VAWA Reauthorization Act of 2013 - Updated HUD Guidance - Notice H 2017-05

person A.J. Johnson today 07/04/2017

On June 30, 2017, HUD issued Notice H 2017-05, Violence Against Women Act (VAWA) Reauthorization Act of 2013 - Additional Guidance for Multifamily Owners and Management Agents. This notice provides guidance to owners and management agents (O/As) of HUD multifamily assisted housing on the requirements of VAWA 2013. The notice supersedes Housing Notices H 2010-23 and H 2009-15. The notice is applicable to the operation of the following programs:
  • Project-based Section 8 programs under the United States Housing Act of 1937;
    • New Construction
    • State agency financed
    • Substantial rehabilitation
    • Section 202/8
    • Rural Housing Services (RHS) Section 515/8
    • Loan Management Set-Aside (LMSA)
    • Property Disposition Set-Aside (PDSA)
  • Section 202/162 Project Assistance Contract (PAC);
  • Section 202 Project Rental Assistance Contract (PRAC);
  • Section 202 Senior Preservation Rental Assistance Contracts (SPRAC);
  • Section 811 PRAC;
  • Section 811 Project Rental Assistance (PRA)
  • Section 236 (including RAP); and
  • Section 221(d)(3)/(d)(5) Below Market Interest Rate (BMIR)
Background On November 16, 2016, HUD published its VAWA Final Rule implementing the requirements of VAWA 2013. This notice expands on and clarifies the HUD Final Rule. Major changes for HUD Multifamily Housing programs include:
  1. Specifies "sexual assault" as a crime covered by VAWA in HUD-covered programs;
  2. Establishes new definitions (e.g., affiliated individual and sexual assault, and others) and revises previously defined terminology (e.g., bifurcate and stalking);
  3. Establishes new requirements for notification of occupancy rights under VAWA, and transmits a Notice of Occupancy Rights under VAWA, form HUD-5380;
  4. Establishes the requirements for creating an emergency transfer plan and for related record keeping and reporting, and provides both a model "Emergency Transfer Plan for Victims of Domestic Violence, Dating Violence, Sexual Assault, or Stalking," form HUD-5381, and an "Emergency Transfer Request for certain victims of Domestic Violence, Dating Violence, Sexual Assault, or Stalking, form HUD-5383;
  5. Revises requirements for documenting the occurrence of Domestic Violence, Dating Violence, Sexual Assault, or Stalking, and provides a new "Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking, and Alternate Documentation," form HUD-5382;
  6. Where the O/A exercises the right to bifurcate a lease and the evicted or terminated tenant was the recipient of assistance at the time of bifurcation, establishes a new requirement for reasonable time periods during which a tenant who is a victim of domestic violence, dating Violence, sexual Assault, or stalking may remain in the unit while establishing eligibility under the current housing program or under another covered housing program, or seeking alternate housing; and
  7. Clarifies that O/As may establish a preference for victims of domestic violence, dating Violence, sexual assault, or stalking, but are not required to do so.
Determining Who May Receive VAWA Protections VAWA protections cover applicants, tenants and assisted families (both women and men), as defined under program regulations for the covered housing. Guests, unassisted members, and live-in aides of a household are ineligible for VAWA protections that are available only to tenants. As a reasonable accommodation, a tenant can request VAWA protections based on the grounds that a live-in aide is a victim of domestic violence, dating violence, sexual Assault, or stalking. If qualified, the tenant may request an emergency transfer for the entire household, including the live-in aide. In cases where a guest or unassisted member is a victim, a tenant cannot be evicted or have assistance terminated based on the domestic violence, dating violence, sexual assault, or stalking of the guest or unassisted member. Determining Eligibility for VAWA Protections O/As may have to determine whether an adverse factor is a "direct result" of domestic violence, dating violence, sexual assault, or stalking. The law prohibits O/As from denying admission to, denying assistance under, terminating participation in, or evicting a tenant based on a adverse factor, if the adverse factor is determined to be a direct result of the fact that the applicant or tenant is or has been a victim of domestic violence, dating violence, sexual assault, or stalking. An adverse factor refers to any factor that can be used as a basis for denying admission or assistance, terminating assistance or participation in a program, or evicting a tenant. If a denial or termination is required by a federal statute, based on a particular adverse factor, the O/A must comply with that statute, even if the adverse factor is a direct result of domestic violence, dating violence, sexual assault, or stalking. For example, if an applicant is subject to a lifetime registration requirement as a sex offender, the O/A must deny the applicant admission, even if the sex offense(s) was (or were) a direct result of the fact that the applicant was a victim of domestic violence, dating violence, sexual assault, or stalking. The presence of an adverse factor may be due to an underlying experience of domestic violence, dating violence, sexual assault, or stalking. An adverse factor may be present during much of an abusive relationship, or it may present itself only when a victim is attempting to leave, or has left, the abusive relationship. Examples of when adverse factors might be a direct result of domestic violence, dating violence, sexual assault, or stalking include:
  1. Poor credit history - for example:
    • Forcing a victim to obtain credit, including credit cards for the perpetrator’s use;
    • Using a victim’s credit or debit card without permission;
    • Selling the victim’s personally identifiable information;
    • Running up debt on joint accounts;
    • Obtaining loans/mortgages in a victim’s name;
    • Preventing a victim from obtaining and/or maintaining employment;
    • Sabotaging work or employment opportunities, or causing a victim to lose his or her job by physically battering the victim prior to important meetings or interviews;
    • Placing utilities or other bills in a victim’s name and then refusing to pay;
    • Forcing a victim to work without pay in a family business, or forcing him or her to turn earnings over to an abuser;
    • Job loss or employment discrimination due to status as a victim;
    • Job loss or lost wages due to missed work to attend court hearings, seek counseling or medical care; and
    • Hospitalization and medical bills the victim cannot pay or cannot pay along with other bills.
