What’s New?
Housing Program
Information:
  Public Housing
  Section 8
     Section 8 Homeownership
  HUD Rental Housing
  Housing Preservation
  Fair Housing
  Rural Housing
    Service
Publications
Congress and Housing
About NHLP
Opportunities at NHLP
Housing Justice Network (HJN)
Thank You
Links
Search

 

Disclaimer

National Housing Law Project
Housing Law Bulletin

Minimum Rents: Issues and New Developments

Of all the radical changes in the federal housing programs that have been threatened since December 1994, only a few have actually so far been enacted. Unfortunately, one of the enacted changes — the imposition of a minimum rent — is already working incredible hardship on some of the very poorest people in the country.

On January 26, 1996, Congress enacted the Balanced Budget Downpayment Act I that created a minimum rent for tenants in public housing and all forms of Section 8 housing.1 The minimum is $25, but it may be raised to $50 by public housing authorities (PHAs) for public housing and the Section 8 certificate and voucher programs. HUD's notices generally set April 1 and May 1, 1996, as the implementation dates for tenants. Immediate implementation is required for applicants. As a result, the devastating consequences of this change for the poorest tenants in HUD's programs are beginning to be seen by some tenants, PHAs, housing advocates, HUD officials and members of Congress.

In addition, PHAs and others are not correctly implementing the statute in many cases. As a result, litigation is being filed to challenge the Act's implementation. Efforts are also being made to have Congress repeal the minimum rent provisions. The purpose of this article is to alert people about the statute, its impact, the litigation being filed and the efforts at repeal.

General Description of the Statute and Its Impact

For the public housing, Section 8 certificate and Moderate Rehabilitation programs, the statute obliges PHAs to charge tenants a minimum monthly rent of at least $25, and allows PHAs to charge a minimum monthly rent of up to $50.2 Some PHAs have opted for a $50 minimum rent. For the voucher program, the statute requires PHAs to reduce the voucher payment so that tenants pay a minimum monthly rent of at least $25 and allows them to require a minimum monthly rent of up to $50.3 The different statutory formula recognizes that tenants may pay more than 30 percent of adjusted income under the voucher program and gives such tenants credit toward the minimum for whatever they already pay that exceeds 30 percent of their income. For all other Section 8 programs, HUD is obliged to require tenants to pay a minimum monthly rent of at least $25, and allowed HUD to require a minimum monthly rent of up to $50.4 HUD has decided not to raise the minimum to $50 for those programs.

The statute's minimum rent provisions in effect override the rent caps of the Brooke Amendment — 30 percent of adjusted income, 10 percent of gross income, or the welfare rent — because it applies "notwithstanding Section 3(a) and 8(o) of the U.S. Housing Act."5 Sections 3(a) and 8(o) are the provisions that set tenants' rent or voucher contribution at 30 percent of adjusted income, 10 percent of gross income or the welfare rent.6 Thus, if $25 (or $50, if a PHA so chooses) exceeds 30 percent of a household's adjusted income or 10 percent of its gross income, the tenant's rent becomes $25 (or $50).

The statute sets an effective date of October 30, 1995, even though it was not enacted until January 26, 1996. HUD has decided not to require PHAs and Section 8 landlords to implement the change retroactively. Unless the provision is extended, either by authorizing legislation or an appropriations act for Fiscal Year 1997, the minimum rent will expire on September 30, 1996.

HUD has issued five notices to implement the statute: one for public housing;7 one for certificates, vouchers and Section 8 Moderate Rehabilitation;8 one for Section 8 single-room occupancy units (SROs) for people who are homeless;9 one for all other forms of Section 8;10 and one encouraging PHAs to avoid evictions of hardship families in public housing and the certificate and voucher programs.11

In late April, when the HUD appropriations act for Fiscal Year 1996 was finally adopted, Congress made two more changes regarding the minimum rent. First, Congress amended the statute to provide that the normal 10-percent-per-year phase-in requirement enacted in 1983 does not apply to rent increases caused by the minimum rent statute.12 Second, Congress authorized the PHAs and HUD to waive the requirement for up to three months to provide a transition period for affected families.13 The report language indicated that the waivers were intended to cope with occasions when families are experiencing serious financial hardship and cannot afford even the most minimal contribution.14

HUD has estimated that some 175,000 households are affected by the minimum rent provision.15 Those 175,000 households break down into 52,600 public housing tenants, 82,700 certificate and voucher tenants, and 39,600 project-based Section 8 tenants. Families with children make up 114,100 of the 175,000 families. Single individuals and households without children make up another 41,600, 11,100 are elderly and 8,000 are people with disabilities. States with low welfare grants, including Alabama, Georgia, Kentucky, Louisiana, Mississippi, South Carolina, Tennessee and Texas, account for 63,000 of the 175,000 households, and Puerto Rico adds 34,000 more. Besides low welfare grants, the other most common causes for rents beneath $25 are people with no income at all because they are in transition from employment to an assistance program or are between assistance programs, because their state does not have a general assistance program, because they are not eligible for AFDC or SSI, or because they have lost their grants. It is also possible that HUD's initial estimates will turn out to be low, because in some places PHAs have sent rent-increase notices to more tenants than HUD had anticipated.

