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2016-02-02 Ordinance
5a Prepared by: Karen Howard, Associate Planner, 410 E Washington St, Iowa City, IA 52240 ORDINANCE NO. 16-4655 AN ORDINANCE AMENDING TITLE 14, ZONING CODE, SECTION 4B -4A-7, TO ALLOW RESIDENTAIL USES ON THE GROUND -LEVEL FLOOR IN THE CENTRAL BUSINESS SUPPORT (CB -5) ZONE IN THE AREA BOUNDED BY GILBERT STREET, VAN BUREN STREET, BURLINGTON STREET AND THE MID -BLOCK ALLEY SOUTH OF JEFFERSON STREET, PROVIDED CERTAIN FORM -BASED ZONING STANDARDS ARE MET. WHEREAS, the area bounded by Gilbert Street, Van Buren Street, Burlington Street and the mid -block alley south of Jefferson Street is located in Downtown Planning District, governed by the Downtown and Riverfront Crossings Master Plan, and consists largely of government offices and facilities and associated civic uses, such as a public parking facility and community recreation center; and WHEREAS, within this area there are opportunities for public-private partnerships to encourage development on vacant lots and underutilized surface parking areas that will achieve public goals, such as preservation of a historic church, construction of public parking facilities, creation of affordable housing and encouraging commercial and recreational uses that will serve a growing residential population in and near downtown Iowa City; and WHEREAS, in this area, for properties zoned Central Business Support (CB -5), it is beneficial to allow market demand to determine the highest and best use by allowing urban residential uses of certain building types as a provisional use in lieu of requiring commercial uses on the ground floor of mixed-use buildings zoned CB -5; and WHEREAS, certain form -based zoning standards can provide the flexibility for these complicated urban infill sites and ensure that buildings are appropriately scaled and designed to fit into an urban setting located between the most intense commercial zone and lower -scale residential neighborhoods in the Central Planning District further to the east; and WHEREAS, the South Gilbert Subdistrict form -based zoning standards are appropriately calibrated and scaled to achieve the goals identified for CB -5 Zoned properties in this area; and WHEREAS, amending the CB -5 zoning code to apply these form -based standards will allow a variety of urban building types, a maximum 6 -story building height, subject to certain exceptions, with a required 10 -foot fagade stepback above the 4t' story and building and parking placement standards appropriate for this pedestrian -oriented urban setting; and WHEREAS, the Planning and Zoning Commission has reviewed the proposed zoning amendments and recommends approval. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA: SECTION I. The Zoning Code of Ordinances of the City of Iowa City, Iowa, Section 14-413-4, "Specific Approval Criteria for Provisional and Special Exceptions", Subsection A "Residential Uses", Paragraph 7 "Multi -Family Uses in Co -1, CNA, CC -2, C13-2, C13-5 and CB -10 Zones" is hereby amended as follows: A. Subparagraph (a) "Location" shall be deleted and substitute in lieu thereof: a. Location: The proposed dwelling units must be located above the street level floor of a building, except as provided in subsections A7e. and A7f., below. B. Subparagraph (e) "CB -5 and CB -10 Exception" shall be amended to state, in part, "In the CB -5 and CB -10 zones, except as provided in subsection A7e(4) and except as allowed by subsection Alf below". C. A new subparagraph (f) "CB -5 Form Based Code Exception", shall be added as follows: Ordinance No. 16-4655 Page 2 f. For properties zoned CB -5 located within the area bounded by Gilbert Street, Van Buren Street, Burlington Street and the mid -block alley south of Jefferson Street, residential uses are allowed on the ground level floor of buildings, provided the following conditions are met: (1) In lieu of the standards in paragraphs c. and d., above, the proposed ground level dwelling units must be located within one of the following building types, as described in the form -based zoning standards in 14-2G-5, Building Type Standards: (a) Apartment Building; (b) Multi -Dwelling Building; (c) Liner Building; (d) Townhouse. (2) Building frontage(s) must be designed to meet the requirements of 14-2G-4, Frontage Type Standards, as applicable for the chosen Building Type. (3) In lieu of the Dimensional Requirements and Central Business Site Development Standards that generally apply in the CB -5 Zone, buildings must comply with the same zoning standards that apply in the South Gilbert Subdistrict of Riverfront Crossings as set forth in 14-2G, Riverfront Crossings Form -based Development Standards, including all General Requirements in 14-2G-7. If the ground level dwelling units are proposed as an integral part of a larger project on the same property that includes a mix of building types, the standards that apply in the South Gilbert Subdistrict shall apply to the entire project in lieu of the Dimensional Requirements and Central Business Site Development Standards of the CB -5 Zone. (4) Buildings are subject to Design Review. Minor adjustments may be allowed by the Design Review Committee as warranted according to the provisions of 14 -2G -7H. SECTION II. REPEALER. All ordinances and parts of ordinances in conflict with the provisions of this Ordinance are hereby repealed. SECTION III. SEVERABILITY. If any section, provision or part of the Ordinance shall be adjudged to be invalid or unconstitutional, such adjudication shall not affect the validity of the Ordinance as a whole or any section, provision or part thereof not adjudged invalid or unconstitutional. SECTION IV. EFFECTIVE DATE. This Ordinance shall be in effect after its final passage, approval and publication. Passed and approved this 2nd day of February , 2016. ATTEST: CITY CLERK Approved b City Attorney's Office /Z Ordinance No. 16-4655 Page 3 It was moved by Mims and seconded by Botchwa Ordinance as read be adopted, and upon roll call there were: AYES: NAYS: ABSENT: ABSTAIN: x Botchway x Cole x Dickens x Mims x Taylor x Thomas X Throgmorton First Consideration 01/05/2016 Vote for passage: AYES: Dickens, Mims, Taylor, Thomas, Throgmorton, Botchway. NAYS: Cole. ABSENT: None. Second Consideration 01/19/2016 Voteforpassage: AYES: Throgmorton, Botchway, Dickens, Mims, Taylor, Thomas. NAYS: Cole. ABSENT: None. Date published 02/11/2016 that the 5b Prepared by: Bob Miklo, Senior Planner, 410 E. Washington Street, Iowa City, IA 52240; 319-356-5240 (REZ15-00022) �� ORDINANCE NO. 16-4656 AN ORDINANCE CONDITIONALLY REZONING APPROXIMATELY .98 ACRE LOCATED SOUTH OF IOWA AVENUE BETWEEN GILBERT AND VAN BUREN STREETS FROM NEIGHBORHOOD PUBLIC (P-1) TO CENTRAL BUSINESS SUPPORT (CB -5). (REZ15-00022) WHEREAS, the applicant, Allen Homes, Inc., has requested a rezoning of property located south of Iowa Avenue between Gilbert and Van Buren Streets from Neighborhood Public (P-1 ) to Central Business Support (CB -5 ); and WHEREAS, the Comprehensive Plan, specifically the Downtown Riverfront Crossings Master Plan supports the proposed combination of public, office, and residential uses; and WHEREAS the preservation of the Unitarian Church as a historic landmark in conjunction with development of the property hereby being rezoned would meet the historic preservation goals of the Comprehensive Plan; and WHEREAS, the Planning and Zoning Commission has determined that the proposed rezoning request complies with the Comprehensive Plan provided that the development of the property generally conforms with massing and scale shown on the concept plan and the Unitarian Church Building is designated as historic landmark; and WHEREAS, Iowa Code §414.5 (2015) provides that the City of Iowa City may impose reasonable conditions on granting a rezoning request, over and above existing regulations, in order to satisfy public needs caused by the requested change; and WHEREAS, the owner and applicant have agreed that the property shall be developed in accordance with the terms and conditions of the Conditional Zoning Agreement attached hereto to ensure appropriate development in this area of the city. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA: SECTION I APPROVAL. Property described below is hereby zoned Central Business Support (CB -5): BEGINNING AT THE NORTHEAST CORNER OF LOT 1, BLOCK 44, ORIGINAL TOWN OF IOWA CITY, IOWA, ACCORDING TO THE PLAT RECORDED IN PLAT BOOK 1, PAGE 116 IN THE RECORDS OF THE JOHNSON COUNTY RECORDER'S OFFICE; THENCE S00°45'22"E, ALONG THE EAST LINE OF SAID LOT 1, AND ITS SOUTHERLY EXTENSION, 160.46 FEET TO CENTERLINE OF THE PLATTED ALLEY; THENCE S89 -19'44"W, ALONG SAID CENTERLINE, 319.30 FEET TO A POINT ON THE WEST LINE OF SAID BLOCK 44; THENCE N00°46'57"W, ALONG SAID WEST LINE, 50.58 FEET TO THE SOUTHWEST CORNER OF THE NORTH 110 FEET OF LOT 4, SAID BLOCK 44; THENCE N89°21'01"E, ALONG THE SOUTH LINE OF SAID NORTH 110 FEET OF LOT 4, A DISTANCE OF 79.84 FEET TO THE SOUTHEAST CORNER OF SAID NORTH 110 FEET OF LOT 4; THENCE N00°46'56"W, ALONG THE EAST LINE OF SAID LOT 4, A DISTANCE OF 110.00 FEET; THENCE N89°21'01"E, ALONG THE NORTH LINE OF LOTS 3, 2 AND 1, A DISTANCE OF 239.53 FEET TO THE POINT OF BEGINNING, CONTAINING 0.98 ACRE (42,477 SQUARE FEET) AND IS SUBJECT TO EASEMENTS AND RESTRICTIONS OF RECORD. SECTION II. ZONING MAP. The building official is hereby authorized and directed to change the zoning map of the City of Iowa City, Iowa, to conform to this amendment upon the final passage, approval and publication of this ordinance by law. SECTION III. CONDITIONAL ZONING AGREEMENT. The mayor is hereby authorized and directed to sign, and the City Clerk attest, the Conditional Zoning Agreement between the property owner(s) and the City, following passage and approval of this Ordinance. SECTION III. CERTIFICATION AND RECORDING. Upon passage and approval of the Ordinance, the City Clerk is hereby authorized and directed to certify a copy of this ordinance and to record the same, at the office of the County Recorder of Johnson County, Iowa, at the owner's expense, all as provided by law. SECTION IV. REPEALER. All ordinances and parts of ordinances in conflict with the provisions of this Ordinance are hereby repealed. Ordinance No. 16-4656 Page 2 SECTION V. SEVERABILITY. If any section, provision or part of the Ordinance shall be adjudged to be invalid or unconstitutional, such adjudication shall not affect the validity of the Ordinance as a whole or any section, provision or part thereof not adjudged invalid or unconstitutional. SECTION VI. EFFECTIVE DATE. This Ordinance shall be in effect after its final passage, approval and publication, as provided by law. Passed and approved this 2nd day of February , 20 1(x Approved by: ATTEST: CITY CLERKCity Attorney's Office Z�Z CITY CLERK Ordinance No. 16-4656 Page 3 It was moved by Botchway and seconded by _ Ordinance as read be adopted, and upon roll call there were: Thomas that the AYES: NAYS: ABSENT: ABSTAIN: x Botchway x Cole x Dickens x Mims x Taylor x Thomas X Throgmorton First Consideration 01/05/2016 Voteforpassage: AYES: Mims, Taylor, Thomas, Throgmorton, Botchway, Cole, Dickens. NAYS: None. ABSENT: None. Second Consideration 01/19/2016 Voteforpassage: AYES: Botchway, Cole, Dickens, Mims, Taylor, Thomas, Throgmorton. NAYS: None. ABSENT: None. Date published 02/11/2016 Prepared by: Bob Miklo, Senior Planner, 410 E. Washington, Iowa City, IA 52240 (319) 356-5240 (REZ15-00022) CONDITIONAL ZONING AGREEMENT THIS AGREEMENT is made between the City of Iowa City, Iowa, a municipal corporation (hereinafter "City"), City of Iowa City (hereinafter "Owner"), and Allen Homes, Inc. (hereinafter "Applicant"). WHEREAS, Owner is the legal title holder of approximately .98 acre of property located south of Iowa Avenue, north of Washington Street, between Gilbert and Van Buren streets; and WHEREAS, the Applicant has requested the rezoning of said property from Neighborhood Public (P-1) to Central Business Support (CB -5); and WHEREAS, the Planning and Zoning Commission has determined that, with preservation of the Unitarian Church Building and development at a scale appropriate for Iowa Avenue, the requested zoning is consistent with the Comprehensive Plan; and WHEREAS, Iowa Code §414.5 (2015) provides that the City of Iowa City may impose reasonable conditions on granting a rezoning request, over and above existing regulations, in order to satisfy public needs caused by the requested change; and WHEREAS, the Owner and Applicant acknowledges that certain conditions and restrictions are reasonable to ensure the development of the property is consistent with the Comprehensive Plan; and WHEREAS, the Applicant acknowledges the need to preserve the Unitarian Church building to comply with the policies of the Comprehensive Plan and acknowledges that the City intends to consider an ordinance designating that structure as a historic structure pursuant to the City zoning code; and WHEREAS, the Owner and Applicant agree to develop this property in accordance with the terms and conditions of a Conditional Zoning Agreement. NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties agree as follows: 1. The Owner is the legal title holder of the property legally described as: BEGINNING AT THE NORTHEAST CORNER OF LOT 1, BLOCK 44, ORIGINAL TOWN OF IOWA CITY, IOWA, ACCORDING TO THE PLAT RECORDED IN PLAT BOOK 1, PAGE 116 IN THE RECORDS OF THE JOHNSON COUNTY RECORDER'S OFFICE; THENCE S00°45'22"E, ALONG THE EAST LINE OF SAID LOT 1, AND ITS SOUTHERLY EXTENSION, 160.46 FEET TO CENTERLINE OF THE PLATTED ALLEY; THENCE S89019'44"W, ALONG SAID CENTERLINE, 319.30 FEET TO A POINT ON THE WEST LINE OF SAID BLOCK 44; THENCE N00046'57"W, ALONG SAID WEST LINE, 50.58 FEET TO THE SOUTHWEST CORNER OF THE NORTH 110 FEET OF LOT 4, SAID BLOCK 44; THENCE N89°21'01 "E, ALONG THE SOUTH LINE OF SAID NORTH 110 FEET OF LOT 4, A DISTANCE OF 79.84 FEET TO THE SOUTHEAST CORNER OF SAID NORTH 110 FEET OF LOT 4; THENCE N00°46'56"W, ALONG THE EAST LINE OF SAID LOT 4, A DISTANCE OF 110.00 FEET; THENCE N89°21'01 "E, ALONG THE NORTH LINE OF LOTS 3, 2 AND 1, A DISTANCE OF 239.53 FEET TO THE POINT OF BEGINNING, CONTAINING 0.98 ACRE (42,477 SQUARE FEET) AND IS SUBJECT TO EASEMENTS AND RESTRICTIONS OF RECORD. ppdadm/agt/rezoning cza- Iowa ave city parking lot.doc 2. Owner and Applicant acknowledge that the City wishes to ensure conformance to the principles of the Comprehensive Plan and the Downtown Riverfront Crossings Master Plan. Further, the parties acknowledge that Iowa Code §414.5 (2015) provides that the City of Iowa City may impose reasonable conditions on granting a rezoning request, over and above the existing regulations, in order to satisfy public needs caused by the requested change. 3. In consideration of the City's rezoning the subject property, Owner and Applicant agree that development of the subject property will conform to all other requirements of the zoning chapter, as well as the following conditions: a. Development of this property shall be in general conformance with massing and scale shown on the concept plan attached here to and by reference made part of this agreement. 4. The Owner and Applicant acknowledge that the conditions contained herein are reasonable conditions to impose on the land under Iowa Code §414.5 (2015), and that said conditions satisfy public needs that are caused by the requested zoning change. 5. The Owner and Applicant acknowledge that in the event the subject property is transferred, sold, redeveloped, or subdivided, all redevelopment will conform with the terms of this Conditional Zoning Agreement. Applicant acknowledges, however, that this Conditional Zoning Agreement does not constitute an agreement between the Owner and Applicant for the conveyance of any property right to Applicant. 6. The parties acknowledge that this Conditional Zoning Agreement shall be deemed to be a covenant running with the land and with title to the land, and shall remain in full force and effect as a covenant with title to the land, unless or until released of record by the City of Iowa City. The parties further acknowledge that this agreement shall inure to the benefit of and bind all successors, representatives, and assigns of the parties. 7. The Owner and Applicant acknowledge that nothing in this Conditional Zoning Agreement shall be construed to relieve the Owner or Applicant from complying with all. other applicable local, state, and federal regulations. 8. The parties agree that this Conditional Zoning Agreement shall be incorporated by reference into the ordinance rezoning the subject property, and that upon adoption and publication of the ordinance, this agreement shall be recorded in the Johnson County Recorder's Office at the Applicant's expense. Dated this 2nd day of February 12016 CITY OF IOWA CITY ALLEN HOMES, INC. / r Maor gy: Attest: ppdadm/agt/rezoning cza- Iowa ave city parking tot.doc 2 Mad an`K. Karr, City Clerk Approved by: Wo 9kp�wn City Attorney's Office CITY OF IOWA CITY ACKNOWLEDGEMENT: STATE OF IOWA JOHNSON COUNTY ) By: This instrument acknowledged before me this Dot day of Fes. 2016, by James A. Throgmorton and Marian K. Karr, as the Mayor and City Clerk, respecti ely, of the City of Iowa City, Iowa. !�FELLIE K. TUTTLE n'lt tuber 221819 t.0, ]:SEA n Expires Allen Homes, Inc. LLC ACKNOWLEDGMENT: State of County of-Toh-ft6 dv+� Notary Public in and for said State This record was acknowledged before me on by --j 2 6q&el) (Name(s) of individual(s) as (type of authority, such as officer or trustee) of nAla- Pt Ab 1 5n/1- (name of party on behalf of whom record was executed). Notary Public in and for the State of Iowa (Stamp or Seal) Title (and Rank) C4 61kre My commission expires: 215 3 ppdadm/agt/rezoning eza- Iowa ave city parking lot.doc 3 Ir , H n m N �i OILDM ST VAN sum ST Prepared by: John Yapp, Development Services Coordinator, 410 E. Washington Street, Iowa City, IA 52240; 319-356-5252 5c5C (VAC15-00005) ORDINANCE NO. 16-4657 ORDINANCE VACATING AIR RIGHTS ABOVE PUBLIC RIGHT-OF-WAY IN NORTH - SOUTH ALLEY BETWEEN HARRISON AND PRENTISS STREETS (VAC15-00005) WHEREAS, the applicant, MidWestOne Bank, has requested that the City vacate and convey to the applicant the air rights above the alley running north -south between East Harrison and East Prentiss Streets; and WHEREAS, MidWestOne Bank intends to build an above -grade enclosed pedestrian walkway to provide a secure, convenient pedestrian connection between the planned municipal parking facility and the MidWestOne Bank Building; and WHEREAS, the air rights to be vacated are 25 feet above grade and will allow the street level to remain available for vehicle and pedestrian traffic; and WHEREAS, the enclosed pedestrian walkway will offer 25 feet of clearance so access for emergency, utility, and service vehicle will not be restricted; and WHEREAS, all adjacent properties will continue to have street level access to the alley; and WHEREAS; there does not appear to be any other factors that warrant retention of this portion (air rights) of right-of-way; and WHEREAS, the Planning and Zoning Commission has the reviewed the proposed vacation of and has recommended approval of the application subject to City staff approval of the design of the skywalk. