News

HUD Takes Hard Line on Local "Nuisance" Policies that Target Affordable Housing

A recent compliance agreement entered into between the Department of Housing & Urban Development (HUD) and a California city demonstrates the aggressive approach HUD will take against localities that develop policies that penalize residents for excessive 911 calls or properties with frequent police responses. HUD and the City of Hemet, California have entered into a Voluntary Compliance Agreement relating to the City s "Rental Registration and Crime Free Rental Housing Program," and "Abatement of Chronic Nuisance Program." The agreement is the result of a compliance review of the City s CDBG program that was conducted by HUD s Office of Fair Housing and Equal Opportunity (FHEO). HUD s preliminary review identified potential non-compliance with Title VI of the Civil Rights Act of 1964. This Agreement clearly demonstrates HUD opposition to a trend among cities to create local ordinances that penalize property owners and residents based on the crime rate in an area or the number of 911 calls for assistance. The Agreement requires that the City of Hemet eliminate the "Rental Registration and Crime Free Rental Housing Program," and "Abatement of Chronic Nuisance Program." The Hemet ordinances required owners of rental properties to submit a "Crime Free Certification," utilize the City s "Crime Free Lease Addendum," pass special inspections, attend Crime Free Rental Housing training, and undergo annual code inspections. The lease addendum required owners to evict or non-renew the lease of tenants based on the number of 911 calls they placed and to evict tenants based on arrest records. By entering into the Agreement, the City will - Notify residents of the City that the two ordinances are no longer in effect;Not implement any future program that has the effect of replacing the two programs that are being eliminated;Submit to HUD for review any new programs relating to code enforcement;No longer limit the number of calls for law enforcement or code enforcement generated by or to a property without further inquiry into the nature, cause, or severity of the alleged nuisance or criminal activity;Notify all rental property owners and known occupants of rental property that the programs have been discontinued;Publish a Notice of Termination of the ordinances in at least two newspapers in the Hemet regional area, including a Spanish language newspaper;Provide $200,000 in financial assistance to property owners who rent to low or moderate-income households to proactively address or remediate potential code enforcement violations or otherwise improve housing conditions;Report to HUD every six-months on program compliance, including marketing materials and activities; andRequire all City employees involved with the enforcement of the programs (including Code Enforcement, Police Officers, and all members of City Council) to attend fair housing training. Local policies such as those that were implemented by the City of Hemet are popping up all over the United States. If you are the owner of a property in a locality that is imposing similar requirements on your property, you should contact the Office of Fair Housing and Equal Opportunity at HUD (https://www.hud.gov/program_offices/fair_housing_equal_opp/online-complaint).

HUD Publishes Operating Cost Adjustment Factors (OCAF) for 2021

On November 27, 2020, HUD published in the Federal Register a Notice of Certain Operating Cost Adjustment Factors for 2021. These OCAFs may be used for eligible project-based assistance properties that have an anniversary date on or after February 11, 2021. OCAFs are annual factors used to adjust Section 8 rents for most Section 8 projects. HUD has used a single methodology for establishing OCAFs. These OCAFs vary among states and territories. Contract rents are adjusted by applying the OCAF to that portion of the rent attributable to operating expenses exclusive of debt service. OCAFs are calculated as the sum of weighted component cost changes for wages, employee benefits, property taxes, insurance, supplies and equipment, fuel oil, electricity, natural gas, and water/sewer/trash, using publicly available indices. To calculate the OCAFs, state-level cost component weights developed from state-wide data are multiplied by the selected inflation factors. For instance, if wages in Virginia comprised 50% of total operating cost expenses and increased by 4% from 2019 to 2020, the wage increase component of the Virginia OCAF for 2021 would be 2% (50% times 4%). This 2% would then be added to the increases for the other eight expense categories to calculate the 2021 OCAF for Virginia. For states where the calculated OCAF is less than zero, the OCAF is floored at zero. Examples of the 2021 OCAFs: New Jersey, Texas, and Wisconsin have the highest OCAFs, at 2.8%.Vermont has the lowest OCAF at 1.8%.The mean OCAF is 2.4% and the median is 2.5%. Owners of affected properties should review the November 27 notice for the OCAF applicable to their state or territory.

