National Housing Law Project Housing Law Bulletin

NAHRO's Public Housing Reform Act of 1995

In summary, NAHRO's bill would consolidate the various public housing funding programs into one fund to cover operations and modernization. Each PHA would be guaranteed a portion of that fund and would have wide discretion to decide how to spend it. At the same time, the current statutory provisions that create rights for tenants and applicants would be repealed. That would mean the end of the federal laws on grievance procedures, model leases, rents, evictions, tenant participation, admissions criteria and preferences. In addition, income limits would be raised dramatically.

Repealing Tenants' Rights

The NAHRO bill would rewrite the key provisions of the United States Housing Act that govern public housing, including those provisions that create rights for the tenants and applicants.⁴ Instead, the PHAs would be granted almost unlimited discretion to set policies on issues that vitally affect tenants and applicants, such as eligibility, admission preferences, rents, tenant participation, grievance procedures and leases. Many of these changes are attractive to some members of Congress and may very well be enacted.

Income limits

Currently, applicants for public housing must have incomes at or below 50 percent of the area median income for their size family, except that 25 percent of the older units (those available before October 1, 1981) and 15 percent of the newer ones may be rented to applicants with incomes up to 80 percent of area median income.⁵ Under NAHRO's bill, a PHA could admit any applicant whose income was at or beneath 80 percent of area median income for that size family.⁶ PHAs would also be allowed to rent any units to applicants with even higher incomes as long as the PHA did not spend any federal operating subsidies or modernization funds in direct support of that unit.⁷ The fact that the federal government has already spent $90 billion dollars for the cost of building and modernizing such units seems irrelevant. Under NAHRO's bill, the PHAs could, in effect, give those precious resources to middle-income families who do not need housing assistance while moderate and lower income families would be left on the waiting lists.

In contrast, under HUD's bill, PHAs (1) would not be allowed to rent to applicants with incomes above 80 percent of area median, (2) would be allowed to rent units to applicants with incomes above 50 percent of the median only if they were willing to pay the ceiling rent, and (3) would rent most of their units to applicants with incomes at or below the 50 percent level.⁸

NAHRO's bill would require PHAs to serve families with a broad range of incomes or provide a reasonable justification for not doing so.⁹ In the past, this income-range requirement had been used to deny or delay admission to applicants with the very lowest incomes.¹⁰ Ironically, with the increased income limits and wider PHA discretion that NAHRO's bill would create, the proposed income-range requirement might actually give applicants with the very lowest incomes access to at least some of the PHAs' units.

Skipping

Current law also prevents PHAs, with one minor exception, from skipping over applicants with lower incomes to accept higher income applicants who have applied later, with a minor exception.¹¹ That anti-skipping provision would be repealed by NAHRO's bill.¹²

Preferences

Federal law also establishes a system of preferences that PHAs must follow in choosing among eligible applicants.¹³ NAHRO's bill would eliminate all federal preferences.¹⁴ Instead, PHAs would be granted the option of establishing their own preferences for their agency plan, which would be developed after a public hearing and then submitted to HUD.¹⁵ In contrast to NAHRO's proposal, HUD's bill would allow two preference categories, one for people with urgent needs and another for people who are employed or work-ready.¹⁶

Rents

For rents, NAHRO's bill would repeal the Brooke Amendment, with its general formula setting rents at 30 percent of adjusted family income.¹⁷ In its place, PHAs would be granted "the maximum degree of flexibility and discretion" in determining rents.¹⁸ They expressly would be authorized to set "minimum rents, flat rents, rent ranges based upon income, or determine rents by any other method" consistent with the goal of serving low-income persons.¹⁹ To the extent PHAs decide to base rents upon income, they would be empowered to define income and which, if any, adjustments would be allowed.²⁰

In contrast, HUD's bill did retain the 30-percent-of-adjusted-income formula and prescribed adjustments of $480 for each dependent, $400 and excessive medical expenses for each elderly or disabled family, attendant care and auxiliary apparatus expenses for family members with disabilities, child care expenses and excessive travel expenses for tenants of Indian housing authorities.²¹

Tenant participation

NAHRO's bill would repeal the present provisions on tenant management and eliminate any funding set-asides for the Tenant Opportunity Program.²² It would give PHAs the option of spending part of their federal funding to provide assistance for tenant organizations.²³