A number of issues have arisen in the implementation of these minimum rent provisions. Some are merely questions arising out of ambiguities that HUD has answered in its implementing notices. Others go the legality of implementation actions taken by HUD, the PHAs and landlords, and even to the constitutionality of the minimum rent statute itself. These include:

  • When may the change be applied to present tenants?
  • What rights do tenants have to notices explaining the grounds for their new rents and hearings to dispute their correctness?
  • Do rent increases caused by the change have to be phased in gradually or may waivers be secured?
  • How does the minimum rent apply to tenants who pay their own utilities?
  • How does the minimum rent apply to voucher participants who pay for rents above the payment standard?
  • Is nonpayment of the minimum rent grounds for eviction?
  • When must the change be made applicable to applicants?
  • Is likely inability to pay the minimum rent grounds to reject an applicant?
  • Is the minimum rent constitutional?
  • What must a PHA do to legally raise the minimum from $25 to $50?

When May the Change Be Applied to Present Tenants?

Even though the statute states that it applies as of October 30, 1995, HUD's implementing notices do not mandate retroactive implementation of the change. Instead, as noted earlier, for public housing, Section 8 certificates and vouchers and Moderate Rehabilitation, HUD directed PHAs to charge the minimum rents prospectively as soon as practicable, but no later than April 1, 1996, for tenants other than new applicants.16 For all other forms of Section 8, HUD required landlords to charge the minimum rent no later than May 1, 1996.17

HUD's public housing notice did recognize that PHAs could raise rents only "in accordance with applicable laws and lease notice provisions" and that PHAs could not charge the new rent on April 1, 1996, if "applicable laws or lease notice provisions require otherwise."18 That latter exception is necessary, because some public housing leases are written as one-year leases or do not contain any provisions allowing the PHA to raise the rent between annual recertifications for reasons other than income changes and changes in family composition. In those cases, PHAs and landlords should not be able to implement the rent increase until expiration of the lease or the next annual recertification. In New Orleans, when attorneys, representing public housing tenants whose leases had not expired, objected to the April 1, 1996, rent increase, HUD and the Housing Authority of New Orleans (HANO) conceded their mistake and agreed that the increase could not become effective before expiration of the current leases. They also agreed to refund any amounts collected from tenants whose leases had not expired.19 The Syracuse Housing Authority did the same when the issue was raised by attorneys representing tenants there. Any PHA that ignores such lease provisions should be challenged for breach of contract and failure to follow the HUD notice.

It is more difficult to develop an argument that the leases for tenants in the other programs would prevent implementation before their expiration because of the terms of those leases. For example, HUD's model lease for the Section 8 project-based programs specifically states:

The Tenant agrees that the amount of rent the Tenant pays…may be changed during the term of this Agreement if:
. . .
e. HUD's procedures for computing the Tenant's assistance payment or rent change… .20
HUD's position is that that clause allows Section 8 project-based landlords to increase the rents even though the lease term has not ended.

Even in cases where leases allow rent changes before the lease term expires, tenants are still entitled to notices of a rent increase, either under the leases themselves or state law. For the project-based Section 8 programs, the HUD model lease expressly requires the landlord to give the tenant "at least 30 days advance written notice of any increase in the tenant's rent… ."21 Public housing leases that allow for rent increases before the lease expires also usually have provisions setting the length of the amount of notice the PHA must give. HUD's notice implementing the change for the public housing program requires PHAs to adhere to that notice period before the rent increase can be made effective.22

For the certificate and voucher programs, the rules on timing are more complicated, because three parties are involved: the landlord, the PHA and the tenant. It is the landlord who charges and collects the minimum rent and the PHA that determines what the tenant's share of the rent will be and makes the Housing Assistance Payment (HAP) to the landlord. Both the HAP contract between the PHA and the landlord23 and the Lease Addendum between the landlord and the tenant24 state that the housing assistance payment and the rent may be changed during the term of the lease and the contract. Both also require the PHA to give the tenant notice of any change, but do not state how much notice is required.

