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From: Todd Espinosa
email: mailto:tespinosa@nhlp.org
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date: 11/26/0 19:06
Date: 12/21/00
Time: 1:08:56 PM
Remote Name: 207.251.188.199
November 16, 2000
Rules Docket Clerk Office of General Counsel Room 10276 U.S. Department of Housing and Urban Development 451 Seventh Street, S.W. Washington, DC 20410
Re: Docket No. FR 4606-I-01: Fair Market Rents: Increased Fair Market Rents and Higher Payment Standards for Certain Areas; Interim Rule
To the Rules Docket Clerk:
These comments are submitted by the Loose Association of Legal Services Housing Attorneys and Clients (LALSHAC), a coalition of over one hundred legal services organizations from across the country formed in 1977 to further the housing interests of the nation's low-income families. One of the activities of LALSHAC has been to prepare comments on regulations proposed by HUD for its housing programs.
In presenting comments, LALSHAC is able to draw upon years of experience its members have had dealing with the problems that arise in the day-to-day operation of the housing programs regulated or funded by HUD. The individual members who helped prepare these comments are listed at the end of this document.
Summary
We commend HUD for its new commitment to help "low-income families keep pace with America's booming economy" embodied in its Fair Market Rent Initiative and interim regulations. P.R. No. 00-223 (Sept. 12, 2000). LALSHAC members in jurisdictions across the country have continually encountered the problems the Fair Market Rent Initiative is intended to address: families finally being issued a Section 8 voucher after months or years on waiting lists and only being able to use their vouchers in very few neighborhoods or not being able to find housing of any kind.
In an effort to assist HUD in achieving the purposes of its Fair Market Rent Initiative, we have formulated a number of recommendations. Specifically, HUD should:
· Require public housing authorities to report voucher success rates and related information in annual plans to ensure full and effective implementation of the Fair Market Rent Initiative;
· Require all public housing authorities in 50th percentile fair market rent areas to report concentration data to remove any disincentives the regulations may inadvertently create thereby discouraging PHAs from making best use of these fair market rents in setting payment standards;
· Make use of updated census data and projections in the administration of the Fair Market Rent Initiative to reflect changes in local housing market conditions;
· Allow public housing authorities that have made demonstrable progress towards deconcentration of voucher families to continue to set 50th percentile payment standards in areas no longer eligible for housing opportunity fair market rents;
· Amend Fair Market Rent calculation criteria to include newly built units to achieve the stated purposes of the Fair Market Rent Initiative; and
· Identify and prevent the illegal discrimination that is another likely cause of low success rates and high voucher family concentration to comply with HUD's affirmative fair housing duties.
I. Require PHAs to Report Voucher Success Rates and Related Information in Annual Plans
The September 12, 2000 press release announcing HUD's new Fair Market Rent Initiative quotes a promise from Secretary Andrew Cuomo: "In communities where people are struggling to use their vouchers, we will step in and make it easier for renters to use the assistance we provide to find a place for their families to call home." P.R. No. 00-223.
Although HUD's action in implementing the Fair Market Rent Initiative is essential, under interim 24 C.F.R. § 982.503(e), PHAs are the ones to decide whether to pursue success rate payment standards. HUD's involvement is limited to approving or denying PHAs' requests for success rate /1 payment standard authorization. See id.
If success rate payment standards are to be initiated by local decision-making processes, we urge HUD to ensure that these are open and public processes. HUD should provide a means by which PHA partners, such as voucher families and their advocates, can readily obtain information necessary to participate in payment standard decision-making. Specifically, HUD should amend 24 C.F.R. § 903.7 to require PHAs to report monthly voucher success rates for the twelve-month period immediately prior to submission of their annual plans to HUD.
In addition, where a PHA's voucher success rate is below 75 percent for any of the twelve months prior to submission, the PHA should be required to describe in its annual plan those concrete steps it will take to improve its success rate, including increasing search time, increasing payment standards to 110 percent of the 40th percentile FMR, and requesting local HUD office authorization to set a "success rate payment standard" under interim § 982.503(e).
II. Require All Public Housing Authorities in 50th Percentile Fair Market Rent Areas to Report Concentration Data
Section 985.3(h) of the interim regulations limits the obligation to report deconcentration data in the Section 8 Management Assessment Program to public housing authorities that use payment standards in excess of 100 percent of FMRs set at the 50th percentile. Submission of this data by other PHAs in 50th percentile areas is optional.
HUD should require that all PHAs in 50th percentile FMR areas submit deconcentration data in the SEMAP reporting process. Deconcentration data is readily available to PHAs and important goals are served when this information is collected and reported. For example, deconcentration data is a very useful indicator in determining the efficacy of payment standard adjustments.
We are further concerned that drawing a distinction between PHAs setting payment standards above 100 percent of area FMR and those that decline to do so will discourage some PHAs from using higher payment standards when higher standards are needed by voucher families. Requiring all PHAs in 50th percentile FMR areas to report deconcentration data removes any disincentives to adopting higher payment standards.