HIghlights of COVID-19 Relief Bill

President Trump is expected to sign the massive, year-end catchall bill Congress passed that combines $900 billion in COVID-19 aid with a $1.4 trillion omnibus spending bill and reams of other unfinished legislation on taxes, energy, education, and health care. Here are highlights of the measure with overall funding amounts and specific amounts for some but not necessarily all initiatives. COVID-19 RELIEF Unemployment insurance ($120 billion). Revives supplemental federal pandemic unemployment benefits but at $300 per week through March 14 instead of the $600 per week benefit that expired in July. This is considered temporary income and should be excluded for purposes of affordable housing programs. Extends special pandemic benefits for "gig" workers and extends the maximum period for state-paid jobless benefits to 50 weeks. Unless guidance from HUD states otherwise, this pandemic benefit should be counted as income and treated in the same manner as regular unemployment. Direct payments ($166 billion). Provides $600 direct payments to individuals making up to $75,000 per year and couples making up to $150,000 per year with payments phased out for higher incomes - with $600 additional payments per dependent child. Since this is a one-time, lump sum payment, this should not be counted as income for affordable housing programs. Paycheck Protection Program ($284 billion). Revives the Paycheck Protection Program, which provides forgivable loans to qualified businesses. Especially hard-hit businesses that received PPP grants would be eligible for a second round. Ensures that PPP subsidies are not taxed. Vaccines, testing, health providers ($69 billion). Delivers more than $30 billion for procurement of vaccines and treatments, distribution funds for states, and a strategic stockpile. Adds $22 billion for testing, tracing and mitigation, $9 billion for health care providers, and $4.5 billion for mental health. Schools and universities ($82 billion). Delivers $54 billion to public K-12 schools affected by the pandemic and $23 billion for colleges and universities; $4 billion would be awarded to a Governors Emergency Education Relief Fund; nearly $1 billion for Native American schools. Rental assistance ($25 billion). Provides money for a first-ever federal rental assistance program; funds to be distributed by state and local governments to help people who have fallen behind on their rent and may be facing eviction. This will be temporary (probably lump sum) and should not be counted as income. Food/farm aid ($26 billion). Increases stamp benefits by 15% for six months and provides funding to food banks, Meals on Wheels and other food aid. Provides an equal amount ($13 billion) to farmers and ranchers. Child Care ($10 billion). Provides $10 billion to the Child Care Development Block Grant to help families with child care costs and help providers cover increased operating costs. Postal Service ($10 billion). Forgives a $10 billion loan to the Postal Service provided in earlier relief legislation. ___ OMNIBUS APPROPRIATIONS ($1.4 TRILLION) The omnibus measure wraps 12 spending bills into one and funds agency operating budgets through Sept. 30 of next year. It combines Democratic priorities such as a $12.5 billion increase over existing budget limits for domestic programs while cutting Immigration and Customs Enforcement detention and removal costs by $431 million. COVID-19 has contributed to sharply lower costs. Republicans supported sustained defense spending, energy provisions and longstanding bans on federal funding of abortion. The measure also provides President Donald Trump with a last, $1.4 billion installment for a wall on the U.S.-Mexico border. ___ MISCELLANEOUS The measure also contains more than 3,000 pages of miscellaneous legislation, such as: Surprise medical billing. Includes bipartisan legislation to protect consumers from huge surprise medical bills after receiving treatment from out-of-network providers. Community health centers. Reauthorizes, for three years, funding for community health centers and extends a variety of expiring health care policies, including reimbursement rates for various health care providers and procedures under Medicare and Medicaid Tax extenders. Extends a variety of expiring tax breaks, including lower excise taxes on craft brewers and distillers. Renewable energy sources would see tax breaks extended, as would motorsport facilities, and people making charitable contributions. Business meals would be 100% deductible through 2022 and out-of-pocket health care costs would be deductible after they reach 7.5% of income. It would also extend favorable tax treatment for "look through" entities of offshore subsidiaries of U.S. corporations. One interesting benefit for the LIHTC program is that it appears that a permanent minimum 4% low-income housing tax credit rate will be included in the final bill, as will a $1.1 billion allocation of additional LIHTCs for 11 states and Puerto Rico. Water projects. Includes an almost 400-page water resources bill that targets $10 billion for 46 Army Corps of Engineers flood control, environmental and coastal protection projects. Clean energy. Boosts "clean energy" programs like research and development, efficiency incentives and tax credits. Phases out "superpollutant" hydrochlorofluorocarbons. Education. Includes a bipartisan agreement to forgive about $1.3 billion in federal loans to historically Black colleges and universities and simplify college financial aid forms. Boosts the maximum Pell Grant for low-income college students by $150 to $6,495. Offers "second chance" Pell Grants to incarcerated prisoners. Horse racing "doping." Adds bipartisan legislation by Majority Leader Mitch McConnell, R-Ky., to create national medication and safety standards for the horse racing industry as lawmakers move to clamp down on the use of performance-enhancing drugs that can lead to horse injuries and deaths. New Smithsonian museums. Establishes the Women s History Museum and the National Museum of the American Latino as new Smithsonian museums located near the National Mall. Pipeline safety. Folds in pipeline safety legislation reauthorizing operating grants and safety standards for oil and gas pipelines. Aircraft safety. Adds, after the scandal involving Boeing 737 MAX crashes, legislation to beef up the Federal Aviation Administration s aircraft certification process. Addresses human factors, automation in the cockpit, and international pilot training while authorizing nearly $275 million over the next five years to carry out the legislation. Intelligence programs. Reauthorizes intelligence programs for 2021. It is expected that the one-time payments and unemployment benefits will begin shortly after the New Year.

