Continuing Resolution Reached; Government Shutdown Averted
Fiscal year 2016 officially ends at midnight tonight, but Congress has fortunately passed a short term stop-gap funding bill for fiscal year 2017. This continuing resolution (CR) will temporarily fund all federal programs at their FY 2016 levels until December 9, 2016. The CR includes $500 million for disaster relief in states such as Louisiana and Maryland, that will be distributed through the Housing and Urban Development Department (HUD)’s Community Development Block Grant program (CDBG). The CR also includes a provision allowing the U.S. Department of Agriculture (USDA) Rural Development (RD) to pay ongoing debt service for rental assistance contracts under its multifamily direct loan programs
While it is a relief that the federal government will not shut down, it is disappointing to see that lawmakers have again failed to pass individual appropriations bills. Both the Senate and House
appropriations bills for Transportation, Housing and Urban Development (T-HUD) provided solid increases for affordable housing programs in FY 2017.
Following the November elections, Congress will again have to come to the negotiating table before December 9, 2016 to craft funding legislation for the remainder of FY 2017. At that time, NAHMA will promote the funding increases as proposed in the Senate and House T-HUD bills.
Senator Rubio Introduces HUD Inspection Process and Enforcement Reform Act
On Tuesday, September 26, Senator Marco Rubio (R-FL) introduced S. 3398, the “HUD Inspection Process and Enforcement Reform Act of 2016.” This bill recodifies and expands upon an amendment that Senator Rubio introduced for the recent Transportation, Housing and Urban Development, and Related Agencies (THUD) appropriations bill for fiscal year 2017; this T-HUD bill has not been passed into law and his amendment is not included as part of the recent CR previously mentioned.
After a visit to a troubled property in Florida, Senator Rubio intends to use S.3398 as a vehicle to target poor property management practices. The bill would shorten the required response time for a property owner to respond to contract violations from 30 days to 15 days. HUD will also be required to prepare a Compliance, Disposition and Enforcement Plan at a quicker rate, from the current 60 days to a new target of 30 days.
The bill also includes provisions that will allow HUD to terminate or demote employees overseeing inspections should they be found to be neglectful of their duties in inspecting a property. The inspection process managed by HUD’s Real Estate Assessment Center (REAC) would be audited as well under S.3398. HUD would be required to produce a report on REAC to Congress which examines:
- The percentage of all inspected properties that received a REAC-inspected score of less than 65 within the 48 month-period preceding the report;
- The number of properties in which the most recent REAC-inspected score represented a decline relative to the previous REAC score;
- A list of the 10 metropolitan statistical areas with the lowest average REAC-inspected scores for all inspected properties; and
- A list of the 10 States with the lowest aver-age REAC-inspected scores for all inspected properties.
Enforcement procedures for the owners and managers of Project-Based Rental Assistance properties are also increased. HUD will be required to take action on properties in which:
- The project receives a Uniform Physical Condition Standards (UPCS) inspection score of 30 or below;
- The project fails to certify in writing to HUD within 3 days of receiving the score under that all urgent health and safety deficiencies identified by the inspector at the project have been corrected; or
- The project receives a UPCS inspection score of more than 30 and less than 59 and has received consecutive scores of less than 60 on UPCS inspections.
For tenants, the bill includes a provision that makes Tenant Protection Vouchers (TPV) available for tenants living in dwelling units in which the owner has been declared in default of a project-based subsidy contract due to imminent health and safety risk to residents.
NAHMA understands Senator Rubio’s intention to rid the affordable housing portfolio of bad players, S.3398 could harm good owners and managers in an effort to address poor management practices. In a grassroots action alert distributed to members in May, NAHMA urged members to call their Representatives and Senators to request that they visit properties in order to demonstrate that the overwhelming majority of multifamily properties provide quality housing. Broad legislative actions like Senator Rubio has introduced may project negative stereotypes or unnecessary burdens upon all affordable housing managers and owners, as a result of the terrible actions of bad managers.
NAHMA will review this bill in consultation with our federal affairs committee and formulate a public response. A press release concerning the bill is available on Senator Rubio’s website
here
House Lawmakers Send Letter to HUD Regarding Criminal Screening Guidance
On September 23, various lawmakers in the House of Representatives sent a letter to HUD Secretary Julian Castro regarding the criminal screening guidance. The letter requests additional information regarding the formation of this guidance and enforcement procedures based on the guidance. It raises concerns for operational questions for owners, managers, and tenants.
The letter is available
here
