Section 3 of the Housing and Urban Development Act of 1968 requires recipients of HUD funding to create job training, employment, and contract opportunities for low- and very low-income individuals. When you think of HUD funding, it's probably subsidized housing that comes to mind. However, HUD also provides financial assistance to community centers, libraries, parks, and local road improvement, among other things.

The intent of Section 3 is to provide these opportunities to the "greatest extent feasible," as outlined in 24 CFR 135.30. This means that other procurement considerations are subordinate to Section 3 goals, and that cost considerations are insufficient grounds for awarding contracts to firms that are not Section 3-compliant.

• Part I: Why does it matter?
• Part II: Is my PHA subject to Section 3?
• Part III: What are my PHA's responsibilities?
• Part IV: Can you recommend some Section 3 best practices?

Why does it matter?

One word: FHEO. The Office of Fair Housing and Equal Opportunity (FHEO) is monitoring Section 3 compliance, and that means it's high on HUD's radar. HUD, FHEO, and the Department of Justice (DOJ) have all stated recently that Section 3 will be a priority for enforcement. PHAs, cities, counties, and even states have been put under voluntary compliance agreements (VCAs) for not adequately implementing Section 3 requirements.

FHEO has also invited businesses and low-income persons to learn more about Section 3 by contacting an FHEO representative at their local HUD field office. Section 3 residents, businesses, or a representative of either may file a complaint if they believe that a violation of Section 3 requirements has occurred where a HUD-funded project is planned or underway. Complaints will be investigated; a complaint that cannot be resolved voluntarily may result in an administrative hearing.

Who are Section 3 residents?

Section 3 residents include not just public housing residents, but also YouthBuild participants and low- and very low-income persons. Low and very low-income household limits are determined annually by HUD. These limits are typically established at 80 percent and 50 percent of the median income for each locality by household size or the number of people residing in the house. (You can find them online here.) Housing choice voucher (HCV) families are not automatically considered Section 3 residents, but can qualify on the basis of income.

Who receives Section 3 priority?

For training and development, priority is given to persons in public and assisted housing, persons in the area where the HUD funding is provided, and homeless persons.

Priority is also given to participants in HUD's YouthBuild programs. In a recent letter posted to the Section 3 website, HUD and the Department of Labor (DOL) announced a partnership in support of YouthBuild, which provides employment and training opportunities for disadvantaged or at-risk youth. The goal of the partnership is to increase apprenticeship opportunities by connecting Section 3-covered contractors and YouthBuild graduates. According to the letter, contractors that sponsor YouthBuild graduates will increase the competitiveness of their proposals when bidding on HUD-funded construction projects. YouthBuild administrators are prepared to market the availability of training opportunities to local Section 3-eligible residents, particularly those residing in public housing.

For contracting, businesses that meet the definition of a Section 3 business concern receive priority.

What is a Section 3 business concern?

A Section 3 business concern is defined as a business that:

• Is owned (51 percent or more) by Section 3 residents; or
• Employs Section 3 residents as at least 30 percent of its full-time, permanent staff; or
• Provides evidence of a commitment to subcontract to Section 3 business concerns for 25 percent or more of the awarded contract

In Part II, we'll discuss which PHAs are subject to Section 3 and provide some important Section 3 definitions and examples.

NMA senior associate Cara Gillette trains, consults, and provides technical assistance nationwide in fair housing, public housing management, hearings, economic self-sufficiency, and governing boards. Prior to joining NMA, she administered public housing and Section 8 waiting lists, served as hearing officer, managed public housing, and oversaw resident economic development programs at the San Diego Housing Commission. She has previously written for the NMA blog on how to work with sequestration in the public housing program.

Looking for further guidance? We can bring our Procurement and Section 3 seminar to your PHA. Email sales@nanmckay.com for more information about our affordable onsite training options.

NMA trainers Samantha Pratter and Sheryl Putnam at last year’s NMA Housing Conference

Trainer and consultant Samantha Pratter has been a part of the NMA team since 2008. As NMA’s writing supervisor, Samantha oversees publications from concept and creation through the ongoing revision process, including NMA Master Books, model policies, course books, and handbooks. She recently wrote for the NMA blog about the key differences between the project-based voucher (PBV) program and the (HCV) housing choice voucher program.

