has a responsibility only to assist "responsible, deserving citizens who cannot provide for themselves because of temporary circumstances or factors beyond their control."⁴

Those two declarations give one a good sense of where the bill would take this society: We are not going to help everyone. At the most we may help the deserving people. We certainly are not going to help anyone who is not an American citizen. Anyone who is long-term poor can forget about seeking help from the federal government; only the temporary poor need apply. And if it looks like they might have caused their own poverty, they will not be assisted.

Local Plans

True to its notion that neither Congress nor HUD knows anything, the bill would devolve to the public housing authorities (PHAs), renamed Local Housing and Management Authorities (LHMAs),⁵ the deregulated power to set policies on almost every issue that would affect the interests of public housing and voucher tenants and applicants.⁶ The areas covered would include policies on eligibility, selection criteria, preferences, tenant assignment, rents, maintenance, security; grievance procedures; evictions and fair housing. Unlike the Senate committee's 1995 authorizing bill,⁷ this bill would eliminate most of the federal laws on those issues and leave it up to the LHMAs to set their own policies.

Those policies would have to be included in a "Community Improvement Plan" established by the LHMA and revised annually.⁸ There would be some opportunity for tenants to influence those policies, because the LHMA would have to give the public 60 days to review the plan and submit comments.⁹ The LHMA would be required to consider those comments, but the House bill does not include provisions like those in the Senate bill which would establish an advisory committee with tenant representation to review and consult on the plan before the PHA could adopt it.¹⁰

Like the Senate bill, however, this House bill does require the LHMA to submit the plan to HUD for its review,¹¹ but HUD would have little authority to reject an inadequate plan. HUD could reject only plans that are incomplete or that are based on information that is challenged in a substantial manner by evidence available to HUD. But if HUD did not act within 60 days of receiving the plan, or within 30 days of receiving an amendment, the plan would be deemed in compliance with the law.

The plan would also include the LHMA's budget for the coming year, its plan for capital expenditures, any plans to demolish or sell any developments or to convert them to vouchers, and its decisions, if any, to designate particular developments as elderly only.¹² HUD's review of the plan during the 60-day window would be the only opportunity for the Department to ensure that the LHMA was in compliance with the law on those planned actions. Unlike the current law, which requires HUD approval of most of these kinds of decisions and their individualized presentation to affected tenants for their views, this bill would lump all decisions into a single, truncated planning process. In so doing, the bill would virtually nullify the role of both the tenants and HUD.

Public Housing

The particular provisions relating to public housing are not much better than either the new declaration of policy or the unregulated devolution of power to LHMAs to set policies in their annual plans. The proposed provisions would repeal current law establishing tenants' and applicants' rights on virtually all issues, including income limits, preferences, use of criminal records, applicants' procedural rights, rents, leases, grievance procedures, evictions, tenant participation, and demolition and sales.

Income Limits

The bill does require LHMAs to rent public housing only to low-income applicants¹³ and, like current law, it defines low-income as 80 percent of the area's median income.¹⁴ However, unlike current law, it authorizes LHMAs, instead of HUD, to adjust the income limit above or below that 80-percent level because of unusually high or low incomes in the area. Authorizing LHMAs to exercise a power that HUD has rarely needed, and that HUD has used mostly to reduce income limits, seems to be a product of knee-jerk devolution. It opens up the specter of LHMAs setting their income limits at the median or 120 percent of the median just because they think that incomes in their area are unusually low.

More importantly, the bill would have no provision targeting any of the resources to applicants who are poor, to applicants with incomes at or below 30 percent of the area median, or even at or below 50 percent of the median. Section 16 of the 1937 Housing Act at least reserves 75 percent of the units for applicants with incomes beneath 50 percent of the median, and it prohibits PHAs from skipping over applicants on the waiting list to take people with higher incomes who have applied later.¹⁵ By repealing the 1937 Act,¹⁶ this bill would eliminate provisions intended to guarantee poor people some of the housing assistance that the country makes available, and would replace those guarantees with nothing.