  2. Poor rental history - for example:
    • Property damage;
    • Noise complaints;
    • Harassment;
    • Trespassing;
    • Threats;
    • Criminal activity;
    • Missed or late rental or utility payments;
    • Writing bad checks to the landlord; and
    • Early lease termination.
  3. Criminal Record - for example:
    • Forcing a victim to write bad checks;
    • Property damage;
    • Theft;
    • Disorderly conduct;
    • Threats;
    • Trespassing;
    • Noise complaints;
    • Family disturbance/trouble;
    • 911 abuse;
    • Public drunkenness;
    • Drug activity (drug use of the selling of drugs);
    • Crimes related to sex work;
    • Failure to protect a child from a batterer’s violence;
    • Crimes committed by a victim in self-defense; and
    • Human trafficking.
  4. Failure to pay rent - for example:
    • The victim’s injury or temporary incapacitation;
    • The arrest of the only wage earning member of the household;
    • Preventing the victim from obtaining and/or maintaining employment;
    • Sabotaging work or employment opportunities; and
    • Causing the victim to lose the victim’s job.
Determining When Adverse Factors Are a Direct Result of Domestic Violence, Dating Violence, Sexual Assault, or Stalking To trigger the direct result analysis, it is the responsibility of the applicant or tenant to:
  1. Inform the O/A that he or she is a victim of domestic violence, dating violence, sexual assault, or stalking, and
  2. Provide enough information for the O/A to make a determination regarding the adverse factor and that the adverse factor was the result of domestic violence, dating violence, sexual assault, or stalking.
The O/A should consider the individual’s statement and any supporting documentation in determining if an adverse factor was a direct result of domestic violence, dating violence, sexual assault, or stalking. If further information is necessary for this determination, the O/A may request additional supporting documentation. However, any request for additional documentation must:
  1. Be in accordance with the O/As policies or practices;
  2. Not require evidence of domestic violence (other than as permitted by the VAWA statute); and
  3. Comply with the VAWA confidentiality requirements.
The O/A must make an objectively reasonable determination, based on all the circumstances, whether the adverse factor is a direct result of the fact that the applicant or tenant is or has been a victim of domestic violence, dating violence, sexual assault, or stalking. Certification & Documentation of Victim Status The "Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking, and Alternative Documentation," form HUD-5382 may be used to document instances of domestic violence, dating violence, sexual assault, or stalking. This form supersedes the Multifamily Housing VAWA Certification form, JUD-91066, which is now obsolete. The HUD-5382 must be made available by the O/A in multiple languages, consistent with HUD’s LEP guidance. The notice provides additional guidance on the type of documentation that may be required to demonstrate victim status.
  • Acceptance of verbal statement - O/As are not required to ask for documentation when an individual presents a claim for VAWA protections. The O/A may choose to provide protection based solely on an individual’s verbal statement.
  • Requesting documentation - if the O/A chooses to require that an applicant document status as a victim of domestic violence, dating violence, sexual assault, or stalking, the O/A must make such request in writing. Simply providing the victim the certification form HUD-5382 does not constitute a written request for documentation.
Time to Submit Documentation The O/A may require submission of documentation within 14 business days after the date that the request for documentation is made. Once a victim provides documentation, the O/A is "encouraged" to acknowledge receipt of the documentation in a timely manner. (Note - HUD will clarify this issue when next updating HUD Handbook 4350.3). Requests for Third Party Documentation of Victim Status The VAWA final rule prohibits an O/A from requiring the victim to provide third party documentation of victim status, unless:
  1. More than one applicant or tenant provides documentation to show he or she is a victim of domestic violence, dating violence, sexual assault, or stalking, and the information in one person’s documentation conflicts with the information in another person’s documentation, or
  2. Submitted documentation contains information that conflicts with existing information already available to the O/A.
In the case of (a) or (b) above, applicants or tenants may submit any of the following to meet the third party documentation request:
  1. A document:
    1. Signed by an employee, agent, or volunteer of a victim service provider, an attorney, or medical or mental health professional from whom the victim has sought assistance relating to domestic violence, dating violence, sexual assault, or stalking, or the effects of abuse;
    2. Signed by the applicant or tenant; and
    3. That specifies, under penalty of perjury, that the professional believes in the occurrence of the incident of domestic violence, dating violence, sexual assault, or stalking that is the ground for protection and remedies under the VAWA final rule, and that the incident meets the applicable definition of domestic violence, dating violence, sexual assault, or stalking under federal law; or
  2. A record of a Federal, State, tribal, territorial, or local law enforcement agency, court, or administrative agency that documents the incident.