Minimum Wage to Increase in Many Areas in 2021

In 2021, 19 states will have new minimum wage rates. Affordable housing managers responsible for determining the income of applicants and residents need to be aware of state and local minimum wage laws in order to ensure the most accurate possible projection of income. States with Minimum Wage in Excess of Federal $7.25 per Hour (as of 1/1/21) - unless noted otherwise, the minimum wage for tipped employees is $2.13 Alaska: $10.34.Arizona: $12.15; $9.15 for tipped employees.Arkansas: $11.00; $2.63 for tipped employees.California: $14.00 - applies only to employers with 26 or more employees. Employers in CA with 25 or fewer employees have a minimum wage of $13.00 per hour. Note: the minimum wage for large employers will increase to $15 per hour in 2022.Colorado: $12.32; $9.30 for tipped employees. Colorado cities have the ability to set higher minimums.Connecticut: $12.00.Delaware: $9.25.District of Columbia: $15.00.Florida: $8.65; $5.63 for tipped employees. Note: the minimum wage will increase to $10 per hour on September 30, 2021, reaching $15 by 2026.Hawaii: $10.10.Illinois: $11.00; $6.60 for tipped employees. The youth minimum wage for youth working less than 650 hours per year is $8.50.Maine: $12.15; $6.08 for tipped employees.Maryland: $11.60 for small employers (14 or fewer workers); $11.75 for all other employers; $3.63 for tipped employees.Massachusetts: $13.50; $5.55 for tipped employees.Michigan: $9.87; $3.75 for tipped employees. Note: This increase has been delayed due to high unemployment numbers and will remain at $9.87 until further notice.Minnesota: $10.08 - this is the rate for large employers (employers with $500,000 or more gross revenue). Small employers have a minimum wage of $8.21 per hour.Missouri: $10.30; $5.15 for tipped workers.Montana: $8.75, for both tipped and non-tipped employees.Nebraska: $9.00Nevada: $8.25 for employees who are not offered health insurance. On July 1, 2020, the minimum wage for employees with health insurance increased to $8.00, and those without health insurance to $9.00.New Jersey: $12.00 (large employers - five or more employees); $11.10 (small employers); $4.13 for tipped employees.New Mexico: $10.50; $2.55 for tipped employees.New York: $12.50 statewide; $10.40 for hospitality, non-fast food, resort service; $8.35 for hospitality, non-fast food, general service; $14.50 for hospitality- fast food; ($15.00 in New York City).Ohio: $8.80 (large employers with $323,000 or more in gross receipts); $7.25 (small employers); $4.40 for tipped employees.Oregon: $11.25 (Portland, $13.25 on July 1) - effective July 1, 2020, the statewide minimum will be $12.00 ($11.50 for nonurban counties).Rhode Island: 10.50South Dakota: $9.45; $4.725 for tipped employees.Vermont: $11.75; $5.88 for tipped employees.Washington: $13.69.West Virginia: $8.75 Certain occupations are exempt from federal minimum wage laws, but states have their own exemptions. Anytime an applicant or resident reports or has a verification of income that is less than the federal or state minimum wage, managers should follow up with employers to determine the reason. That reason should be documented in the file.