The House bill does not even have a provision like the one in the Senate version which would have reserved 40 percent of the units that are initially made available for applicants with incomes beneath 30 percent of area median.¹⁷ Although that provision was deficient (because, as drafted, it did not reach turnover units, which will be the vast majority of public housing units that become available), the House bill affords no protection whatsoever for the lowest-income applicants.

The bill does allow LHMAs to establish income mix criteria.¹⁸ Historically, income mix policies have been devices to attract higher income applicants to public housing and to allow PHAs to admit them out of order. Theoretically, in a world in which a LHMA can pick and choose among applicants with virtually no other restraints, an income mix policy might assure poor applicants access to some units. But, it is not likely to work that way in reality, nor is it likely that the drafters intended income mix plans to guarantee the poorest applicants some access.

Preferences

Another provision in current law that has ensured poor applicants fair access to public housing and other housing assistance has been the federal preference requirement.¹⁹ Under it, 50 percent of public housing and 90 percent of certificates and vouchers have to be made available to people who have the worst case housing needs. This bill would repeal those federal preferences for all housing.²⁰ In their place, the bill would authorize each LHMA to establish its own preferences based on local housing needs and priorities as determined by the LHMA.²¹ The bill would not even require that any local preferences be consistent with the local Comprehensive Housing Affordability Strategy (CHAS) or Consolidated Plan.

There also would be little opportunity for applicants, tenants or the public to have any impact on LHMAs' preference choices. A LHMA's preference policy, if any, would have to be included in its "Plan," but it would be buried there with hundreds of other items.²² In contrast, current law allowing local preferences requires the PHA to hold a public hearing on them before they may be adopted.²³

Criminal Records

Like the Senate bill and like H.R. 3838, which was passed by the House last year, the House authorization bill would require the National Crime Information Center and all other law enforcement agencies to provide information to LHMAs regarding any convictions of public housing tenants or applicants for screening (and eviction) purposes.²⁴ Unlike the Senate bill, those records would not be confined to adults or limited to the preceding five years.²⁵ Nor would an applicant be provided a copy of the record and a chance to dispute its accuracy and relevance before it could be used. There would be no provision requiring that the records be maintained in confidence and destroyed once the purpose for which they were requested had been achieved.

Users of Alcohol or Drugs

Another provision would allow LHMAs to deny admission or participation to current and past illegal drug users, and current alcohol users, if such use provides reasonable cause to believe that they may interfere with other tenants' right to peaceful enjoyment of the premises.²⁶ That provision begins with the clause "[n]otwithstanding any other provision of law," apparently to make the Fair Housing Act's protection for recovering alcoholics or drug addicts inapplicable to these decisions. It is not limited to current illegal use of drugs nor to alcohol abuse. Any use will do, as long as there is the possibility that the applicant would interfere with others.

Applicants' Procedural Rights

The bill would grant applicants a right to be notified of the LHMA's decision on their application, the basis for the decision, and their likely move-in date if they are accepted and the date can be determined.²⁷ That provision mirrors current law, as far as it goes.²⁸ In that respect, it is better than the Senate bill which repeals applicants' procedural rights entirely.²⁹ The House bill, however, does not grant rejected applicants a right to be heard, as does current law.

Rent

Possibly the most disturbing provisions of the bill are those related to rent. With the repeal of the 1937 Housing Act, the Brooke Amendment, which limited rents in most cases to 30 percent of a household's adjusted income, would also be repealed.³⁰ In its place, LHMAs are granted almost unbridled authority to decide what the tenants' rents should be.³¹ The LHMA is to determine what rent is appropriate for the family and the unit. That determination is supposed to be based on factors selected by the LHMA. The LHMA may, but need not, consider the family's adjusted income, the unit's characteristics and the LHMA's expenses, as well as anything else it considers appropriate. The LHMA would have to consider the characteristics of the population it serves, the goals in its "Plan" and the goals of the local CHAS. The rent for any particular family could not be more than the market rent for the unit or less than $50. That is devolution to the extreme.

If the LHMA does take adjusted income into consideration, this bill would provide very little federal control over the definitions of either income or adjustments. The bill would at least retain current law preventing PHAs from counting income not actually received and lump-sum retroactive Social Security and SSI payments.³² Otherwise, the definition of income would be up to the LHMA and HUD. Current mandatory exclusions of minors' earned income,³³ and the new earned income of tenants when they recently move from welfare to work,³⁴ would be repealed.

