National Housing Law Project Housing Law Bulletin

New Welfare Law’s Effect on Immigrants and Their Housing

In summary, the bill would:

• Make ineligible for most federal, state and local housing assistance programs immigrants who are not permanent residents or who have not been admitted as refugees or granted asylum or had their deportation with- held (unqualified immigrants), unless they are already receiving assistance;
• Possibly make new qualified immigrants ineligible for most federal housing assistance for the first five years after they come to this country;
• Make many qualified immigrants ineligible for housing assistance even after the five years are up, by requiring their sponsors' income to be included when calculating eligibility for housing;
• Require housing providers to verify applicants' and tenants' eligibility and require HUD and PHAs, but not others, to report to INS the name, address and other identification of people they know are residing in the country unlawfully; and
• Extend to Rural Housing Services (RHS, formerly the Farmers Home Administration) housing programs the provisions of current federal law that make some undocumented people ineligible for some of HUD's programs.

In addition, and possibly of wider impact, the welfare bill will also make undocumented immigrants and many legal immigrants ineligible for Supplemental Security Income (SSI) and food stamps and, at the state's option, for most welfare programs. Even if they retain their eligibility for housing assistance, immigrants who lose all or part of their income and food stamps will have severe problems relating to housing.

Unqualified Immigrants

The new law first separates out unqualified immigrants from qualified immigrants.² Immigrants are deemed unqualified unless they have:

1. Been lawfully admitted for permanent residence;
2. Been granted asylum;
3. Been admitted as a refugee;
4. Been paroled into the United States for at least one year;
5. Had their deportation withheld; or
6. Been granted conditional entry prior to April 1, 1980.³

Immigrants who do not fit into one of those six categories are not eligible for admission to federal public and assisted housing. These categories of ineligible undocumented people are virtually the same as the categories of people made ineligible for HUD's Section 8, Section 236, Section 235 and public housing programs by Section 214 of the 1980 Housing Act.⁴ That ineligibility section was first implemented in June 1995.⁵

Grandfathering. One large exception to the welfare bill's provisions making these unqualified immigrants ineligible for the federal housing programs covers people who are already receiving housing assistance from HUD's programs or from the Rural Housing Service, formerly the Farmers Home Administration.⁶ Undocumented people who are already receiving such assistance may fall into several categories. First there will be participants in programs such as HUD's Section 221(d)(3) program which were not covered by Section 214. Second, there will be undocumented members of mixed families, i.e., families in which some members are undocumented but others are eligible, who were receiving HUD assistance when the regulations became effective (June 19, 1995), and whose assistance was continued. Finally, there will be other undocumented people who were not qualified for continued assistance but whose termination of assistance has been deferred under the HUD regulations. For these reasons, or any others, people who are receiving HUD or RHS assistance on the date of enactment will continue to be eligible for that assistance despite the changes in the welfare bill.

Disaster relief. Under the welfare bill, unqualified immigrants will also be eligible for disaster relief, as long as it is short-term and in-kind, non-cash assistance.⁷ They would be allowed to stay in the shelters and tents set up for short-term relief, but they probably would not qualify for Section 8 certificates or vouchers. On the other hand, if 18 month-vouchers like the ones used for the 1994 Los Angeles earthquake were considered "short-term," they would fit within the welfare bill's exception for "short-term, non-cash, in-kind emergency disaster relief."⁸

Homelessness programs. Unqualified immigrants would also not be excluded from programs that provide services such as soup kitchens and short-term shelter. Those programs must be approved by the Attorney General, must deliver in-kind services through public agencies and nonprofits, must not be means-tested, and must be necessary for the protection of life or safety.⁹ This exception seems aimed, at least in part, at some of the programs that provide assistance to people who are homeless; but programs that provide long-term solutions to homelessness will not qualify for this exception, at least not if they are means-tested.