The rise in Housing Prices Further Inhibits Affordability - But, May Offer Opportunities to Landlords

Affordable housing across America - whether ownership or rental - is growing scarcer than ever, as the wealthy bid up properties that might once have been considered "affordable." This is especially the case in the big coastal cities. It now appears that the COVID-19 impact on the housing market may turn out to be permanent - and will widen the gap between rich and poor. Renters and buyers alike face rising prices that outstrip income growth and favor people with cash savings. The median prices of a single family home in California has now crossed $700,000, setting a new standard for what the American Dream might cost. Housing experts say this is a trend that has accelerated over the last five months and is tied directly to the pandemic: Low-interest rates - which the Fed will almost certainly keep in place - are pulling people into the market at a time when everyone is craving more space to live and work. "Starter" homes in cities that attract young people are almost nowhere to be found. They are also growing harder to find in exurbs. People leaving San Francisco, where the median home price is $1.1 million, will have to pay nearly $500,000 if they move to Sacramento. While affordability was a crisis even before the pandemic, it has been accelerated by the crisis. While California provides the most extreme example of the problem, the story is the same everywhere. The cost of buying a house across the nation was up 7% in September alone, as shown by the Case-Shiller index. Case-Shiller is an index that is used by securities investors, mortgage banks, servicing operations, and government agencies to make property valuations, assess and manage risk, mitigate losses, and control appraisal quality. Phoenix, Seattle, and San Diego were the cities with the biggest price increases, and the last five months have seen frenzied real estate activity - not just in these areas, but across the Country. Even as many Americans have struggled to pay rent and mortgages, the wealthy have paid above asking prices for homes that used to be worth a lot less - basically hollowing out the low-end of the market. This leads to a chain reaction that keeps low and middle-income people in rentals and leaves fewer financial incentives for single-family developers to build anything but high-end homes. A recent report by the Harvard Joint Center for Housing Studies found that supply is tightest for low and moderate-cost homes. The best solution may be to build our way out - in other words, increase the housing supply to the point where the supply begins to match the demand. Mortgage rates are likely to remain low for the foreseeable future, encouraging home sales. The current lack of supply will continue to drive prices up. Single-family housing starts have remained under 1 million annually for over ten years, but given the current demand, there is hope for a rise in 2021. The only cure for a supply deficit is to build more homes and to make it cheaper to build those new homes. The cost of buying a house hit a six-year high in September, and prospective buyers are unlikely to find better deals anytime soon. A measure of home prices in 20 large cities rose at a 6.6% yearly pace in October according to the Case-Shiller price index. That s up from 5.3% in September. It should be noted that Wall Street economists had predicted a 5.4% increase. A broader measure by Case-Shiller that covers the entire country showed a similarly large 7% increase in home prices over the past year, marking the fastest 12-month gain since 2014. Home prices have actually risen faster during the worst pandemic in a century instead of going down - as would normally be expected. Rock-bottom mortgage rates and a high volume of people leaving cities during the pandemic for more space in the suburbs and beyond has boosted demand at a time when the supply of homes for sale is near historic lows. Prices rose in 19 of the 20 large cities tracked by Case-Shiller. The lone exception, Detroit, may have had higher prices as well, but Case-Shiller could not collect enough data because of rising COVID-19 cases in the area. The smallest increases were in New York and Dallas. New York has seen a particularly large outflow of residents after suffering a huge number of COVID-19 cases early in the pandemic. Dallas was another hard-hit area. In the end, home sales may slow a bit in the face of the current surge in coronavirus cases and a softer economy. But demand - and prices - are not likely to taper off significantly, especially if the newly released vaccines - with more to come - turn out to be effective and widely available. Sales are at the highest level in years and are likely to stay that way once the economic rebound picks up the pace. What impact will this have on affordable rental housing? According to studies done by the Federal Reserve Board, when sales prices are high relative to rents, rent increases during the three years following a price spike have tended to be larger. This indicates that owners of non-subsidized affordable housing (e.g., the LIHTC program), may see opportunities for a rent increase in the next few years - assuming their properties are not already charging maximum LIHTC rent.