HUD's implementing notice for the certificate and voucher programs barely recognizes this tripartite relationship. It requires PHAs to charge the minimum rent to all participants no later than April 1, 1996, and requires PHAs to give tenants and landlords "adequate" notice of any changes in the housing assistance payment and the rent.25 It does not state what constitutes adequate notice, nor does it explain how any lease provisions or state laws relating to the time periods for rent increase notices apply. However, given the recognition of lease and state law notice requirements in HUD's public housing notice, it seems unlikely that HUD intended to preempt any lease provisions or state laws requiring certificate and voucher landlords to give their tenants prior notice of rent increases. Thus one may assume that once the landlord gets notice from the PHA that the housing assistance payment is being changed, the landlord would not be able to charge the tenant the higher rent until it complies with any notice requirements of state law or the lease.

The HUD notice also does not explain the relationship between the PHA's obligation to grant the tenant a hearing regarding the change in the tenant's assistance payment and the time for implementing the rent increase. When the tenant's assistance is reduced, HUD regulations and the due process clause require that the tenant be granted a chance to be heard before the change is made effective.26 It would appear that the effective date of any reduction in an assistance payment must be postponed if the tenant requests a hearing on the change. Thus the landlord's notice increasing the rent would also have to be postponed.

If a PHA seeks to implement the change for certificate or voucher participants or Moderate Rehabilitation tenants in a time period that leaves the landlord insufficient time to give the notices required by state law or the tenants' leases, that action should be challenged as conflicting with the leases and state law, as well as the HUD notice's requirement of "adequate" notice.

What Rights Do Tenants Have to Notices Explaining the Grounds for Their New Rents and Their Right to a Hearing to Dispute Their Correctness?

HUD's regulations for most of its programs require that tenants whose rents are being increased be notified that they have a right to a statement explaining the calculation of their new rent and a right to be heard if they wish to dispute the calculations.27 The Constitution's due process clause also requires as much.28 If a PHA or landlord has not notified the tenant of the right to that explanation and hearing, or if it refuses to provide the explanation or the hearing, the PHA or landlord should be challenged.

In Chicago, when lawyers representing affected tenants challenged the Chicago Housing Authority's failure to grant tenants notice of their rights to an explanation of the grounds for their rent increase and to a hearing to dispute the accuracy of the calculations, the housing authority conceded that the notices were deficient and withdrew them, agreeing to issue new notices that would not be effective until June 1, 1996, and that would inform the tenants of their hearing rights.29

At first glance, it might appear that there would be no need for an explanation of the grounds for the increase or for a hearing, because the rent increase is a result of the statutory change, not a change in the tenant's circumstances. However, when PHAs make mistakes in implementing the statutory change, as some will, it is only the notice explaining the grounds for the increase that reveals the mistake. For example, some PHAs may impose $25 rent charges on tenants who pay zero rent because they pay their own utilities. Those charges are improper, but it is only the statement explaining how the new rent was calculated that will reveal the mistake, and the hearing will give the tenant a chance to correct it.

For this reason, these cases do not fall within the exception provided in HUD's certificate and voucher regulations that denies participants hearings for general policy issues.30 The hearing is needed not to challenge the policy of the minimum rent, but rather the mistakes in implementing it. By the same token, HUD's regulations affirmatively stating when a hearing must be granted have to be construed to cover these cases, even though the regulations were not drafted with minimum rents unrelated to income in mind. The regulations require a hearing to consider whether decisions relating to the individual circumstances of the family are in accordance with the law, including decisions determining the family's income and the use of that income to compute the housing assistance payment.31 When the regulations were drafted, the only factors that affected the tenant's share of the rent and the housing assistance payment were related to the tenant's income. With the statutory change made by Public Law 104-99, a new factor was introduced, i.e., the minimum rent. Even with that factor, however, it still is necessary for tenants to be informed about how their assistance is calculated so they can detect errors, and hearings are necessary to get those errors corrected. If the regulations were not so construed, they would run afoul of the due process clause.

Do the Rent Increases Caused by the Change Have to Be Phased in Gradually or May Waivers Be Secured?

In 1983, Congress provided that rent increases caused by any future changes in federal laws must be phased in at the rate of 10 percent per year for tenants in place at the time of the change.32 That statute has never been repealed. The Balanced Budget Downpayment Act I did not make that provision inapplicable to the minimum rent. Thus it would have seemed that all PHAs and Section 8 landlords would have had to implement the minimum rent for tenants in place when the change became effective at the rate of no more that 10 percent of the previous year's rent level per year.