Verification and reporting. Providers of housing assistance for which unqualified immigrants are ineligible are required to verify all applicants' eligibility for that assistance. The Attorney General is granted 18 months to issue regulations requiring that verification. States that administer providing federal public and assisted housing are given two years after issuance of the federal regulations to put a verification system into effect.¹⁰ It is not clear how this verification system and its implementation dates will be coordinated with the verification system HUD already has operating for Section 214 of the 1980 Act, nor is it clear how any inconsistencies between the two systems may be resolved. For example, under Section 214, any applicant or participant who chooses not to contend that he or she is an eligible alien and could thus avoid verification of his or her status with the INS. If the person does not claim eligibility, he or she is treated as not having the eligible status. Whether the same will be true under the welfare bill is unclear. Section 214 also includes hearing rights relating to verification, but they are not made explicit for the welfare bill disqualifications. Most likely the present housing verification system, with all its rules, will continue in place.

If HUD or a PHA learns that someone is unlawfully in the country, it is required to report that person's name, address and other identifying characteristics to the INS at least quarterly, and more often if requested by the INS.¹¹ This provision does not explicitly cover nonprofit and private, for-profit housing providers, even if they receive assistance from HUD, nor does it cover PHAs that do not participate in the public housing or Section 8 programs such as, for example, any PHAs that have only RHS-assisted housing. In addition, there will rarely be cases where HUD or a PHA "knows" that someone is in the country unlawfully merely from the documents and verifications HUD or a PHA has received under Section 214 of the 1980 Act or under this new welfare bill. All HUD or the PHA will know is that the person did not fit into one of the six immigration categories that are considered eligible for housing assistance. They will not know whether the person is lawfully in the country under some other provision of the immigration law and thus will have no duty to report.

State and local programs. Unqualified immigrants are also disqualified from non-federally funded, state and local housing assistance programs.¹² This disqualification does not apply to unqualified immigrants whose parole into the country is for less than one year. Nor does it apply to the types of disaster relief and homelessness assistance programs excluded from the list of federal programs from which unqualified aliens are disqualified. However, there is no exception to this disqualification for people who are already receiving state or local housing assistance when the welfare bill is enacted. The only way a state may override this disqualification is to pass a law after the welfare bill was enacted that affirmatively makes unqualified immigrants eligible for the state or local programs. Possibly regulations issued by a state agency or an executive order issued by a governor would qualify as such a law, even if the state legislature does not pass a statute. There are also questions about whether this restraint on state power is constitutional.

Section 214. At the same time that the welfare bill makes unqualified immigrants ineligible for federal public and assisted housing, it also would amend Section 214 of the 1980 Housing Act.¹³ Those amendments would add several more housing programs to the ones from which undocumented people are excluded. One is HUD's National Homeowner-ship Trust Demonstration that was enacted in 1990 under the sponsorship of Representative Henry Gonzalez. The others are all administered by RHS in rural areas. They include the Section 502 homeownership program, the Section 504 program of loans and grants for home repairs, the interest credit program that is used both with Section 502 home loans and Section 515 rental housing, the program that provides rental assistance to public agencies and nonprofits that are preserving Section 515 projects, and the rural voucher program. These changes may not be too significant, because RHS has already limited the Section 502 and 504 programs to citizens and permanent residents.

Qualified Immigrants Here Less Than Five Years

The bill may also make some otherwise qualified immigrants ineligible for public and assisted housing for the first five years after they lawfully enter the country.¹⁴ Qualified immigrants are people who fit into one of the six immigration categories described above. The disqualification applies only to people who enter the country after the welfare law was enacted. Thus qualified immigrants who are already here and either already receive housing assistance or subsequently apply for it will not be made ineligible by this provision. Nor will new qualified immigrants be made ineligible during the five-year waiting period for either the disaster assistance or the short-term assistance for homeless people described above for which unqualified immigrants are eligible.

Exceptions. This five-year waiting period also does not apply to people admitted as refugees or granted asylum or whose deportation is being withheld or to veterans, people on active duty or their spouses and children. Obviously it would make no sense to impose a waiting period on a refugee or someone who has been granted asylum, since they had little choice but to emigrate. Similarly, it would seem ungrateful to deny assistance to veterans and people on active duty and their families.