The only mandatory ones income adjustments would be $400 per year for families headed by an elderly person or a person with a disability, excessive medical expenses for any tenants, and child care expenses where needed for employment or education.³⁵ The LHMA could decide whether to use the following adjustments: (1) $480 for each dependent; (2) excessive travel expenses for employment or education, capped at $25 per week; (3) any amount of earned income; or (4) anything else the LHMA might establish.³⁶

Leases and Evictions

Surprisingly, the bill retains the current law providing that leases not contain unreasonable terms and conditions and that they oblige the LHMA to maintain the housing in compliance with HUD's Housing Quality Standards.³⁷ The bill modifies the good cause for eviction requirements somewhat, but does not repeal it.³⁸ Under the bill, any lease violation would be cause for eviction, instead of just serious or repeated ones. In addition, violations of federal, state or local law would be newly prescribed statutory grounds; and activity of household members or guests that is criminal or that threatens others, including non-public housing neighbors, would become grounds for eviction regardless of whether the tenant knew about it. The criminal activity would no longer have to be on or near the premises, nor would it have to threaten anyone connected with the housing.

Eviction procedures would be greatly altered to increase the LHMA's options and decrease the tenant's protections. All evictions, not just those relating to criminal conduct, would be excluded from the grievance process, as long as the state courts provide due process hearings.³⁹ Eviction notice periods would be determined by state law, unless the state law required more than 14 days' notice for nonpayment-of-rent evictions or ones involving health or safety threats. In such states, the federal 14-day requirement would apparently preempt the longer state law periods.⁴⁰ The tenant's federal right to discover documents in the eviction proceedings would be preserved.⁴¹

Involuntary Work Contribution

The bill would require all adult assisted tenants to contribute at least eight hours of work each month within the community.⁴² LHMAs, not HUD as the Senate bill provides,⁴³ could grant exemptions for people who are elderly or whose disabilities render them unable to comply or who are working, attending school or training, or meeting work requirements under other programs. There are no child-care exemption provisions.

Grievance Procedure

Again as somewhat of a surprise, the bill would require each LHMA to establish and implement a grievance procedure for disposition of tenants' grievances involving adverse LHMA actions.⁴⁴ That provision is similar to the current grievance procedure statute,⁴⁵ but it does not spell out the procedural protections in as much detail and does not explain what is meant by "disposition" of the grievance. Most importantly, as explained above, tenants will be denied grievance hearings on all types of evictions.

Maintenance

The provisions on maintenance are an even more pleasant surprise. In an improvement over current law, the bill would specifically require LHMAs to maintain their buildings in compliance with the higher of local codes or housing quality standards prescribed by HUD for public housing.⁴⁶ As noted above, the lease would have to include this obligation. The LHMA would have to inspect its units for compliance each year and report the results to HUD. The bill could be made even better if it would require LHMAs to notify the tenants and the tenants' council of the inspection results as well.

Tenant Participation

On tenant participation the bill gets mixed reviews. It does authorize tenants to form tenant councils and specifies that they must be nonprofit, be representative of tenants, and have elected officers and a democratically elected board.⁴⁷ A LHMA's funding from HUD could be used to develop and maintain a resident organization.⁴⁸ Tenants are also authorized to establish a resident management corporation (RMC) and contract with the LHMA to manage their housing development.⁴⁹ The RMC management would still be subject to the United States Housing Act.

The deficiencies regarding tenant participation concern the lack of mandates that LHMAs recognize the tenants, or even that there be opportunities for tenant participation. Current law at various points specifies that certain actions, such as modernization or demolition, may not be planned and undertaken without first notifying the tenants and involving them in the decision.⁵⁰ This bill would eliminate all those provisions of current law. It would replace them only with the requirement that the LHMA consider comments from the public, which would include the tenants, on the "Plan." The only exception would be a requirement that LHMAs "confer" with tenants on demolitions or sales, but even that cuts back on current tenants' rights.⁵¹

A critique of the provisions on tenant participation on the LHMA board is similarly mixed. The bill retains current law providing that residents of public housing may not be barred from serving on the board because of their status as public housing tenants.⁵² There is also a new provision, like one in H.R. 3838 last year, that requires at least one member of the board to be an elected public housing resident or voucher participant.⁵³ The only exceptions would be if the board is composed solely of local government officials or the LHMA has fewer than 250 units. One member is not sufficient to assure tenants an effective presence on the board, especially if that member may be a voucher holder instead of a public housing tenant.