  3. At the discretion of the O/A, a statement or other evidence provided by the applicant or tenant.
Timeframe to Respond Applicants or tenants must be given 30 calendar days from the date of the request to provide such documentation. If an applicant does not submit any third party documentation within the required time or submits documentation that does not meet the criteria in 1a, 1b, or 1c, above, the O/A may, but is not required to, accept that applicant or tenant’s assertion (form HUD-5382 or verbal statement) of victim status for the VAWA protections. Denying VAWA Protections If the O/A requests, but does not receive, third party documentation, the O/A has the option to deny VAWA protections and must notify the applicant or tenant. If this results in one of the tenants being terminated from assistance, the O/A must hold a separate hearing for that tenant. Alternatively, the O/A may develop or follow an existing family break-up policy that may provide assistance to both persons seeking VAWA protections. VAWA Lease Addendum The Office of Multifamily Housing will soon issue an updated form HUD-91067, "VAWA Lease Addendum," which will include the additional provisions required in the final rule. The updated lease provisions will include updates regarding:
  1. Definitions;
  2. VAWA Protections;
  3. Documenting the occurrence of domestic violence, dating violence, sexual assault, or stalking; and
  4. Remedies available to victims.
O/As must provide a new VAWA lease addendum (when issued) to all current households. This may be done at each household’s next Annual Recertification (AR) or at another timely opportunity. All subsequent new move-ins must also receive the updated VAWA lease addendum. Notice of Occupancy Rights, form HUD-5380 O/As must issue the VAWA Notice of Occupancy Rights without changes to the core protections and confidentiality rights in the Notice. O/As must customize the Notice to reflect the specific program and specify the program operations that may pertain to or affect the VAWA Notice of Occupancy Rights. This may include additional language, so long as the language does not make changes to the core protections and confidentiality rights. Any added language cannot include additional requirements to receive VAWA protection. The VAWA Notice of Occupancy Rights, along with the certification form HUD-5382, must be provided to existing households, applicants, and new move-ins/initial certifications no later than each of the following times:
  1. For applicants -
    1. At the time the household is provided assistance or admission, and
    2. At the time the applicant is denied assistance or admission.
  2. For existing households -
    1. Through December 15, 2017, at each household’s annual recertification (AR), and
    2. With any notification of eviction or termination of assistance, (but not with subsequent eviction or termination notices sent for the same infraction).
If households have already had their AR for 2017 and they were not provided with the forms, the O/A must provide the forms to those households through other means no later than 12/15/17. A note or documentation must be made in the files of those tenants indicating when the forms were provided to the household. Note - while the VAWA Final Rule does not require an applicant/household to sign acknowledgement of receipt of the forms, it is strongly recommended that O/As document each tenant file in a way that demonstrates when the required documentation was provided. It is recommended that the files be documented each time the documents are provided. HUD also encourages O/As to post the VAWA Notice of Occupancy Rights and certification form on their websites and in public areas such as waiting rooms, community bulletin boards, and lobbies, where all tenants may view them. HUD assumes that by December 15, 2017, all current households will have received the required forms and O/As are not required to provide the notice and certification form at future ARs. Victim Confidentiality Any information submitted to an O/A, including the fact that an applicant or tenant is or has been a victim of domestic violence, dating violence, sexual assault, or stalking, must be maintained in confidence by the O/A. Employees of the O/A (or those who administer assistance on their behalf, e.g., contractors) must not have access to the information unless explicitly authorized by the O/A for reasons that specifically call for these individuals to have access to such information under Federal, State, or local law, and the O/A must not enter this information into any shared database, or disclose this information to any other entity or individual, except to the extent that disclosure is:
  1. Requested or consented to in writing by the victim in a time-limited release;
  2. Required for use in an eviction proceeding or hearing regarding termination of assistance; or
  3. Otherwise required by applicable law.
The prohibition against entering this information into any shared database does not preclude the O/A from entering this information into a databases system used by the O/A that meets all requirements for securing sensitive personally identifiable information (PII). Communicating with the Victim Unless given permission by the victim to do so, the O/A must not leave messages that contain confidential information or refer to VAWA (e.g., asking the victim to come to the management office to pick up form HUD-5382) on the victim’s voicemail system or with other individuals, including members of the victim’s household. Leaving a voicemail requesting that the victim contact the O/A without reference VAWA is permissible. O/As should not send mail regarding the incident of domestic violence, dating violence, sexual assault, or stalking to the victim’s address, if the perpetrator may have access to the victim’s mail. O/As may determine the procedures for requesting documentation in writing on a case-by-case basis. For example, policies should state whether the applicant or tenant requesting VAWA protections is required to come to an office or other space that may be safe for the individual to receive the written request and that reasonable accommodations will be made as necessary. If the victim gives the O/A permission to contact him or her about the incident of domestic violence via mail, voicemail system, electronic mail, or other method approved by the victim, it is strongly recommended that this permission be obtained in writing. When discussing these matters directly with the victim, take reasonable precautions to ensure than no one can overhear the conversation. O/As may suggest - but cannot require - that the victim designate an attorney, advocate, or other secure contact for communications regarding the request for VAWA protections. Best Practices to Collect Information & Avoid Unintentional Disclosure
  1. Conduct the intake session in a private room, where the individual and staff person can talk without the risk of other staff or clients overhearing;
  2. Explain the O/As information sharing policies;
  3. Communicate to the individual which property management staff person is responsible for handling questions or complaints about confidentiality;
  4. Provide adequate time for the individual to review and sign forms;
  5. Post confidentiality notices in the management office and around the property;
  6. Ensure that relevant staff understand confidentiality policies;
  7. Post notices about the importance of maintaining confidentiality throughout the office;
  8. Direct staff to respond to third-party inquiries only after verifying that written client consent has been obtained;
  9. Clarify information sharing policies with referring/referral agencies and other service and business partners;
  10. Maintain distinct phone lines for certain purposes;
  11. Avoid using language referencing domestic violence in agency names, program name, organization names, and staff titles;