As NMA's professional development manager, Sheryl Putnam spearheaded the development of our new Blended Occupancy Management and Fundamentals of Low-Income Housing Tax Credit (LIHTC) Management certification seminars. Prior to joining Nan McKay and Associates in 2011, she managed the compliance department for a state housing finance agency, providing compliance oversight activities for the LIHTC, PBRA, and HOME programs. Sheryl will be presenting several sessions at the 2014 NMA and GoSection8 Housing Conference, including this one and How to Avoid Noncompliance: Blended Occupancy.

Ensuring Compliance and Maximizing Financial Resources

How to Avoid Noncompliance: Low-Income Housing Tax Credits (LIHTC) and Hot Topics from IRS Newsletters
Presenters, Sheryl Putnam and Samantha Pratter

The LIHTC Newsletter, which the Internal Revenue Service (IRS) has been publishing since 2000, is an excellent resource for addressing many issues owners face and also provides a valuable forum for networking, sharing information about IRC 42, and communicating guidance. This session will focus on some of the important topics covered in recent newsletters, including information on CHG 4 to the HUD Handbook 4350.3, the exception for married students under the student rule, using new income limits, first-year certifications, reporting noncompliance with utility allowance requirements, treating buildings as part of a multiple building project, and the available unit rule.

Our free one-on-one consulting sessions at the second annual NMA and GoSection8 Housing Conference in Chicago are filling up fast! Sheryl's already fully booked, but Samantha and other industry experts are still available, so sign up now and save your seat. Register online or email sales@nanmckay.com for more information.

NMA professional development manager Sheryl Putnam will be presenting a session on blended occupancy at this year’s NMA Housing Conference

As NMA's professional development manager, Sheryl Putnam spearheaded the development of our new Blended Occupancy Management and Fundamentals of Low-Income Housing Tax Credit (LIHTC) Management certification seminars. Prior to joining Nan McKay and Associates in 2011, she managed the compliance department for a state housing finance agency, providing compliance oversight activities for the LIHTC, PBRA, and HOME programs. Sheryl recently wrote a series for the NMA blog about blended occupancy projects and will be presenting the following session at the 2014 NMA and GoSection8 Housing Conference.

Ensuring Compliance and Maximizing Financial Resources

How to Avoid Noncompliance: Blended Occupancy
Presenter, Sheryl Putnam

Managing housing developments with multiple funding sources can be complicated. Requirements from multiple oversight agencies need to be satisfied, and there's an overall lack of guidance on how to operate blended developments, since each monitoring agency audits for compliance with its own program requirements. Because penalties for noncompliance can be severe, this session will explore some of the most complicated compliance areas, including:

• Applying income limits and income targeting requirements
• Applying correct rent limits/restrictions
• Understanding and applying the LIHTC and Section 8 student rules
• Differences in income and asset calculation and verification
• Applying utility allowances correctly

Sheryl and other industry experts will be available for limited free one-hour consulting sessions at the 2014 NMA and GoSection8 Housing Conference. Registered participants can sign up on a first-come, first-served basis starting July 14. Register online or email sales@nanmckay.com for more information.

This morning HUD published a Federal Register notice implementing program changes contained in the 2014 appropriations act. Like last month’s implementation notice on flat rents (Notice PIH 2014-12), today’s notice will serve as interim guidance pending HUD rulemaking. The effective date for the changes discussed in the notice is July 1.

➤  PHA Consortia: The appropriations act changes the definition of “public housing agency” to include a PHA consortium. While PHAs may request waivers of existing restrictions, HUD notes that it will not approve any consortium for administration of multifamily project-based Section 8 contracts.

➤  Biennial Inspections: In the voucher program, PHAs may now elect to conduct housing quality standards (HQS) inspections biennially rather than annually for assisted units. According to the notice, HUD is implementing this change on a limited basis pending stakeholder input through future rulemaking.

The option to perform biennial inspections applies to assisted units during the term of a HAP contract. PHAs must still perform inspections prior to executing a HAP contract, and on an interim basis when requested by a family or government official. For units which have been inspected during the last 12 months, PHAs may reinspect within 24 months of the most recent inspection. For units which have not been inspected within the past 12 months, PHAs must conduct an annual inspection, and may then schedule the next inspection within 24 months.

The new rule does not require PHAs to adopt a 24-month inspection cycle. PHAs may inspect more frequently if they wish to do so. SEMAP scores will reflect the new requirement.