The drafters of the bill do seem to recognize the value of tenant involvement. They would require that the LHMA contract to involve residents in decisions relating to management in order to qualify for federal funding,⁵⁴ but they buried that requirement in the block grant contract instead of establishing it as an explicit statutory obligation. Moreover, they did not set up specific tenant participation requirements for all of the important steps in the operation of the LHMAs.

Demolition and Disposition

The law on demolition and sale of public housing would be radically changed. Most significantly, HUD would be taken out of the process almost entirely. HUD would become involved only when the LHMA's "Plan" is submitted to HUD for review.⁵⁵ That plan must describe any public housing that will be demolished or sold, the timetable for the demolition or sale, and how the action complies with the statute.⁵⁶ HUD has a limited opportunity to reject a plan.

The bill's provisions might appear to be similar to current law which requires HUD to approve any demolition or sale before the PHA proceeds,⁵⁷ but in fact it is significantly different. Under this bill, HUD is not obliged to review the "Plan" and decide whether to approve it. If HUD does not act within 60 days, the plan is deemed to comply with the Act. Even if HUD does act, all it can do is decide whether there is any evidence that substantially challenges the information the LHMA includes in the plan. It would not independently determine whether there are grounds to demolish or sell the project or whether the LHMA has followed the law. Most importantly, the demolition or sale plan would only be one small part of the LHMA's total "Plan" that HUD would have to review and act upon within 60 days. The totality of the changes — including the short timeline — leave HUD with no effective control over, or even influence upon, the LHMA's demolition and sale decisions.

Other parts of the statute on demolitions and sales are changed as well. The grounds are expanded to include the following: (1) the project is severely distressed; (2) the project is obsolete even where rehabilitation is feasible; (3) there are design or construction deficiencies that make cost-effective rehabilitation infeasible; (4) the LHMA's resources would be substantially burdened because operating expenses and reserves would exceed rental income at market levels with full occupancy; (5) developmental changes in the neighborhood would adversely affect the tenants; and (6) other properties could more efficiently or effectively provide low-income housing.⁵⁸

The bill would require the LHMA to confer with tenants and local government officials.⁵⁹ However, even that could be interpreted as a retrenchment from current law because of the use of the word "confer." The current statute requires PHAs to develop their plan in consultation with the tenants.⁶⁰ That statutory language implies more direct tenant involvement in the decision-making process. With regard to relocation, tenants would get vouchers or relocation to decent affordable housing of their choice, where possible, at rents equal to the LHMA's rent for public housing.⁶¹ Tenants could be relocated before completion of the plan if the units are not clean, safe and healthy.⁶² The LHMA could also move tenants to consolidate occupied units in order to improve living conditions or provide more efficient services.⁶³

Tenant organizations would get a right of first refusal if sale, but not demolition, of their project were planned.⁶⁴ The time limits on the right, however, are extremely short.

Homeownership

Under the bill, LHMAs would be authorized to undertake homeownership programs.⁶⁵ LHMAs could sell any of their units, although the sales would have to be done in accordance with the normal statutory requirements for sale of public housing projects. The purchasers would have to have low incomes, but they would not need to be LHMA tenants. The LHMA could impose other limits on purchasers' eligibility, including a requirement that they be employed. Resident management corporations could be purchasers. Downpayments from the purchaser's own resources and resale restrictions would be required, but the LHMA would set the amount of the downpayment and the terms of the restrictions.

Conversion to Vouchers

The bill does not adopt HUD's proposal for wholesale conversion of public housing to vouchers, but conversion is required for buildings that are substantially vacant or distressed, that have operating and modernization costs that exceed voucher costs, and that are located in a market that has a sufficient supply of housing for voucher holders, as determined by the LHMA.⁶⁶ Once a building is converted, the public housing operating and capital funds for which that building was eligible would have to be used for vouchers.