  12. Use a post office (PO) box to receive written correspondence;
  13. Serve individuals off-site as needed or when appropriate;
  14. Provide interpretation and/or documents translated into the appropriate language when necessary; and
  15. Provide accessible documents or assistance filling out forms for individuals with disabilities.
It should be noted that these are best practice recommendations, and some may not be feasible for all O/As. Emergency Transfers - Note: this Notice contains requirements that are not specifically contained in the Model Emergency Transfer Plan provided by HUD Emergency Transfer Plan The VAWA Final Rule requires O/As to adopt an Emergency Transfer Plan, based on HUD’s Model Emergency Transfer Plan (form HUD-5381). O/As must have adopted an Emergency Transfer Plan no later than June 14, 2017. For Management & Occupancy Reviews (MORs) conducted after June 30, 2017, but before December 14, 2017, reviewers will issue a Recommendation, rather than a finding, for non-compliance relating to the Emergency Transfer Plan. For MORs conducted after December 14, 2017, a Finding will be issued for non-compliance relating to the Emergency Transfer Plan. I recommend that all O/As carefully review the Emergency Transfer Plan requirements of this notice and revise Emergency Transfer Plans to ensure the Plans contain all elements required by the notice. Internal Transfers (moving to a unit in the same project) The Emergency Transfer Plan must allow tenants who are victims of domestic violence, dating violence, sexual assault, or stalking to make an internal emergency transfer with a safe unit is immediately available. A victim determines whether a unit is safe. A best practice is to define "immediately available" as a vacant unit, ready for move-in within a reasonable period of time. It is up to the O/A to define "reasonable period of time." The Plan must describe policies for assisting a tenant in making an internal emergency transfer when a safe unit is not immediately available, and describe reasonable efforts the O/A will take to assist a tenant who wishes to make an external emergency transfer when a unit that meets the victim’s safety standard is not available. O/As are encouraged to review their transfer waiting list policies in their Tenant Selection Plans in order to facilitate emergency transfers. The emergency transfer requirements do not supersede any eligibility or occupancy requirements that may apply under a covered housing program. External Emergency Transfers (moving away from the project to another project) O/As are required to make reasonable efforts to assist a tenant who requests to make an external emergency transfer when a safe unit at the current property is not immediately available. O/As are not required to research available units and/or arrange for the move, but they can if they choose. Efforts should include providing contact information for relevant local service providers, government agencies, and other affordable housing developments in the area. Emergency Transfer Plans must include the following:
  1. A description of the reasonable efforts the O/A will take to assist a victim who wished to move to alternative housing, if a safe unit is not immediately available;
  2. A statement that a tenant must be allowed to seek an internal and external emergency transfer concurrently if an internal safe unit is not immediately available; and
  3. Policies for both assisting a tenant/applicant who is seeking an external emergency transfer under VAWA out of the property and an applicant who is seeking an external emergency transfer under VAWA into the property from another property.
Record Keeping & Reporting Requirements The VAWA Final Rule requires that requests and outcomes of VAWA requests be reported to HUD annually. HUD plans to add these data elements to a future release of the Tenant Rental Assistance Certification System (TRACS). The following items should now be tracked to assist in reporting when the TRACS system is updated:
  1. Number of emergency transfer requests received;
  2. Number of requests resolved;
  3. Number still pending;
  4. Outcomes of requests -
    1. Number of internal unit transfers (within same project);
    2. Number relocated to other HUD-funded housing sites (e.g., other multifamily assisted, public housing/housing vouchers/ or HOME);
    3. Number of other move-outs; and
    4. Number of tenants who chose to remain in unit.
The requirement to report this information in not in effect until TRACS has been updated. HUD will communicate additional details at a later date. Tips When Bifurcating a Lease VAWA permits owners (when otherwise allowed by State or local laws) to "bifurcate" a lease in order to remove a perpetrator from a unit while permitting the victim to remain in the unit. While it may be a necessary step to protect victims of domestic violence, dating violence, sexual assault, or stalking, bifurcation may also result in family break-up. The HUD notice provides extensive guidance relating to family break-ups, and based on that guidance, I offer the following tips. If a victim informs the O/A that a family member is committing domestic violence against him or her and he or she wishes to remain in the unit, the following steps are recommended:
  1. The O/A should already have provided the household members with their VAWA rights, but if not, this should be done immediately. Even if the victim was previously informed of his or her rights under VAWA, the O/A is again encouraged to provide the victim with the VAWA Notice of Occupancy Rights and certification form;
  2. Accept the victim’s statement or request permitted documentation;
  3. Ensure the victim knows of the upcoming notification of eviction of the perpetrator, including the exact date the notification will take place. At the same time, provide the victim with contact information for local victim service providers (the victim may need to leave the unit temporarily and stay in a domestic violence shelter until the eviction takes place);
  4. Begin the eviction process. If the victim wants to move out of the unit for his or her safety, follow the requirements of the Emergency Transfer Plan. If the victim wants to stay in the unit, the O/A should bifurcate the lease by evicting the perpetrator and allowing the victim to remain on the lease. An Interim Recertification (IR) should be conducted to determine the new rent (this is required due to the change in family composition);
  5. If the perpetrator requests a hearing, the O/A is encouraged to conduct an expedited hearing within no more than ten days following the effective date of the notice. The perpetrator has a right to examine the O/As documentation relevant to the eviction. This means the perpetrator has a right to examine the relevant documentation the victim provided when claiming VAWA protections. This is an exception to the victim’s confidentiality rights). To protect the victim’s safety, any information that would reveal the location of the victim, or the location of any services that the victim is receiving must be maintained confidentially (i.e., redacted from the shared documentation), unless it meets the exceptions noted in the law. O/As are encouraged to consult with local domestic violence experts or victim service providers (that have not worked with either the victim or perpetrator) to serve on the grievance hearing panel;
  6. If it is determined that the perpetrator did indeed commit the acts, the case will then be moved to eviction court; and
  7. If the eviction is upheld, the O/A processes the IR to remove the household member and completes the bifurcation of the lease agreement.
