HUD Proposes Comprehensive Changes to HOME Rules

person A.J. Johnson today 05/19/2024

On May 15, 2024, HUD published a preview of a Notice of Proposed Rulemaking proposing significant changes to the HOME Program. The proposed rule is expected to be published in the Federal Register before June, and public comments are due no later than 60 days after that publication.

The proposed rule would make changes in many areas:

  1. Community Housing Development Organization (CHDO) Requirements: Major revisions to CHDO requirements are proposed to streamline processes and improve efficiency.
  2. HOME Rents Approach: A new methodology for setting HOME rents is being introduced to better align with current housing market conditions.
  3. Small-Scale Rental Projects: Requirements for small-scale rental projects will be simplified, making it easier for developers to comply.
  4. HOME Tenant-Based Rental Assistance (TBRA) Programs: The proposed changes will provide greater flexibility in TBRA programs, allowing for more effective tenant support.
  5. Community Land Trusts (CLTs): New flexibilities and simplified provisions are being proposed to encourage their use and effectiveness.
  6. Tenant Protections: The rule would significantly strengthen tenant protections by mandating a HOME tenancy addendum with a uniform set of protections to be included in leases of all HOME-assisted rental housing units. For tenants receiving TBRA, a streamlined set of protections will be required.
  7. Advanced Property Standards: HUD proposes incentives for meeting higher property standards incorporating green building practices, enhanced energy efficiency, and innovative construction techniques for new construction, reconstruction, and rehabilitation projects.
  8. Homeownership Housing Resale Requirements: Clarifications to resale requirements for homeownership housing are included to ensure transparency and consistency.
  9. Technical Amendments and Simplifications: The proposed rule will make technical amendments and simplifications to align with the changes introduced in the 2013 HOME Final Rule.

These proposed changes are part of a broader effort to modernize and improve the HOME program, incorporating updates from the Housing Opportunity Through Modernization Act of 2016 (HOTMA), the Economic Growth Regulatory Relief and Consumer Protection Act, and the National Standards for the Physical Inspection of Real Estate (NSPIRE) Final Rule.

Additionally, the rule updates citations to align with recent changes to the Office of Management and Budget (OMB) regulations at 2 CFR part 200. HUD plans to publish further rulemaking to ensure consistency across all regulations. The proposed changes are detailed in the Proposed Regulation, with further revisions anticipated following the implementation of the HOTMA and NSPIRE Final Rules.

While all the proposed changes are important, I will publish a series of articles in the weeks ahead outlining the proposed changes in four specific areas: (1) HOME Rents, (2) Small Scale Rental Projects, (3) Tenant Protections, and (4) Advanced Property Standards.

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A. J. Johnson to Participate in 29th Annual Mid-Atlantic AHMA Fall Conference

A. J. Johnson will participate in the Mid-Atlantic Affordable Housing Management Association (AHMA) 29th Annual Fall Conference, which will take place in Richmond, VA, from November 19-21, 2024. This year's conference promises to be invaluable for professionals in the affordable housing industry, offering a comprehensive program that addresses both current challenges and future trends.  Highlights of the Conference: 1. HOTMA Implementation and Beyond While the Housing Opportunity Through Modernization Act (HOTMA) remains a focal point, this year's conference expands its scope to cover many pressing issues in affordable housing management. Attendees will gain insights on HOTMA implementation and other critical topics that impact their daily operations. 2. Diverse Learning Tracks  The conference features multiple specialized tracks to cater to various roles and interests within the industry:  - General Interest Track  - LIHTC Track  - HUD Track  - Special Interest Track  - Maintenance Workshop Track  3. Expert-Led Sessions  Renowned industry experts, including A. J. Johnson, Jenny DeSilva, and Dr. Dori Bryan-Ployer, will lead sessions on topics such as conflict resolution, marketing strategies, cyber awareness, and the impact of HOTMA on different housing programs. 4. A. J. Johnson will lead a discussion on Hot Topics in Affordable Housing Sessions and will cover crucial subjects like:  - Assistance animals and medical marijuana policies  - Violence Against Women Act (VAWA) compliance  - Fair housing in the age of artificial intelligence  - Dealing with the Death of a Resident  - Preventing Sexual Harassment  - HOTMA Income and Asset Issues  - Management of Layered Projects  5. Other Topics Featuring Industry Leaders such as Jenny DeSilva and Angelique Napoleon will include: - EIV/TRACS and HOTMA  - Understanding Human Trafficking  6. Hands-On Maintenance Workshops  A dedicated track for maintenance professionals offers practical sessions on HVAC systems, motor operations, and effective preventative maintenance planning.  7. Networking Opportunities  The conference includes a vendor exhibition and reception, providing ample opportunities for attendees to connect with peers and industry suppliers.  8. Keynote Address  The event starts with a keynote address titled "Embrace Uncommon Sense: Boost Workplace Engagement and Wellbeing," which sets an inspiring tone for the conference.  Who Should Attend:  This conference is essential for property managers, compliance officers, maintenance supervisors, asset managers, and anyone involved in the affordable housing industry. Whether you're dealing with LIHTC, HUD programs, or mixed-finance properties, there's something valuable for every professional.  Take advantage of this opportunity to stay ahead in the ever-evolving world of affordable housing management. Join us for three days of learning, networking, and professional growth at the Mid-Atlantic AHMA 2024 Fall Conference.  Register now at mid-atlanticahma.org to secure your spot at this premier industry event!