There is no requirement that the tenants be consulted, nor is there any guarantee that there will be vouchers for all the tenants. Tenants will not be assured a voucher, much less a place to use it. There is also no requirement that the conversion preserve the number of households receiving assistance in that market over the long run or even immediately.

Addressing Poor Management

The bill contains a number of provisions to address poor management. For the first time, the statute would clearly and concisely obliges LHMAs to practice sound management.⁶⁷ Next, the bill would establish a new agency, the Housing Foundation and Accreditation Board, to set standards for sound management, to establish procedures for accrediting LHMAs, and to accredit LHMAs for periods not exceeding five years.⁶⁸ The Board would not be part of HUD. Each LHMA would not only have to be accredited; it would also be subject to an annual audit by an independent auditor selected by the LHMA and the Accreditation Board to assess its financial and management performance.⁶⁹ Based upon that assessment, HUD would classify the LHMA as either exceptionally well managed, well managed, troubled or dysfunctional.⁷⁰

Troubled authorities are ones for whom some hope remains. HUD must enter into a workout agreement with them for the purpose of improving their performance.⁷¹ If they do not make their improvement targets within one year, HUD must take over the LHMA and may withhold CDBG funds from the local government.

Dysfunctional housing authorities are ones for which there is no hope.⁷² Ironically, the bill does not mandate HUD to take any action against them, although it does confer on HUD the authority to take a variety of steps,⁷³ including a transfer of management, a HUD takeover, or a court-appointed receiver. With either a HUD take-over or appointment of a receiver come many additional powers, including powers to demolish or sell the assets, to abrogate contracts, to create new LHMAs, to consolidate the LHMA into another LHMA, and to preempt state and local laws.⁷⁴ HUD even have the power even to override state laws when creating or consolidating LHMAs, although the court-appointed receivers would not have such power.

There also would be a third category of poorly performing housing authorities: chronically troubled PHAs. These are ones that have been classified as troubled for three years or more under the present Public Housing Management Assessment Program (PHMAP). For those authorities, HUD is mandated either to replace the management or take them over.⁷⁵

In certain cases, tenant councils could petition HUD to have management shifted from the LHMA to a more competent entity.⁷⁶ That could be done only if (1) the LHMA was not accredited, (2) the LHMA was designated as troubled, or (3) the development was deteriorated, the tenants were distressed and the neighborhood was in a high-crime area. It is anticipated that at least one of those three conditions would be met by many, if not most, public housing developments.

Block Grant Funding

Following current popularity of the term "block grant," the bill would require HUD to make one-year block grants to LHMAs for capital and operating expenses.⁷⁷ The amount for each LHMA would be determined by the amount authorized and appropriated by Congress. This bill would authorize $5.5 billion each year for the next five years.⁷⁸ That is substantially below the $8 billion that HUD has been seeking for public housing and that the Congress first appropriated in FY 1995, before the rescission. HUD could take 3 percent off the top for its headquarters reserve.⁷⁹ For now, the remainder would be divided into two equal pots to be distributed among the eligible LHMAs. One pot would be divided in accordance with the present operating subsidy performance funding system. The second would be distributed in accordance with the comprehensive grant formula, with adjustments for the smaller PHAs that receive Comprehensive Improvement Assistance Program (CIAP) funds. Eventually, there would be a permanent allocation formula prescribed by statute after negotiated rule-making.⁸⁰

Once the LHMAs get their allocation, they could use it for any eligible use, regardless whether it came from the capital or operating subsidy allocation.⁸¹ Eligible uses would include production, operations, modernization, tenant programs, resident management, homeownership programs, and demolition and disposition.⁸² To secure the grants, LHMAs would have to agree to use them in compliance with their "Plans." They would also have to agree to provide safe, clean and healthy, affordable housing and services, to comply with 1995 Housing Act, and to involve residents in management decisions. No modification of the contract that would impair the rights of tenants or bondholders would be allowed.⁸³

Choice-Based Housing Assistance (Vouchers)

The bill would also replace the certificate and voucher programs with a new, consolidated program called the "choice-based" housing program.⁸⁴ For the most part it is the same as the current voucher program. PHAs, renamed LHMAs, would get the money. They would select the participants. The participants would select their units. Landlords would sign contracts with the LHMAs and receive housing assistance payments from them. The tenants would pay the rest of whatever the landlord charged as rent.