Remember, VAWA protections, including bifurcation, do not apply to guests or unreported members of a household or anyone else living in a unit who is not a tenant. Eviction, removal, termination of occupancy rights, or termination of assistance must be done in accordance with the procedures prescribed by federal, state, or local law. Some jurisdictions may prohibit partial or single tenant evictions. Once a lease is bifurcated, it becomes null and void once the O/A regains possession of the unit. The O/A should then execute a new lease with the victim. Note - as a result of lease bifurcation, it may be necessary to transfer the existing household to an appropriate size unit in accordance with the lease. Establishing Waiting List Preferences O/As may establish an admission preference for victims of domestic violence, dating violence, sexual assault, or stalking. HUD approval is not required to adopt such a preference, but O/As must modify their Tenant Selection Plan to include the owner-adopted preference. This synopsis provides a summary of some of the major elements of the new HUD notice. The notice itself is very comprehensive and all O/As of covered properties should obtain and review the notice in detail. In order to avoid potential non-compliance with VAWA requirements, all O/As should have VAWA procedures in place and fully understood no later than December 14, 2017.

Latest Articles

Understanding Tariffs and Their Impact on Construction Costs

What Are Tariffs? A tariff is simply a tax imposed on imported goods. When products like building materials enter U.S. ports, paying the applicable tariff is a standard part of the customs process. Historical Context Tariffs have deep roots in American history. From the colonial era through the early 1900s, they served as the federal government s primary revenue source. They were relatively straightforward to enforce even before modern technology, as customs officers could inspect incoming shipments at ports and collect the appropriate fees. The federal government s limited taxing authority under the Constitution meant that a modern income tax was not legally permissible until the 16th Amendment was enacted in 1913. The Decline of Tariffs Despite their historical importance, tariffs have several inherent problems that led to their declining use over the past century: They disadvantaged U.S. agricultural interests and exporters as other countries implemented retaliatory trade barriers. The tax burden fell disproportionately on lower-income individuals who spend more of their income on basic necessities. They couldn t generate sufficient revenue to fund modern government operations. When the global economy faltered in 1930, many nations, including the U.S., implemented protective tariffs with the Smoot-Hawley Act. Most economists view this wave of protectionism as a contributing factor to the severity of the Great Depression. Learning from this experience, the U.S. and other advanced economies gradually reduced trade barriers during the postwar period to foster economic cooperation and peace. Current Tariff Landscape Even during periods of free trade enthusiasm, tariffs never disappeared entirely. They remained relatively low in recent years, dropping to 1.5% in 2017 after decades of bipartisan efforts to establish global trade agreements. The Trump administration increased rates to approximately 3% during his previous term, which President Biden largely maintained. According to the Yale Budget Lab, the Trump administration s announced policies would raise the average tariff to 22.5% higher than during the Smoot-Hawley era and roughly equivalent to 1909 levels. Implementation Authority The scale of newly announced tariffs is significantly larger than previous ones. They affect nearly all goods from every country worldwide and invoke emergency authority not previously used for this purpose. Tariffs Impact on Construction Costs Tariffs increase construction costs through several key mechanisms: Direct price increases on imported construction materials like steel, aluminum, lumber, and other building products. These higher costs are typically passed along to developers and ultimately to end consumers. The specific impact depends on several factors: Which materials are targeted The tariff rate percentages Availability of domestic alternatives Proportion of imported versus domestic materials used The recent tariffs on imports from China (20%), Mexico, and Canada (25%) have significant implications for construction. According to the National Association of Home Builders, these tariffs could increase builder costs by approximately $7,500 to $10,000 per home for residential construction. This impact is substantial because approximately 7% of all goods used in new residential construction are imported. Critical materials like softwood lumber come predominantly from Canada (72% of imports), while gypsum for drywall is mainly sourced from Mexico (74% of imports). Multifamily Construction Impact For multifamily construction specifically, with 46% of materials sourced from these countries and 35-50% of project costs tied to finished materials, tariffs could increase material costs by 7.5%, potentially raising total construction budgets by 3-4%. Broader Effects Beyond core construction materials, reciprocal tariffs may also influence other building-related imports, such as carpeting, electrical outlets, security equipment, furniture, and tools. Projects that have already been awarded but are not yet started are likely to experience the most significant impact. Industry forecasts suggest the construction industry will feel the brunt of tariff policy changes in late 2025 and early 2026. Meanwhile, due to tariff-related inflation concerns, the Federal Reserve is expected to maintain stable interest rates through most of 2025. Recent Developments Homebuilders have been relieved, as Canada and Mexico were exempted from the latest round of tariffs, protecting key lumber and drywall component imports. Additionally, a carveout exists for lumber and copper imports. These tariff developments are challenging the U.S. housing market, which is already struggling with supply constraints and affordability issues. Developers with affordable multifamily housing projects in the pipeline or underway but for which materials have not yet been purchased should prepare for these possible increases. Developers facing this uncertainty should take a proactive, strategic approach. Here are some of the steps they should consider: 1. Lock in Pricing Where Possible Negotiate Early Procurement Contracts: Secure pricing and delivery timelines now for materials that may be subject to tariffs. Bulk Purchasing: If financially feasible and storage is available, purchase critical materials before the tariff is implemented. 