One case based in part upon this phase-in requirement has been filed in Minnesota.33 In response to the plaintiffs' request for a temporary restraining order, HUD rather cryptically argued that applying the phase-in requirement to the minimum rent provision produced an implausible construction of the minimum rent provision. In HUD's view, it would mean that, despite the statutory language requiring each family to pay a minimum rent of no less than $25, notwithstanding the Brooke Amendment, some families would still pay less than $25.34 That argument, however, overlooks the fact that any time a phase-in requirement like the one in the 1983 act35 is applied to a statutory change in rent, all tenants will be paying less than the new statutorily prescribed rent until the phase-in is complete. There is nothing implausible about that. Unfortunately, the court denied the TRO, primarily because the harm to the plaintiffs during the TRO period was not clear, since the PHAs asserted that plaintiffs would not be evicted, but also, in part, because the judge appeared to accept HUD's argument on the likelihood of success on the merits.

As was noted above, Congress addressed this issue again when it enacted the final HUD FY 1996 Appropriations Act, as part of the Balanced Budget Downpayment Act II.36 A section of that appropriations legislation provides that the minimum rent provision applies notwithstanding Section 206(d) of the 1983 statute.37 In place of this 10-percent-per-year phase-in requirement, the Balanced Budget Downpayment Act II authorizes PHAs and HUD to grant waivers to families for up to three months in order to allow for a transition to the higher rent.38 In a case where a tenant needs more time to adjust to the $25 minimum charge, one can challenge any PHA's refusal to grant a waiver as being arbitrary. The same would be true of any refusal of a waiver by HUD or a Section 8 landlord. Although the Conference report language refers to the waivers in the context of its recognition that some families may be experiencing serious financial hardship, the statute is not expressly limited to such cases.39 On the other hand, if a family is facing such hardship, the report language should be helpful in challenging the refusal to grant a waiver as arbitrary.

How Does the Minimum Rent Apply to Tenants Who Pay Their Own Utilities?

Tenants who pay their own utilities must be given credit toward the $25 (or $50) minimum for any amount they pay to the utility company, up to the full utility allowance. HUD's notices make that clear for all programs.40 Thus, if 30 percent of a tenant's income is $75 and the tenant's utility allowance is $60, the tenant now pays the PHA $15 as rent and should not be charged any additional rent by the PHA. The tenant's total tenant payment — $75 — already exceeds the $25 minimum, or $50 if the PHA should opt for that minimum.

Even if the tenant's utility allowance were the full $75 and the tenant were not paying any rent to the PHA, the tenant's rent should not be increased because of the minimum rent provision. The tenant is already paying more than $25 (or $50) for the combination of rent to the PHA and utilities, which is all the statute requires. If the tenant's utility allowance were $100 and the tenant were receiving a $25 utility reimbursement from the PHA, the tenant's reimbursement should not be reduced or otherwise affected by the minimum rent and the tenant's rent to the PHA may not be increased because of the minimum rent provision.

HUD's notices may cause some PHAs and Section 8 landlords to make mistakes on this point. The notices try to avoid mistakes by telling the PHAs and landlords that the total tenant payment (TTP) must be at least $25 and that it is still possible for tenants to qualify for utility reimbursements despite the minimum rent. But the notice then goes on to state that if a tenant's TTP is $25 and the utility allowance is $60, the tenant would receive a utility reimbursement of $35.41 That is correct, in that example, but it can leave the PHA or landlord with the impression that all tenants receiving utility allowances prior to the minimum rent must have their utility reimbursements reduced by $25. That, of course, is not true. Tenants who are already paying at least $25 toward their own utilities (or $50 in cases where a PHA opts for the higher minimum) should not experience any reduction in their utility reimbursement. If a PHA makes this mistake when implementing this part of the change — and it appears likely that many will — the PHA should be challenged as violating the statute and HUD's implementing notices.

How Does the Minimum Rent Apply to Voucher Participants Who Pay for Rents Above the Payment Standard?

Under the voucher program, some tenants paid more than 30 percent of their adjusted incomes for rent even before the minimum rent was enacted. That occurred because the subsidy to the landlord is the difference between 30 percent of the tenant's adjusted income and the PHA's payment standard, but landlords may charge rents that exceed the payment standard. When landlords do charge those higher rents, the tenants become responsible for paying the excess, in addition to their normal 30-percent-of-income contribution.

When Congress drafted the minimum rent provision, it recognized this possibility and chose language to ensure that voucher tenants get credit for the full amount they pay the landlord. The statute provides that PHAs:

…shall reduce the monthly assistance payment on behalf of each family who is assisted under the voucher program under section 8 of such Act so that the family pays a minimum monthly rent of not less than $25, and may require a minimum monthly rent of up to $50… .42
If the family is already paying the landlord $25 or more (or $50 or more, if the PHA opts for the higher standard), the PHA has no authority to reduce the assistance payment. That is true even if 30 percent of the tenant's adjusted income and 10 percent of the tenant's gross income are less than $25.