One of the odd things about the bill is that it authorizes only $862 million of funding for each of the next five years.⁸⁵ Given that this program will be replacing the certificate and voucher programs, funding of $862 million per year is barely a drop in the bucket. It appears safe to assume that the drafters made a mistake using the $862 million figure, especially since that is the amount in the House version of the FY 1996 appropriations bill for non-incremental, replacement units.⁸⁶

Another odd thing about the funding is that it appears that LHMAs would receive money from HUD in one-year increments⁸⁷ instead of the five-year and sometimes four-year contracts that have been used in the past. That certainly creates some uncertainty about the long-term prospects for voucher holders. It may also create some administrative problems, especially when a voucher turns over in the second half of a year and the LHMA can make only a very short-term commitment to any prospective landlord.

Allocation of Funds

HUD would establish a formula through a negotiated rule-making process for dividing up the funds among LHMAs.⁸⁸ The formula would be based on census data and information in local CHASes. Certain funds would be set aside from distribution by formula, including funds for contract amendments, renewals, replacements for prepaid and nonrenewed units, and relocation of tenants from public housing that is demolished or sold, relocation of crime witnesses, Section 23 conversions, and property disposition and loan management.⁸⁹

The bill would also allow HUD to reallocate funds in limited circumstances. If an LHMA were to have budget authority that has remained unobligated for eight months, HUD could take half of it back and reallocate it to relatively underfunded areas.⁹⁰

Eligibility and Selection

Participants would have to have low incomes only when they are first selected for participation and when they are recertified.⁹¹ That is a change, because current law does not impose an income limit on continued participation. Now an increase in income disqualifies a participant only if the new income were so high that 30 percent of it would cover the family's entire rent.⁹²

As with public housing, low-income families would be those with incomes at or below 80 percent of the median in the area.⁹³ Again, as with public housing, the LHMA could raise or lower that limit if there were unusually high or low incomes in the area. There are no requirements to ensure that applicants with the lowest incomes receive a fair share of the assistance.

Federal preferences for tenant-based assistance would be repealed. Instead the LHMA could establish its own preferences, based on local housing needs and priorities set by each LHMA.⁹⁴

Selecting Units

Tenants are permitted to select any units they wish, as long as the units are eligible.⁹⁵ With one exception, owners would be free to reject applicants because of their status as program participants, even while renting to other families participating in the program.⁹⁶ The one exception would be present or former (i.e., before mortgage assignment or foreclosure) Section 221(d)(3), Section 236, Rent Supplement, Section 202, Section 23 and Section 8 projects. Those landlords could not discriminate against voucher holders when renting units that rent for less than the rental indicator (formerly the FMR).

Tenants' Rent Contribution

The provisions dictating the rents the tenants would pay would follow the voucher model and provide few protections for tenants. First, landlords would be allowed to charge more rent than the maximum amount that the LHMA could subsidize.⁹⁷ The tenants would have to pay any excess out of their own pocket. There are insufficient provisions to ensure that landlords will not be charging more than a fair amount. An LHMA would have to determine only whether the rent exceeds the market and notify the tenant.⁹⁸ It would not be obliged to help the tenant negotiate a fair rent, nor would it be barred from subsidizing an above-market rent.

Second, the rules for setting maximum subsidy levels inadequately protect tenants. Under the bill, the LHMA would set payment standards that would dictate the maximum portion of the rent that could be subsidized.⁹⁹ The payment standards would only have to be "based on" rental indicators published by HUD.¹⁰⁰ There is no requirement that the payment standards be a specified percentage of the rental indicators, much less than they equal or exceed those indicators. The bill would also provide little guidance to HUD regarding the setting of rental indicators. It states only that they would have to be published at least annually and that they must reflect the rental amount for standard quality rental units.¹⁰¹ It does not dictate that they must be at least at the 40th percentile of the rents for recent movers into decent housing, much less at the 45th percentile. There is also no requirement that HUD and the LHMA review and readjust the rental indicators and payment standards if a significant percentage of the voucher holders either turn their vouchers in unused or pay more than 30 percent of their adjusted incomes for rent.