The rule also permits PHAs to substitute “alternative inspections” for required HQS inspections in some circumstances. After submitting a certification to HUD, the PHA could accept inspection results from the HOME program, the Low Income Housing Tax Credit (LIHTC) program, or similar sources.

For mixed-finance properties, HUD will address changes to inspection requirements in the rulemaking process rather than in this interim notice. Meanwhile, PHAs may adopt biennial inspection policies or alternative inspection methods for these properties.

➤  Definition of Extremely Low Income: In the appropriations act, Congress broadened the definition of “extremely low income (ELI) family” to include families whose income does not exceed the federal poverty level. Under the prior rule, only families whose income did not exceed 30 percent of area median income qualified as ELI.

HUD’s income targeting rule requires that during the PHA’s fiscal year, 75 percent of new admissions to the voucher program and 40 percent of public housing new admissions must be ELI families. The new provision was meant to provide financial relief to PHAs by permitting them to “target” ELI families with slightly higher incomes than the previous rule allowed. For the current fiscal year, PHAs must account for their ELI admissions separately for the period prior to July 1 (under the old rule) and after July 1 (under the new rule).

HUD has recalculated the 2014 income limits to include the new ELI amounts. The revised tables are available here.

➤  Utility Allowances: A change in voucher program rule requires the PHA to now use the utility allowance for the lower of the actual unit size or the voucher bedroom size. Under the previous rule the PHA used the utility allowance for the actual unit size regardless of the voucher bedroom size.

Under the new rule, a family with a 2-bedroom voucher that chooses to lease a 3-bedroom unit will now have the 2-bedroom utility allowance applied. Of course, the PHA must make exceptions if necessary as a reasonable accommodation for a family that includes a person with disabilities.

The new rule on utility allowances is to be applied for all new admissions. For current program participants, the new rule must be applied at the family’s next annual reexamination, as long as the PHA is able to provide the family with written notice at least 60 days in advance of the effective date.

Need help with inspections? Our team of NMAI inspectors have an average background of 12 years’ experience conducting inspections, are highly qualified and certified in HQS and/or UPCS, and have completed required sensitivity and sexual harassment training as well as extensive criminal background checks before beginning work. For more information about NMA Inspections, please visit our website or contact us directly at sales@nanmckay.com.

Up next in our "Meet the Team" interview series is senior associate trainer Sammie Szabo, who joined NMA five years ago after retiring from a four-decade career in the affordable housing industry. With longstanding expertise in complex topics such as project-based vouchers and mixed finance, Ms. Szabo was instrumental in the design of two new seminars focusing on those subjects, Blended Occupancy Management and Developing and Managing Project-Based Vouchers.

Tell us about your work experience.

Before joining Nan McKay and Associates, I worked for a PHA in Southern California for 36 years. That was before the Section 8 program was created, and we administered a public housing program with a total staff of seven people — two in the administrative office (me and the executive director), three in maintenance, and two in the resident services department.

Our waiting list for the public housing program was huge in comparison to the number of units owned by my PHA, and we were very excited when Congress approved the Section 8 program. I wrote our first application for the Section 8 certificate program, and we were approved! Subsequently I wrote and submitted a number of additional applications each and every time funds were available for the certificate program, as well as for the CIAP (pre-capital fund for public housing) and the resident services program.

I became the executive director of the PHA in 1980, and I believe that at age 26 I was the youngest ED. During my tenure with the PHA I expanded the Section 8 program, converted from certificates to vouchers, substantially remodeled the public housing development that had been constructed in 1940, expanded the resident services program, established a vibrant after-school program serving not only children in the public housing program but also in the surrounding community, acquired and rehabbed dilapidated apartments in order to expand affordable housing, and developed affordable housing for seniors using multiple funding sources, including low-income housing tax credits, redevelopment funds, and a loan from the California Housing Finance Agency.

How did you get your start in the industry?

I moved back to California and was looking for a job that interested me, and wasn't just a paycheck. I was offered two jobs on the same day, one at a local college, the other with the housing authority. The people and the work at the housing authority interested me, I hadn't had any experience in the public sector, and after growing up the community, I found the fact that there were programs to help persons of low income in a rather wealthy community fascinating.