The HUD notice on vouchers also makes clear that tenants whose landlords charge more that the payment standard for rent must be given credit for the amount by which the rent exceeds the payment standard, as well as for the 30 percent of adjusted income that they already pay. To make sure the PHAs perform the calculations correctly, HUD attached to its notice a step-by-step worksheet for the voucher program.43 Again, PHAs should be challenged if they mistakenly fail to give voucher tenants credit for that extra payment.

Is Nonpayment of the Minimum Rent Grounds for Eviction?

If one analyses the minimum rent statute literally, one could come to the conclusion that failure to pay the minimum rent means that a tenant must be evicted. Serious or repeated lease violations are grounds for eviction,44 nonpayment of rent is a lease violation45 and the minimum rent is rent. Thus, one could come to the conclusion that failure to pay the minimum rent is grounds to evict a tenant.

On the other hand, such a literal interpretation leads inevitably to the conclusion that Congress has decided that tenants who cannot pay the minimum rent because of their low incomes are too poor for HUD housing assistance. That conclusion is sufficiently absurd, or at least implausible,46 to require at least a second look at the issue. That is particularly true because, for people at the upper end of the income scale, HUD has a regulation that prohibits the eviction of tenants because of their incomes unless the PHA has identified a new home for them that would not cost more than their public housing unit.47 Given Congress' presumed awareness of this eviction protection afforded to higher income tenants, is it likely that Congress intended to require, or even allow, PHAs and landlords to evict tenants with the lowest incomes because they have not paid a rent they cannot afford to pay? We think not. An obligation to avoid eviction in such cases is not unlike HUD's obligation to take assignments of defaulted single-family mortgages to avoid foreclosure, where the default is for reasons beyond the homeowner's control.48

The prospect that some people might be evicted for nonpayment of the minimum rent when they could not pay it has led HUD to issue an additional notice encouraging PHAs to avoid eviction of tenants in hardship cases.49 In the notice, HUD states, "The Department strongly urges HAs to take action to ensure that families with severe hardships are not evicted specifically as a result of their inability to pay the new minimum rents."50

HUD suggests that PHAs do such things as:

  • Exercising discretion to refrain from evicting;
  • Rescheduling rental payments;
  • Referring families to service agencies and homeless assistance programs for rental assistance;
  • Supporting the establishment of local relief funds;
  • Using reserves built up from unused Section 8 administrative fees to pay the minimum rents.
Following these suggestions would enable PHAs to avoid evictions for both public housing and certificate and voucher tenants. HUD has not yet explained how Section 8 project-based landlords can achieve the same results.

As was noted above, Congress, in the Balanced Budget Downpayment Act II authorized PHAs and HUD to grant waivers for up to three months.51 That language may provide a defense to an eviction for nonpayment of the minimum rent if a PHA or HUD has not exercised its discretion to grant a waiver in hardship cases, instead of bringing an eviction action. It is also an indication that Congress, especially the congressional appropriations committees, are not going to retaliate if HUD or any PHA decides not to collect the minimum rent, at least where hardship can be demonstrated.

When Must the Change Be Made Applicable to Applicants?

All applicants who are accepted into the programs after the PHAs and landlords receive the HUD implementing notices are to be charged the minimum rent immediately when they move in.52 The phase-in provision did not apply to them, because it applies only to tenants who were in residence when the statute was enacted or when it became effective.53 The waiver provision added by the Balanced Budget Downpayment Act II, however, is not limited to current tenants. Thus applicants who are unable to pay the minimum rent may still be able to move in under a three-month waiver.

Is Likely Inability to Pay the Minimum Rent Grounds to Reject an Applicant?

For applicants, there is a problem similar to the question of whether failure to pay the minimum rent is grounds to evict a tenant who cannot pay that rent. The analogous question for the applicants is whether inability to pay the minimum rent is grounds for rejection. The basic approach to admissions decisions is whether the applicant is likely to comply with the essential obligations of the lease, one of which is payment of the rent.54 As with evictions, a literal interpretation of the minimum rent statute could lead to the conclusion that PHAs and other landlords would be allowed to reject applicants on the grounds that they are not able to pay the minimum rent. Yet it again seems implausible that Congress intended to make some applicants too poor for housing assistance.

Back in 1974, the Sixth Circuit Court of Appeals rejected HUD's first attempts to develop an economic mix policy for public housing on the grounds that it did not believe that Congress intended to classify some people as too poor for public housing.55 When Congress subsequently enacted its own economic mix policy later in 1974, the court left the impact of that statute to future litigation.56 But the policy eventually developed by Congress and HUD was not one that made one category of applicants absolutely ineligible for public housing because their incomes were too low. It merely made lower income applicants wait longer as higher income applicants moved in to create a more economically balanced tenancy.