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA: SECTION I VACATION. The City of Iowa City hereby vacates all those air rights and all of the air space between a plane elevation of 25 feet above existing grade and a plane elevation of 46 feet above existing grade over and above the following described real property located in Johnson County, Iowa to wit: COMMENCING AT THE NORTHEAST CORNER OF LOT 8, BLOCK 8 COUNTY SEAT ADDITION, IOWA CITY, JOHNSON COUNTY, IOWA, ACCORDING TO THE PLAT OF SURVEY (RETRACEMENT) RECORDED IN PLAT BOOK 56 AT PAGE 267 IN THE RECORD OF THE JOHNSON COUNTY RECORDER'S OFFICE; THENCE S00°43'01"E, ALONG THE EASTERLY LINE OF SAID LOT 8, A DISTANCE OF 27.00 FEET TO THE POINT OF BEGINNING; THENCE N89°20'15"E, 20.00 FEET TO A POINT ON THE WESTERLY LINE OF LOT 1 OF SAID BLOCK 8, COUNTY SEAT ADDITION, IOWA CITY, JOHNSON COUNTY, IOWA; THENCE S00043'0111E, ALONG SAID WESTERLY LINE, 10.00 FEET; THENCE S89°20'15"W, 20.00 FEET TO A POINT ON SAID EASTERLY LINE OF LOT 8; THENCE N00°43'01 "W, ALONG SAID EASTERLY LINE, 10.00 FEET TO THE POINT OF BEGINNING, CONTAINING A FOOTPRINT OF .0005 ACRE (200 SQUARE FEET), ALL BEING SUBJECT TO EASEMENTS AND RESTRICTIONS OF RECORD. SECTION II. REPEALER. All ordinances and parts of ordinances in conflict with the provisions of this Ordinance are hereby repealed. SECTION III. SEVERABILITY. If any section, provision or part of the Ordinance shall be adjudged to be invalid or unconstitutional, such adjudication shall not affect the validity of the Ordinance as a whole or any section, provision or part thereof not adjudged invalid or unconstitutional. SECTION IV. EFFECTIVE DATE. This Ordinance shall be in effect after its final passage, approval and publication, as provided by law. Passed and approved this 2nd day of February , 2016. Ordinance No. 16-4657 Page 2 4�/� ;4� MA R: Approved by: ATTEST: Aa[ CITY CLERK f City Attorney's Office Ordinance No. 16-4657 Page 3 It was moved by Mims and seconded by Botchway that the Ordinance as read be adopted, and upon roll call there were: AYES: NAYS: ABSENT: ABSTAIN: x x x x x Botchway Cole Dickens Mims Taylor Thomas Throgmorton First Consideration 12/15/2015 Voteforpassage: AYES: Payne, Throgmorton, Botchway, Dickens, Dobyns, Hayek, Mims. NAYS: None. ABSENT: None. Second Consideration 01/05/2016 Vote for passage: AYES: Throgmorton, Botchway, Cole, Dickens, Mims, Taylor, Thomas. NAYS: None. ABSENT: None. Date published 02/11/2016 0 10 Prepared by: Stefanie Bowers, Equity Director/Human Rights Coordinator, 410 E. Washington St., Iowa City, IA 52240 (319) 356-5022 ORDINANCE NO. ORDINANCE AMENDING TITLE 2 OF THE CITY CODE, ENTITLED "HUMAN RIGHTS," CHAPTER 2, ENTITLED "GENERAL PROVISIONS," SECTION 2-1-1, ENTITLED "DEFINITIONS; PUBLIC ASSISTANCE SOURCE OF INCOME," TO INCLUDE HOUSING CHOICE VOUCHER SUBSIDIES AND SIMILAR RENT SUBSIDY PROGRAMS AND TO CLARIFY THE DEFINITION OF "HOUSING TRANSACTION." WHEREAS, the Human Rights Ordinance currently excludes rent subsidies in the definition of Public Assistance Source of Income; and WHEREAS, the exclusion of rent subsidies in the definition of Public Assistance Source of Income creates inequalities in the rental market; and WHEREAS, every resident or potential resident of Iowa City should not be restricted or denied the opportunity to apply for and reside in a housing unit that meets their income qualifications; and WHEREAS, the exclusion of rent subsidies are contrary to Iowa City's commitment to ensure fair housing opportunities for all; and WHEREAS, in Ordinance No. 15-4650, the definition of Housing Accommodation was deleted because it is not a term used by HUD (the U.S. Department of Housing and Urban Development), but that term remained within the definition of Housing Transaction; and WHEREAS, the definition of Housing Transaction should be amended to delete the term Housing Accommodation; and WHEREAS, it is in the best interest of the City to adopt these amendments to further fair housing. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA: SECTION I. AMENDMENTS. 1. Title 2, entitled "Human Rights," Chapter 2, entitled "General Provisions," Section 1, entitled "Definitions," is amended by repealing the definitions of "Housing Transaction" and "Public Assistance Source of Income" and replacing them with the following: Housing Transaction: The sale, exchange, rental or lease of real property and the offer to sell, exchange, rent or lease real property. Public Assistance Source of Income: Income and support derived from any tax supported federal, state or local funds, including, but not limited to, social security, supplemental security income, temporary assistance for needy families, family investment program, general relief, food stamps, and unemployment compensation, Housing Choice Voucher subsidies and similar rent subsidy programs. SECTION 11. REPEALER. All Ordinances and parts of Ordinances in conflict with the provision of this Ordinance are hereby repealed. SECTION III. SEVERABILITY. If any section, provision or part of the Ordinance shall be adjudged to be invalid or unconstitutional, such adjudication shall not affect the validity of the Ordinance as a whole or any section, provision or part thereof not adjudged invalid or unconstitutional. SECTION IV. EFFECTIVE DATE. This Ordinance shall be effective June 1, 2016. Passed and approved this day of MAYOR ATTEST: CITY CLERK 2016. Approved by: J - 1 -d- tom City Attorney's Office Ordinance No. Page It was moved by and seconded by _ Ordinance as read be adopted, and upon roll call there were: AYES: NAYS: ABSENT: ABSTAIN: First Consideration Vote for passage: Throgmorton, Botchway Cole Dickens Mims Taylor Thomas Throgmorton 02/02/2016 AYES: Cole, Mims, Taylor, Thomas, Botchway. NAYS: None. ABSENT: Dickens. Second Consideration _ Vote for passage: Date published that the Prepared by: Stefanie Bowers, Equity Director/Human Rights Coordinator, 410 E. Washington St., Iowa City, IA 52240 (319) 356-5022 ORDINANCE NO. ORDINANCE AMENDING TITLE 2 OF THE CITY CODE, oENTITLED "HUMAN RIGHTS," CHAPTER 2, ENTITLED "GENERAL PROVISI S," SECTION 2-1-1, ENTITLED "DEFINITIONS; PUBLIC ASSISTANCE SOU E OF INCOME," TO INCLUDE HOUSING OHOICE VOUCHER SUBSIDIES AND IMILAR RENT SUBSIDY PROGRAMS AND TO CLARIFY THE DEFINITION OF "H SING TRANSACTION." WHEREAS, the Human Ri hts Ordinance currently excludes p6nt subsidies in the definition of Public Assistance Source of Income; a d WHEREAS, the exclusion o ent subsidies in the defin creates inequalities in the rental m ket; and WHEREAS, every resident or tential resident of loFrai -- opportunity to apply for and reside in housing unity that WHEREAS, the exclusion of rent ubsidies are co housing opportunities for all; and WHEREAS, in Ordinance No. 15- 50 because it is not a term used by HUD the term remained within the definition of Housi WHEREAS, the definition of Housing T Accommodation; and WHEREAS, it is in the best interest of the of Public Assistance Source of Income City should not be restricted or denied the is their income qualifications; and r to Iowa City's commitment to ensure fair , the d($nition of Housing Accommodation was deleted S. Dep ment of Housing and Urban Development), but that Tran action due to an oversight; ns tion should be amended to delete the term Housing to adopt these amendments to further fair housing. NOW, THEREFORE, BE IT ORDAINE7 BY\ HE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA: SECTION I. AMENDMENTS. 1. Title 2, entitled "Human Rig s," Chapter 2,\ofr General Provisions" Section 1, entitled "Definitions," is amended by repeali the definitions ng Transaction" and "Public Assistance Source of Income" and replacing th with the followin Housing Transaction: The sale, a hange, rental or leaproperty and the offerto sell, exchange, rent or lease real property. Public Assistance Source of In ome: Income and support derived m any tax supported federal, state or local funds, including, but t limited to, social security, suppl ental security income, temporary assistance for needy familie ,family investment program, general reli f, food stamps, and unemployment compensation, Housing Ch ce Voucher subsidies and similar rent sub -dy programs. All Ordinances and parts of Ordinances in apnflict with the provision of this Ordinance are hereby SECTION III. SEVFBABILITY. If any section, provision or part of the Ordinance shall be adjudged to be invalid or unconstitutio al, such adjudication shall not affect the validity of the Ordinance as a whole or any section, provision or p rt thereof not adjudged invalid or unconstitutional. SECTION IV. VFFECTIVE DATE. This Ordinance shall be in effect after its final passage, approval and publication, as rovided by law. Passed anti nnnmvari Chic MAYOR ATTEST: rine of 7(11 R rc 0 QiG®� ®,.� CITY OF IOWA CITY MEMORANDUM Date: January 28, 2016 To: Geoff Fruin, Assistant City Manager Of From: Human Rights/Equity Director Stefanie Bowers Housing Authority Administrator Steve J. Rackis . Re: Response to the Greater Iowa City Area Apartment Association's correspondence of January 13, 2016—Human Rights Commission's Recommendation on including Housing Choice Voucher and other rental subsidies in the definition of Public Assistance Source of Income under the Human Rights Ordinance. On January 13, 2016, the Greater Iowa City Area Apartment Association (hereinafter "GICAAA") provided correspondence to Council concerning the Human Rights Commission's pending recommendation to include the Housing Choice Voucher Program (HCV) in the definition of Public Assistance Source of Income. The proposed amendment was recommended by the Human Rights Commission to the Council in March 2015. Staff recommends approval. Background: This amendment is to further fair housing. As part of the City of Iowa City 2014 Impediments to Fair Housing_ Choice, a survey was conducted that found 31 % or 63 individuals out of 210 HCV participants surveyed believed that HCV was the most common reason for discrimination in the area of housing in Johnson County. This same report noted that "there are barriers to mobility and free housing choice for protected classes and persons of low income" and one way to overcome these impediments is to add housing choice status as a protected class under the City's fair housing laws. What the proposed amendment would make unlawful is to advertise that persons who hold a HCV are not welcomed or not solicited. For example, an advertisement that reads "NO SECTION 8 ALLOWED!" The proposed amendment would also make it unlawful to refuse to rent to a person based solely on the fact that they hold a voucher. For example, if a landlord has an available rental unit and three applicants (one is a HCV holder) have applied for the unit and they all meet the landlord's tenant selection criteria, the landlord could not lawfully refuse to rent to the applicant who holds a HCV based solely on that fact. The landlord should use their routine selection process for selecting who will reside in that unit. Other examples include intentionally inflating rental rates with the specific purpose of excluding HCV holders or applying a higher screening to HCV holders over that of non -HCV holders. January 28, 2016 Page 2 Current fair housing laws make it illegal to discriminate in housing based on race, familial status, sex, and 12 additional protected characteristics. These are characteristics that are not supposed to be taken into account when making tenant selections. This amendment is no different. The proposed amendment does not mandate that a landlord rent to an applicant just because they are a voucher holder or change the criteria they use in making tenant selections. For example, if a landlord has an available rental unit and three applicants (one who holds a HCV) have applied for the unit and all meet the landlord's tenant selection criteria, the landlord's decision of whom to rent to would be based on their procedures and practices of selection. A person who holds a voucher is not given preference over any other applicant. The landlord's decision of whom to rent to should be based on that landlord's procedures and practices regardless if one of the applicants is a HCV holder. 1671 If a landlord has an available unit and a person with a voucher applies for that unit and the landlord's criteria for all applicants is a good past landlord reference and the person with a voucher has a negative prior landlord reference the landlord can lawfully refuse to rent to that person as long as the landlord always denies applicants with a negative reference. A landlord should screen each applicant the same and can lawfully refuse to rent to a person who does not meet their selection standards. If passed the amendment shall be in effect starting June 1, 2016. This will allow City staff from the Human Rights Office and the Neighborhood & Development Services Department (includes the Housing Authority) to do outreach on this new addition to fair housing. Targeted groups include landlords, landlord housing associations and participants in the HCV program. The City Communications Department and City Channel 4 will also assist with brochures, programming, advertisements, and website updates that will serve to educate the community as well. Analysis: The following information for Council is in response to the January 13, 2016 correspondence from the GICAAA. The italicized bold font represents comments by the GICAAA, and staff response follows directly after. 1. Landlords participating with Section 8 are obligated to sign a HUD document, the HAP contract The HAP (Housing Assistance Payment) contract is required by HUD and is a written agreement between the Housing Authority and the owner of a unit occupied by a HCV (Housing Choice Voucher Program) holder. The HAP is not signed until the Housing Authority approves the unit. In order to approve the unit, the Housing Authority must ensure that the unit has passed inspection, (meets the Housing Quality Standards (HQS)), the owner executes a lease with the tenant, and the rent charged by the owner is reasonable for the unit size and the market. January 28, 2016 Page 3 2. Landlords and property managers with properties inside and outside the Iowa City limits will present tenants with 2 sets of rules Landlords with properties in other areas are already working with different fair housing laws. Iowa City's fair housing laws currently offer greater protection than exists at either the state or federal level. Iowa City protection includes: age, presence of absence of dependents, public assistance source of income', creed, (not covered at the state or federal level) sexual orientation and gender identity (covered at the state level but at not the federal level). Including HCV in the definition of Public Assistance Source of Income should not create any Freater administrative burden to landlords with properties outside of Iowa City than is occurring. Landlords should be using the same application process for accepting/rejecting potential tenants regardless of where the property exists. 3. Economic risk for landlords may be perceived as greater. Landlords renting to HCV holder face less risk than renting to non HCV holders. A landlord's income is derived from the rents collected from tenants. HUD regulations minimize landlord risk as Housing Authorities are required to recalculate the tenant/HAP portions of the contract rent when a family's income decreases. The GICAAA in their memo expressed concern that if the HUD published Fair Market Rents (FMRs) fall, this decrease would render units "unaffordable to the Section 8 tenant and necessitating their moving out. " In fact, the FMRs for our jurisdiction have fallen 3 times in the last 5 years and did not result in the termination of any HAP contracts or the forced move -out by HCV holders. Further, there is no HUD regulatory or statutory requirements preventing a landlord from requiring a co-signor/guarantor on the lease. The Housing Authority does not allow HCV participants to move without proper notification or landlord written approval. This is a program violation and may result in the termination of the assistance. 4. Insurance may be affected Area insurance agents and carriers reported this is not a concern for multifamily developments that base their rents on "market rates;" however, it may be a concern for multifamily developments that base their rents on "income targeting." Multifamily developments that base rents on "income targeting" are typically developments that receive financing from state and federal sources such as the Low Income Housing Tax Credit Program (LIHTC); the U.S. Department of Agriculture's Section 515 Program; HUD's Section 202 (elderly), Section 811 (disabled), and Section 236 and Section 221(d) (family) Programs. Examples in Iowa City include: Regency Heights, Autumn Park Apartments, Ecumenical Towers, Capitol House, Systems Unlimited Group Homes, and Pheasant Ridge Apartments. 5. The Section 8 program is not fair for all. Housing Authorities are required to submit demographic data to HUD when the Housing Authority completes an annual or interim recertification. HUD makes this data available to the ' Current definition excludes rental subsidies. 2 The Iowa City Housing Authority's jurisdiction is Johnson County, Iowa County, and Washington County (North of Highway 92). Most persons who hold a HCV reside in Johnson County and this percentage "mirrors where the general population resides in Johnson County. January 28, 2016 Page 4 general public through the Resident Characteristics Report (RCR). The amount of time a family participates in the HCV program, or the length of stay, is included in the RCR. The length of stay report from September 1, 2014 — December 31, 2015, shows that 56% of all HCV participants exit the program in 5 years or less; 77% exit in 10 years or less. The GCIAAA, stated in their memo, "In fact, vouchers were lost during the recent sequestration process." The Iowa City Housing Authority did not lose any HCV's due to sequestration. 6. Landlord freedom to contract or not contract in connection with property they own will be lost with negligible gain in the community. The Fair Housing Act was enacted in 1968 by President Lyndon B. Johnson to address housing discrimination with the specific purpose of providing remedies and enforcement options for persons who were unable to rent or purchase homes in the neighborhoods of their choice regardless of their financial resources due to landlords/sellers refusing them based on race, color, national origin, religion or sex. Comparatively, this amendment is no different. Every resident or potential resident to this community should be allowed the opportunity to apply for and reside in a housing unit of their choice and that they can afford. Across the country 12 states, 9 counties and 18 cities include rent subsidies in their fair housing laws and have done so without any challenge from HUD. Even though neither the appellate courts in Iowa nor the federal appellate court for Iowa have ruled on this issue, a strong case can be made that there is no preemption and/or that there is no conflict between the proposed ordinance and federal law. Possible course of action 1. Have a new Section 8 protected class ordinance take effect when the voucher utilization rate falls to a set level such as 90%, which would be 30% higher than national levels Those who hold a HCV are not being considered for affordable rental units because there are some landlords who refuse to consider them as applicants. A high utilization rate does not prove that persons are able to rent housing units of their choice or in an area of their choice. The Iowa City Housing Authority's 10 -year voucher utilization rate = 97%.3 A high utilization rate is helpful but it does not take into account whether applicants who use HCV are able to obtain rental units that would fit within their financial means throughout Iowa City. Z Create a city fund to reimburse landlords for unpaid damages beyond normal /wear and tear, lost rent, attorney fees, and repair costs when participating in the Section 8 program; $500,000 to start. These are common business risks associated with the rental of any property. While most tenants are respectful of property they are leasing or renting there are those who are not. A person who uses a HCV is not more likely to damage a rental unit than any other tenant. 3. Have the city lease apartments from landlords under normal lease terms and then they can be sublet to Section 8 tenants 3 Currently 416 landlords participate in the Housing Choice Voucher Program and HCV/VASH utilization is 101.3%. January 28, 2016 Page 5 HUD does not allow this type of arrangement. 