Small PHA Legislation Introduced to Address Administrative Burdens

On March 21, Representatives Steven Palazzo (R-Miss.), Sanford Bishop (D-Ga.), and Brad Ashford (D-Neb.) introduced the Small Public Housing Agency Opportunity Act of 2016 (H.R. 4816) to address the administrative burdens facing small and rural housing authorities across the country.

H.R. 4816 would simplify inspection and compliance requirements as well as eliminate excessive paperwork for public housing authorities (PHAs) supporting fewer than 550 households. Specifically, the bill limits HUD inspections of housing and voucher units to once every three years, unless the small PHA is classified “troubled” by HUD. It also eliminates certain paperwork, including the submission of reports not required of owners and operators of Section 8 private properties, as well as unnecessary environmental reviews for agencies not undergoing new construction. H.R. 4816 is the House companion bill to S.2292, introduced by U.S. Senators Deb Fischer (R-Neb.) and Jon Tester (D-Mont.).

The bill would also allow for:

• Up to 50 percent of the PHA’s voucher allocation to be project-based, up from 20 percent;
• Public housing operating funds, public housing capital funds, and voucher funds to be combined and used for any activity eligible under the public housing or voucher programs as long as the PHA assists the same number of households as in the previous year and maintains a comparable mix of families by family size; and
• The minimum rent, now $50, to increase annually for PHA residents based on the percentage increase in the Consumer Price Index for all urban consumers for the year.

The bill also includes a rent reform demonstration in which up to 20 percent of small PHAs may be selected by HUD to choose one of the following methods for establishing a household’s rent contribution for a public housing unit:

Tiered rent system. An initial rent is set and adjusted annually based on changes in area median incomes (AMI). There would be four initial rent tiers:

• For extremely low-income households, a fixed amount equal to 30 percent of 10 percent of AMI.
• For very low-income households, an amount equal to 30 percent of 30 percent of AMI.
• For low-income households, an amount equal to 30 percent of 50 percent of AMI.
• Households whose income exceeds 80 percent of AMI must pay rent equal to the higher of 30 percent of 80 percent of AMI or the market rent.

Gross income-based rents. An initial rent is set at an amount between 26 percent and 28 percent of a household’s income, adjusted annually based on factors selected by the PHA. PHAs are allowed to set a minimum rent.

Existing rent mechanisms. A PHA may use any of the above mechanisms in conjunction with the mechanism currently in the law.