An absolute ban against the very poorest tenants was set aside by the Eleventh Circuit in another case.57 There the PHA, among other things, had refused to rent to applicants who would be in a negative-rent situation. The court found that practice in violation of the then existing regulatory law on public housing. It seems unlikely that the same Congress that enacted the minimum rent provision also intended to overturn prior law to the extent of making indigence a bar to admission to public housing or receipt of HUD housing assistance. None of HUD's notices, however, addresses this question.

Is the Minimum Rent Constitutional?

The case filed in Minnesota also raises the question of whether the minimum rent is constitutional.58 It does create two classes of people, those who are charged only 30 percent of their adjusted incomes for rent, and thus can afford HUD-assisted housing, and those who are charged more, some of whom will never be able to afford HUD-assisted housing. The most graphic picture of the resulting discrimination arises from a comparison of tenants with incomes high enough that they do not pay the minimum rent and tenants with no income at all who become ineligible for HUD-assisted housing. Tenants whose minimum rents would constitute 50, 60, 75 or 90 percent of their incomes suffer slightly less drastic discrimination. There is no rational basis for deciding that the people with the lowest incomes in the country should be ineligible for housing assistance.

The statute and HUD's implementation of it also create two other classes of tenants, those who live in public housing or participate in the Section 8 Moderate Rehabilitation, certificate or voucher programs, and those who live in all other forms of Section 8 housing. The former group may be charged a minimum rent of up to $50 at the PHA's whim, while the latter group may be charged only $25, because HUD has decided not to exercise its discretion to raise the minimum to $50. There is no rational basis for this different treatment, especially because some PHAs own and operate not only public housing but also Section 8 projects. That raises the possibility that tenants of the same PHA would be charged different minimum rents, depending which type of housing they live in.59

What Must a PHA Do to Legally Raise the Minimum From $25 to $50?

The statute does allow PHAs to raise the minimum rent as high as $50 for public housing, certificates and vouchers and Section 8 Moderate Rehabilitation tenants.60 The statute does not explain why Congress gave the PHAs that power or which situations would be appropriate for an increase. HUD's implementing notices place some limits on the PHAs' exercise of that discretion. The notice for public housing states that "the housing authority needs to consider the potential impact of such charge on the lowest-income residents and the possibility that the minimum rent will expire on September 30, 1996, if it is not extended."61 The decision must be made by the PHA board, and copies of the board resolution must be sent promptly to the HUD field office. For certificate and voucher tenants, the HUD notice urges PHAs "to carefully consider the potential impact on their families when deciding whether to increase the minimum rent above $25."62 If a PHA were to raise the minimum above $25 for certificate or voucher participants, it would have to amend its administrative plan and have it adopted by its board or other authorized PHA officer and to immediately notify the HUD field office.

The HUD notices do not state that the PHA must notify affected tenants and allow them to be heard before deciding whether to raise their rents. However, PHAs are obliged to do so by the Fourteenth Amendment.63 Any PHA that has not provided such a procedural protection should be challenged. Notice and a chance to comment may also be required by state administrative procedure acts.

Legislative Activity

Congress is now considering various bills that present an opportunity to repeal the minimum rent provision or modify it. As indicated above, the Balanced Budget Downpayment Act II authorized PHAs and HUD to grant waivers of up to three months. The House authorizing bill, H.R. 2406,64 which passed the House on May 9, also would allow PHAs to grant waivers without any time limit in cases of severe financial hardship.65 The Senate authorizing bill, which has already passed the Senate, has a provision making the minimum rent optional for the PHA, instead of mandatory as it is now.66 If that bill were to be enacted, being later in time, it would implicitly repeal the mandatory nature of Pub. L. No. 104-99.

Whether Congress does that will depend, in part, on how many convincing anecdotes are presented to members of Congress that demonstrate what is wrong with the minimum rent provision. In addition, some PHAs are not enamored of the minimum rent provisions and may lobby for their repeal. If that were to occur, it would be a step in the right direction.