2. Revisit and Update Budgets Include Contingency Allowances: Adjust budgets to account for a potential spike in material costs (e.g., steel, aluminum, electrical components). Run Revised Pro Formas: Model project feasibility under different tariff scenarios to understand the margin of financial risk. 3. Communicate with Key Stakeholders Inform Lenders and Syndicators: Ensure your financial partners know potential cost escalations and any resulting impact on project viability or timelines. Coordinate with HFAs and Local Agencies: If the deal includes LIHTCs or public funding, discuss possible adjustments or relief options (e.g., basis boosts, revised gap financing). 4. Evaluate Alternative Materials and Suppliers Source Domestic Alternatives: Tariffs often target imported materials. Switching to local or tariff-exempt sources could mitigate cost hikes. Value Engineering: Reassess design specs to identify non-critical elements where substitutions could reduce costs. 5. Monitor Policy and Industry Updates Stay Informed: Watch for updates on tariff decisions and industry responses through trade associations (e.g., NAHB, NMHC). Engage in Advocacy: Support efforts to exempt affordable housing materials from tariffs or seek policy carve-outs. 6. Build Schedule Flexibility Buffer Time for Delays: Tariffs often disrupt supply chains, so build in extra time for procurement and delivery to avoid construction slowdowns. 7. Document Impacts Track Cost Changes: Keep records showing cost increases due to tariffs this can be useful when requesting additional funding or extensions from oversight bodies. Being proactive can help developers manage risk rather than be blindsided by rising costs. In this environment, a smart developer remains nimble, communicates clearly, and plans for the worst while hoping for the best.

A. J. Johnson Partners with Mid-Atlantic AHMA for Training on Affordable Housing - May 2025

In May 2025, A. J. Johnson will partner with the MidAtlantic Affordable Housing Management Association for four live webinar training sessions for real estate professionals, particularly those in the affordable multifamily housing field. The following sessions will be presented: May 20: Acquisition/Rehab, Tenant Selection Plans & Affirmative Fair Housing Marketing Plans The complexities of affordable housing development don t stop at financing. When acquisition, rehabilitation, and layered funding programs collide, the stakes increase. Join industry expert A. J. Johnson for a practical and timely webinar on compliance pitfalls and planning strategies that can make or break your LIHTC project. This fast-paced session will break down the following: Acquisition-Rehab LIHTC Projects: How IRS rules impact "placed in service dates, acquisition credits, and meeting the 120-day qualification rule. The Available Unit Rule (AUR): Why this often-overlooked rule can lead to credit loss even on properties that no longer recertify. Tenant Selection Plans (TSPs): What every property manager must know about layered program requirements, lottery procedures, and legal screening standards. Affirmative Fair Housing Marketing Plans (AFHMPs): How to structure your outreach to comply with HUD requirements and avoid costly fair housing violations. Whether you're a developer, property manager, or compliance officer, this training will give you actionable strategies to keep your project on track and in full regulatory compliance. Who Should Attend - LIHTC developers, compliance specialists, property managers, syndicators, and housing agency staff responsible for acquisition, rehabilitation, and oversight of layered programs. May 21: HOTMA - Update on HUD Requirements On January 9, 2023, HUD published a final rule implementing The Housing Opportunity Through Modernization Act (HOTMA), signed into law on July 29, 2016. This final rule was published in the Federal Register on February 14, 2023, and has yet to become effective for HUD programs. Virtually all HUD programs are impacted by the rule, as are the Low-Income Housing Tax Credit (LIHTC) Program and the Rural Development Section 515 Program. Since publishing the final rule in February 2023, HUD has provided additional guidance in implementing the rule, including extensions regarding implementation. This three-hour training will explain any updated HUD guidance and will cover the following areas: Definitional changes relating to earned and unearned income, non-recurring income, and foster children; Revised Income Exclusions; New requirements relative to Student Financial Assistance; Changes to the HUD permitted deductions from gross income, including a full review of the new "hardship exemptions; Brand new rules regarding assets; New Interim Recertification requirements; and The new definition of "annual income. May 22: Basic LIHTC Compliance This training is designed primarily for site and investment asset managers responsible for site-related asset management. It is especially beneficial to those managers who are relatively inexperienced in the tax credit program. It covers all aspects of credit related to on-site management, including the applicant interview process, determining resident eligibility (income and student issues), handling recertification, setting rents - including a full review of utility allowance requirements - lease issues, and the importance of maintaining the property. The training includes problems and questions to ensure students fully comprehend the material. May 28: Dealing with Income and Assets in Affordable Multifamily Housing - Course Overview This live webinar provides concentrated instruction on the required methodology for calculating and verifying income and determining the value of assets and income generated by those assets. The first section of the course involves a comprehensive discussion of employment income, military pay, pensions/social security, self-employment income, and child support. It concludes with workshop problems designed to test what the student has learned during the discussion phase of the training and serve to reinforce HUD-required techniques for determining income. The second component of the training focuses on a detailed discussion of requirements related to determining asset value and income. It applies to all federal housing programs, including the low-income housing tax credit, tax-exempt bonds, Section 8, Section 515, and HOME. Multiple types of assets are covered in terms of what constitutes an asset and how they must be verified. This section also concludes with problems designed to test the student s understanding of the basic requirements relative to assets. These sessions are part of a year-long collaboration between A. J. Johnson and MidAtlantic AHMA and are designed to provide affordable housing professionals with the knowledge needed to manage the complex requirements of the various agencies overseeing these programs effectively. Individuals or organizations interested in any (or all) training sessions may register by visiting either www.ajjcs.net or https://www.mid-atlanticahma.org.

