Property Compliance News Briefs - January 2012

Sunday, January 1, 2012

Janet Golrick, the U.S. Department of Housing and Urban Development's (HUD's) acting deputy assistant secretary for Multifamily Housing Programs, sent a memo on November 22 to Section 8 multifamily project owners announcing policy changes related to project-based rental assistance (PBRA). The memo says that HUD in the coming months will formally implement the changes through Housing Notices. The three changes, which will implement PBRA savings and constrain expenditures, are: funds currently held in project residual receipts accounts will be used to reduce assistance payments; HUD will limit all Option 4 contract renewals and annual rent adjustments to operating cost adjustment factor (OCAF) increases if proposed rents exceed market rents; and HUD will require all rent comparability studies to justify proposed rents that exceed 110 percent of small area fair market rents (SAFMR). On December 5, HUD clarified the first change in a second memo that says that only residual receipts relating to so-called "new reg" Section 8 contracts may potentially be used; it is believed that residual receipts relating to Section 236, Section 221(d)(3) and "old reg" Section 8 contracts will remain the property of owners. These changes are described further in the memo, which can be found online at www.hudresourcecenter.com.

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The average cost of insuring apartments rose by 1 percent in 2011, according to the National Multi Housing Council's (NMHC's) Apartment Cost of Risk Survey. NMHC said this marks the first total cost of risk (TCR) increase for apartments in four years and attributed the rise to a 25 percent increase in workers' compensation rates. For comparison, 2010's report showed a 6 percent decline in TCR. View the survey results online at www.nmhc.org.

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HUD clarified rules against duplication of emergency assistance benefits under the Community Development Block Grant (CDBG) program. These regulations, which are contained in the Stafford Act, require grantees of federal disaster recovery funds to complete a duplication of benefits analysis specific to each funding applicant. HUD says state and local governments have struggled to account for the multitude of sources providing assistance following a disaster and that they have requested guidance to help improve their grant management and avoid noncompliance penalties. HUD, the Federal Emergency Management Agency and the Small Business Administration developed the new guidance to provide grantees a framework to simplify their duplication of benefits analyses when processing applications for CDBG disaster recovery funds. It will also help ease the burden of administering disaster assistance funds so that the funds can be distributed more quickly and the risk of noncompliance is reduced, HUD said. See the November 16 Federal Register for more information.

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Tax Credit Asset Management (TCAM) announced that it has been engaged to provide asset management consulting services for the District of Columbia Housing Authority. The agency seeks to build capacity to manage its large and complex affordable housing portfolio, TCAM said. TCAM's Jenny Netzer will lead the project, with Allen Feliz as lead consultant.

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HUD has proposed a rule to implement the Fair Housing Act's discriminatory effects standard. The new regulations would establish uniform standards for determining when a housing practice with a discriminatory effect violates the Fair Housing Act. Under this proposed rule, the plaintiff would bear the initial burden of proving that a facially neutral practice has a disparate impact on a group of persons protected by the Act; then the burden of proof would shift to the respondent, who would be required to prove that the challenged practice is necessary and legitimate. The standard would apply to both public and private entities. Written comments are due January 17. The proposed rule appeared in the November 16 Federal Register.

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365 Connect launched an electronic resident services program for the affordable housing industry. Called the Comprehensive Resident Services Program, the platform allows affordable housing operators to use a comprehensive plan to serve residents; delivers educational materials and local information; and includes a resident communication forum.

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