  1. Pub. L. No. 104-99, § 402(a), 110 Stat. 44 (Jan. 26, 1996).
  2. Id. §§ 402(a)(1) and (4).
  3. Id. § 402(a)(2).
  4. Id. § 402(a)(3).
  5. Id. § 402(a). For background on the Brooke Amendment, see, e.g., The Brooke Amendment Should Not Be Repealed, 26 HOUS. L. BULL. 17 (Feb. 1996).
  6. 42 U.S.C.A. §§ 1437a(a) and 1437f(o) (West 1994).
  7. HUD Notice PIH 96-6, "Administrative Provisions of the January 26, 1996, Continuing Resolution Affecting Public and Indian Housing Programs" (issued Feb. 13, 1996; expires Sept. 30, 1996).
  8. HUD Notice PIH 96-7, "January 26, 1996, Continuing Resolution Statutory Changes Affecting the Administration of the Section 8 Certificate, Voucher, and Moderate Rehabilitation Programs" (issued Feb. 13, 1996; expires Sept. 30, 1996).
  9. HUD Notice CPD-96-03, "Tenant Rent Calculations For Certain HUD McKinney Act Programs" (issued Mar. 22, 1996).
  10. HUD Notice H 96-7, "January 26, 1996, Continuing Resolution Statutory Changes Affecting the Administration of Multifamily Assisted Housing Programs" (issued Mar. 15, 1996).
  11. HUD Notice PIH 96-12, "Managing the Minimum Rent Requirements" (issued Mar. 21, 1996).
  12. Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1996 (hereafter "HUD FY 1996 Appropriations Act"), § 229, enacted as part of Pub. L. No. 104-134 (known as the Omnibus Appropriations Act for Fiscal Year 1996 or the Balanced Budget Downpayment Act II), § 101(e), 110 Stat. ___ (Apr. 26, 1996) (143 CONG. REC. H3920).
  13. Id. § 230.
  14. H. REP. NO. 538, 104th Cong., 2d Sess. (Apr. 25, 1996).
  15. Letter from HUD Secretary Henry G. Cisneros to Senator Christopher S. Bond (Mar. 26, 1996), Attachment A (on file at the National Housing Law Project).
  16. HUD Notice PIH 96-6, supra note 7, at 3; HUD Notice PIH 96-7, supra note 8, at 7.
  17. HUD Notice PIH 96-7, supra note 8, at 2. Minimum rents were applied immediately to applicants to all of these programs.
  18. HUD Notice PIH 96-6, supra note 7, at 3.
  19. Letter from Kevin Emmanuel Marchman, Housing Authority of New Orleans Chair, to Charles Delbaum, New Orleans Legal Assistance Corporation (Apr. 12, 1996) (on file at the National Housing Law Project).
  20. HUD, Model Lease for Subsidized Programs, ¶ 4, reprinted in HUD Handbook 4350.3, App. 19a (Nov. 1981).
  21. Id.
  22. HUD Notice PIH 96-6, supra note 7, at 3.
  23. 24 C.F.R. § 982.451(c)(1) (1996), issued at 60 Fed. Reg. 34,712 (July 3, 1995).
  24. HUD Lease Addendum, Section 8 Existing Housing Certificate Program, HUD-52535.3 (Mar. 1996) (available from HUD).
  25. HUD Notice PIH 96-7, supra note 8, at 7.
  26. See, e.g., Simmons v. Drew, 716 F.2d 1160 (7th Cir. 1983); 24 C.F.R. § 982.555 (1996), issued at 60 Fed. Reg. 34,716 (July 3, 1995).
  27. 24 C.F.R. § 966.4(c)(4) (1995); 24 C.F.R. §§ 982.555(a) and (c) (1996), added at 60 Fed. Reg. 34,716 (July 3, 1995).
  28. See Davis v. Mansfield Metro. Hous. Auth., 751 F.2d 180 (6th Cir. 1984); Simmons v. Drew, supra note 26; Chavez v. Santa Fe Hous. Auth., 606 F.2d 282 (10th Cir. 1979).
  29. Letter from Edwin Eisindrath, HUD, and Joseph Shuldiner, Chicago Housing Authority, to William P. Wilen and Richard M. Wheelock, Legal Assistance Foundation of Chicago (Apr. 2, 1996) (on file at the National Housing Law Project).
  30. 24 C.F.R. § 982.555(b)(2) (1996), added at 60 Fed. Reg. 34,716 (July 3, 1995).
  31. 24 C.F.R. § 982.555(a)(1) (1996), added at 60 Fed. Reg. 34,716 (July 3, 1995).
  32. Pub. L. No. 98-181, §§ 206(d)(1) and (2), 98 Stat. 1153, 1180 (1983), noted after 42 U.S.C.A. § 1437a (West 1994).
  33. Young v. Cisneros, No. _______________ (D. Minn. complaint filed April __, 1996).