4. Allow landlords who are mandated to participate in the voucher program to require that tenants participate in the Family Self -Sufficiency Program. (An underutilized voluntary HUD program shown to increase employment, increase income, and increase asset accumulation) The Iowa City Housing Authority's Family Self -Sufficiency program is in the top 3rd of all programs in the Kansas City Region -7 (Iowa, Nebraska, Kansas, and Missouri). In the State of Iowa, the Iowa City Housing Authority has the 2nd largest number of total participants (as reported by HUD in the Family Self Sufficiency grant awards for Calendar Year 2016). However this program is not an option for all individuals as some individuals who use a HCV cannot work due to age or a disability. The Family Self -Sufficiency program enables families assisted through the HCV program, to increase their earned income and reduce their need for rental subsidies. Participants in this program are provided opportunities for education, job training and counseling so they can obtain skills necessary to achieve self- sufficiency. S. Request that the Greater Iowa City Apartment Association work with Iowa City landlords to remove non-inclusive language from rental ads The proposed ordinance would prohibit advertisements that indicate persons who use a HCV are not solicited and would also prohibit landlords from rejecting an applicant just because they use a HCV. 6. Encourage landlords to use lowaHousingSearch.org, a free search engine listing affordable units for rent which accept Section 8. Staff can and will encourage landlords to use this search engine when listing affordable units but the proposed ordinance is to further fair housing and to remove housing barriers for persons who use HCV. 7. Work with surrounding communities to make this a regional project especially since surrounding towns have more affordable units available. The proposed amendment is to further affordable housing opportunities for persons/families that currently are refused or not considered here in Iowa City due to their use of a HCV. 8. Do nothing, recognizing that mandating landlords to participate and obligating them to sign an additional contract with different terms than for other tenants is a violation of civil liberties Across the country 12 states, 9 counties and 18 cities include rent subsidies in their fair housing laws and have done so without any challenge from HUD. Even though neither the appellate courts in Iowa nor the federal appellate court for Iowa have ruled on this issue, a strong case can be made that there is no preemption and/or that there is no conflict the proposed ordinance and the federal law. Current and historical data suggest that the requirements of the HAP contract are not as onerous as the GICAAA suggests. Four -hundred January 28, 2016 Page 6 and sixteen (416) landlords received a HAP check from the Housing Authority for January 2016. Recommendation: It is staff's recommendation that the Council amend the Human Rights Ordinance to include "HCV and similar rent subsidy programs" in the definition of Public Assistance Source of Income. To refuse to rent (lease) to a person because the person will use a rental subsidy is not a practice that supports the values of this community and is contrary to our commitment to fair housing. Attached: Correspondence from GICAAA from January 13, 2016. Memo Staff Recommendation dated January 13, 2016. Correspondence from GICAAA from July 21, 2015. 2015 - 2016 Board: President — Chris Villhauer Vice -President — Tony Vespa Secretary — Michelle Lamkins Treasurer — Mark Ruggeberg David Kacena Jim Houghton Blaine Thomas Celeste Holloway Greater Iowa City Area Apartment Association P.O.Box 1765 Iowa City, IA 52244 www,gicaa.org January 13, 2016 City of Iowa City Attn: City Council 410 E, Washington St. Iowa City, IA 32240 Dear City Council Members, This correspondence is concerning a recommendation to the City Council to include Housing Choice Voucher (Section 8) in the definition of Public Assistance Source of Income. The Greater Iowa City Apartment Association is a local non-profit organization whose membership includes owners of rental property, managers of rental units, or those associated with either. Many of our members currently participate in the Housing Choice Voucher program and have a great working relationship with Housing Administrator, Steven Rackis and his staff. We have enjoyed having Mr. Rackis as a guest speaker at our meetings many times. The Greater Iowa City Apartment Association helps to promote Fair Housing education in order to achieve equal housing opportunities for all. The attached information explains why the choice to participate in this federally funded program should remain voluntary by both tenants and landlords. The Greater Iowa City Apartment Association would like to work with the Iowa City Housing Authority, the Human Rights Commission, and any other group or commission that you, or the City Council, feel would be beneficial in working towards the housing goals of the City of Iowa City. If you have any questions please let me know. Thank you for your time. Sincerely, Chris Villhauer President CDc� Greater Iowa City Apartment Association w= apartmentassoc&p,maii.com s -a --- www. icg_ aa.org m� s� Better Landlording Through Education Greater Iowa City Area Apartment Asso P.O.Box 1765 Iowa City, IA. 52244 www.gicaa.org Regarding Section 8 source of income protected class: In a November 17, 2015 memo from Stefanie Bowers to Tom Markus we read "Including participation in the HCV program to the definition of Public Assistance Source of Income simply requires those renting housing units to treat all applicants equally." This is Not True. 1. Landlords participating with Section 8 are obligated to sign a HUD document, the HAP contract. Section 8 is a Federal Program which is voluntary for tenants and landlords. There is no Federal or Iowa State law mandating that landlords participate. The terms of the HAP contract are different than for other tenants, especially Part B,#4 which spells out all the possible reasons that the HAP contract and therefore the lease will terminate. In addition Part B, 7c2 states "The amount of the PHA housing assistance payment is subject to change during the HAP contract term in accordance with HUD requirements. The PHA must notify the family and the owner of any changes in the amount of the housing assistance payment." All City Councilors should read the 12 page HAP contract to understand that it is neither simple, nor the same as for other tenants. No other protected classes or source of income require such a contract in addition to the regular lease. 2. Landlords and property managers with properties inside and outside the Iowa City limits will present tenants with 2 sets of rules. Currently 68% of vouchers are used in Iowa City and the rest are spread throughout Johnson County and parts of other counties. Section 8 tenants are limited to units at Fair Market Rent. This is a complicated calculation by HUD set at 40% of 2 bedroom gross rents reported in tixe AmeffZan Community Survey over a 5 year period ending 3 years before it appli `-Tpd t4en making some mathematical adjustments. In 2014 the American Comer fty -%rvey canvassed about 350 renters in Johnson County out of about 21,200 t". QWy pew reporting on 2 bedroom units will be counted in future Fair Market Rett. Tl� is at". sample! Depending on who is surveyed each year, Fair Market Rate i iifl,- ise' r fall, R (Indeed, the national association of directors of all the Public Housiri AuthZities write to HUD every year with scathing comments complaining that Fair Market Rent is flawed, not credible, inaccurate, and volatile, showing wild swings from year to year.) In contrast, the local Cook Appraisal Apartment Survey is done biennially, surveys about 5000 units, and utilizes geographic areas. These areas are the "Pentacrest Mile", Iowa City outside the "Mile", Coralville, and North Liberty. Pentacrest Mile has substantially higher average rents than other areas. Rents do not rise and fall because of survey results, but are determined by business decisions. Fair Market Rent cannot adjust for realities in rental markets in different areas of the county. 3. Economic risk for landlords may be perceived as greater. Landlords renting to students or young people are likely to require a co-signer on the lease to have a better guarantee that damages or early move outs will be paid for. A co- signer is not possible with a Section 8 tenant and there is less likelihood of recovering damages after going through a lawsuit in court. Property owners can have legitimate business reasons for choosing to participate in the Section 8 program and can have legitimate business reasons for declining to participate. Economic sustainability requires prudent management of all risks and opportunities. Vacancies, evictions, turnover, nuisance complaints, unhappy neighbors, property damage, and administrative costs are all to be avoided if one is to operate an economically sustainable business. Landlords may also be concerned that Fair Market Rent will fall, making the unit unaffordable to the Section 8 tenant and necessitating their moving out. Some landlords own and operate 1000 units and many other landlords may only have one or two units. This may represent their retirement income, where even a month or two of vacancy is a very big deal. The human rights of all stakeholders should be taken into account. Some cities which have passed ordinances protecting Section 8 have also established a city fund which can reimburse landlords for losses. 4. Insurance may be affected. Insurance coverage for multifamily housing is already limited. Property insurance companies consider subsidized housing including Section end student housing to be "high risk". This leads to higher premiums, moranant0pated exclusions, or no coverage at all. For example: ' West Bend Company will write for up to 10% units with Section 8 wit "rrkxtra-prey charged. —F - AIC (Apartment Insurance Consultants) has some policies allowing up tc1,09/'ut sill other good rate policies that say "No subsidized, student, senior or assi,06d hosing: Cincinnati (a main market for standard apartments) will not insure ap6rtmenMhat take Section 8. A landlord who has to pay a higher premium or loses coverage because of a mandate to participate in the Section 8 program will have a legitimate concern. (Perhaps all insurance companies should be mandated to cover Section 8 housing. However, when risks are spread out then insurance rates would rise for everything.) We should note that it is actuaries that determine perceived risks, costs, expected losses, and average expenses. Risk discrimination is the underpinning of insurance. 5. The Section 8 program is not fair for all. Across the country Section 8 waiting lists may open for only 1-5 days every 2-10 years. Hundreds of thousands of people will apply to be in a lottery to be on a waiting list for a voucher. A lucky few will eventually get a voucher after years of waiting while everyone else gets nothing. HUD estimates that it may be able to help 25% of people who qualify for their subsidized housing programs including Section 8. In addition, many renters are just as impoverished but choose not to apply for a voucher. Making Section 8 voucher holders a more favored group may be considered discriminatory against all those who are eligible but choose not to apply. Once receiving a housing voucher, there is little incentive to get off the system and families may utilize a voucher for decades. This does not allow others to have such an opportunity since there are not resources to add vouchers at this time. In fact, vouchers were lost during the recent sequestration process. 6. Landlord freedom to contract or not contract in connection with property they own will be lost with negligible gain in the community. Most cities who have passed ordinances to make Section 8 a protected class have done so because of very poor voucher utilization rates. Research has shown that utilization rates may improve but locations where vouchers are used does not change. Iowa City Housing Authority has maximum utilization rates and 450 participating landlords. The program runs very well. In the Iowa City Housing Authority brochure "Reasons for Landlords to Consider Participating in HCVP" it states: You may rent to as many or as few participants as you choose; landlords are not required to forever participate. If you have multiple units you are not required to rent them all or a percentage to other participants. Would this all be changed with new policy? Is that the intent? Mandating landlord participation in Section 8 is intended to deconcentrate pockets of poverty. However, our Iowa City high poverty concentration areas are right around the University itself, most likely because 63% of people under the poverty threshold in Iowa City are age 18-24. (ACS 2014) These are likely to be students who are Twt eligNe for vouchers. Data about poverty is deceptive: We publicly subsidize up to 3% oGII reaU in Johnson County but these households may still show up as under po� tesho(; because Section 8 and other subsidies do not count as a source of incin fe AC survey which determines area median income.rri } E6- Possible course of action Have a new Section 8 protected class ordinance take effect when the voucher utilization rate falls to a set level such as 90%, which would be 30% higher than national levels. 2. Create a city fund to reimburse landlords for unpaid damages beyond normal "wear and tear", lost rent, attorney fees, and repair costs when participating in the Section 8 program; $500,000 to start. 3. Have the city lease apartments from landlords under normal lease terms and then they can be sublet to Section 8 tenants. 4. Allow landlords who are mandated to participate in the voucher program to require that tenants participate in the Family Self -Sufficiency Program. (An underutilized voluntary HUD program shown to increase employment, increase income, and increase asset accumulation) 5. Request that the Greater Iowa City Apartment Association work with Iowa City landlords to remove non-inclusive language from rental ads. 6. Encourage landlords to use Iowa HousingSea rch.org, a free search engine listing affordable units for rent which accept Section 8. 7. Work with surrounding communities to make this a regional project especially since surrounding towns have more affordable units available. 8. Do nothing, recognizing that mandating landlords to participate and obligating them to sign an additional contract with different terms than for other tenants is a violation of civil liberties. `n :' Housing Assistance Payments Contract (HAP Contnict) Section 8 Tenant -Based Assistance Housing Choice Voucher Program U.S. Department of Housing and Urban Development Office ofPublic and Indian Housing OMB Approval 2577-0169 (Exp. 04/30/2018) Privacy Act 113tatement. The Department of Housing and Urban Development (HUD) is authorized to collect the information required on this form by Section 8 of the U.S. Housing Act of 1937 (42 U.S.C. 1437f). Collection of family members' names and unit address, and owner's name and payment address is mandatory. The information is used to provide Section 8 tenant -based assistance under the Housing Choice Voucher program in the form of housing assistance payments. The information also specifies what utilities and appliances are to be supplied by the owner, and what utilities and appliances are to be supplied by the tenant. HUD may disclose this information to Federal, State and local agencies when relevant to civil, criminal, or regulatory Investigations and prosecutions. It will not be otherwise disclosed or released outside of HUD, except as permitted or required by law. a1 ur�provi a any of Me Information may result in Holay or rejection or lamily or owner a iapa ion m e program. Instructions lbr use of HAP Contract However, this form may not be used for the following special This foam of Housing Assistance Payments Contract (HAP contract) housing types: (1) manufactured home space rental by a family that is used to provide Section 8 tenant -based assistance under the owns the manufactured home and leases only the space; (2) housing choice voucher program (voucher program) of the U.S. cooperative housing; and (3) the homeownership option under Department of Housing and Urban Development (HUD). The main Section 8(y) of the United States Housing Act of 1937 (42 U.S.C. regulation for this program is 24 Code of Federal Regulations Part 1437f(y)). 982. The local voucher program is administered by a public housing agency (PHA) . The HAP contact is an agreement between the PHA and the owner of a unit occupied by an assisted family. The HAP contract has three parts: Part A Contract information (fill-ins). See section by section instructions. Part B Body of contract Part C Tenancy addendum Use of this form Use of this HAP contract is required by HUD. Modification of the HAP contract is not permitted. The HAP contract must be word-for- word in the foam prescribed by HUD. However, the PHA may choose to add the following: Language that prohibits the owner from collecting a security deposit in excess of private market practice, or in excess of amounts charged by the owner to unassisted tenants. Such a prohibition must be added to Part A of the HAP contract Language that defines when the housing assistance payment by the PHA is deemed received by the owner (e.g., upon mailing by the PHA or actual receipt by the owner). Such language must be added to Part A of the HAP contract To prepare the HAP contract, fill in all contract information in Part A of the contract. Part A must then be executed by the owner and the PHA. Use for special housing types In addition to use for the basic Section 8 voucher program, this form must also be used for the following "special housing types" which are voucher progg-am variants for special needs (see 24 CFR Part 982, Subpart M): (1) single room occupancy (SRO) housing; (2) congregate housing; (3) group home; (4) shared housing; and (5) manufactured home rental by a family that leases the manufactured home and space. When this form is used for a special housing type, the special housing type shall be specified in Part A of the HAP contract, as follows: "This HAP contract is used for the following special housing type under HUD regulations for the Section 8 voucher program: (Insert Name of Special Housing type)." How to fill in Part A Section by Section Instructions Section 2: Tenant Enter full name of tenant Section 3. Contract Unit Enter address of unit, including apartment number, if any. Section 4. Household Members Enter full names of all PHA -approved household members. Specify if any such person is a live-in aide, which is a person approved by the PHA to reside in the unit to provide supportive services for a family member who is a person with disabilities. Section 5. Initial Lease Term Enter first date and last date of initial lease term. The initial lease term must be for at least one year. However, the PHA may approve a shorter initial lease term if the PHA determines that: Such shorter team would improve housing opportunities for the tenant, and Such shorter tam is the prevailing local market practice. Section 6. Initial Rent to Owner Enter the amount of the monthly rent to owner during the initial lease term. The PHA must determine that the rent to owner is reasonable in comparison to tent for other comparable unassisted units. During the initial lease term, the owner may not raise the rent to owner. ry Section 7. Housing Assistance Payment o Enter the initial amount of the monthly housitmgt L� p nce y Section 8. Utilities and Appliances. The lease and the HAP oontract must specify vAvd tilih'es gW f— � appliances are to be supplied by the owner, akw at —F utilities and appliances are to be supplied by this 1►t Fill a� section 8 to show who is responsible to provii6 ar pay fo-rMlities and appliances. N .c Previous editions are obsolete Page 1 of 12 form HUD -52641 (04/2015) ref Handbook 7420.8 Housing Assistance Payments Contract U.S. Department of Housing and Urban Development HAP Contract) Office of Public and Indian Housing Section 8 Tenant -Based Assistance Housing Choice Voucher Program Part A of the HAP Contract: Contract Information (To prepare the contract, fill out all contract information in Part A.) 1. Contents of Contract This HAP contract has three parts: Part A: Contract Information Part B: Body of Contract Part C: Tenancy Addendum 2. Tenant 3. Contract Unit 4. Household The following persons may reside in the unit. Other persons may not be added to the household without prior written approval of the owner and the PHA. The HAP contract term commences on the first day of the initial lease term. At the beginning of the HAP contact term, the amount of the housing assistance payment by the PHA to the owner is $ per month. The amount of the monthly housing assistance payment by the PHA to the owner is subject to change during the HAP contract term in accordance with HUD requirements. form HUD -52641 (04/2015) Previous editions are obsolete Page 2 of 12 ref Handbook 7420.8 CM rn 5. Initial Lease Term- The initial lease term begins on (mm/dd/yyyy): ._ The initial lease tens ends on (mm/dd/yyyy): "` w —C1 Y 6. Initial Rent to Owner = f The initial rent to owner is: $ During the initial lease term, the owner may not raise the rent to owner. N 7. Initial Housing Assistance Payment The HAP contract term commences on the first day of the initial lease term. At the beginning of the HAP contact term, the amount of the housing assistance payment by the PHA to the owner is $ per month. The amount of the monthly housing assistance payment by the PHA to the owner is subject to change during the HAP contract term in accordance with HUD requirements. form HUD -52641 (04/2015) Previous editions are obsolete Page 2 of 12 ref Handbook 7420.8 9. Utillitles an ppp lances The owner shall provide or pay for the utilities and appliances indicated below b�yy an " o". The tenant shall provide or pay for the utilities and appliances indicated below by a "T'. Utiles otherwise ified below the owner shall for all utilities and a liances vided b the owner Item Specify fuel type Provided by Paid b Heating Natural gas Bottlegas Oil or Electric Coal or Other �m Cooking Natural gas Bottle gas Oil or Electric Coal or Other Water Heating Natural gas ottle gas Oil or Electric Coal or Other Other Electric .