I accepted the job with the housing authority, and I was hooked. The job was never boring, and the opportunities to learn, grow, and expand the programs and services that help families move up and out were challenging. I loved it! I always said I would leave the public sector when I got bored, or found the job no longer challenged me. It never happened. Frustrating at times? Absolutely! Boring? Never.

What’s one topic you’re most passionate about in the affordable housing industry?

Providing families, and especially children, with an opportunity to improve their lives and futures. Housing is the keystone to a better future.

What's your favorite part about your job?

Helping the people who help the people. Sounds corny, but it's what we do. At NMA we take pride in providing our students and clients with the tools they need to do their job well. I am thrilled when I complete a consulting assignment or training and know that because of the work we do, our clients are better prepared to serve their agencies and their clients and manage these precious federal resources.

Describe your typical work day?

There isn't a typical work day. Some days are all about travel — getting from home base to the training or consulting site, dealing with airports, security, hotels, car rentals, and all that is associated with the joys of travel. Some days I get up very, very early, often in a  different time zone, locate training rooms and materials, unpack, set up a training room, and prepare myself to be ready and energized when the students arrive. Thank God for coffee!

Other days it's all about meeting with agency staff, getting to know their agency and their needs in order to meet their consulting goals, and respectfully providing the services they need. Yes, living in hotels and eating meals alone is part of the job, but the services we provide are well worth the travel, long days, early mornings, and sore feet.

Tell us about a successful project that you had a part in.

I'm thankful that I've had the opportunity to be a part of many successful projects: working with my team and the local police department to turn a crime-ridden public housing development into a clean, safe, family-friendly environment; developing much-needed senior housing for extremely low-income seniors as well as "gap group" seniors, those above the income limit levels for government subsidies but too poor to afford quality housing with services; and helping agencies create policies and procedures that allow them to better manage their agencies.

The one that touches my heart the most... the development of an after-school program for children in public housing. When I started at the housing authority, I was appalled by the dropout rate of the youth growing up in public housing. By the time I left my agency, 99 percent of our young people graduated from high school, and the majority went on to graduate from college. We made a real difference, long-term, in the lives of those children and their families.

When she isn't traveling, training, or consulting, Sammie Szabo loves to read, and can devour a book or two a day. She also enjoys riding the dunes on her quad and appreciating the beauty of the desert, but her favorite pastime is spending time with her family.

Tip #2: Know what funding/subsidy sources your development has.

There are many different permissible combinations of funding/subsidy sources that can be used in developing affordable rental housing. The low-income housing tax credit program is one of the few programs that can be combined with just about anything.

When you have low-income housing tax credits layered with other funding/subsidy, such as public housing, project-based rental assistance, or HOME, compliance can be tricky. Make sure you keep copies of pertinent regulatory agreements, HAP contracts, income limits, rent limits, and written agreements in one place so that your staff can understand the development's unique blend of programs.

Next: Working with the LIHTC program: Tip #3

As professional development manager, Sheryl Putnam took the lead role in designing NMA's newest certification seminar, Fundamentals of Low-Income Housing Tax Credit (LIHTC) Management. Prior to joining Nan McKay and Associates in 2011, Ms. Putnam managed the compliance department for a state housing finance agency, providing compliance oversight activities for the LIHTC, PBRA, and HOME programs. She recently wrote a series for the NMA blog about blended occupancy projects.

Take advantage of NMA's annual year-end sale and save 20% on upcoming sessions of the new LIHTC class in Orlando, FL; Columbia, SC; and New Orleans, LA. Email sales@nanmckay.com for more information.

NMA founder and president Nan McKay is celebrating a major milestone this year: her 50th year in housing. In an ongoing series of posts, she'll be sharing her stories of how the industry has changed over the course of decades.

Nan has previously written for the NMA blog on the topic of executive management and high performance achievement in the HCV program, and was recently profiled in the latest installment of our interview series.

• Part I: Interesting tidbits from 1937 to 1963
• Part II: Urban renewal on Concord Street
• Part III: The most exciting New Year’s Eve
• Part IV: Integrating Concord Street into the new highrise
• Part V: The men of the building
• Part VI: The women of the building
• Part VII: Public housing in the 1960s and 1970s
• Part VIII: The advent of Section 8

Public housing in the 1960s and 1970s

In the '60s and '70s, public housing for families was centered primarily in the large urban areas. Perhaps that's because, prior to public housing, low-income families' choice of housing was often to live in overcrowded slum housing. Many families in public housing were working families who were trying to survive and get ahead. The income limits were higher than today; there were "ceiling rents" which capped the rents and allowed working families to become self-sufficient.