Crime-Free Ordinances: When Local Laws Conflict with Federal Fair Housing Protections

In August 2024, the Civil Rights Division of the Department of Justice issued a critical warning: municipal "crime-free rental housing and "nuisance property ordinances may violate federal fair housing laws. These ordinances effective in nearly 2,000 cities across 48 states until recently place landlords in a precarious position. While intended to reduce crime and maintain neighborhood stability, these measures often result in unintended discrimination and can expose landlords to significant legal liability. Notable Legal Cases Several landmark cases have established important precedents regarding crime-free ordinances: United States v. City of Hesperia (2023) In a groundbreaking case, the Justice Department secured a landmark agreement with the City of Hesperia, California, and the San Bernardino County Sheriff s Department to resolve racial and national origin discrimination allegations in their "crime-free rental housing program. The consent order required the city to completely repeal its crime-free program and ordinance marking the first resolution demanding the complete end of such a program. The settlement included a $950,000 payout, with $670,000 allocated to compensate individuals harmed by the program. The Justice Department alleged that the city and sheriff s department engaged in a pattern of discrimination against Black and Latinx individuals in violation of the Fair Housing Act and Title VI of the Civil Rights Act of 1964 through the enforcement of their crime-free rental housing program. Briggs v. Norristown After experiencing the harmful impacts of a nuisance ordinance, Ms. Briggs, with support from the American Civil Liberties Union, filed a lawsuit against the City of Norristown. The Department of Housing and Urban Development (HUD) filed a complaint stating that the ordinance violated the Fair Housing Act based on its impact on women experiencing domestic violence. The case resulted in a settlement requiring Norristown to repeal its ordinances, and subsequently, Pennsylvania passed legislation banning localities from creating these types of ordinances. Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. (2015) In this influential Supreme Court case, the Court held that disparate impact claims are cognizable under the Fair Housing Act. This crucial decision established that housing policies with discriminatory effects even without discriminatory intent could violate the FHA. The ruling is particularly relevant to crime-free ordinances, which often produce disparate impacts on protected classes. The Legal Conflict: Federal Protections vs. Local Ordinances Landlords face a troubling dilemma: follow local crime-free ordinances and risk violating federal law, or disregard local requirements and face municipal penalties. This conflict stems from the fact that these ordinances may violate four major federal laws: 1. The Fair Housing Act Crime-free ordinances often have a disproportionate impact on protected classes. For example: When these ordinances require eviction based on arrests rather than convictions, they disproportionately affect Black and Hispanic tenants, who statistically face higher rates of police interaction regardless of criminal activity. Blanket policies requiring eviction of an entire household due to one member s criminal activity can discriminate against families with children, female-headed households, and certain cultural groups where extended family living arrangements are common. 2. Title VI of the Civil Rights Act of 1964 Title VI prohibits discrimination in programs receiving federal funds. When municipalities with crime-free ordinances receive federal housing funds, they may violate Title VI if: Their ordinances have disparate impacts on protected classes Implementation decisions are influenced by discriminatory intent or stereotypes about certain neighborhoods or demographic groups 3. The Americans with Disabilities Act (ADA) Crime-free ordinances may discriminate against individuals with disabilities in several ways: Automatic eviction for behavior related to mental health conditions without consideration of reasonable accommodations Policies that penalize multiple emergency service calls, which may disproportionately impact those with chronic health conditions requiring frequent medical assistance Exclusions of individuals with past substance use disorder convictions, despite recovery and treatment 4. The Violence Against Women Act (VAWA) VAWA specifically protects victims of domestic violence, dating violence, sexual assault, and stalking from housing discrimination. Crime-free ordinances often violate these protections by: Requiring eviction when police are called to a property multiple times, discouraging victims from seeking help Failing to distinguish between perpetrators and victims when criminal activity occurs Treating domestic disturbances as "nuisances rather than recognizing them as situations where victims need protection Problematic Practices in Crime-Free Ordinances Collective Punishment: Holding Entire Households Accountable One of the most troubling aspects of many crime-free ordinances is the requirement to evict entire households based on one individual s actions. This approach: Punishes innocent family members who had no knowledge of or participation in criminal activity Creates homelessness risks for vulnerable household members, including children, elderly relatives, and individuals with disabilities Disproportionately impacts communities where multi-generational or extended family living arrangements are cultural norms. Blanket Exclusions Based on Criminal Records Many ordinances include overly broad exclusions for individuals with criminal records: Lifetime bans for certain offenses, regardless of rehabilitation or time elapsed Failure to consider the nature, severity, or relevance of the criminal conduct to tenant suitability No individualized assessment of actual risk to property or other tenants Exclusion Based on Arrests Rather Than Convictions Some ordinances allow or require action against tenants based merely on arrests: Violates the presumption of innocence It has a disparate impact on communities of color, which