—ov Water Sewer Trash Collection Air Conditioning Refrigerator Range/Microwave Other (specify) Signatures: Public Housing Agency Print or Type Name ofPHA Sigiature Print or Type Name and Tide o Signatory Owner Print or Type Nerve o owner Signature Print or Type Name and Tide o Sigitatory Date (nim/ ) Date(mml Mail Payments to: Name X— form HUD -52641 (04/2015) Previous editions are obsolete Page 3 of 12 ref Handbook 7420.8 N --i Address (street, city, State, Zip) r �m v .—ov X— form HUD -52641 (04/2015) Previous editions are obsolete Page 3 of 12 ref Handbook 7420.8 Housing Assistance Payments Contract (HAP Contract) Section 8 Tenant -Based Assistance Housing Choice Voucher Program Part B of HAP Contract: Body of Contract 1. Purpose a This is a HAP contract between the PHA and the owner. The HAP contract is entered to provide assistance for the family under the Section 8 voucher - program (see HUD program regulations at 24 Code of Federal Regulations Part 982). b. The HAP contract only applies to the household and contract unit specified in Part A of the HAP contact C. During the HAP contract term, the PHA will pay housing assistance payments to the owner in accordance with the HAP contract. d. The family will reside in the contract unit with assistance under the Section 8 vouches• program. The housing assistance payments by the PHA assist the tenant to lease the contact unit from the owner for occupancy by the family. 2. Lease of Contract Unit a The owner has leased the contract unit to the tenant for occupancy by the family with assistance under the Section 8 voucher program. b The PHA has approved leasing of the unit in accordance with requirements of the Section 8 voucher program. c The lease for the contract unit must include word- for-word all provisions of the tenancy addendum required by HUD (Part C of the HAP contract). d The owner certifies that: (1) The owner and the tenant have entered into a lease of the contract unit that includes all provisions of the tenancy addendum. (2) The lease is in a standard form that is used in the locality by the owner and that is generally used for other unassisted tenants in the premises. (3) The lease is consistent with State and local law. e The owner is responsible for screening the family's behavior or suitability for tenancy. The PHA is not responsible for such screening. The PHA has no liability or responsibility to the owner or other persons for the family's behavior or the family's conduct in tenancy. U.S. Department of Housing and Urban Development Office of Public and Indian Housing for such breach include recovery of overpayments, suspension of housing assistance payments, abatement or other reduction of housing assistance payments, termination of housing assistance payments, and termination of the HAP contract. The PHA may not exercise such remedies against the owner because of an HQS breach for which the family is responsible, and that is not caused by the owner. d. The PHA shall not make any housing assistance payments if the contract unit does not meet the HQS, unless the owner corrects the defect within the period specified by the PHA and the PHA verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within the period specified by the PHA. e. The PHA may inspect the contract unit and premises at such times as the PHA determines necessary, to ensure that the unit is in accordance with the HQS. f. The PHA must notify the owner of any HQS defects shown by the inspection. g. The owner must provide all housing services as agreed to in the lease. 4. Term of HAP Contract a. Relation to lease term. The term of the HAP contract begins on the first day of the initial tern of the lease, and terminates on the last day of the term of the lease (including the initial lease term and any extensions). b. When HAP contract terminates. (1) The HAP contract terminates automatically if the lease is terminated by the owner or the tenant. (2) The PHA may terminate program assistance for the family for any grounds authorized in accordance with HUD requirements. If the PHA terminates program assistance for the family, the HAP contract terminates awornatically. (3) If the family moves from the contact unit, the HAP contract terminates automaticallp (4) The HAP contact ternvnates autonl ally 180 calendar days after the l housmgc sistm payment to the owner. µcw (5) The PHA may trmLnateifie ,P d' ntract if the PHA determines, in at - nce HUD requirements, that available-� giram ding is 3. Maintenance, Utilities, and Other Servicest not sufficient to support eoti�tped asSjstancej y a. The owner must maintain the contact unit and for families in the program. premises in accordance with the housing quality (6) The HAP contact term—_' Vftia&ay upo&1W standards (HQS)• death of a single member 15" ld, iriclud ng single b. The owner must provide all utilities needed to member households with a`'T ve-in aidN— comply with the HQS. C. If the owner does not maintain the contract unit in accordance with the HQS, or fails to provide all utilities needed to comply with the HQS, the PHA may exercise any available remedies. PHA remedies form HUD -52641 (04/2015) Previous editions are obsolete Page 4 of 12 ref Handbook 7420.8 (7) The PHA may terminate the HAP contract if the PHA determines that the contract unit does not provide adequate space in accordance with the HQS because of an increase in family size or a change in family composition. (8) If the family breaks up, the PHA may terminate the HAP contract, or may continue housing assistance payments on behalf of family members who remain in the contract unit. (9) The PHA may terminate the HAP contract if the PHA deternmes that the unit does not meet all requirements of the HQS, or determines that the owner has otherwise breached the HAP contract Provision and Payment for Utilities and Appliances a The lease must specify what utilities are to be provided or paid by the owner or the tenant b. The lease must specify what appliances are to be pro- vided or paid by the owner or the tenant. C. Part A of the HAP contract specifies what utilities and appliances are to be provided or paid by the owner or the tenant The lease shall be consistent with the HAP contract. 6. Rent to Owner: Reasonable Rent a During the HAP contract term, the rent to owner may at no time exceed the reasonable rent for the contract unit as most recently determined or redetermined by the PHA in accordance with HUD requirements. b. The PHA must determine whether the rent to owner is reasonable in comparison to rent for other comparable unassisted units. To make this determination, the PHA must consider: (1) The location, quality, size, unit type, and age of the contract unit; and (2) Any amenities, housing services, maintenance and utilities provided and paid by the owner. c. The PHA must redetermine the reasonable rent when required in accordance with HUD requirements. The PHA may redetermine the reasonable rent at any time. d. During the HAP contract term, the rent to owner may not exceed rent charged by the owner for comparable unassisted units in the premises. The owner must give the PHA any information requested by the PHA on rents charged by the owner for other units in the premises or elsewhere. 7. PHA Payment to Owner a. When paid (1) During the term of the HAP contract, the PHA must make monthly housing assistance payments to the owner on behalf of the family at the beginning of each month. (2) The PHA must pay housing assistance payments promptly when due to the owner. (3) If housing assistance payments are not paid promptly when due after the first two calendar months of the HAP contract term, the PHA shall pay the owner penalties if all of the following circumstances apply: (i) Such penalties are in accordance with generally accepted practices and law, as applicable in the local housing market, governing penalties for late payment of rent by a tenant; (ii) It is the owner's practice to charge such penalties for assisted and unassisted tenants; and (iii) The owner also charges such penalties against the tenant for late payment of family rent to owner. However, the PHA shall not be obligated to pay any late payment penalty if HUD determines that late payment by the PHA is due to factors beyond the PHA's control. Moreover, the PHA shall not be obligated to pay any late payment penalty if housing assistance payments by the PHA. are delayed or denied as a remedy for owner breach of the HAP contract (including any of the following PHA remedies: recovery of overpayments, suspension of housing assistance payments, abatement or reduction of housing assistance payments, termination of housing assistance payments and termination of the contract). (4) Housing assistance payments shall only be paid to the owner while the family is residing in the contract unit during the term of the HAP contract The PHA shall not pay a housing assistance payment to the owner for any month after the month when the family moves out b. Owner compliance with HAP contract. Unless the owner has complied with all provisions of the HAP contract, the owner does not have a right to receive housing assistance payments under the HAP contract. c. Amount of PHA payment to owner (1) The amount of the monthly PHA housing assistance payment to the owner shall be determined by the PHA in accordance with HUD requirements for a tenancy under the voucher program. (2) The amount of the PHA housing assistance payment is subject to change during the HAP contract term in accordance with HUD requirements. The PHA must notify the family and the owner of any changes in the amount of the housing assistance payment (3) The housing assistance payment for the first month of the HAP contract term shall be pro- rated for a partial month d. Application of payment. The monthly housing assistance payment shall be credited against the monthly rem to owner for the contract unit. e Limit of PHA responsibility. (1) The PHA is only responsible for making housing assistance payments to the owner in accordance with the HAP contract and HUD requirements for a tenancy under the voucher prograr, (2) The PHA shall not pay a�W portion jthe rent to owner in excess of t"sin sistartc��* payment The PHA shall"' paty ably res claims by the owner against the �.. f Overpayment to owner. If theme det iris tliat the owner is not entitled to the�.l�ertrsm assistan ai payment or any part of it, the PISA, 41 Addi to other remedies may deduct the amo "",, Y > 9�;the o erpaym�t .;�„ from any amounts due the own (fi IudWamounts due under any other Section 8 ass�sftce corXh W). 8. Owner Certification form HUD -52641 (04/2015) Previous editions are obsolete Page 5 of 12 ref Handbook 7420.8 During the term of this contract, the owner certifies that: a. The owner is rnairdaaningthe eonhact unit andpiemises in accordance with the HQS. b. The contract unit is leased to the tenant The lease includes the tenancy addendum (Part C of the HAP contract), and is in accordance with the HAP contract and program requirements. The owner has provided the lease to the PHA, including any revisions of the lease. C. The rent to owner does not exceed rents charged by the owner for rental of comparable unassisted units in the Premises. d Except for the rent to owner, the owner has not received and will not receive any payments or other consideration (from the family, the PHA, HUD, or any other public or private source) for rental of the contract unit during the HAP contract term. e. The family does not own or have any interest in the contract unit f. To the best of the owner's knowledge, the members of the family reside in the contact unit, and the unit is the family's only residence. g. The owner (including a principal or other interested party) is not the parent, child, grandparent grandchild, sister, or brother of any member of the family, unless the PHA has determined (and has notified the owner and the family of such determination) that approving rental of the unit, notwithstanding such relationship, would provide reasonable accommodation for a family member who is a person with disabilities. 9. Prohibition of Discrimination. In accordance with applicable equal opportunity statutes, Executive Orders, and regulations: The owner must not discriminate against any person because of race, color, religion, sex, national origin, age, familial status, or disability in connection with the HAP contract. The owner must cooperate with the PHA and HUD in conducting equal opportunity compliance reviews and complaint investigations in connection with the HAP contract 10. Owner's Breach of HAP Contract Any of the following actions by the owner (including a principal or other interested party) is a breach of the HAP contract by the owner: (1) If the owner has violated any obligation under the HAP contract, including the owner's obligation to maintain the unit in accordance with the HQS. (2) If the owner has violated any obligation under any other housing assistance payments contract under Section 8. (3) If the owner has committed fraud, bribery or any other conupt or criminal act in connection with any Federal housing assistance program. (4) For projects with mortgages insured by HUD or loans made by HUD, if the owner has failed to comply with the regulations for the applicable mortgage insurance or loan program, with the mortgage or mortgage note, or with the regulatory agreement; or if the owner has committed fiaud, bribery or any other corrupt or criminal act in connection with the mortgage or loan. (5) If the owner has engaged in any drug-related criminal activity or any violent criminal activity. b. If the PHA determines that a breach has occurred, the PHA may exercise any of its rights and remedies under the HAP contract, or any other available rights and remedies for such breach. The PHA shall notify the owner of such determination, including a brief statement of the reasons for the determination. The notice by the PHA to the owner may require the owner to take corrective action, as verified or determined by the PHA, by a deadline prescribed in the notice. C. The PHA's rights and remedies for owner breach of the HAP contract include recovery of overpayments, suspension of housing assistance payments, abatement or other reduction of housing assistance payments, termination of housing assistance payments, and termination of the HAP contract. d The PHA may seek and obtain additional relief by judicial order or action, including specific performance, other injunctive relief or order for damages. e. Even if the family continues to live in the contract unit, the PHA may exercise any rights and remedies for owner breach of the HAP contract f. The PHA's exercise or non -exercise of any right or remedy for owner breach of the HAP contract is not a waiver of the right to exercise that or any other right or remedy at any time. 11. PHA and HUD Access to Premises and Owner's Records a. The owner must provide any information pertinent to the HAP contract that the PHA or HUD may reasonably require. b. The PHA, HUD and the Comptroller General of the United States shall have full and free access to the contract unit and the premises, and to all accounts and other records of the owner that are relevant to the HAP contract, including the right to examine or audit the records and to make copies. C. The owner must grant such access to computerized or other electronic records, and to any computers, equip- ment or facilities containing such records, and must provide any information or assistance needed to access the records. 12. Exclusion of Third Party Rights a. The family is not a party to or third party Wficiary of Part B of the HAP contract. The famaip may not enforce any provision of Part Kmd ma)vmt exercise any right or remedy against tl,per of 1:HA under Part B. %> =5 b. The tenant or the PHA mV-'"' krce1b9 tenar addendum (Part C of the HAP-Raqtractagainst Jhe owner, and may exercise any„,,g)tt er remedy aga F ., the owner under the tenancy a13&rtdom. C. The PHA does not assume any;rrensibr for in,} to, or any liability to, any perog' itljuredas-a resulYvf the owner's action or fail= to -act in colwon with management of the contract unit or the pvp=s or with implementation of the HAP contract, or as a result of any other action or failure to act by the owner. d. The owner is not the agent of the PHA, and the HAP contract does not create or affect any relationship between the PHA and any lender to the owner or any suppliers, employees, contractors or subcontractors used by the owner in connection with management of form HUD -52641 (04/2015) Previous editions are obsolete Page 6 of 12 ref Handbook 7420.8 the contract unit or the premises or with implementation of the HAP contract. 