1. WASHINGTON UPDATE Tamar Greenspan Policy Advisor, Public and Affordable Housing National Association of Housing and Redevelopment Officials September 13, 2012

2. The Big Picture

3. Housing Expenditures

4. Budget Process  President’s Request  302(a), 302(b), Budget bills  House: $51.61 billion for the FY 2013 Transportation, Housing and Urban Development and Related Agencies (THUD) appropriations bill. 7% ($3.64 billion) lower than FY 2012 enacted THUD bill.  Senate: $53.44 billion for the FY 2013 Transportation, Housing and Urban Development and Related Agencies (THUD) appropriations bill. 3.8% ($1.81 billion) lower than FY 2012 enacted THUD bill. Budget Control Act of 2012

5. Budget Process  Continuing Resolution (CR)  Political considerations  Passed by House this week  Will be debated by Senate next week  Sequester?  $109 Billion in automatic cuts  “Sequestration Transparency Act” (H.R. 5872) “sequestration percentages and amounts necessary to achieve the required reduction of sequestrable budgetary resources and resulting reductions at the program, project and activity level.”

6. Public Housing FY 2012 Enacted FY 2013 Proposed FY 2013 S. 2322 FY 2013 H.R. 5972 FY 2013 NAHRO Public Housing Operating Fund$3,962$4,524$4,591$4,524$5,279 Public Housing Capital Fund$1,875$2,070$1,985 $3,750 ROSS Program[$50]$0[$50] $50 Emergency Capital Needs[$20] $20 Jobs-Plus Pilot-[$50][$15][$0] Severely Distressed Public Housing (HOPE VI/CNI)$120$150$120$0$150

7. Public Housing Operating Fund

8. Operating Reserve Offset  “The Secretary shall take into account public housing agencies’ excess operating fund reserves, as determined by the Secretary”  “The Secretary shall not offset excess reserves by more than $750,000,000”  “The Secretary shall establish a process by which public housing agencies can appeal the initial allocation amounts”

9. Operating Reserve Offset  Collateral Damage from the Operating Reserve Offset  Lowered baseline  Restrictions on capital investments  Arbitrary reserves policy  Dangerous precedent  What does this mean going forward?  NAHRO/PHADA Litigation

10. CY 2013 Operating Fund  Continuing Resolution  Anomalies sought: Offset language, Appropriation amount  “front loading” funds  Final FY 2013 Appropriations  NAHRO estimates 86-90% proration Changes to flat rents, medical expense deductions, and minimum rents  Sequester?

11. CY 2013 Operating Fund  Minimum Rent  All PHAs will be required to implement a minimum rent of $75  Reduction to eligibility: about $67 M annually  Medical Deductions  The threshold for deducting unreimbursed medical expenses would increase from 3% to 10%  Reduction to eligibility: about $37 M annually  Flat Rents  All PHAs would be required to set flat rents equal to 80% of FMR  Reduction to eligibility: about $150 M in the first year, $460 M when fully phased in

12. Public Housing Subsidy Reform  In 2012, HUD Proposed Merging the Operating Fund and Capital Fund  Legislative Instrument: FY 2013 Budget Proposal Affordable Housing & Self Sufficiency Improvement Act (AHSSIA)  HUD’s “Listening Tour” Findings PHAs do not support full consolidation PHAs want additional flexibility Replacement reserves

13. Rental Assistance Demonstration  In the FY 2012 Appropriations Act, Congress authorized the conversion of up to 60,000 units of public housing to assistance under Section 8  Project-Based Vouchers  Project-Based Rental Assistance  Limited to current funding  Appropriated level at time of closing (likely FY 2013)  Contract terms  PBV: 15 years (20 years with PHA approval)  PBRA: 20 years  Mandatory renewals  Mobility  “Good Cause” Exemptions