New Products Make Healthy Housing a Reality

Healthy living is on everyone s mind now. The COVID-19 pandemic has raised awareness of the environments we live in and the importance of those environments in our daily lives. Also, the increase in reasonable accommodation requests relating to "multiple chemical sensitivity" has made it clear to housing owners and managers that the chemicals and materials we use in our housing make a difference in the quality of life for both residents and staff. Currently, most health-related actions taken by owners are reactive - i.e., we make changes when forced to through the fair housing or Section 504 reasonable accommodation process. However, visionary developers are beginning to develop housing that is healthier than any housing developed in the past, greatly reducing the likelihood of complaints and the subsequent revisions to property operations. In short, it is time to consider the health of our residents and staff in the design of multifamily housing. "Green building" practices have been around for years now, and this should be the starting point for any plan to develop healthy housing. Most people view green building as a series of energy-saving features, and that is certainly the case. But in addition to energy savings, green building techniques promote healthy living through the use of non-toxic building and cleaning materials, which now are generally comparable in cost to the more traditional non-healthy building products. New design approaches are being utilized by affordable housing architects, including the use of natural light in units and more exercise and activity spaces for residents. Indoor air quality is being dramatically improved with technologically advanced air filters and better mold prevention systems. While the cost of these advanced environmental systems has traditionally been a concern, the greenest HVAC systems now have the lowest life-cycle costs. It is now possible to develop affordable multifamily housing using sustainability elements that meet the requirements of the National Green Building Standard (NGSB) certification. NGSB is a third party certification ANSI standard.  Healthy elements can now be built into housing complexes from top to bottom. Paint There are now many cost-effective paint options that utilize the HomeFree hazard spectrum. Paint is one of the primary finishes in a home. It covers a large percentage of the interior surface area. Selecting interior paint products that have the fewest hazards possible can have a significant impact on occupants and installers. Attributes to consider in the selection of interior latex paints are minimizing volatile organic compounds (VOCs), and alkylphenol ethoxylate (APE) free paints. Look for low VOC content in paints - at a minimum, specify paint bases with a VOC content less than 50g/L. Because VOC content misses some VOCs that may be emitted from paints, also look for an emission certification. Colorants can add VOCs and other hazardous content to paints. Select paints with colorants that do not increase the VOC content of the base paint when tinted. APEs are a high priority to avoid due to their toxicity and potential for widespread exposure. Look for paints that are APE free. The goal with regard to interior paints should be at least 85% of interior coatings that meet the low VOC content or low VOC emission requirement. Using low VOC paints over an entire apartment complex may add from $40 to $50 per unit in cost, depending on project size. Combining the relative affordability of the VOC free paint with the clear health benefit such paint affords, all housing operators should consider implementing a requirement for zero VOC paint across entire portfolios - including existing units. Some forward-thinking developers, including Homes for America, have already implemented this change. This change alone will impact employees and residents by decreasing exposure to hazardous volatile chemicals that increase the risk of asthma and chemicals that may interfere with hormone function. Flooring Healthy flooring options include some linoleum flooring and biobased flooring. The biobased flooring is significantly more costly than traditional apartment flooring so may not be a viable option for most affordable housing. While linoleum is more cost-effective, it is prone to denting. For this reason, it may be considered for senior housing but may not be a good option for the heavy use associated with family housing. Other building elements are also being developed with healthier living in mind, including countertops, cabinetry and millwork, insulation, and drywall. Going forward, no new affordable housing development should be built that is not green and healthy. In terms of cost, healthy housing is no less feasible than traditional housing that does not take into consideration healthy living. With the development of healthy housing products, new housing will be better suited to withstand the ravages of the next pandemic - which is certain to come. Green housing will also better prepare us for climate change and the more frequent extreme weather events.