13. Conflict of Interest a "Covered individual" means a person or entity who is a member of any of the following classes: (1) Any present or former member or officer of the PHA (except a PHA commissioner who is a participant in the program); (2) Any employee of the PHA, or any contractor, sub -contractor or agent of the PHA, who formulates policy or who influences decisions with respect to the program; (3) Any public official, member of a governing body, or State or local legislator, who exercises functions or responsibilities with respect to the program; or (4) Any member of the Congress of the United States. b. A covered individual may not have any direct or indirect interest in the HAP contract or in any benefits or payments under the contract (including the interest of an immediate family member of such covered individual) while such person is a covered individual or during one year thereafter. Q "Immediate family member" means the spouse, parent (including a stepparent), child (including a stepchild), grandparent, grandchild, sister or brother (including a stepsister or stepbrother) of any covered individual. d. The owner certifies and is responsible for assuring that no person or entity has or will have a prohibited interest, at execution of the HAP contract, or at any time during the HAP contract term. e. If a prohibited interest occurs, the owner shall promptly and fully disclose such interest to the PHA and HUD. f. The conflict of interest prohibition under this section may be waived by the HUD field office for good cause. g. No member of or delegate to the Congress of the United States or resident commissioner shall be admitted to any share or part of the HAP contract or to any benefits which may arise from it 14. Assignment of the HAP Contract a. The owner may not assign the HAP contract to a new owner without the prior written consent of the PHA. b. If the owner requests PHA consent to assign the HAP contract to a new owner, the owner shall supply any information as required by the PHA pertinent to the proposed assignment. C. The HAP contract may not be assigned to a new owner that is debarred, suspended or subject to a limited the Fair Housing Act or other Federal equal opportunity requirements. e. The HAP contract may not be assigned to a new owner if the new owner (including a principal or other interested party) is the parent, child, grandparent, grandchild, sister or brother of any member of the family, unless the PHA has determined (and has notified the family of such determination) that approving the assignment, notwithstanding such relationship, would provide reasonable accommodation for a family member who is a person with disabilities. f. The PHA may deny approval to assign the HAP contract if the owner or proposed new owner (including a principal or other interested party): (1) Has violated obligations under a housing assistance payments contract under Section 8; (2) Has committed fraud, bribery or any other corrupt or criminal act in connection with any Federal housing program; (3) Has engaged in any drug-related criminal activity or any violent criminal activity; (4) Has a history or practice of non-compliance with the HQS for units leased under the Section 8 tenant -based programs, or non-compliance with applicable housing standards for units leased with project -based Section 8 assistance or for units leased under any other Federal housing program; (5) Has a history or practice of failing to terminate tenancy of tenants assisted under any Federally assisted housing program for activity engaged in by the tenant, any member of the household, a guest or another person under the control of any member of the household that: (a) Threatens the right to peaceful enjoyment of the premises by other residents; (b) Threatens the health or safety of other residents, of employees of the PHA, or of owner employees or other persons engaged in management of the housing, (c) Threatens the health or safety of, or the right to peaceful enjoyment of their residents by, persons residing in the immediate vicinity of the premises; or (d) Is drug-related criminal activity or violent criminal activity; (6) Has a history or practice of renting units that fail to meet State or local housing codes; or (7) Has not paid State or local real estate taxes, fines or assessments. denial of participation under HUD regulations (see 24 g. The new owner must agree to be bound by and comply Code of Federal Regulations Part 24). with the HAP contract. The agreement must be in d. The HAP contract may not be assigned to a new owner writing, and in a form acceptable to the PHA. The new if HUD has prohibited such assignment because: owner must give the PHA a copy of th�,�yexecuted (1) The Federal government has instituted an agreement administrative or judicial action against the owner or proposed new owner for violation of the cr. 15. Foreclosure. In the case of any foreclos k31 a immdiate Fair Housing Act or other Federal equal successor in interest in the property pursuatt' 3e?lie forWsure " 1 opportunity requirements, and such action is shall assume such interest subject to the leash en 1he'prior ' pending; or owner and the tenant and to the HAP contracor 1 1 PHA for (2) A or administrative agency has determined owner and the the occupied unit. Thi—s CoMsionwnot affect any State or local law that provides lout e ds or that the owner or proposed new owner violated other additional protections for tenants. This pro �onsunset, on December 31, 2012 unless extended by late °.' .. form HUD -62641 (0412015) Previous editions are obsolete Page 7 of 12 ref Handbook 7420.8 16. Written Notices. Any notice by the PHA or the owner in connection with this contract must be in writing. 17. Entire Agreement: Interpretation a. The *.RAP contract contains the entire agreement between the owner and the PHA. b The HAP contract shall be interpreted and implemented in accordance with all statutory requirements, and with all HUD requirements, including the HUD program regulations at 24 Code of Federal Regulations Part 982. Previous editions are obsolete Page 8 of 12 r_n form HUD -52641 (0412015) ref Handbook 7420.8 ry �1 r_n form HUD -52641 (0412015) ref Handbook 7420.8 Housing Assistance Payments Contract U.S. Department of Housing (HAP Contract)and Urban Development Section 8 Tenant -Based Assistance Office ofPublic and Indian Housing Housing Choice Voucher Program Part C of HAP Contract: Tenancy Addendum term of the lease and any extension term), the rent to owner may at no time exceed: 1. Section 8 Voucher Program (1) The reasonable rent for the unit as most recently determined or redetermined by the a The owner is leasing the contract unit to the tenant PHA in accordance with HUD requirements, for occupancy by the tenant's family with assistance or for a tenancy under the Section 8 housing choice (2) Rent charged by the owner for comparable voucher program (voucher • program) of the United unassisted units in the premises. States Department of Housing and Urban Development (HUD). b. The owner has entered into a Housing Assistance 5. Family Payment to Owner Payments Contract (HAP contract) with the PHA a The family is responsible for paying the owner any under the voucher program. Under the HAP portion of the rent to owner that is not covered by contract, the PHA will make housing assistance the PHA housing assistance payment payments to the owner to assist the tenant in leasing b. Each month, the PHA will make a housing the unit from the owner. assistance payment to the owner on behalf of the family in accordance with the HAP contract. The 2. Lease amount of the monthly housing assistance payment a The owner has given the PHA a copy of the lease, will be determined by the PHA in accordance with including any revisions agreed by the owner and the HUD requirements for a tenancy under the Section 8 The owner certifies that the teens of the lease voucher program. C. The monthly housing assistance payment shall be are in accordance with all provisions the HAP contract and that the lease includes the tenancy the credited against the monthly rent owner for the m addendum. contract unit. b. The tenant shall have the right enforce the d The tenant is not responsible for paying the portion tenancy addendum against the owner.. If there any of rent to owner covered by the PHA housing conflict between the tenancy addendum and any assistance payment under the HAP contact between other provisions of the lease, the language of the the owner and the PHA. A PHA failure to pay the tenancy addendum shall control. housing assistance payment to the owner is not a violation of the lease. The owner may not terminate 3. Use of Contract Unit the tenancy for nonpayment of the PHA housing assistance payment. a During the lease term, the family will reside in the e. The owner may not charge or accept, from the contract unit with assistance under the voucher family or from any other source, any payment for program. rent of the unit in addition to the rent to owner. Rent b. The composition of the household must be approved to owner includes all housing services, maintenance, by the PHA. The family must promptly inform the utilities and appliances to be provided and paid by PHA of the birth, adoption or court -awarded custody the owner in accordance with the lease. of a child. Other persons may not be added to the f. The owner must immediately return any excess rent household without prior written approval of the payment to the tenant owner and the PHA. C. The contact unit may only be used for residence by 6. Other Fees and Charges the PHA -approved household members. The unit must be the family's only residence. Members of the a Rent to owner does not include cost of arty meals or household may engage in legal profit making supportive services or furniture which may be activities incidental to primary use of the unit for provided by the owner. residence by members of the family. b. The owner may not require the tenant or family d. The tenant may not sublease or let the unit. members to pay mages for any mea" supportive e. The tenant may not assign the lease or transfer the services or furniture whicl may be pig ided by the unit owner. Nonpayment of Any Wch dwges is«"p grounds for termination of tyy. 4. Rent to Owner C. The owner may not charge t ienani extra amus for items customarily inin r rot to owf m a The initial rent to owner may not exceed the amountthe locality, or providedi additional c t to approved by the PHA in accordance with HUD unsubsidized tenants in tht ises.-O b. requirements. Changes in the rent to owner shall be determined by 7. Maintenance, Utilities, and QXhet,Ser44ces ' the provisions of the lease. However, the owner may a Maintenance ms°; not raise the rent during the initial term ofthe lease. 71 C. During the term of the lease (including the initial (1) The owner must maintain the unit and premises in accordance with the HQS. (2) Maintenance and replacement (including redecoration) must be in accordance with the standard practice for the building concerned as established by the owner. b Utilities and appliances (1) The owner must provide all utilities needed to comply with the HQS. (2) The owner is not responsible for a breach of the HQS caused by the tenant's failure to: (a) Pay for any utilities that areto be paid by the tenant. (b) Provide and maintain any appliances that are to be provided by the tenant. c. Family damage. The owner is not responsible for a breach of the HQS because of damages beyond normal wear and tear caused by any member of the household or by a guest. d Housing services. The owner must provide all housing services as agreed to in the lease. 8. Termination of Tenancy by Owner a. Requirements. The owner may only terminate the tenancy in accordance with the lease and HUD requirements. b Grounds. During the term of the lease (the initial term of the lease or any extension term), the owner may only terminate the tenancy because of: (1) Serious or repeated violation of the lease; (2) Violation of Federal, State, or local law that imposes obligations on the tenant in connection with the occupancy or use of the unit and the premises; (3) Criminal activity or alcohol abuse (as provided in paragraph c); or (4) Other good cause (as provided in paragraph d). c Criminal activity or alcohol abuse. (1) The owner may terminate the tenancy during the term of the lease if any member of the household, a guest or another person under a resident's control commits any of the following types of criminal activity: (a) Any criminal activity that threatens the health or safety of, or the right to peaceful enjoyment of the premises by, other residents (including property management staff residing on the premises); (b) Any criminal activity that threatens the health or safety of, or the right to peaceful enjoyment of their residences by, persons residing in the immediate vicinity of the premises; (c) Any violent criminal activity on or near the premises; or (d) Any drag -related criminal activity on or near the premises. (2) The owner may terminate the tenancy during the term of the lease if any member of the household is: (a) Fleeing to avoid prosecution, or custody or confinement after conviction, for a crime, or attempt to commit a crime, that is a felony under the laws of the place from which the individual flees, or that, in the case of the State of New Jersey, is a high misdemeanor, or (b) Violating a condition of probation or parole under Federal or State law. (3) The owner may terminate the tenancy for criminal activity by a household member in accordance with this section if the owner determines that the household member has committed the criminal activity, regardless of whether the household member has been arrested or convicted for such activity. (4) The owner may terminate the tenancy during the term of the lease if any member of the household has engaged in abuse of alcohol that threatens the health, safety or right to peaceful enjoyment of the premises by other residents. d Other good cause for termination of tenancy (1) During the initial lease term, other good cause for termination of tenancy must be something the family did or failed to do. (2) During the initial lease term or during any extension term, other good cause may include: (a) Disturbance of neighbors, (b) Destruction of property, or (c) Living or housekeeping habits that cause damage to the unit or premises. (3) After the initial lease term, such good cause may include: (a) The tenant's failure to accept the owner's offer of a new lease or revision; (b) The owner's desire to use the unit for personal or family use or for a purpose other than use as a residential rental unit; or (c) A business or economic reason for termination of the tenancy (such as sale of the property, renovation of the unit, the owner's desire to rent the unit for a higher rent). (5) The examples of other good cause in this paragraph do not preempt any State or local laws to the contrary. (6) In the case of an owner who is an i#v3ediate successor in interest pursuant to fol% osure during the term of the lase, requiparg the tenant to vacate the prop"tg�rior tre.cale shad= not constitute other good the owner may terminate tl�a rpy a ective otr°*" the date of transfer of th F to t 2pwner' the owner: (a) will ogrAothe unit as a` primary residence; and'(b�ah s prdVWd th tenant a notice to vacate; at 1ealit 90,&ys befo the effective date of suvlr.�, Two. formgl D.52641 (04/2015) Previous editions are obsolete Page 10 of 12 ref Handbook 7420.8 provision shall not affect any State or local law that provides for longer time periods or addition protections for tenants. This provision will sunset on December 31, 2012 unless extended by law. e. Protections for Victims of Abuse. (1) An incident or incidents of actual or threatened domestic violence, dating violence, or stalking will not be construed as serious or repeated violations of the lease or other "good cause" for termination of the assistance, tenancy, or occupancy rights of such a victim. (2) Criminal activity directly relating to abuse, engaged in by a member of a tenant's household or any guest or other person under the tenant's control, shall not be cause for termination of assistance, tenancy, or occupancy rights if the tenant or an immediate member of the tenant's family is the victim or threatened victim of domestic violence, dating violence, or stalking. (3) Notwithstanding any restrictions on admission, occupancy, or terminations of occupancy or assistance, or any Federal, State or local law to the contrary, a PHA, owner or manager may "bifurcate" a lease, or otherwise remove a household member fiom a lease, without regard to whether a household member is a signatory to the lease, in order to evict, remove, terminate occupancy rights, or terminate assistance to any individual who is a tenant or lawful occupant and who engages in criminal acts of physical violence against family members or others. This action may be taken without evicting, removing, trmLnahng assistance to, or otherwise penalizing the 'victim of the violence who is also a tenant or lawful occupant. Such eviction, removal, termination of occupancy rights, or termination of assistance shall be effected in accordance with the procedures prescribed by Federal, State, and local law for the termination of leases or assistance under the housing choice voucher program. (4) Nothing in this section may be construed to limit the authority of a public housing agency, owner, or manager, when notified, to honor court orders addressing rights of access or control of the property, including civil protection orders issued to protect the victim and issued to address the distribution or possession of property among the household members in cases where a family breaks UP. (5) Nothing in this section limits any otherwise available authority of an owner or manager to evict or the public housing agency to terminate assistance to a tenant for any violation of a lease not premised on the act or acts of violence in question against the tenant or a member of the tenant's household, provided that the owner, manager, or public housing agency does not subject an individual who is or has been a victim of domestic violence, dating violence, or stalking to a more clemmxling standard than other tenants in determining whether to evict or terminate. (6) Nothing in this section may be construed to limit the authority of an owner or manager to evict, or the public housing agency to terminate assistance, to any tenant if the owner, manager, or public housing agency can demonstrate an actual and imminent threat to other tenants or those employed at or providing service to the property if the tenant is not evicted or terminated from assistance. () Nothing in this section shall be construed to supersede any provision of any Federal, State, or local law that provides greater protection than this section for victims of domestic violence, dating violence, or stalking. Eviction by court action. The owner may only evict the tenant by a court action. Owner notice of grounds (1) At or before the beginning ing of a court action to evict the tenant, the owner must give the tenant a notice that specifies the grounds for termination of tenancy. The notice may be included in or combined with any owner eviction notice. (2) The owner must give the PHA a copy of any owner eviction notice at the same time the owner notifies the tenant. (3) Eviction notice means a notice to vacate, or a complaint or other initial pleading used to begin an eviction action under State or local law. 9. Lease: Relation to RAP Contract Ifthe HAP contract terminates for any reason, the lease terminates automatically. 10. PHA Termination of Assistance The PHA may terminate program assistance for the family for any grounds authorized in accordance with HUD requirements. If the PHA terminates program assistance for the family, the lease terminates automatically. 