National Housing Law Project Housing Law Bulletin

Since 1987, tenants in public and Section 8 Moderate Rehabilitation housing and participants in the certificate and voucher programs who have been moving from welfare to a training or employment program, or to work, have been eligible to have part or all of their new income or reimbursements disregarded for a period of time in order to assist them in making the transition to work. Unfortunately, based on surveys conducted by the National Housing Law Project and others, significant numbers of housing authorities have failed to implement the income disregards in a timely manner resulting in rent overcharges to residents./2/

In Virginia, the Charlottesville-Albemarle Legal Aid Society (CALAS) surveyed the state’s public housing authorities and, based on that survey, concluded that no housing authority in Virginia implemented in a timely fashion the 18-month earned income disregard./3/ In many areas of the state, public housing authorities still may not be implementing that disregard correctly.

As a result, CALAS took on the task of identifying, locating and seeking a remedy on behalf of current and former residents of the Charlottesville Housing Authority who had been overcharged rent. Using law students, resident organization contacts, flyers, outreach sessions at public housing authority, notices from the public housing authority itself, and by monitoring the district court eviction docket, CALAS identified over 60 families that were potentially affected by the authority’s failure to properly implement the disregard.

Once the families were identified, CALAS enlisted the cooperation of the local social services department and other providers of employment training to help find and verify the participation of their former students. Since one employment program was the most common qualifying program in which public housing residents had participated, CALAS was able to persuade the Department of Social Services to cross reference their records with a comprehensive list of public housing authority addresses and to mail notices of possible rent overcharges. Every participant in the program whose records matched a public housing address was sent a notice that he or she might have paid too much rent.

Through this process, CALAS identified 33 families that had been overcharged rent and five families that qualified for the disregard prospectively. CALAS also secured the voluntary dismissal of 28 summonses for unlawful detainer, with 12 of the defendants receiving substantial rent refunds.

Overall, CALAS restored $57,883 to public housing residents who had been overcharged. It is continuing to press for $15,000 in claims on behalf of an additional 12 residents. The rent overcharges ranged from $108 to $3,505, with the average amount of refund being $1,542.

Current residents almost universally chose to receive their refund in the form of rent credit, or a partial credit and partial refund. This avoided the problem of a cash refund potentially disrupting their eligibility for other assistance payments such as TANF, food stamps, Medicaid, or SSI. The use of rent credits may also have been beneficial to the housing authority since HUD recently announced that it would not adjust retroactively the amount of operating subsidy that it made available to an authority to account for the authority’s failure to implement the disregard on a timely basis./4/ If rent credits were in effect at the time the authority submitted its rent rolls to HUD for the upcoming fiscal year, the authority may end up receiving more in operating subsidy over the next year than it actually provided, or will provide, to the residents in rent credits.

It is interesting to note that CALAS achieved these results against a housing authority that has relatively few public housing family units: only 376 public housing units, of which 123 are designated for the elderly and disabled.

Advocates should be aware that the Quality Housing and Work Responsibility Act of 1998 (QHWRA) has altered the income disregards that are available to residents as of October 1, 1999./5/ This should not, however, deter you from aggressively pursing remedies for current and past public housing residents who were eligible for but were not credited with the income disregards.

NHLP has an information packet for advocates on the income disregards. It may be obtained by writing or calling the Publications Clerk at NHLP and requesting an "income disregard packet." Persons wanting more information about the Charlottesville case should contact Claire Curry at CALAS, P.O. Box 197, Charlottesville, VA 22902-0197.

Notes

1    This article is based in part on an article that appeared in the Virginia Poverty Law Review, Vol. 21, No. 8, at 4-5 (Feb. 99). Portions reprinted with permission.

2    See PHAs, Rents and the Working Poor, 28 HOUS. L. BULL. 89 (June 1998).

3    Generally, this disregard excludes from income, for the purposes of calculating a tenant’s rent, the earnings and benefits of any resident participating in a federal, state or locally funded training program for the duration of the program and for up to 18 months of employment in the first job acquired after completion of the training.

4    See HUD Notice PIH 98-56, Treatment of Income Received from Training Programs -- Housing Authority Responsibility (Nov. 20, 1998).

5    See Congress’ New Public Housing and Voucher Programs, 28 HOUS. L. BULL. 165, 173-174 (Oct./Nov. 1998).

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