Hoarding - A Challenge for Housing Managers

In 2013, the American Psychiatric Association (APA) declared hoarding to be a clinical disability, automatically putting the issue of hoarding front and center with housing operators. The Fair Housing Act (FHA) bans discrimination against individuals with disabilities. The FHA defines disability as any physical or mental impairment that substantially affects one or more major life activities. Hoarding is more than simply having too much clutter. It is characterized by the accumulation of items that are generally viewed as having no value, and the inability to discard those items. The most telling characteristic of hoarding is that it creates a situation in which the home cannot be used for its intended purpose. According to the APA s Diagnostic Statistical Manual V (DSM-5), hoarding causes major distress or problems in social, work, or other important areas of functioning (including maintaining a safe environment for self and others). Many people with hoarding disorder also experience other mental disorders, including depression, anxiety disorders, attention-deficit/hyperactivity disorder, or alcohol use disorder. Professional owners and property managers know the rights of the disabled, especially those rights relating to the requirement that when reasonable to do so, owners are required to accommodate the needs of a disabled person when such accommodation is necessary to afford the person equal use and enjoyment of a property. In most cases, owners are not required to offer accommodations (i.e., changes in policy or practices) unless requested by a disabled person or a person requesting on behalf of a disabled person. Within the context of housing, hoarding is one type of disability where a housing operator may have to offer accommodation without one being requested. All housing owners and managers should have an established plan relating to dealing with hoarding issues. There are a number of elements that will be present in any good "hoarding plan." Train Staff to Detect Signs of Hoarding The goal is to catch hoarding before it seeps out of the unit and affects other residents or common areas. This can usually only be done through visual observation, either by staff or other residents. It may also be detected by the presence of noxious odors in hallways and other common areas. Staff should be trained to immediately report these issues. Hoarding is not limited to common possessions, such as clothing, newspapers, or plastic bags; some people hoard garbage and rotting food - even animals or human waste products. Investigate Potential Hoarding Immediately When the issue is discovered due to odors, a determination of the source is required. Once that determination is made, the resident whose unit appears to be the source of the problem should be contacted. Follow state and local law with regard to a landlord s right to inspect the unit, but such inspection is a necessity. Once inside, document the conditions, focusing on violations of lease provisions and applicable health and safety codes. Make notes about the nature and cause of any noxious smells, pest infestations, and other problems that have spread outside the unit. Unless prohibited by state or local law, photos should be taken. Descriptions of hoarding conditions may not adequately describe the problem. However, if the resident is adamant about not having photos taken, it is best not to force the issue. Ultimately, the resident s cooperation will be required in resolving the problem. Stay neutral and nonjudgmental in dealing with the resident. Do not take matters into your own hands to clear away the resident s possessions. That approach will backfire more often than not - especially if the resident has not asked for your assistance. Even if the resident does request your assistance in the cleaning process, it is best not to agree. This sets a bad precedent for what you will do for residents and may create liability if the resident accuses the staff of theft or damage to personal property. Be Alert for Reasonable Accommodation Needs If the condition of the unit violates the lease - which it almost certainly will - it is best not to follow standard lease violation procedures with regard to the hoarding problem. This is the one time when it is recommended that housing operators initiate the reasonable accommodation process, without waiting for a specific request. If a hoarding problem is indicated, the resident almost certainly has a recognized mental impairment and is therefore disabled. In these cases, fair housing law may require the granting of a reasonable accommodation that would give the resident time to restore the unit to an acceptable standard. It is "time" that is the accommodation. Residents with hoarding problems will almost never specifically ask for an accommodation. While such a request may come from a family member or advocate, it may not come at all. In these cases, it is recommended that the housing provider offer additional time if the resident is willing to cooperate in the preparation of a plan that will improve the condition of the unit. This type of communication should come from the corporate office of the housing owner - not the site staff. It may even be best if it comes from the attorney for the housing provider. Determine the Accommodations that will Correct the Situation Following are examples of the types of accommodations that could be offered: Meeting with the resident to identify health and safety issues that need to be addressed;Establishing goals and timelines with the resident to address the health and safety issues;Setting periodic dates for follow up visits;Setting forth the goals, timelines, and re-inspection requirements in a written agreement that the resident signs;Providing the resident with a list of community resources that can assist persons with hoarding issues;Working with a fair housing and/or mental health advocacy group or attorney assisting the resident to develop a plan to bring the unit into compliance; andExtending the time for compliance with a legal notice that has been served or entering into a stipulation agreement in an eviction that gives the resident a final opportunity to address the health and safety issues and preserve their tenancy. The priority should be solving legitimate health and safety