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HUD Housing Programs: Tenants’ Rights (The Green Book): 12.3.5.4 Applicable Laws and Regulations

Congress has enacted numerous policies governing the foreclosure and HUD-owned disposition process. For many of these statutes, HUD has also adopted implementing regulations and subregulatory policies. This subsection provides a brief overview of these laws and policies. Because of their complexity, any potentially applicable laws and policies should be closely reviewed to determine whether HUD is exercising its discretionary authority legally.

HUD Housing Programs: Tenants’ Rights (The Green Book): 12.4.1 Overview

Units may lose Project-Based Section 8 rental assistance for variety of reasons. First, an owner may refuse to renew the housing assistance payment contract on the terms that HUD offers at the contract’s expiration (“opt out”). Second, HUD or the responsible agency may seek to terminate the contract for serious violations during the contract term or fail to renew the contract at its expiration. Third, Congress and HUD may fail to appropriate sufficient funds to fulfill the obligations of the contract, either during its term or at renewal.

HUD Housing Programs: Tenants’ Rights (The Green Book): 12.4.2.1 Introduction

Because the terms of Section 8 Project-Based contracts are limited, usually shorter than the term of the loans financing their capital costs, they may end prematurely, on dates unrelated to tenant or project needs. Although most of the original contracts had 20-year terms, some were as short as five years. Since the mid-1990s, after expiration of the original contracts, many renewal contracts have had one-year terms, subject to annual appropriations. Some owners have agreed to longer renewal terms, usually between five and 20 years, subject to annual appropriations.

HUD Housing Programs: Tenants’ Rights (The Green Book): 12.4.2.2 Legal Claims to Challenge Section 8 Opt-Outs

Substantive and procedural requirements may protect the interests of tenants in units threatened by opt-out. However, there is no mandatory duty for the owner to remain in the program if the rents are adjusted to market comparables. Usually, because the renewal decision rests with the owner, tenants and advocates must rely on a patchwork of restrictions and incentives in the applicable laws and guidelines to preserve units, or at least to protect tenants against involuntary displacement.

HUD Housing Programs: Tenants’ Rights (The Green Book): 12.4.3 HUD or Agency Termination or Refusal to Renew Project-Based Section 8 Contract

Despite an owner’s desire to renew, the Section 8 regulatory agency (HUD, a contract administrator, or a Participating Administrative Entity (PAE)577 exercising administrative responsibilities under contract with HUD) may refuse to renew a contract with an otherwise eligible owner, after a planning or review process, based on specific criteria concerning housing quality or owner performance.578 An agency refusal to renew may affect projects seeking ordinary renewal, as well as those elig

HUD Housing Programs: Tenants’ Rights (The Green Book): 12.4.4 Insufficient Appropriations to Fund Expiring Project-Based Section 8 Contracts

Congress must appropriate funds annually to renew expiring Section 8 contracts and they have done so on an annual basis for the past several years. However, because the subsidy commitments for renewal contracts, regardless of their contracts’ stated terms, last for only one year at a time, there is always the risk that Congress will not appropriate funds sufficient to cover all existing units at their required rent levels.600 Federal budget deficits and the uncertain politics of domestic discretionary spending heighten this risk.

HUD Housing Programs: Tenants’ Rights (The Green Book): 12.4.5 Voucher Conversion under Mark to Market Restructuring

When an owner of a property with above-market rents renews a Section 8 contract, the renewal rents are usually limited to market levels. Some owners must pursue Mark to Market debt restructuring, which may require other changes, such as the conversion of project-based assistance to tenant-based Vouchers. The FY 18 appropriations legislation extended the Mark to Market program until October 1, 2022.604

HUD Housing Programs: Tenants’ Rights (The Green Book): 12.4.6 Underutilization or Improper Use of Project-Based Section 8 Units

A Section 8 contract does not guarantee that subsidized units are invariably made available to eligible families. Sometimes, an owner does not utilize the Section 8 subsidies, instead renting units to over-income tenants or leaving units vacant and not claiming assistance payments from HUD. Alternatively, an owner may rent large units to income-eligible families who are too small for the units, making those units unavailable to larger families.

HUD Housing Programs: Tenants’ Rights (The Green Book): 8.2.2.3 Voucher Program

Voucher participants have the right and responsibility to be involved in the PHA Planning Process and to be represented on the RAB. If the PHA administers a Voucher program and the number of families assisted under the Voucher program is 20 percent or more of all families assisted by the PHA, voucher participants must have reasonable representation on the RAB.76 In practice, PHAs have added voucher participants to a RAB, including a RAB that is composed of a jurisdiction-wide tenant council.

