NMHC and NAA submitted comments to HUD today outlining suggested improvements to the Section 8 rental assistance program that would increase market-rate property owner participation, thereby creating more housing opportunities for lower income renters. The multifamily industry believes this program is of vital importance and is optimistic that the suggested regulatory and administrative fixes would increase its effectiveness.
As summarized in the letter to HUD, NMHC and NAA call for a in depth review of the following practices:
Improve Initial Lease-Up Procedure for Tenant-Based Vouchers: The requirements associated with initial lease-up are overly burdensome and often deter owner participation. Because the private-sector lease-up process can be completed virtually instantaneously, units are typical rented to unassisted residents within a couple of days. In contrast, the lease-up of Section 8 assisted residents can take months. This is often due to overly burdensome inspections and paperwork. Delays in lease-ups result in lost income, which – particularly for small property owners who rely on every penny to keep their small businesses afloat – can be the difference between a profitable and distressed property.
Allow Market Rate Rents and Allow for Transfers of Housing Assistance Payments Contracts for Project-Based Vouchers: Rent-setting practices for project-based vouchers are often opaque and confusing. Additionally, this practice is conducted by local public housing authorities (PHAs), which means that there is often variance in administration. The “rent-reasonableness” calculation can be quite subjective and results in uncertainty for potential property owners. NMHC and NAA suggest that PHAs be given more flexibility in rent-setting to align practices more closely with the private market. This will increase the ability of PHAs to preserve housing options for low-income households in areas of opportunity.
Simplify Funding and Transfer Procedures for Project-Based Rental Assistance (PBRA): PBRA is one of the country's most powerful tools for preserving and expanding housing opportunities for low-income households. Unfortunately, except for the conversion of public housing assistance under the Rental Assistance Demonstration (RAD), there is no new PBRA assistance. Therefore, the continuation of PBRA is dependent on HUD's ability to renew and transfer existing PBRA contracts to new owners and potentially to new project sites. Transfers of PBRA assistance face two main problems: the transfer process is administratively cumbersome and initial payments are often delayed because of administrative difficulties. NMHC and NAA make a number of recommendations that would make the transfer and funding process more transparent and standardized to help preserve this powerful tool.
Reduce Regulatory Burdens While Being Mindful of Legitimate Business Practices: Aside from the specific practices called out above, NMHC and NAA also urge HUD to more intentionally take into account the legitimate business practices of private property owners and reduce regulatory burdens across all the programs. The HUD-documented additional costs related to Section 8 compliance and the uncertainty related to voucher program administration are important considerations for property owners and should be acknowledged as the Department considers reforms and improvements to the programs.
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