experience higher rates of arrests that do not lead to convictions Creates housing instability based on unproven allegations rather than established facts Automatic Exclusion for Any Criminal Conviction Overly broad policies that automatically deny housing based on any criminal history: Fail to distinguish between violent crimes and minor offenses Ignore evidence of rehabilitation and the age of convictions Create permanent barriers to housing for individuals who have served their sentences and are working to reintegrate into society. Penalizing Emergency Service Calls Particularly problematic are provisions that treat emergency calls as "nuisances : Discourages tenants from seeking emergency medical assistance Forces vulnerable individuals to choose between needed help and keeping their housing Creates dangerous situations where tenants delay calling for assistance during genuine emergencies. Punishing Victims of Domestic Violence Perhaps most concerning is how these ordinances often penalize victims: Treating domestic violence incidents as "nuisance activities requiring eviction Failing to distinguish between calls made by victims versus perpetrators Creating a situation where victims must choose between enduring abuse in silence or risking homelessness. Legal Protections and Ongoing Developments The legal landscape around crime-free ordinances continues to evolve. In states like Illinois, legislation has been enacted to protect survivors of domestic or sexual violence and individuals with disabilities from being penalized due to calls to police for assistance. The Illinois Department of Human Rights and the UIC Law School Fair Housing Legal Support Center and Clinic have developed a guidebook addressing the fair housing implications of nuisance and crime-free ordinances. In 2024, additional cases have further clarified the legal boundaries of these ordinances: A case against a municipality alleged violations of both the Americans with Disabilities Act and Fair Housing Act for enforcing crime-free housing ordinances that denied tenants with mental health disabilities equal access to emergency response services. The consent decree required the municipality to revise its program rules and enforcement practices and adopt non-discrimination policies. The Department of Justice has increased enforcement actions against localities with discriminatory housing policies, particularly those that disproportionately affect racial minorities, women, and people with disabilities. Recommendations for Landlords If your municipality has implemented a crime-free ordinance that may conflict with federal protections, consider the following steps: 1. Review your lease agreements and policies to identify provisions that may violate federal law, even if required by local ordinance. 2. Consult with a housing attorney familiar with fair housing law and local regulations to understand your specific obligations and risks. 3. Implement individualized assessments rather than blanket policies when evaluating potential tenants with criminal histories. 4. Document all housing decisions with clear, non-discriminatory business justifications. 5. Create explicit exceptions in your policies for domestic violence victims and emergency service calls. 6. Engage with local government by attending city council meetings and advocating for amendments to problematic ordinances. 7. Join or form landlord associations to collectively address concerns with local officials. 8. If necessary, consider seeking a declaratory judgment in court to resolve the conflict between federal and local requirements. 9. Stay informed about new legal developments in this rapidly evolving area of law. Navigating this legal minefield is challenging; however, landlords should prioritize compliance with federal civil rights laws. When local ordinances and federal protections conflict, federal law generally prevails. By taking proactive steps to ensure fair housing practices, landlords can protect themselves from liability while also supporting safe, stable housing for all community members.

HUD Publishes 2025 Income Limits

On April 1, 2025, HUD published the 2025 income limits for HUD programs and the Low-Income Housing Tax Credit and Tax-Exempt Bond programs. The limits are effective on April 1, 2025. The limits for the LIHTC and Bond projects are published separately from those for HUD programs. For better understanding, LIHTC and Bond properties operate under the Multifamily Tax Subsidy Project (MTSP) limits. These properties are 'held harmless' from income limit (and therefore rent) reductions. This means that these properties may use the highest income limits for resident qualification and rent calculation since the project has been in service. However, it's important to note that HUD program income limits are not 'held harmless '. HUD publishes the 50% and 60% MTSP limits alongside the Average Income (AI) limits, which are set at 20%, 30%, 40%, 50%, 60%, 70%, and 80%. Projects that began service before 2009 may utilize the HERA Special Income Limits in areas where HUD has published such limits. Projects placed in service after 2008 cannot use the HERA Special Limits. Projects in rural areas not financed by tax-exempt bonds can use the higher MTSP limits or the National Non-Metropolitan Income Limits (NNMIL). It is important to note that for 2025, HUD has made changes to the definitions of geographic areas as determined by the Office of Management and Budget (OMB). The counties or towns within certain metropolitan areas may have changed. Owners and managers should consult the HUD Area Definition Report for a list of their areas and their components. The link to the Area Definition Report can be found on the website provided below. Owners of LIHTC projects may rely on the 2024 income limits for all purposes for 45 days after the effective date of the newly issued limits, which ends on May 16, 2025. The limits for HUD programs may be found at www.huduser.gov/portal/datasets/il.html. The limits for LIHTC and Bond programs may be found at www.huduser.gov/portal/datasets/mtsp.html.

Want news delivered to your inbox?

Subscribe to our news articles to stay up to date.

We care about the protection of your data. Read our Privacy Policy.