11. Family Move Out The tenant must notify the PHA and the owner before the family moves out of the unit. 12. Security Deposit a. The owner may collect a security deposit from the Previous editions are obsolete Page 11 of 12 tenant. (However, the PHA may prohibit the owner from collecting a security deposit in excess of private market practice, or in excess of amounts charged by the owner to unassisted e&nts. Any such PHA -required restriction must bs:Vecified in the HAP contract.) v� When the family moves out:..of ft eonbw unit, t — owner, subject to State and*-cow,ay use the security deposit, includ* inter, t on deposit, as reimburseme ` y aWaid rant payable by the tenant, any- s to the um that te any other amounts at thct'& rtt ow ander tire' 1 lease. —" C_1 form HUD -62641 (04/2015) ref Handbook 7420.8 C. The owner must give the tenant a list of all items charged against the security deposit, and the amount of each item. After deducting the amount, if any, used to reimburse the owner, the owner must promptly refund the full amount of the unused balance to the tenant. d. If the security deposit is not sufficient to cover amounts the tenant owes under the lease, the owner may collect the balance from the tenant. 13. Prohibition of Discrimination In accordance with applicable equal opportunity statutes, Executive Orders, and regulations, the owner must not discriminate against any person because of race, color, religion, sex, national origin, age, familial status or disability in connection with the lease. 14. Conflict with Other Provisions of Lease a. The terms of the tenancy addendum are prescribed by HUD in accordance with Federal law and regulation, as a condition for Federal assistance to the tenant and tenant's family under the Section 8 voucher program. b. In case of any conflict between the provisions of the tenancy addendum as required by HUD, and any otherprovisions of the lease or any other agreement between the owner and the tenant, the requirements of the HUD -required tenancy addendum shall control. 15. Changes in Lease or Rent a. The tenant and the owner may not make any change in the tenancy addendum. However, if the tenant and the owner agree to any other changes in the lease, such changes must be in writing, and the owner must immediately give the PHA a copy of such changes. The lease, including any changes, must be in accordance with the requirements of the tenancy addendum b. In the following cases, tenant -based assistance shall not be continued unless the PHA has approved a new tenancy in accordance with program requirements and has executed a new HAP contract with the owner: (1) If there are any changes in lease requirements governing tenant or ownerresponsibilities for utilities or appliances; (2) If there are any changes in lease provisions governing the term of the lease; (3) If the family moves to a new unit, even ifthe unit is in the same building or complex. c. PHA approval of the tenancy, and execution of a new HAP contract, are not required for agreed changes in the lease other than as specified in paragraph b. d. The owner must notify the PHA of any changes in the amount of the rent to owner at least sixty days before any such changes go into effect, and the amount of the rent to owner following any such agreed change may not exceed the reasonable rent for the unit as most recently determined or redetermined by the PHA in accordance with HUD requirements. 16. Notices Any notice under the lease by the tenant to the owner or by the owner to the tenant must be in writine. 17. Definitions Contract unit. The housing unit tented by the tenant with assistance under the program. Family. The persons who may reside in the unit with assistance under the program. HAP contract. The housing assistance payments contract between the PHA and the owner. The PHA pays housing assistance payments to the owner in accordance with the HAP contract. Household. The persons who may reside in the contract unit. The household consists of the family and any PHA -approved live-in aide. (A live-in aide is a person who resides in the unit to provide necessary supportive services for a member of the family who is a person with disabilities.) Housing quality standards (HQS). The HUD minimum quality standards for housing assisted under the Section 8 tonant-based programs. HUD. The U.S. Department of Housing and Urban Development. HUD requirements. HUD requirements for the Section 8 program. HUD requirements are issued by HUD headquarters, as regulations, Federal Register notices or other binding program directives. Lease. The written agreement between the owner and the tenant for the lease of the contract unit to the tenant. The lease includes the tenancy addendum prescribed by HUD. PHA. Public Housing Agency. Premises. The building or complex in which the contract unit is located, including common areas and grounds. Program. The Section 8 housing choice voucher program. Rent to owner. The total monthly rent payable to the owner for the contract unit. The rent to owner is the sum of the portion of rent payable by the tenant plus the PHA housing assistance payment to the owner. Section 8. Section 8 of the United States Housing Act of 1937 (42 United States Code 1437f). Tenant. The family member (or members) who leases the unit from the owner. Voucher program. The Section 8 housing choice voucher program. Under this program, HUD provides funds to a PHA for rent subsidy on behalf of eligible families. The tenancy under the lease will be assisted with rent subsidy for a tenancy under the voucher program. form HUD -52641 (0412015) Previous editions are obsolete Page 12 of 12 ref Handbook 7420.8 r"3 x tw zz r,�tt form HUD -52641 (0412015) Previous editions are obsolete Page 12 of 12 ref Handbook 7420.8 kL loop I Helping House America October 8, 2015 Public Housing Authorities Directors Association 511 Capitol Court, NE, Washington, DC 20002-4937 phone: 202-546-5445 fax: 202-546-2280 www.phada.org Peter B. Kahn & Jean Lin Pao Economic and Market Analysis Division Office of Policy Development and Research Department of Housing and Urban Development 451 7th Street SW., Room 8100 Washington, DC 20410 Lourdes Castro Ramirez Principal Deputy Assistant Secretary for Public and Indian Housing Department of Housing and Urban Development 451 7th Street SW., Room 4100 Washington, DC 20410 Re: Proposed Fair Market Rents for the Housing Choice Voucher Program, Moderate Rehabilitation Single Room Occupancy Program and Other Programs; Fiscal Year 2016 [Docket No. FR -5885—N-01] To Whom It May Concern: On behalf of the Public Housing Authorities Directors Association (PHADA) and its 1,900 members, I would like to thank you for the opportunity to comment on the Department's notice titled, Proposed Fair Market Rents for the Housing Choice Voucher Program, Moderate Rehabilitation Single Room Occupancy Program and Other Programs; Fiscal Year 2016 [Docket No. FR -5885—N-01]. PHADA's letter summarizes issues that are explained in greater detail in the enclosed memo. Please note that PHADA's submission to HUD through www.regulations.gov, also includes a number of tables of PHADA's analysis of HUD's proposed FY 2016 FMR and SAFMR values. PHADA's letter, memo and data tables include our critiques and recommendations regarding HUD's: • proposed FY 2016 Fair Market Rents (FMRs); • proposed FY 2016 Small Area Fair Market Rents (SAFMRs); • proposed changes in the use of data and geographic areas to determine FMRs and SAFMRs; • criterion for qualification and requalification of 50th percentile FMRs; • inadequate review of the methodological assumptions used by the Department to assess the accuracy of its discretionary FMR and SAFMR estimating methodologies relative to the ACS data available for that identical time period; and • deeply flawed FMRs, SAFMRs, etc. and PHADA's related recommendations regarding a broad range of adverse program impacts. r-13 N The scope of low-income households, property owners and communities serveA by Hausing Authorities and other HUD partners covered by HUD's Fair Market Rent (FNJ - &d `mall Pqqa Fair Market Rent (SAFMR) values is substantial. Therefore, it is critically ' ter H14PAo produce accurate rental housing values. Regrettably, HUD has not accomplislRdihiXWal fir A r,,� 1 over a decade. If the Department finalizes FMRs and SAFMRs as proposed for FY 2016, it will be another year that HUD will fall far short of achieving this goal. With the greatest depth and breadth of rental housing data HUD's Office of Policy Development & Research (PD&R) has ever had available to it through special tabulations from the Census Bureau of the 5 -year and 1 -year American Community Surveys, it is disappointing to see the inaccurate results of HUD's proposed FY 2016 FMRs and SAFMRs. PHADA and our members' critiques and analyses of HUD's proposed rental figures pertain to certain aspects of the flawed area definitions and methodologies it employs in adjusting rental values on a discretionary basis. Despite the service we provide by illustrating flawed outcomes in HUD's proposed rental housing values each year, we believe it is ultimately incumbent upon the Department to identify and correct all of the underlying flaws in its methodologies which lead to these outcomes. In years' past, the Department's consistent replies to PHADA and its members' valid comments and analyses, by citing FMR statutory language as the reason it cannot make such recommended changes. HUD's thread bare explanations year after year amount to feeble excuses for its inaction on PHADA and our members' valid critiques and recommendations for improvements. HUD has refused to seek changes in FMR statutes in the areas subject to comment and recommendations from PHADA and our members. Moreover, many of PHADA and our members' recommendations to HUD relate to aspects of the Department's discretionary authority which require no change in HUD's FMR statutory authority. Taking these two facts together, there is ample evidence of the choices HUD has and continues to make each year that go well beyond the reasons the Department has posited in past replies for its action and inaction. It is long past time for HUD to get this important task right. PHADA urges HUD to take these necessary steps within its existing discretionary authority for FY 2016 and to submit legislative language regarding our recommended changes for FY 2017 and beyond. Correcting HUD's proposed FY 2016 FMRs will help Housing Authorities (HAs) maintain the purpose of the programs - to assist low-income households in sustaining decent, safe, sanitary and affordable housing. Barring the Department addressing flaws in its proposed FMRs and SAFMRs, the implementation of HUD's rental housing values will continue to erode the performance of Federally -assisted rental and homeownership programs and ultimately undermine the Department's goals under its five year strategic plan. On behalf of PHADA, I would like to thank you for the opportunity to comment on these important issues. If you need any information or have questions, please feel free to call me at 202-546-5445. Sincerely, = `� Jonathan B. Zimmerman Policy Analyst 2 Public Housing Authorities Directors Association fAJr 511 Capitol Court, NE, Washington, DC 20002-4937 Helping House America phone: 202-546-5445 fax: 202-546-2280 vwvw.phada.org Memo To: HUD From: Jonathan Zimmerman, Policy Analyst / PHADA Re: Comments regarding Re: Proposed Fair Market Rents for the Housing Choice Voucher Program, Moderate Rehabilitation Single Room Occupancy Program and Other Programs; Fiscal Year 2016 [Docket No. FR -5885—N-01] Date: October 8, 2015 Obviously, HUD's proposed FY 2016 FMRs and SAFMRs are subject to comment by October 8, 2015. As such I added to our previous comment letters, a number of additional critiques and data analyses regarding HUD's proposed FY 2016 FMRs, SAFMRs. I respectfully request that the Department adopt these prior and current recommendations. I bolded the text of our recommendations in order to underscore them. Please find attached, a memo with my comments and analyses filed on behalf of PHADA that are also designated by our logo. Error of Estimate Using ACS Data HUD's notice of proposed FY 2016 FMRs "incorporates a change in the level of statistical reliability that is allowed for an ACS estimate to be used in the calculation of FMRs. Previously, if the error of the estimate was less than the estimate itself, HUD used the estimate. The Proposed FMRs in this notice use ACS estimates where the size of the error is limited to half of the estimate." PHADA supports this change as a reasonable measure to help improve the accuracy of FMRs. Replacing 50th Percentile FMRs with SAFMRs It was wise for HUD not to implement a change in the Department's existing data and methodology for 50th percentile FMRs at this time. PHADA's comment letter on this topic is enclosed._ HUD's Discretionary Adoption of OMB Areas (Feb. 2013) as FMR Areas An additional change to the proposed FY 2016 FMRs is the incorporation of t bri y 2> 2013, Office of Management and Budget (OMB) metropolitan area definition hpdate Wed cin the 2010 Decennial Census data. The 2013 ACS data are the first to use the ne*-w a definiti in the compilation of the ACS data. As a result of HUD's discretionary adoptign of OMB's areas (February 2013) for purposes of calculating its proposed FY 2016 FMRs, there aft` counties formerly designated by HUD as non -metro that the Department proposes designating as metro areas and vice -versa. PHADA's enclosed analyses include these counties, showing erratic FMR values that do not reflect historic norms of rental housing market changes. More time is needed for us to undertake a deeper analysis of HUD's proposed FMR area changes including a determination of whether or not OMB's area definitions correct the problems HUD created with its discretionary adoption of these areas for FMR purposes from FY 2006 — FY 2015. HUD recently announced that it is providing a one-year extension of its proposed change to Columbia, MD. Overall, there are many more counties that are adversely affected by HUD's discretionary adoption of OMB's February 2013 area definitions for FMR purposes for which HUD has made no allowances. PHADA strongly urges the Department to set up a streamlined process for HAs to make a similar request of HUD and to be granted a similar one-year extension to the Department's proposed FMR area definitions. Similarly, PHADA strongly urges HUD to set up a streamlined process for HAs to appeal HUD's proposed FY 2016 FMRs if they dramatically conflict with a recent statistically valid rental market study by an HA or HUD within the last several years. There are many examples enclosed which illustrate HUD's proposed FY 2016 FMR values compared with HUD's prior years' FMR values, that are counterintuitive with historic norms of applicable rental housing values. PHADA compared proposed FY 2016 FMRs with proposed FMRs by county/town and bedroom size. At a time of scarce Federal resources for housing assistance programs, HUD's inaccurate and erratic FMRs and SAFMRs contribute to over - subsidization in some rental housing markets and under -subsidization in others. While HAs have the opportunity to set voucher payment standards within their "basic range" of 90-110 percent of applicable FMRs, the magnitude of HUD's errant FMRs and SAFMRs is so great in many instances that further efforts are necessary in order for HAs to secure exception payment standards and special exception payment standards. In voucher programs, HAs have the discretionary authority to set voucher payment standards higher or lower than FMRs in order to adjust for and under or oversupply of available and affordable units at the local level. Among other factors, it appears that HUD's discretionary adjustments to FMRs for three bedrooms or greater as a way to expand affordable housing opportunities for larger size households where there is a scarcity of available and affordable larger sized dwelling units, may contribute to FMRs values that are inaccurate and/or erratic. The fact that HUD establishes ranges in FMR values of all bedroom sizes in relation to other bedroom sizes each year, while completely ignoring dramatic changes in FMR values within the same bedroom size in the same county year over year that well exceed those established ranges, is an indication that the Department's methodology for making adjustments to the raw 9VS data lacks a coherent approach or any form of internal quality control year over year;P r --- �titi w rn Ut 90 Day Grace Period From the Date of HUD's Final FMRs/SAFMRs HUD established a reasonable approach to HAs' implementation of the former FY 2014 Public Housing flat rent law. As you know, HUD issued PIH Notice 2014-12 to HAs on May 19, 2014 allowing HAs to implement flat rents as early as June 1, 2014 and as late at October 31, 2014. At that time, HUD deemed a change in flat rent as a "significant amendment" rather than leaving it up to each HA's definition of a "significant amendment." To its credit, HUD provided time for HAs to go through that process such that both HUD and HAs met the Congressional requirement to start the flat rent process by June 1, 2014 such that the last effective date of flat rents for residents was no later than October 31, 2014. That made sense. It is impractical for HAs (or HUD if the Department were to put itself in HAs shoes for a moment) for FMRs and/or flat rents to take effect for tenants/residents the day FMRs are published or in a time period that is impossible for HAs to comply. PHADA recommends HUD allow HAs a 90 day grace period from HUD's publication of final FY 2016 FMRs before any HAs' revised voucher payment standards would affect voucher -assisted households' rent shares or Total Tenant Payment (TTP) as of January 1, 2016. PHADA also recommends HUD allow HAs at least a 90 day grace period from HUD's publication of final FY 2016 FMRs and SAFMRs before any HAs' flat rents would affect Public Housing -assisted households' rent shares or TTP as of January 1, 2016. FMRs & SAFMRs For Voucher Program Pumoses The timing of HUD's proposed FMRs, final FMRs and required effective date of FMRs/SAFMRs on tenants/residents is important. To reiterate, allowing HAs a 90 day grace period from HUD's final FMRs/SAFMRs publication date of October 1St to implement voucher payment standards no later than January 1, 2016 is still important. PHADA also requests HUD PIH and HUD OPPLI to consider our request for a 90 day grace period, as well as revisit its existing voucher program policies related to voucher payment standard decreases resulting from HUD's volatile FMRs, and revisit its criterion for approval or denial of Housing Authorities' exception voucher payment standard types (e.g. exception and special exception, voucher success rate FMRs, etc.). a Voucher Payment Standard Decreases --I As a result of HUD PD&R's volatile final FMRs year over year in the sarrqiRe4ea the same bedroom size, clarification from HUD is needed on the implementatiO4af Housingi Authorities' changing their voucher payment standards just be within "baste ,ge pa�rii standards in relation to HUD's volatile final FY 2016 FMRs. For example,�tf t`Horsing Authority's existing voucher payment standard (using final FY 2014 FMRsjis nowove the "basic range" FMR due solely to HUD's final FY 2016 FMRs which changed significantly from the year before, they are put in a position of having to decrease their payment standards just to remain in the "basic range," where applicable. This action triggers HUD's other program requirement - the lower payment standard amount will not apply to families who have already leased units under the higher standard until they move to a new unit or have a change in their family size or composition, or at the second annual reexamination after the HA lowers its payment standard. If HUD PD&R's final FMRs in the same FMR area and bedroom size were not so volatile year over year, the above actions would not be needed. But dealing with the present realities rather than based on my hopes for improvements to HUD PD&R's FMRs in the future, when HAs are now forced to take the action described above resulting from HUD's volatile FMRs, it is not an efficient or effective use of precious and limited Federal Housing Assistance payment funds to serve the greatest number of households at affordable income to rent burdens as possible. In the past, HUD PIH only entertained and granted waiver requests from HAs' to implement decreased voucher payment standards earlier than the second re-exam requirement if it would help prevent termination of housing assistance to existing leased households. For the reasons described above that result from HUD's volatile FMRs, HUD's standards for evaluating this type of waiver request from HAs should be revisited, revised and issued to HAs for their education and usage. HUD's volatile FMRs are also likely to compound existing problems with HAs' compliance with HUD's "affordability standard" (listed below). As you know, HUD's regulatory "affordability standard" has also been an important component in HUD's previous reviews of HA's request to decrease their voucher payment standards below their "basic range" and/or to their waiver requests to implement them earlier than the second annual reexamination after the PHA lowers its payment standard. There are a number of scenarios and reasons where providing a similar 90 day treatment to Housing Authorities (HAs) in voucher programs as HUD does in the Public Housing, is also needed and warranted. PHADA requests HUD provide HAs with a 90 day grace period from the effective date of final FMRs on agencies' implementation of new voucher payment standards, due to: 1) The volatility of FMR decreases and increases year over year within the FMR area and bedroom size, triggers HAs' actions around revising voucher payment standards and rent reasonableness determinations; 2) HAs need time to process any change in voucher payment standards in relation to final FMRs and to conduct rent reasonableness where applicable, along with needing time to submit exception payment standard requests to HUD for approval or denial; and 3) HUD's recent track record of publishing final FMRs has been late, without enough time for HAs to simultaneously adopt new voucher payment standards in relation to final FMRs. E, u. g n[L Yt1Rtl.