Grievance procedure

NAHRO's bill would also repeal the current statutory requirement that each PHA have a grievance procedure.²⁴ The only hearing rights prescribed by the bill for tenants would be a right to be heard if the PHA were to terminate their assistance other than by the normal expiration of their leases.²⁵ In contrast to the rights currently afforded tenants, if HUD were to take adverse action against a PHA, the NAHRO bill would grant the PHA the right to a specific notice of the grounds and a hearing in its own state, with a right to judicial review in federal court.²⁶

Leases and good cause for eviction

On leases, NAHRO's bill would explicitly ban HUD from regulating the provisions of a PHA's lease, would allow the PHA to decide what the lease terms and conditions would be, and would permit month-to-month leases without requiring that the PHA have good cause when refusing to renew.²⁷ The bill would repeal tenants' other statutory rights regarding leases,²⁸ including the ban on unreasonable lease terms, the PHA's duty to maintain the project in decent condition, the right to 14 days' notice in nonpayment eviction cases and 30 days' notice in others, and the right to discovery of documents during any judicial eviction proceedings.

Demolitions and Sales

NAHRO's bill would radically change the current rules on demolitions and sales. The requirement that a PHA secure HUD approval before demolishing or selling a project would be repealed, as would the PHA's duty to notify affected tenants and tenant organizations and consider their views. The PHA's current obligation to give tenants an opportunity to purchase the building would likewise be repealed; so would the requirement that units in any building demolished or sold be replaced on a one-for-one basis. The standard for demolition would remain unchanged: the building would have to be obsolete and returning it to useful life would have to be infeasible. Similarly, the standard for selling a project would remain the same, but, under the NAHRO proposal, there would be no HUD review. Tenants would be given relocation rights, but not the right to housing of their choice, as the law presently requires.²⁹

Troubled PHAs

NAHRO does propose new authority for HUD to deal with troubled PHAs but, not surprisingly, it is not as aggressive as that proposed by HUD. Under HUD's bill, the Department would be required to declare each troubled PHA to be in breach of its Annual Contributions Contract if, after one year's notice, the PHA had not demonstrated improvement satisfactory to HUD. At that time, HUD would have to take direct control of the PHA or appoint another entity to do so.³⁰

In contrast, NAHRO's bill would create two categories of troubled PHAs: "distressed" PHAs and "endangered" ones. Distressed PHAs would be ones that are about to fail or have failed to comply with the NAHRO's rewritten version of the United States Housing Act or their own local performance standards. Those PHAs would get technical assistance and would have to prepare a plan for corrective action and file reports with HUD. Endangered PHAs are ones that have been distressed for more than four years or are insolvent or guilty of gross mismanagement. HUD would have to either take over endangered PHAs or petition the federal court for a receiver for them.³¹

Consolidated Funding

Unlike HUD's bill, NAHRO's would not convert federal funding for public housing into tenant-based assistance. NAHRO's bill would retain guaranteed federal funding for PHAs by consolidating into a single fund monies that are now authorized for modernization and operating subsidies.³² The PHAs would have maximum flexibility in deciding how to use the funds. They could be used for operation, modernization or new development. They would eventually be allocated among PHAs in accordance with a formula to be enacted by Congress on the basis of recommendations from HUD and a newly constituted Public Housing Grant Allocations Committee.

Private Rights of Action

As the final blow, NAHRO's bill would expressly deny tenants and applicants any private right of action to enforce any provisions of the law.³³ The language of the bill expressly states that the United States Housing Act does not confer on any person or organization a right of action in any court to enforce any of the Act's provisions. HUD and the PHAs alone would have such rights to sue. Tenants and applicants would even be barred from enforcing contracts between HUD and the PHAs as third-party beneficiaries.

With this bill, as the discussion above should have revealed, the PHAs who belong to NAHRO are seeking almost unlimited authority over the housing they operate, despite the fact that the federal government and the tenants, not the PHAs, have paid for it and the fact that the housing was developed and subsidized for the benefit of the tenants, not the PHAs. PHAs would get nearly complete immunity from federal control. They would deny tenants nearly all their rights, except those few granted by the federal Constitution. These PHAs are jumping on the twin bandwagons of deregulation and devolution of power to state and local governments to pursue their own agenda. It is a long time since we have witnessed such a naked grab for far-reaching power by a governmental entity in America.

