#4 Rent Assistance Administrative Plan Revisio
NEIGHBORHOOD SERVICES MEMORANDUM
April 14, 2010
Memo To: Community Development Authority
Memo From: Jennifer Petruzzello, Neighborhood Services Director
Subject: Item #4 –Public Hearing and Action on Proposed Revisions to the
Administrative Plan for the Section 8 Rental Assistance Program
Summary
The City of Janesville Neighborhood Services Department administers the Section 8 Housing
Choice Voucher Program. This program is governed by the Code of Federal Regulations, which
HUD uses to outline many of the Section 8 Program requirements, and a locally adopted
Administrative Plan, which must cover any policies that are exclusive to the local housing
agency. The Community Development Authority has the responsibility of establishing and
updating the Administrative Plan.
Neighborhood Services staff is recommending that changes be made to the Section 8 Rent
Assistance Administrative Plan to address the “Refinement of Income & Rent Rule” adopted by
HUD and effective January 31, 2010, and to facilitate cost savings measures in the Housing
Choice Voucher Program.
Background
Effective January 31, 2010, HUD implemented the Refinement of Income & Rent Rule. This rule
requires the use of an online system of income verification with the purpose of improving
integrity within the HUD rental program, reducing administrative and subsidy payment errors,
streamlining the income verification process, and ensuring that limited Federal subsidies serve
as many eligible families as possible.
In addition to updating the Administrative Plan to address the new rule, Neighborhood Services
is anticipating a funding shortfall within our Section 8 Rent Assistance Program during 2010.
This shortfall is the result of a shift in the number of units we assist to a maximum dollar amount
we can assist each year. During 2009, the City was increasing the number of units we were
assisting in an effort reach more families, while at the same time, the amount of subsidy that we
pay for each unit was increasing. This increase was predominantly the result of lower household
incomes, which then resulted in a higher subsidy (payment) being made on behalf of our clients.
As a result, it appears that the program may have insufficient funds to support families currently
on the program without implementing cost saving measures.
I have been in contact with the HUD financial office, and have requested their consideration for
increasing our annual funding due to increased leasing, high portability costs (when our clients
move to another community), and the decline in our local economic environment.
Recommended Changes
Changes that are recommended due to the Refinement of Income and Rent Rule include:
1. Adding a policy to address what would happen if the head of household is deceased.
Changes that are recommended as a result of the anticipated funding shortfall include:
1. Effective immediately, the Housing Authority would deny requests for individuals to move
to other communities with a higher payment standard, unless those housing authorities
agree to absorb them into their program rather than billing the City of Janesville. This
practice is allowed by HUD when the Housing Authority is experiencing a funding
shortfall. Individuals would be placed on a waiting list, and would be given an opportunity
to move before the City issues any other vouchers off of the waiting list. When given this
opportunity, individuals would have 30 days in which to request to move.
2. Increase the minimum rent payment from $25.00 to $35.00 per month. Minimum rent
refers to the Total Tenant Payment and includes the combined amount a family pays
towards rent and/or utilities, when it is applied. The increase would be effective
immediately with the July 1 annual reviews and incorporated when individuals have their
6 month and/or annual review. HUD has indicated to us that most Housing Authorities
have a minimum rent payment of $50. Staff is recommending that this amount be
increased in 2 phases with a $10 increase initially and another $15 increase 12 months
later.
3. Increase the minimum rent payment from $35.00 to $50.00 per month. Minimum rent
refers to the Total Tenant Payment and includes the combined amount a family pays
towards rent and/or utilities, when it is applied. This would be the second and final
increase planned for the minimum rent payment.
4. Amend our occupancy standards. Occupancy standards refer to the minimum number of
bedrooms required to accommodate a family of a given size. Our current occupancy
standard is written from a perspective of calculating the minimum number of bedrooms.