Third, LHMAs would have virtually unfettered discretion to set tenants' rent contribution. The Brooke Amendment¹⁰² which sets that contribution at 30 percent of adjusted income would be repealed. LHMAs would be allowed to establish a tenant's contribution at no less than $50 and no more than the payment standard.¹⁰³ Within that range, an LHMA could set a tenant's contribution at whatever level it considered appropriate. However, the LHMA would be required to waive any rent-setting rules that would make rents unaffordable for elderly and disabled families.

Grievance Procedure

Again, as with public housing, the LHMA would have to establish a grievance procedure to dispose of grievances concerning adverse actions in the choice-based housing program.¹⁰⁴ That would be an addition to the statute, because the current certificate and voucher programs have no statutory hearing requirements. However, it probably is an addition without a difference, since the regulatory hearing requirements in the tenant-based programs are required by the due process clause.

Leases

The length of the lease term would be whatever is agreed to by the household and the landlord.¹⁰⁵ During the lease, grounds for eviction would be limited to breach of the lease, violation of law, other good cause and criminal or threatening activity of the tenant, a household member or any other person under the tenant's control, regardless of the tenant's knowledge of that conduct.¹⁰⁶ The leases would have to have the same terms as unassisted tenants' leases. Eviction procedures would be governed by state law.¹⁰⁷

Housing Quality Standards

The units would have to comply with the higher of local codes or HUD's Housing Quality Standards (HQS), unless local codes would severely restrict housing choice.¹⁰⁸ LHMAs would have to inspect the units annually. HUD would be required to establish enforcement procedures that were flexible and that conform to the private market, whatever that means.

Portability

Tenants' portability rights would not only be repealed, portability itself would be prohibited.¹⁰⁹ Instead, LHMAs could provide assistance to families moving into their jurisdictions who had been assisted at their former place of residence,¹¹⁰ but LHMAs would not be obligated to do so. Applicants who move from one LHMA jurisdiction to another would preserve their date on the former LHMA's waiting list when applying at the new LHMA and could get on that waiting list even if it were closed. LHMAs could deny assistance to any in-mover who was terminated by another LHMA for wrongdoing.¹¹¹