It turned out that although elderly highrises were successful, highrises for families weren't a great idea. Many highrises for families were built in larger cities in the '60s and '70s. Many had award-winning designs, which would have been far more successful; however, the buildings often had to be severely modified due to funding and financing restraints, thereby making the projects unlivable.

Also, limits on amenities made the properties undesirable. The end result of highrises for families was usually floors and floors of people stacked upon people, with unreliable elevators as the only means of transport. Have you ever looked at the yard of these highrises with children as residents? It was tiny — miniscule — in many places. So where were the children supposed to play?

In some of the large cities, teenagers found a place to play. We were shocked by the stories about elevator surfing in the family highrises. The kids would climb on top of the elevator and then jump from one elevator to the other as one was coming up and the other going down.

Pruitt-Igoe, late 1960s

Working in the housing field, we heard about Pruitt-Igoe, a large public housing project in St. Louis which was first occupied in 1954. By the late 1960s, Pruitt-Igoe with its 2,870 apartments was infamous for its poverty, crime, and segregation.

The apartments were deliberately small, with undersized kitchen appliances. "Skip-stop" elevators stopped only at the first, fourth, seventh, and tenth floors, forcing residents to use stairs in an attempt to lessen congestion.

The same "anchor floors" were equipped with large communal corridors, laundry rooms, communal rooms, and garbage chutes. The stairwells and corridors attracted muggers. Ventilation was poor; centralized air conditioning nonexistent. In the 1970s, Pruitt-Igoe's 11-story buildings were torn down.

We also heard about the conditions in other family highrises in several of the large urban areas. These buildings were home to as many as 15,000 people, living in mid-rise and highrise apartment buildings totaling 3,000 to 4,000 units. Over the years, gang violence and neglect created terrible living conditions. Residents were threatened and had to pay a fee to the gangs to even enter the buildings. The stairwells became dangerous areas. Violence became the norm. Residents were fearful for their children as they left the buildings, even on their walk to school. In some areas there were chaotic New Year's Eve celebrations when gang members fired guns into the air, causing police to block off nearby streets every year.

Problems weren't confined to highrises. HUD began to realize that highrises for families might not have been a good idea and started to design low-rise apartments, duplexes, and even single-family residences for families. The counter problem, however, was that these units took up more space and were more costly to build and maintain. In some cities, the buildings were more likely to be three to six stories, but the concentration of poverty, the lack of employment, and in some cases, police brutality fueled the fires of social tension, a la the Watts Riots in 1965.

One would not think that government-funded projects would be segregated, but they were. In the 1970s, HUD issued directives to deconcentrate low-income households. A 1992 paper by Mittie Olion Chandler examines the lack of deconcentration in public housing, stating: "Decentralized decision making in site selection and resident selection allowed local preferences and, in most cases, existing racially divided residential patterns to prevail."

Choice and opportunity were not the buzzwords in public housing in that era. In the '70s, I remember going on a bus tour of housing developments in a large southern city as part of a national conference. The PHA tour guide was pointing out the public housing developments as we drove. Finally I couldn't stand it any longer and asked, "Are these projects integrated? They don't appear to be." I thought if the government said to do it, all PHAs would have complied. The tour guide looked me up and down and said, "Where are you from anyway?" I was very naive.

The inner-city public housing problems became worse with the widespread use of drugs. By the '70s, according to an interesting article titled History of Gangs in the United States, "public housing high-rises became gang incubators and drug turf battlegrounds." The article notes that in some cities, gangs were well established in public housing as early as the '60s.

Public housing for families in smaller communities didn't experience the drug and gang problems in the 1970s and 1980s. The buildings were smaller, and gangs and drugs didn't hit many of the smaller communities until much later. Therefore, most of the smaller PHAs in the '70s didn't come face-to-face with gang and drug issues.

In some ways, I wish I hadn't missed that segment of public housing firsthand. However, I have a good friend in the company, Betty Turner, who did work during that period for several large PHAs. I'm sharing some of the things she said about those days:

The advent of PCP was a major factor in the change in the public housing atmosphere in the 1970s. PCP was a liquid that people would soak a "cigarillo" in, then dry and smoke it. It caused bizarre behavior, and PHAs began to have trouble collecting rent because people were spending money on the drug. In reading about PCP, I found some interesting data. PCP was actually a veterinary drug. Its nickname was angel dust. I read a few articles that said the drug is returning to Los Angeles and Washington, D.C. Young adults reportedly are driving in from the suburbs to buy it from street dealers. So PCP's influence may not be over.