HUD Housing Programs: Tenants’ Rights (The Green Book): 8.2.3 Timeline for PHA Plan Process

The statute and HUD regulations establish some key deadlines in the Plan Process, but leave much of the detail to the local PHAs.80 Seventy-five days before the end of the PHA’s fiscal year, each PHA is required to submit its final Plan to HUD.81 In addition, every PHA is required to have at least one public hearing on the proposed Plan and provide the public a 45-day written notice of that hearing, which is typically published in local newspapers and/or posted on the PHA’s website.

HUD Housing Programs: Tenants’ Rights (The Green Book): 8.2.4 Obtaining PHA Plans

Proposed Plan. Each PHA is required to make the proposed Plan available to the public at least 45 days before the public hearing.86 In addition, drafts of the proposed plan should be available to the RAB as early as possible so that it may make meaningful and effective comments.87 If the proposed Plan is not available, residents and their advocates may seek assistance from HUD to obtain copies from the PHA or make a request under a state freedom of information act.

HUD Housing Programs: Tenants’ Rights (The Green Book): 8.2.5 Written Comments

Residents and advocates may submit written comments on the Plan by the deadline provided by the PHA (usually the day of or shortly before the public hearing). Commenting is a good opportunity for residents to critique the Plan and provide specific language that should be included in the Plan. Often, a PHA will respond to such public comments.95 If the PHA is not responsive to important public comments, these comments should be labeled as a challenge to an element in the PHA Plan and sent to HUD.

HUD Housing Programs: Tenants’ Rights (The Green Book): 8.2.6 Public Hearing

The PHA must hold a public hearing to accept comments on its proposed plans. The PHA must notify the public of the hearing date and time and indicate that the proposed PHA Plan, including all required attachments and documents relating to the Plan, is available for review.98 The hearing must be at a location and, presumably, a time that is convenient to the residents and program participants.99

HUD Housing Programs: Tenants’ Rights (The Green Book): 8.2.8 Amending the PHA Plan

The regulations require PHA Plans to define what constitutes a “significant” amendment to the Plan.120 HUD deems certain changes to the PHA Plan to be “significant” amendments.121 One court failed to dismiss a complaint alleging that adding credit worthiness as screening criteria is a significant amendment.122 Another court denied a PHA’s motion to dismiss, finding that changes to minimum rent, occupancy standards, and payment standard polici

HUD Housing Programs: Tenants’ Rights (The Green Book): 8.3 Section 8 Administrative Plan and Public Housing ACOP

In addition to reviewing the Annual and Five-Year Plans, residents and advocates should examine the PHA’s Section 8 Administrative Plan and public housing Admission and Continued Occupancy Policy (ACOP). These two documents respectively govern the PHA’s day-to-day operation of the Section 8 Voucher and public housing programs. The Administrative Plan sets forth the policies that the PHA uses in its Section 8 program,130 while the ACOP sets forth the policies that are used in the public housing program.

HUD Housing Programs: Tenants’ Rights (The Green Book): 8.4 Annual MTW Plan and Report

Moving To Work (MTW) public housing authorities have different reporting requirements than non-MTW agencies.135 A PHA’s Annual Plan is replaced by the Annual MTW Plan. MTW PHAs have an agreement with HUD that outlines the general terms of participation in the demonstration program (the Standard Agreement).136 Attachment B of the Standard Agreement with HUD, Form MTW 50900, lists the required elements for the Annual MTW Plan.137

HUD Housing Programs: Tenants’ Rights (The Green Book): 3.2.2.1 Overview

Some PHAs and owners of HUD-assisted properties have attempted to restrict the kinds and numbers of guests that a tenant may have or to prohibit certain non-residents from being present. These policies include management requirements for prior approval of, or other restrictions on, overnight guests, and policies prohibiting tenants from having certain individuals as guests or invitees.

HUD Housing Programs: Tenants’ Rights (The Green Book): 9.2.2 Resident Notice and Comment

What is Notice and Comment? The notice-and-comment process requires PHAs to provide public housing residents notice of a PHA’s contemplated action and an opportunity for the residents to comment on the proposed action. However, depending on the type of action considered by the PHA, the form of the notice and comment can vary. For example, some rules require a specific notice period and others specifically mandate the PHA to consider the comments.11

HUD Housing Programs: Tenants’ Rights (The Green Book): 9.2.3 Resident Councils

PHAs should encourage the formation of resident councils by informing tenants of the benefits of having resident organizations. The benefits of having a duly-elected resident council include the role that resident councils play in selecting members to the Resident Advisory Board (RAB), the possibility that the PHA will make a unit available for tenant participation activities, and the role that resident organizations have in deciding how to use the funds collected from allocating $25 per occupied unit per year.25