Rural Development Issues Emergency Call System Guidance

The Rural Housing Service (RHS) has issued an Unnumbered Letter providing guidance to Multifamily Housing (MFH) staff and program participants regarding emergency call systems, also referred to as "pullcords in MFH units. Installing and using emergency call systems in MFH units, commonly in bathrooms and bedrooms, have historically provided a means for tenants to alert others if they require assistance in the case of an emergency, such as a fall, fire, or medical issue. Many installed emergency call systems no longer function and provide a false sense of security, leading tenants to believe the system will directly alert emergency response services or property management. Additionally, the need for emergency call systems has diminished due to the availability and advancements in technology, such as cell phones and personal medical/life alert equipment. The purpose of the Unnumbered Letter is to inform RHS staff and property operators that RHS does not require emergency call systems in any MFH units. However, some MFH properties still have these systems. Rural Development requires the system to be operational if an emergency call system is in place in any unit. MFH properties that continue to utilize emergency call systems must ensure that the systems work as designed. The system must be regularly inspected per state and local laws. If a property previously used an emergency call system and it is no longer operational, the inoperable system must be removed. Owners and managers are responsible for ensuring that tenants understand how the emergency call system functions. It is recommended that owners provide written instructions and a demonstration of the system to tenants. Recommendations include: Step-by-step instructions on how to use the system. Guidance to tenants on what services are available in response to the system activation, including clarification that the system is not tied to and, therefore, not a substitute for 911 emergency services. Clearly marked features of the system in each unit. Steps on how to correct a false alarm if the system is accidentally activated or misused by residents or visitors. Steps on how to report problems with the emergency call system. In conclusion, while the Rural Housing Service (RHS) no longer mandates the installation of emergency call systems in Multifamily Housing (MFH) units, properties that choose to maintain these systems must ensure they are fully operational and regularly inspected. As advancements in personal alert technology provide reliable alternatives, MFH property owners and managers should prioritize educating tenants on the limitations and proper use of existing emergency call systems. This approach not only helps prevent misunderstandings about the system s capabilities but also enhances tenant safety by encouraging the use of more effective emergency response options.

2025 Social Security COLA Announced

The federal government announced on October 10, 2024, that the Social Security Cost of Living Adjustment (COLA) for 2025 will be 2.5%, slightly lower than the 3.2% increase for 2024. This increase will provide an additional $50 per month for the average retiree. Social Security recipients will receive a notice in the mail in early December showing their new benefit amount. Recipients will see an increase in their January 2025 payment. Those receiving SSI will see the increase on December 31, 2024. Owners and managers of properties required to determine residents' incomes should use the new COLA SS rate when projecting applicants' and residents' incomes. This also affects individuals receiving SSI, VA pensions, Civil Service pensions, and Railroad retirement.

New York City Reaches Landmark Settlement Agreement on Fair Housing Practices

In a significant development for fair housing in New York City, Parkchester, a major residential complex in the Bronx, has entered into a comprehensive settlement agreement to address allegations of discriminatory rental practices. The deal, reached with the New York City Commission on Human Rights, outlines extensive reforms to Parkchester's rental policies and procedures, mainly focusing on the treatment of applicants with rental assistance. Key Provisions of the Settlement: Non-Discrimination in Rental Assistance: Parkchester has agreed to consider all rental assistance types when evaluating sponsor units' applications. This includes Section 8 vouchers, Housing Choice Vouchers, HASA, CityFHEPS, and Olmstead programs. The complex is prohibited from giving preference to one type of rental assistance over another. Elimination of Minimum Income Requirements: Parkchester will no longer impose minimum income requirements for applicants using rental assistance. This change aims to increase housing accessibility for low-income individuals and families. Credit Score and Housing History: The agreement prohibits Parkchester from requiring minimum credit scores or verifiable housing history for applicants with rental assistance. Credit history will not be considered in the application process for those whose rent is fully covered by assistance. Fair Chance Housing: Parkchester has committed to complying with the New York City Fair Chance Housing Act, which will take effect on January 1, 2025. This includes performing individualized assessments of applicants' criminal histories. Application Process Reforms: The settlement mandates changes to Parkchester's application and screening materials to ensure compliance with federal, state, and local laws. It also requires Parkchester to provide reasonable accommodations for applicants who need assistance with the digital application process. Set-Aside Units: In a significant move, Parkchester has agreed to a quota system where two out of every three available sponsor units will be rented to applicants with rental assistance until 850 such applicants have moved in. This includes the 257 that have moved in since August 1, 2022. Advertising and Outreach: The agreement requires Parkchester to include specific language in its advertisements and website, welcoming applicants with rental assistance and explaining the non-discrimination policies. Training and Monitoring: Parkchester staff will undergo comprehensive fair housing training. The agreement also establishes a monitoring system, requiring Parkchester to maintain detailed records and provide regular reports to the Commission on Human Rights for five years. This settlement represents a significant step forward in ensuring equal access to housing in one of New York City's largest residential complexes. The agreement aims to create more inclusive and diverse communities within Parkchester by addressing systemic barriers that have historically disadvantaged applicants with rental assistance. The reforms outlined in this agreement could serve as a model for other large residential properties in New York City and beyond, potentially influencing fair housing practices on a broader scale.

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