�. .w.t- L.: HUD's Regulatory "Affordability Standard" HUD's voucher regulation referred to as HUD's "affordability standard" [24 CFR §982.503(d)] and [24 CFR §982.503(g)] states: "§ 982.503 Voucher tenancy: Payment standard amount and schedule. - (d) HUD approval of payment standard amount below the basic range. HUD may consider a PHA request for approval to establish a payment standard amount that is lower than the basic range. At HUD's sole discretion, HUD may approve PHA establishment of a payment standard lower than the basic range. In determining whether to approve the PHA request, HUD will consider appropriate factors, including rent burden of families assisted under the program. HUD will not approve a lower payment standard if the family share for more than 40 percent of participants in the PHA's voucher program exceeds 30 percent of adjusted monthly income. Such determination may be based on the most recent examinations of family income." "§ 982.503 Voucher tenancy: Payment standard amount and schedule. (g) HUD review of PHA payment standard schedules. (1) HUD will monitor rent burdens of families assisted in a PHA's voucher program. HUD will review the PHA's payment standard for a particular unit size if HUD finds that 40 percent or more of such families occupying units of that unit size currently pay more than 30 percent of adjusted monthly income as the family share. Such determination may be based on the most recent examinations of family income. (2) After such review, HUD may, at its discretion, require the PHA to modify payment standard amounts for any unit size on the PHA payment standard schedule. HUD may require the PHA to establish an increased payment standard amount within the basic range." Voucher Payment Standard Increases The scenario described above regarding HAs' having to decrease their payment standards just to remain in the "basic range" would also apply to agencies that have to increase their payment standards just to remain in the "basic range" in relation to HUD's FY 2016 FMRs. To reiterate, when agencies have to increase their voucher payment standards due to HUD's volatile FMRs, HUD and HAs' shared strategic goal to serve the greatest number of low-income households at the best possible income to rent affordability with the funds available is undermined. In both "basic range" scenarios described above, agencies may apply to HUD for a vsdety of other voucher payment standard types (e.g. exception and special exception, vglicher;eaccess_rate FMRs, etc.). In the past, HUD PIH only entertained and granted waiver requosEftoHAs' implement decreased voucher payment standards earlier than the second re-e�equ�ireme it would help prevent termination of housing assistance to existing leased hou�ds.L+or reasons described above that result from HUD's volatile FMRs, HUD's standgiWfor qalua this type of waiver request from HAs should be revisited and revised in a less i w 5jameQ and issued to HAs for their education and usage. N There is an intersection between this recommendation and the earlier recommendation for HUD to allow HAs a 90 day grace period from HUD's publication of final FMRs before any HAs' revised voucher payment standards would affect voucher -assisted households' rent shares or Total Tenant Payment (TTP). This intersection is that HUD should allow HAs to maintain their existing voucher payment standards during the period of their application to HUD for either a decreased or increased exception payment standard application to HUD, and still be deemed to be in compliance with voucher payment standard regulations. A Specific Example of Unproductive and Unworkable FMRs to Illustrate A Systemic Problem with HUD's FMRs Attached is a spreadsheet which shows FMRs from 2012 to 2016 for the counties covered by the Lebanon County Housing Authority (LCHA) in Pennsylvania. In 2013, LCHAs' FMRs went up an average of 18%, then in 2014 they went down 13%, then in 2015 they went back up 13%, and in 2016 they are all over the place — 0 bedroom up 10%, 1, 2, and 3 BR down between 2 and 5% and 4 BR up almost 4%. The Lebanon County Housing Authority has their voucher payment standards set at 109% of FMR to allow for maximum mobility to higher rent areas (to the extent that such units exist). So now LCHA will once again need to REDUCE their payment standards (and all that goes with it, like the two year phase in for a payment standard reduction). But LCHA is already only half way into the two year phase in for the reduction that happened in 2014! So to summarize — LCHA has participants still at the higher 2013 payment standards and they all will not be phased in to those new lower 2014 standards until the end of 2015. Then they have the participants who came in at the lowered 2014 standards who are now in the midst of being increased to the higher 2015 standards. However, these people will now need a two year phase in to the lowered 2016 standards (so they won't be changed until the end of 2017). Furthermore, the people who are just ending the phase in to the lowered 2014 standards will actually see an increase to the 2016 standards, since they essentially missed the 2015 14% increase. So to one group the 2016 amounts are really an increase (since they were stuck in the two year phase in), while to others the 2016 amounts are a decrease and hence the start of another two year phase in. Think about how LCHA and other HAs are to explain all of this to their staff, let alone the participants, let alone the property owners. Think about how to explain to a participant that a one bedroom apartment that rents for say $620 was unaffordable in 2012, then affordable in 2013, then unaffordable again in 2014, then affordable in 2015 and now unaffordable again in 2016. What in the world is HUD doing? Rents do not change that way in the real world and HAs cannot possibly run the program this way nor should require them to do so without_-, dramatically improving its deeply flawed FMRs and SAFMRs. HAs that operatienalizlUD's flawed FMRs to property owners have a hard time being taken as knowledgeablCzeai este 6, professionals when it is already hard for HAs to get them to participate in the pr. 2%e-- same is true with voucher holders who's income to rent burdens are also affecter e w intersection of HAs' voucher payment standards and gross rents of their current ant�t'utu;@ dwelling units. How are HAs going to assist voucher holders in their evaluation attd_ :Choice of r--! dwelling units in "higher opportunity areas" when agencies have to once again ruce payment cr standards for the most popularly sized units? This is also a recipe for increased improper payments stemming from HUD's erratic FMRs. Given the Department and HAs' deeply important mission to serve the nation's low-income households, participating property owners and communities, HUD's execution of FMRs and SAFMRs is a sad indictment. '/ HUD's Small Area FMR Values Used In the Small Area Rent Ratio Variable Are Not Credible Over the years HUD officials have talked about breaking down silos within the Department in order to improve program service. In this vein, PHADA includes a number of adverse program impacts resulting from HUD PD&R's FMR and SAFMR values as well as other HUD PIH's utilization of this data/information for programmatic purposes. Because Section 8 voucher programs are primarily rental market-based, it is essential that the Housing Choice Voucher Administrative Fee Study and formula include an accurate and valid rental market variable in the fee formula. A valid fee formula variable for the "availability of affordable housing" category is needed, because Small Area Rent Ratios (SARRs), which rely on HUD's Small Area Fair Market Rents (SAFMRs), are deeply flawed. In referring to SARRs, HUD's notice states, "[fjor PHAs in Metropolitan counties, the small area rent ratio is calculated as the median gross rent for the zip codes where voucher holders live, weighted by the share of voucher holders in each zip code, divided by the median gross rent for the Metropolitan area; for PHAs in non -Metropolitan counties, the small area rent ratio is calculated as the unadjusted two-bedroom FMR for the non -Metropolitan counties where the PHA operates, divided by the published FMR. One of the underlying data sets used for the SARR variable is HUD's SAFMRs. PHADA's analysis of HUD's SAFMRs is available to HUD and the public at: nap:o�.ohada.orgtxWSAFMRs20iiw2Ol4-06272014.ode. PHADA's analysis of SAFMRs have demonstrated: 1) wild swings and extreme relationships in SAFMR values on a systemic basis among and between bedroom sizes within in the same zip code or area in the same year for both metropolitan and non -metropolitan areas that are not found in any other independent and reputable rental housing market study or analysis; 2) wild swings and extreme relationships in SAFMR values on a systemic basis among and between bedroom sizes within in the same zip code or area year -over -year for both metropolitan and non -metropolitan areas that are not found in any other independent and reputable rental housing market study or analysis. Historically, rental housing markets do not operate in either of these ways. PHADA recommends the Department study an alternative data source for the "availability of affordable housing" factor. For example, American Community Survey (ACS) provides valuable rental housing dwelling unit data by county. HUD should study the extent of available dwelling units' rent and utility costs that would be affordable to extrewly low- income households, very low-income households and low-income households. T" Comprehensive Housing Affordability Strategy (CHAS) data and similar• analyJ# of ii—b household income levels, may also lend itself to similar use. We request ILUD flPst pull" the results of its findings in the context of fee formula. Conceptually, these data4burces with some additional analysis, would address HUD's intended "availability;of affordabl! housing" factor established at the outset of the study design. Instead, the Department'is7 ;v attempting to shoe -horn deeply flawed SARR values into the fee formula under "expanding housing opportunities" in a way that was not part of the study design. The significance level of this test is traditionally set at 1 percent or 5 percent level. The p=value of SARRs in HUD's study was marginally statistically significant (1%) but only at the 10 percent level. Usually a 10 percent significance level is only used in small studies where there is not robust data set available. As such, the Small Area. Rent Ratio (SARR) is not by any means a significant indictor of HAs' administrative costs to administer voucher programs. Did HUD choose a significance level before data collection? If so, what was the significance level set at prior to HUD's data collection? If the significance level of SARRs did not meet the level set by HUD prior to data collection, why was this not underscored in the Department's report? If the significance level of SARRs did not meet the level set by HUD prior to data collection, what is the Department's justification for including SARRs in the fee formula? The theoretical basis for SARR states, "More HCV participants in neighborhoods with relatively high rents could increase costs for the PHA as owners willing to accept vouchers are harder to find, more units available at or below the payment standard may fail inspection, and new voucher tenants may need more guidance in finding suitable housing in unfamiliar neighborhoods" However, HUD's study report did not provide any information in the final report regarding its analysis of the 60 sample HAs' Random Moment Sampling (RMS) data to reinforce the theoretical basis for SARRs driving administrative costs. While HUD's theory may be true, nothing in HUD's RMS analysis of the 60 sample HAs confirmed or refuted this theory. Among other voucher program functions, had HUD conducted and published its RMS analysis of HAs' Housing Quality Standard (HQS) inspections by census tract, zip code, etc. using the Global Positioning System (GPS) feature on its smart phones for example, policy makers would be have been able to understand the validity or lack thereof of the study team's SARR regression results and theoretical construct. Unfortunately, HUD has not done this to date. PHADA recommends HUD review its RMS data with this in mind and to publish the results that either proves or disproves its conceptual theory. Under HUD's original combined cost driver model, the research design listed "time on expanding housing opportunities" as a variable included in a combined cost driver model as one of several variables including "time on intake" within the overall cost driver category – "PHA staff time allocation." However under its retest, HUD's final study report uses SARRs to fulfill a cost driver category referred to as "expanding housing opportunities" rather than to fulfill the originally intended cost driver category referred to as "availability of affordable housing" in its combined cost driver model. Careful examination of HUD's final study report demonstrates the reasons that SARRs are inadequate for either as "availability of affordable housing" or as "expanding housing opportunities" as administrative cost driver categories. Moreover, HUD's final study demonstrates that "time on expanding housing opportunities" is inadequate even within the overall cost driver category of "PHA staff time allocation." Specifically, HUD's final report states: -- Another consideration is that the study did not collect data on outcometecio expanding housing opportunities—that is, whether those PHAs that orded more time on expanding housing opportunities activities during the Rperigd7r ry 10 actually had better outcomes than other PHAs, such as more HCV households living in opportunity neighborhoods. The small area rent ratio variable, which captures the extent to which HCV households live in relatively expensive areas, may be a better measure of PHA outcomes regarding the locational distribution of HCV participants and the costs associated with helping participants to lease up in such areas. We concluded that time on expanding housing opportunities was not a reliable cost driver for several reasons. First, we observed very little time spent on expanding housing opportunities in the time study ... The small amount of time recorded for expanding housing opportunities likely reflects the severe funding constraints that PHAs were operating under during the data collection period. The PHAs in the study reported that they did not have the resources to invest substantial staff time in expanding housing opportunities even though they valued these activities... While the cost driver analysis found that the time spent on Expanding Housing Opportunities was a significant cost driver with a very large coefficient, it does not make sense that it is, in reality, a significant cost driver since it accounts for less than one percent of PHAs' time on the HCV program ... it is likely that the expanding housing opportunities variable is picking up some other factor that is not being captured by any of the other variables in the model. Given the inconsistency with the time study findings, we do not consider time spent on expanding housing opportunities to be a reliable cost driver. Despite the shortcomings and incomplete analysis of SARRs by the study team, HUD's final study formula improperly retains SARRs in the fee formula. PHADA recommends that HUD undertake an analysis of the other rental housing market data sets described above and publish its findings. HUD did not ask in its notice for comment about whether or not it should retain or remove the SARR variable from the fee formula. By contrast, HUD asked in its notice whether or not it should retain or remove the Health Insurance Cost Index from the formula. Whether by design or default, the contradiction in the way HUD PIH framed the issues regarding the validity of SARRs vs. Health Insurance Cost Index for purposes of retention or removal from the fee formula, leaves the impression that the Department is politicizing this administrative fee formula study and process. PHADA's comments regarding HUD's `Establishing a More Effective Fair Market Rent (FMR) System; Using Small Area Fair Market Rents (SAFMRs) in Housing Choice Voucher Program Instead of the Current 50a' Percentile FMRs; Advanced Notice of Proposed Rulemaking" is publicly available at: http://www.re¢ulations.pov/#!documentDetail;D=HUD-2016-0051-0062 Whether by design or default, it appears that HUD's solicitation for comment on SAFMRs and its separate sOcitation for comment on SARRs relating to its voucher fee formula are taking place in fiblatioirfrom each other. This is taking place, despite the fact that there would be effects on administrative fee rates and funding. # N) C11 11 Barring a natural disaster, major economic change positively or negatively, or major change in the supply and demand of rental housing in applicable 40th or 50th percentile FMR areas, historically applicable rental housing market values do not increase, decrease, increase and then decrease at significant percentages year after year within the same community and bedroom size. Historically, non -metropolitan areas do not experience substantially greater annual increases or decreases in rental values than metropolitan areas. However, that is exactly what has happened with HUD's FMR values over the years. PHADA has repeatedly called upon HUD, to provide interested parties and the public with other comparable statistically valid rental housing market studies by other qualified organizations that illustrate dramatic annual undulations in opposite directions within the same area and bedroom size each year over a number of years, in applicable rental housing market values. Absent publishing such independent studies, we urge the Department to provide citations for such studies. If such studies exist, they would presumably bolster the soundness of the Department's FMR and SAFMR methodologies. If however such