The proposed change would shift this focus to the maximum number of bedrooms
allowed. This shift in focus will allow a greater number of households to be assisted
under the program. The primary impact would be that children under the age of 6 would
be required to share a bedroom and that the number of units would not be increased for
increases in the household size unless by birth, adoption, marriage, age of children
increases to 6, or court-awarded custody. This would predominantly impact young
children and non-related additions to the household unless the individuals are willing to
share bedrooms. Our current standards are listed below. This change would be effective
during a household’s annual review so that they would have an opportunity to move to a
smaller unit if they chose to do so.
Current Number of Persons
# of Bedrooms Minimum Maximum
0 1 2
1 1 2
2 2 4
3 4 6
4 6 8
5 8 10
*Children of the opposite sex, other than those under the age of 6, are not be required to
occupy the same bedroom.
5. Staff recommends that the CDA set a second public hearing for June 16 to adopt a
termination policy. As this represents a significant policy change a 45 day notice period
is required prior the scheduled public hearing. HUD regulations allow that the Housing
Authority may terminate the Housing Assistance Payment contract if the Public Housing
Authority determines, in accordance with HUD requirements, that funding under the
annual funding contract is insufficient to support continued assistance for families in the
program. This policy would be implemented as a last resort when a funding shortfall
exists.
Before any terminations would be announced, the HA would consider its entire budget
authority, and carefully consider all cost-savings measures and the impact such
terminations will likely have on program applicants and participants. The HA would notify
the HUD Field Office in Milwaukee and its HUD Financial Analyst.
If terminations become necessary, staff proposes a policy where:
1. The order of terminations will be as follows:
a. Single, non elderly households, first on, first off;
b. Non elderly households, first on, first off;
c. Participants in the YWCA Transitional Living Program, first on, first off;
d. Elderly households, first on, first off; and
e. Disabled households, first on, first off.
2. Individuals terminated from the program due to a funding shortfall will be placed on
the top of the waiting list and offered assistance in the reverse order of the
termination.
The CDA would not be approving the termination policy at their April meeting, but
rather setting it for a public hearing at their June meeting.
Other recommended changes to the administrative plan include:
1. A clarification that the local preference for selection off of the waiting list refers to
individuals who live or work in the City of Janesville at the time their name has come to
the top of the waiting list.
2. Reduced the threshold for passing a criminal background check by adding the ability to
deny when 2 or more alcohol or drug related arrests have occurred during the preceding
thirty-six months.
3. Added language that an applicant will be ineligible if any household member is a lifetime
registered sex offender. This is a regulatory requirement.
4. Added language that assistance will be terminated to an individual who is registered as a
lifetime sex offender under a state sex offender registration program. This is a regulatory
requirement.
5. Remove the ability for the HA to add someone to the program when their name comes to
the top of the waiting list and they owe another HA funds, even when they have entered
into a repayment agreement.
Recommendation
Following a public hearing, staff recommends that the CDA approve the following changes to
the Section 8 Administrative Plan:
1. Approve a policy to address when a head of household dies.
2. Deny requests to move to higher rent areas when a funding shortfall exists.
3. Increase the minimum rent payment from $25.00 to $35.00 per month, beginning with
July 1, 2010 annuals.
4. Increase the minimum rent payment from $35.00 to $50.00 per month, beginning with
the July 1, 2011 annuals.
5. Amend our occupancy standards to assume that children under the age of 6 will share a
bedroom and that the HA will not issue a larger voucher due to additions of family
members other than by birth, adoption, marriage, or court-awarded custody.
6. Set a second public hearing for June 16 to adopt a termination policy. A clarification that
the local preference for selection off of the waiting list refers to individuals who live or
work in the City of Janesville at the time their name has come to the top of the waiting
list.
7. Reduced the threshold for passing a criminal background check by adding the ability to
deny when 2 or more alcohol or drug related arrests have occurred during the preceding
thirty-six months.
8. Added language that an applicant will be ineligible if any household member is a lifetime
registered sex offender.
9. Added language that assistance will be terminated to an individual who is registered as a
lifetime sex offender under a state sex offender registration program.
10. Remove the ability for the HA to add someone to the program when their name comes to
the top of the waiting list and they owe another HA funds, even when they have entered
into a repayment agreement