issues rather than trying to achieve ideal housekeeping practices. Residents with hoarding issues may not realize they have a problem - of the severity of the problem - or be equipped to resolve the problem on their own. Also, hoarding has a high rate of recidivism, so any written agreement made with the resident should include language that provides for periodic unit check-ins to monitor ongoing compliance after the health and safety issues have been remedied and a specific time period for correction of any future health and safety issues. An "Interactive Process" is Required There may be times when granting additional time to clean a unit may not be reasonable. If the condition of the unit poses an immediate risk to the health and safety of other residents or to the building itself, giving additional time may not be reasonable. Accommodation may not be required, and termination of the tenancy may be the best approach, if: The condition of the unit is a clear, direct, and immediate threat to the health and safety of other residents or the property and there is no accommodation that will eliminate or sufficiently mitigate the health and safety issues;There are serious health and safety issues that cannot be resolved through accommodation;The resident has caused serious monetary damage to the unit and refuses to reimburse the landlord for the cost of the damage; orThe resident will not engage in the accommodation process or cooperate in bringing the unit back into compliance. However, whenever an accommodation request is denied, owners and managers should enter into an interactive process with the resident to determine if there is an alternative accommodation that may work for both the resident and the property. It is also important to be flexible in terms of timing - especially if the resident exhibits some degree of cooperation. It may take multiple attempts, extended deadlines, or outside help to alleviate problems inside the unit. Remember, any plan to ameliorate a hoarding problem should call for periodic unit visits during the accommodation process - as often as once a month. However, once the resident has brought the unit to an acceptable condition, re-inspections should probably not occur more than quarterly. If the Process Fails, Protect the Property and Other Residents If the resident ignores warnings about lease violations or otherwise fails to address hoarding problems, proceedings to recover possession of the unit should be undertaken. To determine whether a resident with a hoarding problem poses a direct threat, an individualized assessment must be made based on reliable, objective evidence, such as current conduct or recent history of overt acts. The assessment must consider: The nature, duration, and severity of the risk of injury;The probability that injury will occur; andWhether any reasonable accommodation could eliminate the direct threat. Be Prepared to Give Multiple Chances Even if it is proven that a resident s hoarding justifies eviction, owners should be prepared for further delays under certain circumstances. Courts are inclined to give the benefit of the doubt to a disabled person unless it is clear that they are a direct threat to the property. A recent court case illustrates the hesitancy on the part of some courts to remove residents due to hoarding issues. The case is 140 West End Ave. Owners Corp v. Dinah, L., New York, November 2019. Facts of the Case:The resident was an elderly woman who had lived at the community for ten years.In 2017, due to severe hoarding, the landlord undertook eviction proceedings.The resident amassed garbage, books, and newspapers, resulting in infestation, unreasonable odors, and an increased risk of fire.After a year, a court-appointed a guardian with authority to go into her unit, arrange for heavy-duty cleaning, and if necessary, remove the resident from the premises to complete the cleaning.After multiple attempts to resolve the matter, the case went to trial in 2019.An employee of the management company testified that strong urine and garbage odors continued to emanate from the unit as late as the day before the hearing. A 2018 cleaning had eliminated the odors only for a few weeks.A maintenance worker who had been in the unit twice to inspect the HVAC system testified that he observed piles of garbage, clothing, papers, and other debris that made navigating the unit difficult and that there were extreme odors of urine and feces.Management had photos, which showed garbage and clutter strewn throughout the unit.The resident s next-door neighbor also testified about strong and unpleasant odors coming from the apartment.Ruling:The court ruled that the landlord proved that the resident breached the lease by maintaining a nuisance, which interfered with other residents' use and enjoyment of their homes. Since the condition continued over a two-year period, it was a clear continuity and recurrence of objectionable conduct.However, the court, using its discretion, said that the resident would be likely to suffer extreme hardship if a stay weren t granted. Furthermore, the guardian was making good faith efforts to secure a safe, affordable dwelling for the resident and that is was reasonable to give the guardian more time to do so. Also, the resident appeared to be cooperating with the owner and guardian.The court granted a stay of execution for 90-days to allow the guardian time to sell her unit and relocate her to a suitable environment, or in the alternative, to allow the guardian an opportunity to cure the nuisance condition, without prejudice to see a further stay upon a showing of good cause. This case illustrates the difficulty that may be encountered in attempting to remove a resident with a hoarding problem.  While eviction may ultimately be the only solution, "bending over backwards" to assist a hoarding resident in resolving the issue is strongly recommended. In this way, if legal action later becomes inevitable, the courts are more likely to be sympathetic to a landlord s position. It is important to understand that fair housing law may protect residents engaged in hoarding behavior, but there are limits to those protections. Having a process in place to deal with hoarding issues as they arise will go a long way toward ensuring a satisfactory outcome for landlords facing this problem.