III. Make Use of Updated Census Data and Projections in the Administration of the Fair Market Rent Initiative
Local housing market conditions have shown a potential to be highly dynamic even over short periods of time. For example, HUD's September 12, 2000 press release states that "[o]ver the past three years, rents have risen more than one-and-a-half times faster than inflation and twice as fast in some markets."
We recommend that HUD tailor the regulations for the Fair Market Rent Initiative more readily to take changes in local housing markets into account. In particular, we are concerned that HUD's procedures for identifying census tracts "accessible" to voucher households are limited to an analysis of decennial census data. See 65 Fed. Reg. 58870, 58871. Because experience has shown how much housing affordability can change over relatively short periods of time, much less over a decade, we recommend that HUD make use of updated census data and projections in identifying voucher-accessible census tracts.
IV. Allow Public Housing Authorities that Have Made Demonstrable Progress Towards Deconcentration of Voucher Families to Continue to Set 50th Percentile Payment Standards in Areas No Longer Eligible for Housing Opportunity Fair Market Rents
Under the interim regulations, 50th percentile FMRs will be set by area for an initial period of three years. At the end of this period, the area will be evaluated for reduction of the concentration of voucher households with eligibility for 50th percentile FMRs continuing only if voucher household concentration has been reduced. If concentrations have not been reduced, the area will be ineligible for 50th percentile FMRs for the following three years.
HUD notes that some PHAs may operate in more than one FMR area. However, many metropolitan PHAs operate in one FMR area along with one or several other PHAs. In some cases, a metropolitan area could include many smaller PHAs, with a relatively small number of voucher holders, operating together with one or more large PHAs, administering a greater number of vouchers relative to the smaller PHAs. /2 If HUD measures deconcentration in terms of the geographic distribution of voucher holders "in the FMR area," smaller PHAs that have made substantial progress towards expanding mobility for their voucher families could be unfairly penalized because of the lack of progress made by larger PHA administering vouchers in the same FMR area. 65 Fed. Reg. 58870, 58874.
Forcing small PHAs that have made good use of 50th percentile FMRs to reduce their payment standards in such a situation would be especially counterproductive. Payment standard reductions would be expected to erase the progress these PHAs have made towards deconcentration of voucher households.
HUD has taken steps to address these problems in the interim regulations, but we are concerned about the extent to which they will actually preserve deconcentration progress made by PHAs. First, under § 888.113(c)(2)(iv) of the interim regulations, PHAs in areas no longer designated for housing opportunity FMRs can become eligible for success rate payment standards. However, this is not a sufficient solution. Under interim § 982.503(e), eligibility for success rate payment standards would occur only after a period of at least six months and a serious disruption of families' voucher utilization rates, a disruption that likely would have been avoidable in the first place by maintaining 50th percentile FMRs.
Second, Hud has provided in interim § 982.503(f) that PHAs in areas no that no longer qualify for 50th percentile FMRs may qualify for "payment standard protection" if these PHAs have "scored the maximum number of points on the deconcentration bonus indicator in § 985.3(h) in the prior year, or in two of the past three years." We are concerned because the standards set forth in 24 C.F.R. § 985.3(h)(1)(i)-(iii) (2000) deal not with the geographic concentration of voucher households, but with the numbers of voucher households residing in "low poverty census tracts."
While we recognize the potential opportunities low poverty areas offer voucher families, the 50th percentile FMR policy has not specifically been designed to address the poverty levels of the census tracts in which voucher families reside. Neither the interim regulations nor the comments in the official summary draw a conclusive link between the geographic concentrations of voucher holders and the levels of poverty in which voucher holders reside. We are therefore concerned that PHAs that have made progress towards deconcentration of voucher households, but have not met the additional "low poverty" requirements of § 985.3(h), will have their payment standards lowered with a resulting reconcentration of voucher families.
For these reasons, we urge HUD to provide another means by which PHAs in areas that no longer qualify for housing opportunity FMRs can show that they have made meaningful progress towards reducing voucher household concentration and thereby continue to be eligible to set payment standards based on 50th percentile FMRs. Where area-wide deconcentration benchmarks have not been achieved, PHAs should be given an opportunity to point to measures they undertook during the three year period to provide voucher households with expanded housing choices. These measures should be objective and identifiable. They could include: steps taken in response to recommendations made in local analyses of impediments to fair housing, activities which affirmatively furthered fair housing, and steps taken and actual progress made towards expand housing opportunities as described in Section 8 Management Assessment reports pursuant to 24 C.F.R. §985.3(g) (2000).
V. Amend FMR Calculation Criteria to Include Newly Built to Voucher Families
The official summary of the interim Fair Market Rents regulations states that the "policy is designed to ensure that families with housing vouchers have access to at least half of all available units in … areas" designated for 50th percentile FMR increases. 65 Fed. Reg. 58870 (Oct. 2, 2000). We applaud and fully support HUD's intentions to expand voucher families' access to housing.
