July 21, 2023

Senate Appropriations Committee Releases THUD Funding Bill

This week, the Senate Committee on Appropriations released the fiscal year (FY) 2024 draft Transportation, Housing, and Urban Development (THUD) funding bill. The bill provides $70.06 billion for HUD, compared to $68.2 billion in the House THUD bill. Below is a breakdown of key HUD rental assistance programs with proposed funding levels for FY24:

Proposed Funding for HUD Programs

TBRA–The Senate bill requests $31.737 billion for Tenant-Based Rental Assistance (TBRA), which is $1.5 billion more than the FY23 level. This includes:

• $27.6 billion for Contract Renewals, which is an increase of $ 1 billion from the 2023 levels;
• $2.7 billion in Administrative Fees, a decrease of roughly $500 million;
• $445 million for Tenant Protection Vouchers, which is an increase of $100 million;
• $686 million for Section 811 Mainstream Renewals, which is an increase of $79.5 million;
• Funding for Mobility Services and Incremental Vouchers was not included.

PBRA–The legislation requests $15.8 billion for the Project-Based Rental Assistance (PBRA) program, which is $913 million more than the 2023 current level. This includes:

• $15.4 billion for contract renewals and amendments                        
• $448 million for Performance-Based Contract Administration (PBCA)
• The Committee also included $32 million for HUD to provide budget-based rent adjustments to PBRA contracts that have been renewed through the mark-to-market [M2M] program and are distressed or at risk of becoming distressed.

Section 202– The Senate bill includes $1.075 billion for the Section 202 Housing for the Elderly program, equal to the FY23 level. This includes $797 million for the costs associated with fully funding all annual PRAC renewals and amendments; $6 million to support preservation transactions originally developed with a capital advance and assisted by a PRAC; $152 million for new capital advances; and $120 million for service coordinators and the continuation of existing congregate service grants.

Section 811– The Senate bill requests $360 million for the Housing for Persons with Disabilities, which is equal to the 2023 current level. This level of funding, in addition to residual receipts, recaptures, and other unobligated balances, will support all PRAC renewals and amendments while also providing up to $152 million for the creation of new affordable housing for persons with disabilities through project rental assistance.

HOME Program— The bill provides $1.5 billion for the HOME Investments Partnerships Program, which is $1 billion more than the House recommendation.

Public Housing— The Senate bill requests $8.875 billion for the Public Housing Fund, which is $300 million above the FY23 enacted level and $530 million. It provides $3.2 billion to public housing capital needs, a decrease from the $3.3 billion provided in FY23. The bill would provide $5.530 billion for public housing operating costs, an increase of $400 million from current FY23 funding. The bill also provides $198 million for the Self-Sufficiency Programs, including $140 million for the Family Self-Sufficiency Program.

REAC—The bill proposes $50 million to support ongoing physical inspections and financial assessments by REAC, including implementation of the NSPIRE model. The Committee also directs HUD to coordinate with the Treasury and USDA to clarify what actions the agencies are taking to align inspection standards and to raise awareness on ways to minimize the need for duplicative physical inspections.

Yes In My Back Yard Incentive Grant Program—The Committee stated that the Federal Government can support communities as they remove barriers to affordable housing production in order to increase the supply of housing, lower housing costs, and ensure families have an affordable place to live, particularly in high-opportunity neighborhoods. The Committee included $100,000,000 for a competitive grant program to reward State, local, and regional jurisdictions that have made significant progress in improving zoning and land use policies, or removing other local barriers, that can increase affordable housing production and preservation.

Fair Market Rents—The Committee remains concerned that, in some areas, fair market rents calculated by HUD continue to drop, despite increases in rent at the local level. The Committee encourages HUD to continue its progress toward reforming the process of setting FMRs and strongly encourages HUD, to the extent permissible under current regulations, to set FMRs at no lower than the previous year’s level for an FMR area, unless the Department has sufficient local data to justify such a change. Additionally, HUD is directed to report on the potential impact of expanding PHAs’ ability to set payment standards from 110 percent of FMR to 120 percent of FMR if PHAs provide rent comparability studies that illustrate HUD-calculated FMRs are lower than actual market rates, or of increasing the FMR above the 40th percentile of gross rents.

Healthy Homes—The House bill provides $350 million for the Office of Lead Hazard Control and Healthy Homes, which is $60 million below the FY23 current level and the President’s Budget Request.

To view a summary of the bill, click here. To view the full bill text, click here.

Administration Announces New Efforts to Increase Transparency of Housing Fees

This week, President Biden and HUD Secretary Fudge announced new commitments by several of the biggest rental housing search platforms to increase transparency of housing fees, and released new research that highlights and summarizes state and local innovation to address junk fees. Rental fees can increase cost burdens for renter households, who are often already spending a growing share of their income on rent due to a limited housing supply across the country. “Too often, renters are hit with unexpected fees on top of their rent,” said Secretary Fudge. “Today’s announcement shows the Biden-Harris Administration’s commitment to lower costs for renters and build a fairer, more transparent rental housing marketplace.”  During the announcement, President Biden outlined several new steps in the Administration’s effort to crack down on rental junk fees and lower costs for renters, including:

New commitments from rental housing platforms Zillow, Apartments.com, and AffordableHousing.com.

• Zillow launched a Cost of Renting Summary on its active apartment listings, empowering the 28 million unique monthly users on its rental platform with clear information on the cost of renting. This new tool will enable renters to easily find out the total cost of renting an apartment from the outset, including all monthly costs and one-time costs, like security deposits and application fees.
• Apartments.com announced that this year it will launch a new calculator on its platform that will help renters determine the all-in price of a desired unit. This will include all up-front costs as well as recurring monthly rents and fees. The Apartments.com Network currently lists almost 1.5 million active availabilities across more than 385,000 properties.
• AffordableHousing.com, the nation’s largest online platform dedicated solely to affordable housing, will require owners to disclose all refundable and non-refundable fees and charges upfront in their listings. It will launch a new “Trusted Owner” badge that protects renters from being charged junk fees by identifying owners who have a history of adhering to best practices, including commitment to reasonable fee limits, no junk fees, and full fee disclosure.

HUD also released a new research brief that provides an overview of the research on rental fees and highlights state, local, and private sector strategies to encourage transparency and fairness in the rental market, including capping or eliminating rental application fees; allowing prospective renters to provide their own screening reports; allowing a single application fee to cover multiple applications; and clearly identifying bottom-line amounts that tenants will pay for move-in and monthly rent. The brief provides a blueprint for how everyone from local government to landlords can do better for renters.

Additionally, the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission, requested information on tenant screening processes, including how landlords and property managers set application and screening fees, which will help inform enforcement and policy actions under each agency’s jurisdiction. The CFPB has noted that background checks too often include inaccurate or misleading information and risk scores that lack independent validation of their reliability.

In the coming months, the Administration will work with Congress, state leaders, and the private sector to address rental junk fees and build a fairer rental housing market. On July 26, the Senate Committee on Banking, Housing, and Urban Affairs will host its first-ever hearing on junk fees, including in the rental housing market. NAHMA will continue to monitor this situation closely.

A White House fact sheet outlining today’s announcements is available here.