14. Housing Choice Vouchers Program ($ Millions) FY 2012 Enacted FY 2013 Proposed FY 2013 S. 2322 FY 2013 H.R. 5972 FY 2013 NAHRO Tenant-Based Rental Assistance$18,970$19,023 $19,396 $19,134 Section 8 HAP Renewals[$17,242][$17,238] [$17,495][$17,238] $17,980 Ongoing Administrative Fees[$1,300][$1,525] [$1,560][$1,525] $1,883 Tenant Protection/ Administrative Fees [$50] [$15][$50] $50 Tenant Protection Vouchers[$75] [$80][$75] Fully Fund Incremental HUD-VASH Vouchers[$75] $75 Family Self-Sufficiency (FSS) Coordinators [$60]$60 [$60] $75 Sec. 8 Project-Based Rental Assistance $9,340$8,700 $9,876$8,700 Fully Fund

15. Section 8 Admin Fees  For 2012 and 2011, NAHRO’s advocacy resulted in HUD using its discretionary authority to augment PHAs’ fee funding:  CY 2011: 83% to 84.5%  CY 2012: currently at 80%, increased from 75%  Using HUD’s estimates from its FY 2013 budget justifications, NAHRO estimates that the funding level in H.R. 5972 and HUD’s budget request would provide an 81 percent pro-ration for FY 2013  NAHRO estimates that S. 2322 would yield an 83 percent pro-ration for ongoing Section 8 administrative fees  If the House and Senate enact a CR for FY 2013 at the FY 2012 enacted level at $1.300 billion, NAHRO estimates the FY 2013 ongoing administrative fee funding level would yield a 69 percent pro-ration. If this occurs, it would result in the lowest ongoing administrative fee pro-ration in the 37 year history of the Section 8 tenant-based program

16. Section 8 Admin Fees  It takes people to help people.

17. Legislation  Affordable Housing and Self Sufficiency Improvement Act (AHSSIA)  Formerly known as SEVRA, SESA  Comprehensive reform of Section 8 voucher program, significant changes to Public Housing  Expansion of MtW  Permanent authorization of RAD

18. Other Legislation  LIHTC extender bills (Cantwell-Snowe)  Fixes value of 9% tax credits  Family Self-Sufficiency Act (Reed)  Combines PH and S8 FSS programs  Expands eligible self-sufficiency activities  Makes PBRA residents eligible recipients

19. Regulatory Relief  President Obama issued Executive Order 13563 on Jan. 18, 2011  The Executive Order requires federal agencies to seek more affordable, less intrusive ways to achieve policy goals and would give careful consideration to the costs and benefits of those regulations  In addition, agencies are to coordinate, simplify, and harmonize regulations to reduce costs and promote certainty for businesses and the public

20. Regulatory Relief  NAHRO’s comments on the Section 8 Housing Choice Voucher program included but not limited to: 1) improving opportunities for ongoing administrative fee revenues within existing resources; 2) reducing PHAs’ administrative burdens; 3) the use of Housing Assistance Payments and Net Restricted HAP Assets; 4) the Section Eight Management Assessment Program (SEMAP); 5) portability; 6) improvements to HUD’s Information Technology systems such as PIC and the Voucher Management System (VMS); 7) improving HUD’s regulatory framework, organization and oversight approaches

21. Regulatory Reform  Public Housing Assessment System (PHAS)  HUD is working on developing PHAS IV Emphasize “risk” over “compliance” Consolidate PHAS and SEMAP Replace HQS inspection with UPCS for HCV program  Listening Sessions around the country through October NAHRO has insisted that HUD adhere to the rulemaking process and issue a proposed rule before moving to the final rule stage

22. Advocacy Never underestimate the power of a small group of committed people to change the world. In fact, it is the only thing that ever has. ~Margaret Mead

23. Advocacy We must use all of our voices! http://www.nahro.org/nahro-advocacy

24. Questions? Tamar Greenspan tgreenspan@nahro.org 202-580-7234