It is also quite possible that the five-year waiting period will not apply to any federal housing assistance program. The bill imposes the five-year waiting period on "federal means tested public benefits." The bill has no definition of that term, because the definition that the bill originally contained violated a Senate rule, known as the Byrd rule. For somewhat technical reasons, it is possible that housing assistance may not be interpreted to be a federal means-tested public benefit. If it is so interpreted, qualified aliens will not have to wait five years to be eligible for the federal housing programs.

State and local programs. States and local governments are authorized, but not required, to observe a five-year waiting period for qualified immigrants who want to participate in state or local housing assistance programs.¹⁵ As with the federal programs, the state and local programs cannot make refugees, people granted asylum, veterans, or people on active duty and their families wait five years. States and local governments, however, may also establish other eligibility requirements for their housing programs that would altogether disqualify legal immigrants, other than refugees, veterans, their families and people with 40 quarters of employment in this country.

Deeming Sponsors' Income to Be the Immigrant's Income

Even after the five-year waiting period is over, qualified immigrants may still not qualify for public or assisted housing if they entered the country with the support of a sponsor whose income is high enough to meet the person's housing costs. This may result because of a provision that requires that the income of people who sponsored the immigrant be counted along with the immigrant's income in determining the immigrant's eligibility and level of assistance.¹⁶ This deeming requirement does not apply to immigrants who entered the country before the welfare bill was enacted, nor does it apply to immigrants who have 40 quarters of employment that qualify them for Social Security coverage.

For the most part, this provision will not have a widespread immediate impact. Most of the people who eventually will be affected will be those who are not eligible during the first five years after enactment because of the five-year waiting period. One class of people exempt from this waiting period — refugees and asylees — will not be affected by deeming because they do not need sponsors to enter. The other class of people exempt from the five-year waiting period — sponsored immigrants who are United States military veterans or people on active duty and their families — are not likely to be in large enough numbers for anyone to apply the deeming requirement to them immediately.

Disqualification of Immigrants from the Income Programs

In addition, and possibly of wider impact, the welfare bill will also make undocumented immigrants and many legal immigrants ineligible for most welfare programs, SSI and food stamps. Even if they retain their eligibility for housing assistance, immigrants who lose part or all of their income and food stamps will have severe problems relating to housing.

From what are they disqualified? The provisions that make immigrants ineligible for the income and other benefit programs are the same ones that make them ineligible for housing assistance, with variations in the details. Unqualified immigrants, many of whom are in the country lawfully, are made ineligible for the new welfare program and for SSI, unemployment benefits, food stamps and other nutrition programs, and Medicaid and other health programs.¹⁷ No exception is made for unqualified immigrants who are already receiving assistance. Unqualified immigrants are also excluded from state-funded programs, unless the state passes a law after the welfare law's enactment, making them eligible.¹⁸

Legal immigrants, i.e., qualified immigrants, including those who are already here and receiving assistance, will be disqualified from SSI and food stamps unless they are refugees, asylees or veterans or are on active duty.¹⁹ People currently receiving SSI or food stamps will lose their benefits when their eligibility is redetermined in the first year after enactment. New qualified immigrants will also be barred from all other federal means-tested benefit programs for the first five years after they enter, unless they are refugees, asylees, veterans or people on active duty.²⁰ That will disqualify them from Medicaid and welfare during those five years. After the five-year waiting period, many will still be disqualified because their sponsors' incomes will be deemed to be theirs when eligibility is determined.²¹ In addition, states are given the option of disqualifying these immigrants from welfare and Medicaid even if they would be eligible under the deeming rules.²² That state option even includes disqualifying from welfare and Medicaid immigrants who are already here.²³ States are also authorized, as of January 1, 1997, to terminate legal immigrants from any state-funded programs.²⁴

Who is eligible for housing but ineligible for other assistance? There will be families participating in federal and state housing programs who will be directly affected by these disqualifications even though they retain their eligibility for housing assistance. Because there are no grandfathering clauses for most of the other assistance programs, people who retain eligibility for housing assistance because of grandfathering will lose income and other benefits because of the other disqualifications. Whenever states exercise their discretion to disqualify legal immigrants from their welfare and Medicaid programs, some recipients of housing assistance will lose welfare and Medicaid eligibility. If the five-year waiting period is not interpreted to apply to federal housing assistance, some new legal immigrants will be eligible for housing assistance, but not welfare or Medicaid. Because of the pro-ration of housing assistance, there will be some families in housing programs who will have less income to pay their rent because their undocumented family members have been terminated from other programs.

