#7 Public Hearing and Action - Rent Assistance
NEIGHBORHOOD SERVICES MEMORANDUM
June 8, 2010
To: Community Development Authority
From: Jennifer Petruzzello, Neighborhood Services Director
Subject: Item #7 –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 increase the minimum monthly rent and to
include a termination policy to address the possibility of a funding shortfall.
Background
For 2010, the City of Janesville Community Development Authority was anticipating a
funding shortfall within our Section 8 Rent Assistance Program. This anticipated
shortfall was the result of increased leasing, higher portability payments (the amount we
are required to pay when an individual moves to another housing authority), and a
significant increase in the average amount of assistance provided to households. 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.
The City of Janesville has received additional funding from HUD in the amount of
$237,487 to partially offset the anticipated shortfall. Administrative changes and policy
changes approved by the CDA in April of 2010, and the use of all of our fund balance
This means that
are expected to result in “break even” finances by the end of the year.
we are not expecting to terminate any participants due to a lack of funding in
2010.
However, this situation brought to our attention that our Administrative Plan did
not include a policy to address this situation, and HUD requires that such a policy be
created.
Proposed Changes
At this time, two changes are being proposed to the Section 8 Rent Assistance
Administrative Plan. These changes include increasing the minimum monthly rent and
including a termination policy to address the possibility of a funding shortfall.
1. 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 September 1 annual reviews and incorporated when individuals
have their 6 month interim and/or annual review.
HUD has indicated to us that most Housing Authorities have a minimum rent
payment of $50. Staff is recommending a $10 increase at this time. Based on a
review of participants who are currently at the minimum rent level over the past 2
months, approximately 3% of Section 8 households pay the minimum rent. This
equals approximately 16 households overall. Making this change has a small impact
on program costs, in that a $10 increase will equal $160/month or $1,920/year.
However, making this change also communicates to participants that it is important
for them to contribute towards their rent payment, and demonstrates to HUD that the
CDA is taking steps to manage program costs.
nd
An earlier recommendation to include a 2 increase of $15 for a total of $50/month in
12 months has been removed at this time. This amount will be reviewed again in 12-
24 months, or when future changes to the Administrative Plan are proposed.
2. Adopt a termination of assistance due to insufficient funds policy. 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 CDA 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 CDA
would notify the HUD Field Office in Milwaukee and its HUD Financial Analyst.
Participants and landlords would have a minimum of 90 days notice regarding any
terminations due to insufficient funding.
If terminations become necessary, the order of terminations will be as follows:
a. Single, non elderly, non disabled households, first on, first off;
b. Non elderly, non disabled households, first on, first off;
c. Participants in the YWCA Transitional Living Program, first on, first off;
d. Elderly, non disabled households, first on, first off; and
e. Disabled households, first on, first off.
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.
While any terminations will create a hardship for participants, this approach is being
recommended because it attempts to minimize the impact of the shortfall by focusing
first on those who have been participating in the program for a period of time and
thus have had housing stability for a period of time, and those who may have greater
flexibility in obtaining alternate housing.
Recommendation
Following a public hearing, staff recommends that the CDA make a motion to approve
the following changes to the Section 8 Administrative Plan:
1. Increase the minimum rent payment from $25.00 to $35.00 per month, beginning
with September 1, 2010 annuals.
2. Adopt a “termination of assistance due to insufficient funds” policy as noted
above.
A copy of the Administrative Plan, which incorporates the proposed policy changes is
attached.