The appearance of crack cocaine in the 1980s, however, was even worse, and had a major impact on public housing. At the time, public housing funding was decreasing, and federal preferences contributed to housing the most needy families. Youth gangs and street gangs began to form territories for selling drugs. (According to an article in the U.S. Department of Justice's Juvenile Justice Bulletin, a youth gang generally has an age range from 12 to 24, while a street gang may include both youth gangs and adult criminal organizations.)

Gang members often had a girlfriend who dealt drugs out of her unit. Gang members began hanging out in the public housing projects, and residents grew fearful. People with children didn't want to live in that environment, and worried about drug influence or, worse yet, their children's involvement in gangs.

There was a key difference in public housing on the East Coast vs. the West Coast. Public housing for families on the East Coast often consisted of highrise buildings, while the West Coast had mostly mid- to low-rise housing. There were complications for both. Highrises were easier for gangs to "take over" because of the concentration, but low-rise buildings made it more difficult for PHA staff to monitor drug and gang activity.

In the early to mid '80s, cocaine became the drug of choice in the inner cities, and youth and street gang involvement in drug trafficking increased. The reality is that when a lot of money is involved, it changes the picture.

The drug elimination grants which began in the 1980s finally began to acknowledge and address the drug and gang problems. Blocking streets, redesigning properties, and providing funding to address drug and gang problems and to offer alternatives for youth became a HUD priority.

Has it been a success? Public housing is really a microcosm of society. Have drugs been eliminated in the rest of society? Are gangs no longer a problem? Have deconcentration efforts been successful?

Next: Part VIII: The advent of Section 8

While serving as executive director of a Minnesota housing authority, Nan McKay started one of the nation’s first Section 8 programs. She has devoted the past two years to redesigning NMA’s HCV Executive Management course and rewriting the HCV Executive Management Master Book. Look for her this September at the NMA Housing Conference, where she will be presenting a legislative update with her insight on the latest industry news.

NMA founder and president Nan McKay is celebrating a major milestone this year: her 50th year in housing. In an ongoing series of posts, she'll be sharing her stories of how the industry has changed over the course of decades.

Nan has previously written for the NMA blog on the topic of executive management and high performance achievement in the HCV program, and was recently profiled in the latest installment of our interview series.

• Part I: Interesting tidbits from 1937 to 1963
• Part II: Urban renewal on Concord Street
• Part III: The most exciting New Year’s Eve
• Part IV: Integrating Concord Street into the new highrise
• Part V: The men of the building
• Part VI: The women of the building
• Part VII: Public housing in the 1960s and 1970s
• Part VIII: The advent of Section 8

An overview of early public housing

The passage of the U.S. Housing Act of 1937, sometimes called the Wagner-Steagall Act, marks the formal beginning of public housing. I wasn't born yet, but there's some fascinating information available about those early years, especially when compared to public housing today. I encourage everyone to read J. A. Stoloff's paper, The History of Public Housing, which describes the background and origins of the federal public housing program.

USHA poster, 1940s

The Housing Act of 1937, which created the United States Housing Authority, was passed with two purposes: to bolster the lagging economy by reducing unemployment with the creation of jobs and to temporarily provide housing for the working poor. It was not designed as a permanent solution.

After WWII, when the advent of low-interest mortgages helped many families move out of public housing and into the suburbs, the benefits began to be targeted to immigrants and the poor. Many of these people were living in tenements with unsafe and unsanitary living conditions.

Interesting tidbits from 1937 to 1963

Ms. Stoloff's paper gives an excellent, well-documented description of the evolution of public housing. Several items related to screening caught my attention:

• Income screening — incomes must be no higher than five times the rental cost of the unit, with an exception for families with three or more children, who could have six times the rental cost.
• Due to the inconsistency in the way public housing was managed, very strict tenant policies were enforced.
• Unwed pregnant women could be evicted.
• Large fines for property damage were imposed.
• Families had to have two parents.
• The head of the household had to hold a job.
• Families had to have a record of good housekeeping skills.