Novogradac Releases Estimates of National, State, and Local Median Incomes for 2021 and 2022

Novogradac, a national accounting and professional services firm, has released its estimates of income limits on a national and state level. Using the 2019 American Community Survey (ACS) and the Congressional Budget Office s (CBO) consumer price index (CPI) estimate, Novogradac developed an initial estimate of area median income and very-low-income for 2021 and 2022. While only estimates, these figures can assist the affordable housing industry with planning for the upcoming two years. What follows is a summary of the Novogradac estimates. National Median Income 2021 incomes will be heavily impacted by COVID-19, and it is estimated that the national median income will increase by less than 1%. Based on this, affordable housing operators should expect minimal increases in HUD published income limits for 2021, translating to a limited ability to increase rents. However, there is a much better outlook for 2022, and Novogradac estimates that the national median income will increase by more than 5.75%. For the period 2015 - 2019, the annual increase in the HUD National Median Income averaged 4.28%, so while 2021 is likely to be well below average, there is a good chance for a rebound in 2022. While national data provides a look at the "big picture," housing is market specific, so an examination of the trends at a state level is of much more use to individual housing operators. State Median Income Some states will go against the national trend and experience significant increases in 2021, but others will actually see decreases in income. Almost 25% of states will have a decrease in state median income in 2021, as compared to five states in 2020 and no states estimated for 2022. In fact, Novogradac estimates that all states will see income increases in 2022, with around 70% of states showing increases of more than 5%. States that are likely to see a decrease in median income in 2021 are Arkansas, Iowa, Kentucky, Louisiana, Maine, Montana, Nebraska, New Mexico, Pennsylvania, Rhode Island, South Dakota (may drop by nearly 4%), and Wisconsin. All other states are likely to remain the same or see slight increases. However, there are some states are expected to buck the 2021 trend, including Washington D.C. (+7.87%), Oregon (+3.6%), and Vermont (+5.57%). Operators in the states with declining incomes will have to rely on the hold harmless provisions of the law to avoid rent and income reductions for LIHTC and tax-exempt bond properties. Keep in mind that some affordable housing programs are not held harmless from income reductions, and those without rental assistance (e.g., HOME) could face actual rent reductions. HUD will cap the increases in income each year, and Novogradac estimates that the cap in 2021 will be 5% and 2022 will be 11.6%. This means that in 2021 if an area has a median income of greater than 5%, the HUD income increase will be capped at 5%. Additional information on the Novogradac estimates can be obtained by checking out the article published by Thomas Stagg in the November 30, 2020, Novogradac Blog. Visit https://www.novoco.com/resource-centers/affordable-housing-tax-credits and click on "National Median Income Estimates for 2021 and 2022" under "Notes from Novogradac."

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