1. The United States Housing Act of 1995, H.R. 2406 (introduced Sept. 27, 1995).
2. 42 U.S.C.A. § 1441 (West 1994).
3. H.R. 2406, § 2(2).
4. H.R. 2406, § 2(1)(A).
5. H.R. 2406, § 103.
6. H.R. 2406, § 107.
7. Public Housing Reform and Empowerment Act of 1995, S. 1260 (introduced on Sept. 14, 1995). See The Public Housing Portions of the Senate's 1995 Authorizing Bill, 25 HOUS. L. BULL. 51 (Sept. 1995).
8. H.R. 2406, § 107.
9. H.R. 2406, § 107(e).
10. S. 1260 § 106.
11. H.R. 2406, § 108.
12. H.R. 2406, § 107.
13. H.R. 2406, § 222(a).
14. H.R. 2406, § 102(13).
15. 42 U.S.C.A. § 1437n (West 1994).
16. H.R. 2406, § 501(a)(1).
17. S. 1260, § 114.
18. H.R. 2406, § 222(b).
19. 42 U.S.C.A. §§ 1437d(c)(4)(A) and 1437f(d)(1)(A) (West 1994).
20. H.R. 2406, § 501(a)(1).
21. H.R. 2406, § 223.
22. H.R. 2406, § 107(c)(2)(B).
23. 42 U.S.C.A. § 1437d(c)(4)(A)(ii) (West 1994).
24. H.R. 2406, § 224(b).
25. S. 1260, § 107(h).
26. H.R. 2406, § 105. A separate bill including a similar provision has already been reported from the House Banking Committee. The Senior Citizens Housing, Safety and Economic Relief Act of 1995, H.R. 117, 104th Cong., 1st Sess. (Oct. 12, 1995).
27. H.R. 2406, § 224(c).
28. Compare 42 U.S.C.A. § 1437d(c)(3) (West 1994).
29. S. 1260, § 107(b).
30. 42 U.S.C.A. § 1437a(c) (West 1994).
31. H.R. 2406, § 225.
32. H.R. 2406, § 102(8).
33. 24 C.F.R. § 913.106(c)(1).
34. 42 U.S.C.A. § 1437a(c) (West 1994).
35. H.R. 2406, § 104(b).
36. H.R. 2406, § 104(c).
37. H.R. 2406, §§ 226(1) and (2).
38. Compare H.R. 2406 § 226(4) with 42 U.S.C.A. § 1437d(l) (West 1994).
39. H.R. 2406, § 232(b).
40. H.R. 2406, § 226(3).
41. H.R. 2406, § 226(6).
42. H.R. 2406, § 106.
43. S.1260, § 111, amending 42 U.S.C. § 1437j(c).
44. H.R. 2406, § 232.
45. 42 U.S.C.A. § 1437d(k) (West 1994).
46. H.R. 2406, § 233(a).
47. H.R. 2406, § 235(a).
48. H.R. 2406, § 203(a)(6).
49. H.R. 2406, §§ 235(b) and 236.
50. 42 U.S.C.A. §§ 1437l(d) and 1437p(b)(1) (West 1994).
51. H.R. 2406, § 261(d).
52. Compare 42 U.S.C.A. § 1437 (West 1994) with H.R. 2406, § 103(b)(1).
53. H.R. 2406, § 103(b)(2).
54. H.R. 2406, § 201(a)(2)(D).
55. H.R. 2406, § 108.
56. H.R. 2406, § 261(h).
57. 42 U.S.C.A. § 1437p (West 1994).
58. H.R. 2406, § 261(c).
59. H.R. 2406, § 261(d).
60. 42 U.S.C.A. § 1437p(b)(1) (West 1994).
61. H.R. 2406, § 261(f).
62. H.R. 2406, § 261(k).
63. H.R. 2406, § 261(l).
64. H.R. 2406, § 261(g).
65. H.R. 2406, § 251.
66. H.R. 2406, § 203(b).
67. H.R. 2406, § 231(a).
68. H.R. 2406, § 401.
69. H.R. 2406, § 432.
70. H.R. 2406, §§ 433 and 431(a)(2).
71. H.R. 2406, § 435.
72. H.R. 2406, § 431(a)(2)(D).
73. H.R. 2406, § 437.
74. H.R. 2406, §§ 437(d) and (e)(2).
75. H.R. 2406, § 438.
76. H.R. 2406, § 237.
77. H.R. 2406, §§ 201 and 202.
78. H.R. 2406, § 274.
79. H.R. 2406, § 109.
80. H.R. 2406, § 204.
81. H.R. 2406, § 203(c).
82. H.R. 2406, § 203(a).
83. H.R. 2406, § 201.
84. H.R. 2406, §§ 301-381.
85. H.R. 2406, § 305.
86. H.R. 2099 (July 27, 1995).
87. H.R. 2406, § 302(c).
88. H.R. 2406, § 303(a).
89. H.R. 2406, § 303(b)(3).
90. H.R. 2406, § 303(d).
91. H.R. 2406, § 321(a)(1).
92. 24 C.F.R. § 882.212(c) (1995).
93. H.R. 2406, § 102(13).
94. H.R. 2406, § 321(c).
95. H.R. 2406, § 327.
96. H.R. 2406, § 381.
97. H.R. 2406, § 354(a).
98. H.R. 2406, § 354(b).
99. H.R. 2406, § 352.
100. H.R. 2406, § 353.
101. H.R. 2406, § 323.
102. 42 U.S.C.A. § 1437a(a) (West 1994).
103. H.R. 2406, § 322.
104. H.R. 2406, § 330.
105. H.R. 2406, § 324.
106. H.R. 2406, § 325.
107. H.R. 2406, § 325(b).
108. H.R. 2406, § 328(a)(2).
109. H.R. 2406, § 356.
110. H.R. 2406, § 321(d).
111. H.R. 2406, §§ 321(e) and (f).