  34. HUD, Memorandum in Opposition to Motion for Temporary Restraining Order, filed in Young v. Cisneros, supra note 33 (memorandum filed Apr. 12, 1996), at 6-8.
  35. Supra note 32.
  36. Supra note 12.
  37. HUD FY 1996 Appropriations Act, supra note 12, § 229.
  38. Id. § 230.
  39. H. REP. NO. 538, 104th Cong., 2d Sess. (Apr. 25, 1996).
  40. HUD Notice PIH 96-6, supra note 7, at 2; HUD Notice PIH 96-7, supra note 8, at 6-7; HUD Notice H 96-7, supra note 10, at 2.
  41. HUD Notice PH 96-6, supra note 7, at 2; HUD Notice PIH 96-7, supra note 8, at 6; and HUD Notice H 96-7, supra note 10, at 2.
  42. Pub. L. No. 104-99, § 402(a)(2).
  43. HUD Notice PIH 96-7, supra note 8, Attachment.
  44. 42 U.S.C.A. § 1437d(l)(4) (West 1994) and 24 C.F.R. § 966.4(l)(2) (1995).
  45. 24 C.F.R. § 966.4(b)(1) (1995).
  46. Compare HUD, Memorandum in Opposition to Motion for Temporary Restraining Order, filed in Young v. Cisneros, supra note 33.
  47. 24 C.F.R. § 960.210 (1995).
  48. See Brown v. Lynn, 385 F. Supp. 986 (N.D. Ill. 1974), motion to reconsider denied, 392 F. Supp. 559 (N.D. Ill. 1975).
  49. HUD Notice PIH 96-12, "Managing the Minimum Rent Requirements" (Mar. 21, 1996).
  50. Id. at 1.
  51. HUD FY 1996 Appropriations Act, supra note 12, at § 230.
  52. HUD Notice PIH 96-6, supra note 7, at 3; HUD Notice PIH 96-7, supra note 8, at 7; HUD Notice H 96-7, supra note 10, at 2.
  53. Pub. L. No. 98-181, §§ 206(d)(1) and (2), 97 Stat. 1153, 1179 (1983).
  54. 24 C.F.R. § 960.205 (1996); Public and Assisted Housing Occupancy Task Force, Report to Congress and to the Department of Housing and Urban Development (Apr. 7, 1994), at 1-25.
  55. Fletcher v. Housing Auth. of Louisville, 491 F.2d 793, 801-04 (6th Cir. 1974), vacated and remanded, 419 U.S. 812 (1974), reinstated upon remand, 525 F.2d 532 (6th Cir. 1975).
  56. Id. at 525 F.2d 532 (6th Cir. 1975).
  57. Gholston v. Housing Auth., 818 F.2d 776 (11th Cir. 1987).
  58. Young v. Cisneros, supra note 33.
  59. Cf. Yolano-Donnelly Tenant Ass'n v. Cisneros, Civ. No. S-86-846 MLS PAN (E.D. Cal. Memorandum of Decision and Order filed Mar. 8, 1996) (plaintiffs survived motion to dismiss equal protection claim that HUD's rules on undocumented persons unlawfully discriminated against people who resided in PHA-supervised housing when compared to residents of HUD-supervised housing).
  60. Pub. L. No. 104-99, § 402(a).
  61. HUD Notice PIH 96-6, supra note 7, at 2.
  62. HUD Notice PIH 96-7, supra note 8, at 7.
  63. See Burr v. New Rochelle Hous. Auth., 479 F.2d 1165 (2d Cir. 1973); cf. Thompson v. Washington, 497 F.2d 626 (D.C. Cir. 1973) (implied statutory right to be heard).
  64. The United States Housing Act of 1996, H.R. 2406, 142 CONG. REC. H4559-H4643 (May 8, 1996) and H4662-H4753 (May 9, 1996). See also House Passes H.R. 2406 to Repeal the United States Housing Act elsewhere in this issue.
  65. H.R. 2406, §§ 225(b) and 322(b).
  66. S. 1260, Public Housing Reform and Empowerment Act of 1996, § 103, 142 CONG. REC. S153 (passed by Senate Jan. 10, 1996).


Back to this issue's Table of Contents.
Back to the Article List.
Back to the NHLP Home Page.

Main Office:
National Housing Law Project
614 Grand Ave., Ste. 320
Oakland, CA 94610
510-251-9400
510-451-2300
nhlp@nhlp.org
Washington, DC Office:
1629 K. Street, NW, Suite 600
Washington, DC 20006
202-463-9461
Fax 202-463-9462
Page Copyright © 1999, NHLP
 
 
 

Site designed, maintained,
and hosted by Change Communications.

Main Office:
National Housing Law Project
614 Grand Ave., Ste. 320
Oakland, CA 94610
510-251-9400
Fax 510-451-2300
nhlp@nhlp.org
Washington, DC Office:
1012 Fourteenth Street NW, Suite 610
Washington, D.C. 20005
(202) 347-8775 (202) 347-8776 (FAX)
Page Copyright © 1999-2002  NHLP
Site designed, maintained,