Today in the Federal Register, HUD published an interim rule titled "Streamlining Administrative Regulations for Public Housing: Revisions to Public Housing Flat Rents." The interim rule provides PHAs with increased flexibility in setting flat rents, as reflected in the 2015 appropriations act. Today’s rule amends the requirements of the 2014 appropriations act implemented by Notice PIH 2014-12.
As explained in the notice, the 2015 appropriations act provides PHAs with two alternatives to the current requirement for setting flat rents at 80 percent of the applicable fair market rent (FMR). First, PHAs may establish flat rents based on 80 percent of the applicable FMR, or 80 percent of an FMR representing a smaller geographic area. This second FMR would be either the small area FMR (SAFMR), issued for metropolitan counties, or the unadjusted rents, for counties not covered by an SAFMR. If neither a SAFMR nor an unadjusted rent has been determined for an area, PHAs must set flat rents based on the applicable FMR for the larger area.
Second, PHAs may request an exception from HUD for a flat rent amount that is lower than either of the two FMRs. Such requests must include a market analysis and a demonstration that the lower flat rent is reasonable in comparison to similar unassisted units. PHAs are not, of course, required to exercise the new flexibility described in today’s notice:
Some PHAs may want to wait for the conclusion of public comment and the final rule before taking advantage of the new authority, and HUD understands and supports this position.
While HUD published the interim rule without soliciting public comments in order to expedite flat rent relief for PHAs, a 60-day public comment period is now open and will close on November 9, 2015. The interim rule is effective today. Proposed FMRs for federal fiscal year (FFY) 2016 were posted last week and are available on HUD’s FMR page.
Got questions about the new flat rent guidance? NMA experts will be available for limited free one-hour consulting sessions at the 2015 NMA and GoSection8 Housing Conference. Registered participants can sign up on a first-come, first-served basis now. Register online or email sales@nanmckay.com for more information.