1. NAHRO, Public Housing Reform Act of 1995 (May 1995). The citations below to NAHRO's bill refer to sections of this proposed legislation.
2. HUD, The American Community Partnerships Act (May 1995). See HUD's 1995 Bill: The American Community Partnerships Act — A Summary of the Public Housing Provisions, elsewhere in this issue.
3. NAHRO, No Longer Business as Usual: "At a Glance" (Mar. 1995); NAHRO, No Longer Business As Usual: "Detailed Analysis" (Mar. 1995).
4. Section 4 of the Public Housing Reform Act, revising Sections 2, 3, 6, 7, 9, 12, 18 and 21 and repealing Sections 5(h), (i) and (j), 13, 14, 16, 20, 22, 23 and 25 of the United States Housing Act of 1937, 42 U.S.C.A. §§ 1437, 1437a, 1437b, 1437c, 1437d, 1437e, 1437g, 1437j, 1437k, 1437l, 1437n, 1437p, 1437r, 1437s, 1437t, 1437u and 1437w, respectively (West 1994).
5. Id. § 1437n.
6. Section 3(a)(1) and (b)(17) of the United States Housing Act, as rewritten by Section 4(b) of the Public Housing Reform Act.
7. Revised Section 3(a)(1) of the United States Housing Act, as rewritten by Section 4(b) of the Public Housing Reform Act.
8. HUD, American Community Partnerships Act, supra note 2, § 202, adding § 442 to the United States Housing Act.
9. Section 6(a)(10)(A) of the United States Housing Act, as rewritten by Section 4(e) of the Public Housing Reform Act.
10. See, e.g., Fletcher v. Housing Auth. of Louisville, 491 F.2d 793 (6th Cir. 1974), vacated and remanded, 419 U.S. 812 (1974), reinstated upon remand, 525 F.2d 532 (6th Cir. 1975).
11. 42 U.S.C.A. § 1437n(c) (West 1994).
12. Section 4(l) of the Public Housing Reform Act, which would repeal Section 16 of the United States Housing Act.
13. 42 U.S.C.A. § 1437d(c)(4)(A) (West 1994).
14. The Public Housing Reform Act, § 4(e), rewriting Section 6 of the United States Housing Act.
15. Section 6(a)(2) of the United States Housing Act, as rewritten by Section 4(e) of the Public Housing Reform Act.
16. HUD, The American Community Partnerships Act, supra note 2, § 202, adding § 444(b) to the United States Housing Act.
17. 42 U.S.C.A. § 1437a (West 1994).
18. Section 6(k)(1) of the United States Housing Act, as rewritten by Section 4(e) of the Public Housing Reform Act.
19. Id.
20. Section 3(b)(10) of the United States Housing Act, as rewritten by Section 4(b) the Public Housing Reform Act.
21. HUD, The American Community Partnerships Act, supra note 2, § 205.
22. Section 4(o) of the Public Housing Reform Act, repealing Section 20 of the United States Housing Act, 42 U.S.C.A. § 1437r (West 1994).
23. Section 3(c)(2)(D) of the United States Housing Act, as rewritten by Section 4(b) of the Public Housing Reform Act.
24. 42 U.S.C.A. § 1437d(k) (West 1994).
25. Section 6(k)(3) of the United States Housing Act, as rewritten by Section 4(e) of the Public Housing Reform Act.
26. Section 6(j)(3)&(5) of the United States Housing Act, as rewritten by Section 4(e) of the Public Housing Reform Act.
27. Section 6(k)(2) of the United States Housing Act, as rewritten by Section 4(e) of the Public Housing Reform Act.
28. 42 U.S.C.A. § 1437d(l) (West 1994).
29. Section 18 of the United States Housing Act, as rewritten by Section 4(n) of the Public Housing Reform Act. Compare 42 U.S.C.A. § 1437p (West 1994).
30. HUD, American Community Partnerships Act, supra note 2, § 202, adding § 424(c)(3) to the United States Housing Act.
31. Section 6(j) of the United States Housing Act, as rewritten by Section 4(e) of the Public Housing Reform Act.
32. Section 9 of the United States Housing Act, as rewritten by Section 4(g) of the Public Housing Reform Act.
33. Section 25 of the United States Housing Act, as rewritten by Section 4(s) of the Public Housing Reform Act.