Housing authorities across the country are interested in joining the Moving to Work (MTW) demonstration, but many are unclear on how to become an MTW agency, or how to implement flexibilities once they achieve MTW status.
In this series of posts, we'll discuss how the existing Moving to Work agencies became MTW, the pending legislation that could expand the MTW demonstration to a record number of PHAs, and which flexibilities MTW agencies choose to adopt most frequently.
MTW Flexibilities
Many PHAs want to attain Moving to Work (MTW) designation for the opportunity to streamline program operations as well as the ability to combine funding for the public housing and housing choice voucher (HCV) programs. Almost all MTW agencies have elected to merge their primary funding streams using fungibility (also known as single-fund budget), creating budgets that address the needs of the PHA and allow the PHA to best determine how funds should be allocated. Today's post examines fungibility and streamlining flexibilities adopted by MTW PHAs.
PHAs generally have to use their single-fund budget for activities outlined in Sections 8 and 9 of the 1937 Housing Act (that is, public housing or HCV program activities). Some PHAs have applied for and received special authorization to use some of their single-fund budget for local, non-traditional purposes that allow the agency to meet other low-income housing or service needs in their communities.
In addition to fungibility, MTW agencies adopt policies that reduce overall workload and administrative burden on staff and families. This reduction results in cost savings that are reported in the agency's Moving to Work Annual Report submitted to HUD every year. For example, many agencies implement biennial or even triennial recertifications, allowing staff to process many fewer recertifications annually and reducing the amount of paperwork to be completed and trips to the PHA that families must make.
Some MTW PHAs also limit the number of interims that can be processed per year, decreasing staff workload and ultimately program costs. Another popular streamlining activity is the elimination of counting asset income. Because many assisted households have little to no assets, this allows the PHA to skip the laborious process of collecting asset information and then verifying the income. (See also Notice PIH 2013-03.)
Another common flexibility employed by PHAs involves project-based vouchers (PBV). Many MTW agencies increase the percentage of their HCV budget that can be allocated to PBVs in order to serve more families with unit-based assistance. Some also increase the percentage of units in a building that may be project-based. Increasingly, MTW agencies are leveraging PBVs to develop supportive housing and other housing types targeted at hard-to-serve populations.
Finally, many MTW agencies put into practice what is known as "rent reform." Rent reform, which modifies how a participant's rent is determined, is strongly encouraged by HUD. However, strategies for rent reform vary. Some PHAs have implemented flat rents and/or utility allowances, while other have increased the minimum rent up to $125, and still others have implemented tiered rent schedules based on income and family size. Other common rent reform activities include standardizing medical, disability, and child care deductions.
Such activities are certainly appealing to many PHAs, but some industry watchers are concerned that the overall impact of these flexibilities is unknown. Partially in response to their concerns, HUD's Office of Policy Development and Research has planned an evaluation of Moving to Work rent reforms. If you are interested in more details on this project, please see the recently published notice of proposed information collection on the evaluation. NMA will continue to update PHAs about any MTW evaluation developments through our blog.
Although many PHAs would like to be MTW, the only way that agencies in the past have become MTW is through legislation and, in most instances, subsequent application processes via PIH notices. Demand for the flexibility offered by the MTW demonstration, particularly that related to streamlining administrative burden, has far exceeded the number of slots available. As a result, there have been numerous bills proposed before Congress to further expand the demonstration to more PHAs. Our next post will examine this proposed legislation.
NMA consultant Alison Bell played a leading role as part of a management transition team in the successful start-up of the outsourced administration of a large MTW HCV program. She continues to assist PHAs with their IT procurement projects and provides ongoing technical support to MTW agencies.
Nan McKay and Associates has worked with a number of MTW agencies across the country and can leverage that experience to provide assistance in crafting applications for PHAs that meet the above criteria. For more information, contact sales@nanmckay.com.
