On March 1, NAHRO submitted comments on HUD’s Advanced Notice of Proposed Rulemaking entitled “Strengthening Oversight of Over-Income Tenancy in Public Housing” (FR-5904-A-01). Comments are due to HUD by Friday, March 4 at midnight. NAHRO’s comment letter discussed the costs and benefits of a proposed rule limiting tenancy on over-income residents, the potential negative financial implications this limitation would have on PHAs, the importance of PHA discretion, and potential thresholds for HUD to consider if they move forward with a proposed rule. NAHRO’s letter stressed that although an unmet need for housing assistance certainly exists, there are legitimate and appropriate reasons for housing authorities to continue serving these families. Examples of the “egregious abuses” highlighted in HUD’s Office of the Inspector General (OIG) report that acted as the genesis for HUD’s ANPR are rare.

Currently, there is no statute or regulation that prohibits over-income families from continuing to reside in public housing. HUD’s regulations give PHAs the discretion to develop policies that meet the needs of their communities. There are myriad reasons why over-income tenants remain in public housing. The vast majority of over-income families earn just over the income eligibility limit and are still progressing toward economic stability. NAHRO is concerned that overly stringent policies regarding over-income tenancies would dis-incentivize low-income families in public housing from striving toward self-sufficiency.

Furthermore, overly-stringent policies limiting over-income tenancies in public housing would have adverse financial implications to the management and operation of those properties. Stable tenancies reduce the costs of identifying and certifying new households, as well as the costs of preparing the new units for new occupants. Lower costs associated with continuing to house higher-income households allow PHAs to focus additional resources on lower-income tenants, as many over-income families pay a rent determined by the market value of their property and do not actually receive a subsidy. These higher rents can further help offset the costs of housing lower-income families and reduce the cost of operating public housing. Currently, the Operating Fund is prorated at 84 percent of full eligibility, and the Capital Fund is funded at only half of its annual rate of accrual. Increased income and improved economic standing are testament to the positive impact public housing has on families in need, and NAHRO cautions against any overly-stringent policy that limits over-income tenancies without regard to these important considerations.

NAHRO’s comment letter also stresses the importance of PHA discretion regarding over-income tenants. It is important that any regulation limiting tenancies of over-income residents provides flexibility to address the diversity that exists amongst different PHAs. PHAs range dramatically in size, location, property type and resident population, and it is necessary to take these differences into account. Certain markets, especially in larger cities, have insufficient stock of appropriate and affordable housing in the private market.

Comments for HUD’s ANPR are due by March 4 at midnight.

NAHRO’s comment letter can be found here.

Questions? Contact Eric Oberdorfer at eoberdorfer@nahro.org.

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