Rent reductions. This loss of income and other assistance by both qualified and unqualified immigrants will produce severe ramifications in their housing situations. They certainly will be less able to pay rent, both because they will have less cash income and some of that cash will be needed for other expenses, such as food and health care, that previously would have been covered by other benefit programs. Where households participate in housing programs in which rent is based upon income, the loss of cash income should mean a decrease in rent.²⁵ Even in cases where the housing programs have minimum rent requirements, there at least should be a rent decrease to the minimum rent level and possibly a three-month waiver of the minimum rent to afford a transition in hardship cases.²⁶ It is very important for housing providers and tenants advocates to be prepared to implement these rent decreases immediately.

When other non-cash benefits are lost, it will not be as easy to soften the blow somewhat with decreased rents. A loss of food stamps will not affect rent levels, because foodstamps are not counted when rent is calculated.²⁷ A loss of Medicaid may have some effect upon rent. Households headed by people who are elderly or who have disabilities are allowed to deduct medical expenses that exceed 3 percent of their incomes when their rents are calculated.²⁸ Medical expenses covered by Medicaid or other benefit programs may not be counted in calculating the deduction. People who lose Medicaid or other coverage will be able to include those medical expenses in their rent calculations and qualify for a rent decrease. Again, it will be important for housing providers and advocates to secure rent adjustments immediately once the other benefits change.

Avoiding evictions. In situations where tenants get into financial difficulties because of disqualification for other benefits, but rent decreases are not authorized or are insufficient to overcome the difficulty, housing providers must be understanding of these situations when collecting the rent. The Notice that HUD sent to PHAs and other HUD-assisted landlords describing ways to avoid evictions in minimum-rent hardship cases should be followed where immigrants have been disqualified from other benefit programs.²⁹

Disqualification of immigrants from income and other benefit programs may also have some impact on HUD's budget, as less rental income means that PHAs and Section 8 landlords draw more on their operating subsidies and housing assistance payments. In calculating the needs for Section 8 contract amendments and public housing operating subsidies, HUD must consider these additional needs and include them in its budget request to Congress.

1. Pub. L. No. 104-193, 110 Stat. 2105, 104th Cong., 2d Sess. (Aug. 22, 1996). Unless otherwise indicated, section citations refer to this newly enacted law. For a summary of the wider impact of this legislation on poor people in general and on the housing programs themselves, see New Welfare Law's Effect on Welfare Recipients and on Housing Programs and Their Recipients, elsewhere in this issue.
2. § 401.
3. § 431.
4. 42 U.S.C.A. § 1436a (West 1994) (cited hereafter as "Section 214").
5. 24 C.F.R. Part 5, Subpart E (1996).
6. § 401(b)(1)(E).
7. § 401(b)(1)(B).
8. Id.
9. § 401(b)(1)(D).
10. § 432.
11. § 404(d).
12. § 411.
13. § 441.
14. § 403.
15. § 412.
16. § 421.
17. § 401.
18. § 411.
19. § 402(a).
20. § 403.
21. § 421.
22. § 402(b).
23. Id.
24. § 412.
25. See, e.g., 42 U.S.C.A. § 1437a(a) (West 1994) (rent based on monthly income).
26. See Pub. L. No. 104-99, § 402, 110 Stat. 26, 40 (1996); § 229 of Section 101(e) of Pub. L. No. 104-134, 110 Stat. 1321 (1996).
27. See 24 C.F.R. § 813.106(c)(11) (1995).
28. See 24 C.F.R. § 813.102 (1995) (adjusted income).
29. See HUD Notice PIH 96-12, Managing the Minimum Rent Requirements (Mar. 21, 1996).