However, we point out that under HUD's current methods for calculating FMRs, voucher families will essentially never have access to at least half of "all available" units in any area. This is because FMR calculation methods exclude rents for "newly built units." 24 C.F.R. § 888.113(a) (2000). Public housing units and substandard units are also excluded under this regulation. See id.
For purposes of the Housing Choice Voucher Program, the exclusion of public housing units and substandard units from FMR calculations is completely appropriate. These units are not "available" to voucher families since families may not use vouchers to lease public housing units or units that fail to comply with Housing Quality Standards. The same is not true of newly built units.
There is nothing in the Section 8 voucher regulations that restricts families' ability to use their vouchers in newly built units. Excluding newly built units from FMR calculations all but ensures that FMRs will not accurately reflect the rents of units in the housing markets in which families attempt to use their vouchers. The newly built unit exclusion therefore ensures that no 40th percentile FMR or 50th percentile FMR ever provides voucher families with actual access to 40 or 50 percent of the available units when any of the available units are new units.
We recommend that HUD amend its FMR calculation criteria, for both 40th and 50th percentile FMRs, to include newly built units. This would ensure that FMRs actually reflect the units available to voucher families. It is also necessary if HUD's new FMR policy is to achieve its intended purpose of providing voucher families with access to half the available units in their local housing markets.
Further, based on the expansive statements included in the official summary of the interim regulations, we are concerned that the fact that newly built units are from HUD's current FMR calculation procedures may have been overlooked. Consequently, we are concerned that HUD may have overstated its estimate that "[t]he new policy will increase the pool of apartments affordable to families receiving federal housing vouchers by 25% or more than 1.4 million units nationwide." P.R. No. 00-23.
VI. Identify and Prevent the Illegal Discrimination that Is Another Likely Cause of Low Success Rates and High Voucher Family Concentration
According to Multifamily Tenant Characteristics System data, 42 percent of voucher households nationally are headed by African Americans and 16 percent are headed by Latinos. While we await the results of HUD's most recent decennial national housing discrimination study, we know that according to the 1989 study, African Americans and Latinos encounter discrimination fifty percent of the time when trying to rent or buy a home. See JOHN YINGER, Access Denied, Access Constrained: Results and Implications of the 1989 Housing Discrimination Study, in CLEAR AND CONVINCING EVIDENCE: MEASUREMENT OF DISCRIMINATION IN AMERICA (MICHAEL FOX AND RAYMOND STRUYK, EDS.) (1993).
In other words, approximately half of the households in HUD's largest and most rapidly expanding housing program can expect to encounter illegal discrimination at least half of the time. In fact, commentators have argued that voucher families are particularly vulnerable to illegal discrimination, with "Section 8 discrimination" serving as a convenient proxy for discrimination on other bases. See Paula Beck, Fighting Section 8 Discrimination: The Fair Housing Act's New Frontier, 31 Harv. C.R.-C.L. L. Rev. 155 (1996). See also Stacie Young, Proxy for Discrimination: Vouchers in the Section 8 Housing Program, 2 Chicago Policy Review 47 (1998).
Despite all of this, HUD makes absolutely no reference to fair housing violations or illegal discrimination in its interim regulations, press release, and related materials. In acknowledging that voucher utilization problems may have causes apart from FMR levels, HUD mentions only "family choice" as one of these possible causes, conspicuously omitting illegal discrimination. See 65 Fed. Reg. at 58871.
We urge greater attentiveness to the role of illegal discrimination in high voucher concentration and low success rates. We are certain that HUD is well aware of its duties to affirmatively further fair housing under the Fair Housing Act. See 42 U.S.C. § 3608(e)(5) (West 2000). We also remind HUD that it is under a further and more specific obligation "to take all action necessary and appropriate to prevent discrimination because of race, color, religion (creed), sex, disability, familial status or national origin" pursuant to Executive Order 11063, § 101 (1962).
As a first step towards fulfilling its affirmative fair housing duties and towards enabling all voucher families real access to the thousands of new homes the Fair Market Rent Initiative promises to make available, we urge HUD clearly and unequivocally to acknowledge the barriers posed by illegal discrimination to the successful operation of the Section 8 voucher program and to assess the extent of illegal discrimination in the voucher program. In particular, we recommend that HUD make funding available through its Fair Housing Initiatives Program specifically to investigate illegal, and potentially hidden, discrimination against voucher families on an individual basis and on a regional or national basis through audit testing. HUD should build on the analysis it has already done and begin by focusing efforts on the 39 areas of high voucher family concentration it identified in its September 12, 2000 press release.
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/1 As described in interim § 985.503(p)(3)(i), a PHA's voucher success rate is the percentage of the families to whom the PHA has issued vouchers who have secured housing with their vouchers over a period of time. /2 A state-wide PHA administering a relatively small number of vouchers in an FMR area also served by one or more large PHAs could find itself in a similar position.