The Housing Act of 1949 introduced several changes:

• Different types of subsidized housing
• Priority for very low-income people
• Income limits
• Maximum rents (so as not to compete with the private sector)

HUD has published a public housing timeline, which is very helpful. You can also find interesting reading on the beginnings of public housing at Wikipedia.

Next: Part II: Urban renewal on Concord Street

While serving as executive director of a Minnesota housing authority, Nan McKay started one of the nation’s first Section 8 programs. She has devoted the past two years to redesigning NMA’s HCV Executive Management course and rewriting the HCV Executive Management Master Book. Look for her this September at the NMA Housing Conference, where she will be presenting a legislative update with her insight on the latest industry news.

The U.S. Treasury Department and the Internal Revenue Service announced yesterday that they will waive low-income housing tax credit (LIHTC) rules that prohibit owners of low-income housing from providing housing to victims of Hurricane Sandy who do not qualify as low-income. The action will expand the availability of housing for disaster victims and their families.

According to their press release, the IRS will be temporarily suspending income limitation requirements and non-transient requirements for qualified low-income housing projects that provide housing to victims of Hurricane Sandy.

The National Affordable Housing Management Association (NAHMA) has announced that it is currently following up regarding the specifics associated with this waiver and will provide members with more information as it becomes available.

In related news, the Department of Housing and Urban Development (HUD) has launched a website for victims of Hurricane Sandy, particularly those in New York and New Jersey. It provides phone numbers to call for HUD assistance or guidance, lists of local resources, links to the Federal Emergency Management Agency (FEMA) website, steps to take in dealing with a storm-damaged home, and a fair housing disaster toolkit.

On the HUD home page, you'll also find a "widget" to the Hurricane Sandy recovery page at USA.gov. Access more disaster recovery resources at http://www.huduser.org/portal/sandy.html.

To stay updated on the latest program information, subscribe to NMA's PIH Alert and Housing Resource Newsletter. Order before January 1, 2013 to receive a 10% savings.

Projects with multiple sources of funding/subsidy are more common than ever before. These projects are referred to as blended occupancy or combined funding projects.

Managing eligibility of these projects is complicated and can cause confusion. It's not uncommon to have a project with two, three, or four different types of funding. That means varying and often conflicting compliance requirements from multiple agencies.

Tip #1: Understand your project's funding/subsidy sources.

It sounds fairly straightforward, but a thorough understanding of each funding and subsidy source is the first step to successfully managing your blended occupancy project.

Read the project's governing documents. Key information such as affordability periods, number of units that must be rent restricted, income limits of eligible households, and other critical information will be outlined in the project's governing documents. These documents will also tell you if the project owner has elected to rent a certain number of units to tenants at lower income levels than required by the IRS or HUD.

If you don't have the project's governing documents, get them from the project owner. You can't be expected to successfully manage the project without them.

Tip #2: The most restrictive program wins.

A general rule is that the most restrictive program wins! If you manage eligibility to the most restrictive program, you will generally be in compliance with other programs.

A blended occupancy/combined funding unit with Low-Income Housing Tax Credits (LIHTC) and Project-Based Section 8 Assistance (PBRA) must use the Multifamily Tax Subsidy Projects (MTSP) income limits to determine initial tenant income eligibility for the LIHTC program and the HUD Program Income Limits to determine initial tenant income eligibility for the PBRA program.

If your project has LIHTCs, you must also know the building's Placed-In-Service (PIS) date. The income limit for your building is determined by the date it was placed in service. This date is located on an important governing document, the IRS Form 8609.

Remember, the most restrictive income limit must be used to determine initial tenant income eligibility.

Tip #3: Get training.

With multiple financing/subsidy sources in your project, you must be able to quickly interpret and apply complex federal regulations issued by multiple regulatory agencies. The consequences for noncompliance, particularly for LIHTC, can be devastating. Initial and ongoing training is not a luxury for blended occupancy projects, it's a must.

Professional Development Manager Cara Gillette oversees NMA's regulatory and program management seminars, ensuring excellence across the board. She recently co-developed a new class, Blended Occupancy Management, which provides the practical tools needed to navigate a complex regulatory environment.

To learn more about blended occupancy and combined funding, sign up for the upcoming Housing Help Session. This audio conference is a convenient and affordable training option, just $99 for PIH Alert subscribers and $129 for non-subscribers.