studies do not exist and the Department is unwilling to address this topic publicly, it casts strong doubts about the accuracy of HUD's FMR and SAFMR results. Among other inherent flaws in HUD's SAFMR methodology, is that relative to other zip codes in an SAFMR area, HUD PD&R does not take into consideration: 1) the quantity of rental housing in each zip code; 2) or the differences in population by zip code; in determining SAFMR values for each zip code. In several instances, HAs authorities that have reviewed HUD's small area / zip code FMRs for their service areas found that HUD's SAFMR calculations were not adjusted as a result of some zip code FMRs containing only commercial office space and/or were made up of Post Office boxes but did not contain rental housing. By contrast, among and between census tracts, they have relatively similar population sizes where substantial differences in the quantity of rental housing can also be captured. Because several of HUD's discretionary methodologies used for proposed FY 2016 FMRs were also implemented in FY 2014 going back to FY 2006, PHADA also enclosed our analyses of HUD's proposed FY 2014 FMRs compared with the last four years' FMRs (starting with the special tabulations from the 2010 Decennial Census). PHADA's analyses in metro areas and non -metro areas for FY 2010 — FY 2014 FMRs are accessible to HUD and the public at: htto�//wwwohadaorc/odf/MetmFMRsFy2010102014-07012014.odf and hft-//www.phadaorpJmWNotiMctmFMRs20loto2Ol4n- o6292oi4.D respectively. Like HUD's SAFMR values, the Department's FMR values also contain dramatic increases and decreases each year, often in the opposite direction within the same bedroom size year after year over this four year period. As PHADA has demonstrated over the years in its comments to HUD regarding FMRs (and SAFMRs), prior to FY 2006 HUD's use of a different OMB area as the geographic area through which it used AHS/ACS rental hosing market data, produced more accurate FMRs than the Department's current methaiiolog�'; Similarly, HUD's previous methodology produced more accurate annual inflati *a toWor J i HAs' HAP contract renewal funding, so that agencies' would have more accurate3H AP -related; -- funding with which to lease the greatest number of authorized households, which—igfium enabl� them to earn administrative fees commensurately. M N 0� 12 The HUD/Abt study team reviewed a host of other measures of housing affordability, one from the ACS and two from the USPS. The draft report states that the "small area rent ratio variable captures the local housing market conditions that PHAs are working under that we could not address through other variables such as vacancy rates, which produced counter -intuitive results in our modeling." PHADA believes that it is essential that the voucher program(s), which is a market-based program, include a variable in the fee formula of "availability of affordable housing." Unfortunately, it is impossible for PHADA to look past the glaring problems of SAFMRs as one of the major underlying data sets going into the "small area rent ratio." The HUD/Abt research team adopted a series of principles, standards and protocols in the administrative fee study prior to any variable being adopted for the fee formula. PHADA requests the study team to review and reconsider whether or not SAFMRs prior to its use in the "small area rent ratio" variable being used for fee formula category "availability of affordable housing" by default rather than it meeting both institutions' principles, standards and protocols established for this study. For our part, PHADA recommends that additional work or acquisition of special tabulations of available rental market, vacancy and other data sets identified in the draft report take place, to come up with a valid fee formula variable for the category of "availability of affordable housing" which in our view the "small area rent ratio' is not. Please note that our opposition to the use of SAFMRs in the "small area rent ratio" is not and should not be reduced to concerns we raised about SAFMRs' volatility in a fee formula. Before HUD even gets to the point of evaluating or modifying a variable like SARRs for its volatility, the Department must first evaluate the accuracy and validity of the underlying SAFMR data as representative of rental housing markets. PHADA believes that the SAFMRs do not meet that first test. Programmatic Impacts of HUD's Proposed FY 2016 FMRs The task at hand for HUD PD&R is to develop the most accurate FMRs possible with the data available and our task is to comment on the Department's data sources and methods for its FMR values. However, both Congress and other interest program stakeholders should also be made aware of the adverse program impacts of HUD's proposed FMRs that will affect approximately five million low-income households in communities around the country including but not limited to: • HUD's proposed FY 2016 FMRs where the extent of the decrease is inaccurate, will decrease voucher holders' "success rates" in securing a dwelling unit, increase the number of voucher -assisted households with housing cost burdens (income to rent and utility allowances or expenses) relative to their income, contribute to voucher -assisted households living in greater concentrations of poverty, and contribute to voucher -assisted households living in dwelling units with relatively lower quality housing stock. In the aggregate, this will also result in lower leasing and budget utilization rates thR would otherwise be the case, as well as reduced administration fees for the IJAs. Ina%ese instances, this will also result in a downward spiral of all funding and_ice a:. • HUD's proposed FY 2016 FMRs where the extent of the increase is inWrafe, will, result in HAs' per voucher HAP costs increasing and being able to leasC fiwera 13 households under the budget -based renewal HAP funding system in place for the last ten years and for the foreseeable future. In both of the scenarios described in the two paragraphs above, with additional burdens placed upon HAs, they can apply for waivers to HUD for exception voucher payment standards and special exception voucher payment standards in an attempt to compensate for HUD's inaccurate proposed FMRs, but there is no guarantee that the Department will approve them. Further, given the depth and breadth of inaccurate proposed FY 2016 FMRs the volume of waivers that affected HAs will submit with extensive documentation to justify their requests. This fact coupled with the Department's strained staffing capacity to review such waivers on a timely basis is a poor way to conduct business at a time of greatly reduced financial resources to HAs. A five percent change in the FMR triggers a rent reasonableness study, which is costly for cash-strapped HAs. We believe it is also imprudent for HUD PD&R to impose prohibitively expensive costs on HAs and other program stakeholders to conduct local real-estate rental housing markets consistent with HUD's data sampling and other requirements, in order for them to correct HUD PD&R's inaccurate and discretionary FMR methodologies. This is less a critique of the mail -in rental housing market survey HUD has implemented. Instead, this is more of a critique of the inaccurate FMR values HUD PD&R generates which necessitate additional mail -in survey expenses. The expense of mail -in surveys would not be necessary if HUD's FMR values were accurate. With dramatically reduced FMR values, participating property owners will be less likely to renew their existing assisted dwelling leases with low-income housing -assisted households, and more likely to rent to higher income households. Prospective property owners will be less likely to participate in many HA's Section 8 voucher programs in the future. This will result in a significant loss of available and affordable housing units to extremely -low-income and very -low-income households and prevent assisted -households from leasing decent, safe, sanitary and affordable housing units. HUD's proposed FY 2016 FMRs apply to Public Housing flat rents. All HAs must set flat rents no lower than 80 percent of applicable FMRs. The dramatic changes in annual FMRs within the identical area and bedroom size coupled with HUD's flat rent at no less than 80% of applicable FMRs which themselves are wildly inaccurate, has wrought havoc among many affected Public Housing -assisted households and the financial viability of some HAs' applicable public housing developments. 0 The implications of HUD's proposed FY 2016 FMRs also apply to othgprogrmns including: conversions to HUD's Rental Assistance Demonstration (RA .irotn` Public k i Housing, Moderate Rehabilitation, Rent Supplement, and Section 236 Irejo A sistat�—Fe_ Payment programs to Section 8 Project -Based Rental Assistance and Pr*tt~B&M Voucher programs as modified under RAD. HUD's proposed FY 2016 s if nadO final will also be used in the maximum allowable rent policies in RAD, w}�` is a keys. 3 element in the demonstration's structure. The maximum rent for properos congrang to the Section 8 Project -Based Voucher program as modified by RAD, is the lesse"f. 1) 14 total program funding in FY 2012; or 2) an amount not to exceed 110 percent of the applicable FMR by bedroom size; or 3) HUD's rent reasonableness regulatory requirements [as defined under 24 CFR Section 983.303(b)]. The maximum rent for properties converting to the Section 8 Project -Based Rental Assistance program as modified by RAD, is the lesser of. 1) total program funding in FY 2012; or 2) an amount not to exceed 120 percent of the FMR. N cCr' 15 FY 2016 FAIR MARKET RENT DOCUMENTATION SYSTEM The $fmrtype$ FY 2016 Iowa City, IA HUD Metro FMR Area FMRs for All Bedroom Sizes $fmrtype$ FY 2016 FMRs By Unit Bedrooms Two -Bedroom Three -Bedroom Four -Bedroom $546 $658 $853 $1,243 $1,489 The Office of Management and Budget release new Core Based Statistical Area definitions in February 2013. The Census American Community Survey incorporated these definitions in the A-CS2013 release, which are the basis for FY2016 Fair Market Rents. HUD has elected to continue use of the pre -2013 definitions except where the post -2013 definitions result in a smaller FMR area. This is consistent with HUD's objective to maximize tenant choice by allowing FMRs to vary locally. The Iowa City, IA HUD Metro FMR Area consists of the following counties: Johnson County, Iowa. All information here applies to the entirety of the Iowa City, IA HUD Metro FMR Area. Fair Market Rent Calculation Methodology Show/Hide Methodology Narrative Fair Market Rents for metropolitan areas and non -metropolitan FMR areas are developed as follows: 1. 2009-2013 5 -year American Community Survey (ACS) estimates of 2 - bedroom adjusted standard quality gross rents calculated for eacl ,MRarea are used as the new basis for FY2016 provided the estimate is statfislicA --- reliable. The test for reliability is whether the margin of error for tN6st&ate is less than 50% of the estimate itself. If an area does not have a reliable 2009-2013 5 -year, HUD checks -whether the area has had a reliable estimate in any of the past 5 years. If so, the most recent reliable estimate is updated by the change in the area's corresponding State metropolitan or non -metropolitan area from the year of the most recent reliable estimate to 2009. This update value becomes the http:llwww.huduser.gov/datasets/fmrlfmrs/FY2016 code/2016summary.odn 11/29/15, 11:19 AM Page 1 of 6 basis for FY2016. If an area has not had a reliable estimate in the past 5 years, the estimate State for the area's corresponding metropolitan area (if applicable) or State non -metropolitan area is used as the basis for FY2016. 2. HUD calculates a recent mover adjustment factor by comparing a 2013 1 -year 40th percentile recent mover 2-bedr000m rent to the 2009-2013 5 -year 40th percentile adjusted standard quality gross rent. If either the recent mover and non -recent mover rent estimates are not reliable, HUD uses the recent mover adjustment for a larger geography. For metropolitan areas, the order of geographies examined is: FMR Area, Entire Metropolitan Area (for Metropolitan Sub -Areas), State Metropolitan Portion, Entire State, and Entire US; for non - metropolitan areas, the order of geographies examined is: FMR Area, State Non - Metropolitan Portion, Entire State, and Entire US. The recent mover adjustment factor is floored at one. 3. HUD calculates the appropriate recent mover adjustment factor between the 5 - year data and the 1 -year data and applies this to the 5 -year base rent estimate. 4. Rents are calculated as of 2014 using the relevant (regional or local) change in gross rent Consumer Price Index (CPI) from annual 2013 to annual 2014. 5. All estimates are then inflated from 2014 to FY2016 using a trend factor based on the most average annual change in national gross rents over the most recent 5 years. 6. FY2016 FMRs are then compared to a State minimum rent, and any area whose preliminary FMR falls below this value is raised to the level of the State minimum. The results of the Fair Market Rent Step -by -Step Process 1. The following are the 2013 American Community Survey 5 -year 2 -Bedroom Adjusted Standard Quality Gross Rent estimate and margin of error for Iowa City, IA HUD Metro FMR Area. http://www.huduser.gov/datasets/fmr/fmrs/FY2016 code/2016summary.odn 1129/15, 11:19 AM Page 2 of 6 ACS2o13 5 - Year 2- ACS2013 5 -Year 2 - Bedroom Bedroom Adjusted Area Adjusted Standard Quality Ratio Result Standard Gross Rent Margin q Quality Gross of Error `� o Rent - 0,017 < .5 US.�, Iowa ACS2013$-Year' I City, Iowa City,=lA HttiS IA $13/ Metro F�?tk Area HUD $]$� $13 $783=0.017 2 -Bedroom Metro http://www.huduser.gov/datasets/fmr/fmrs/FY2016 code/2016summary.odn 1129/15, 11:19 AM Page 2 of 6 FMR Adjusted Area Standard Quality Gross Rent Since the ACS2013 Margin of Error Ratio is less than .5, the ACS2013 Iowa City, IA HUD Metro FMR Area value is used for the estimate of 2 -Bedroom Adjusted Standard Quality Gross Rent: Area ACS2013 Rent Iowa City, IA HUD Metro FMR Area $783 2. A recent mover adjustment factor is applied based on the smallest area of geography which contains Iowa City, IA HUD Metro FMR Area and has an ACS2013 1 -year Adjusted Standard Quality Recent -Mover estimate with a Margin of Error Ratio that is less than .5. ACS2013 1 -Year 2 -Bedroom Area Adjusted Standard Quality Recent -Mover Gross Rent Iowa City, IA HUD $$Q� Metro FMR Area ACS2013 1 -Year 2 - Bedroom Adjusted Standard Quality Ratio Result Recent -Mover Gross Rent Margin of Error 0.123 < .5 Use ACS2013 1 -Year Iowa City, IA HUD $99 0.123 Metro FMR Area 2 - Bedroom Adjusted Standard Quality Recent -Mover Gross Re& The smallest area of geography which contains Iowa City, IA HUD Metro FMR Area and has an ACS2013 1 -year Adjusted Standard Quality Recent=MoveY' estimate with a Margin of Error Ratio that is less than .5 is Iowa City, IA tibD -' Metro FMR Area. 3. The calculation of the relevant Recent -Mover Adjustment Factor for Iowa City, IA HUD Metro FMR Area is as follows: ACS2013 ACS2013 5 -Year 40th 5 -Year Percentile 2 -Bedroom Area Adjusted Standard Quality Gross Rent http://www.huduser.gov/datasets/fmr/fmrs/FY2016_code/2016 sum ma ry.od n ACS2013 1 -Year 40th Percentile 2 -Bedroom Adjusted Standard Quality Recent -Mover Gross Rent 11;29115, 11:19 AM Page 3 of 6 Iowa City, IA HUD Metro FMR Area Area Ratio Recent -Mover Adjustment Factor Iowa City, IA HUD $806/ 1.029 >_ 1.0 Use calculated Recent -Mover Metro FMR Area $783 Adjustment Factor of 1.029 =1.029 4. The calculation of the relevant CPI Update Factors for Iowa City, IA HUD Metro FMR Area is as follows: HUD updates the 2013 intermediate rent with the ratio of the annual 2014 local or regional CPI to the annual 2013 local or regional CPI to establish rents as of 2014. Update Factor CPI Update Factor Type Region CPI 5. The calculation of the Trend Factor is as follows: HUD uses the average annual change in national gross rents over the most recent 5 years. This annual change is applied for 1.75 years, or 7 quarters. This makes Fair Market Rents "as of" FY2016. 2008 National 2013 National Gross Rent Gross Rent $824 $905 Average Annual Trend Change Factor ($905 / $824)1/5 = 1.0197/4 1.019 1.033 6. The FY 2016 2 -Bedroom Fair Market Rent for Iowa City, IA HUD Metro FMR Area is calculated as follows: T, ACSzois Recent- Annual 2013 Tr ng- FY X16'21 Area 5 -Year Mover Adjustment to 2014 CPI 1.033 to = Bedioorn— Estimate Factor Adjustment FY2016 - EMR i Vi"i Iowa City, *, IA HUD $783 1.029 1.0238 1.0334 '' * 1.P? 38 Metro FMR 1.0334=$853 Area 7. In keeping with HUD policy, the preliminary FY 2016 FMR is checked to ensure that is does not fall below the state minimum. http://www.huduser.gov/datasets/fmr/fmrs/FY2016_codeI2016summary.odn 11/29/15, 11:19 AM Page 4 of 6 Preliminary Area FY2016 2 - Bedroom FMR Iowa City, IA HUD Metro $853 FMR Area FY 2016 Iowa State Minimum $611 $fmrtype$ FY2016 2 - Bedroom FMR $853 >_ $611 Use Iowa City, IA HUD Metro FMR Area FMR of $853 $fmrtype$ FY2016 Rents for All Bedroom Sizes for Iowa City, IA HUD Metro FMR Area The following table shows the $fmrtype$ FY 2016 FMRs by bedroom sizes. Click on the links in the table to see how the bedroom rents were derived. $fmrtype$ FY 2016 FMRs By Unit Bedrooms Efficiency_ One- Two- Three- Four- Ber nn Bedroom B_ r m Bedroom $fmrtype$ FY 2016 $546 $658 $853 $1,243 $1,489 FMR The FMRs for unit sizes larger than four bedrooms are calculated by adding 15 percent to the four bedroom FMR, for each extra bedroom. For example, the FMR for a five bedroom unit is 1.15 times the four bedroom FMR, and the FMR for a six bedroom unit is 1.30 times the four bedroom FMR. FMRs for single -room occupancy units are 0.75 times the zero bedroom (efficiency) FMR. Public Comment Sought on Alternative Trend Factor As an alternative to the trend factor methodology currently used, HUD is considering using a forecast of gross rent changes, i.e., forecasts of the national CPI components Rent of Primary Residence and Fuels and Utilities combined into a weighted average "Gross Rent Index". If the Gross Rent Index forecast ha6een used as the trend factor in formulating the proposed FY2016 FMRs, the 7-qyarter•* trend factor would have been 1.0457, and the FMRs for Iowa City, DvHUD Metro -7, FMR Area using this alternative methodology would be the following: —, Alternate $fmrtype$ FY 2016 FMRs By Unit Bedrooms 3� Efficiency One- Two - Bedroom Bedroom $fmrtype$ FY 2016 Three- Four - Bedroom Bedroom http://www.huduser.gov/datasets/fmr/fmrs/FY2016 code/2016summary.odn 11/29/15, 11:19 AM Page 5 of 6 FMR $552 $665 $863 $1,258 $1,507 More information on the Gross Rent Index forecast is available here. Public comment on this proposed methodology change as well as other aspects of Proposed FY2016 FMRs may be submitted via ragulations.aov Permanent link to this page: BIZ/-/www.huduser.gQ_v/portal/data s�Ltmf/Jmrs/FY2016_Co-de/2016summaryodn? year=2016&fmrty_De=$fmrty_pe$&cbsasub= METR026980MM3500 Other HUD Metro FMR Areas in the Same MSA Select another $fmrtype$ FY 2016 HUD Metro FMR Area that is a part of the Iowa City, I MSA: Washington County, IA HUD Metro FMR Area Select Metropolitan FMR Area Select a different area Press below to select a different county within the same state (same primary state for metropolitan areas): Adair County, IA Select a new county Press below to select a different state: Select a new state Select a $fmrtype$ FY 2016 Metropolitan FMR Area: Iowa City, IA HUD Metro FMR Area Select Metropolitan FMR Area P HUD Home Page HUD User Home I Data Sets I Fair Market Rents152±ron�Inc e Limits @/IL Summary�ystem Multifamily Tax Subsidy Project (J '-Income its HUD LIHTC Databaserr— Prepared by the Economic and Market AnalysisDivision, HUD. Technical problerri,or quos ions? Contact Us. http://www.huduser.gov/datasets/fmr/fmrs/FY2016 code/2016summary.odn 11/29/15, 11:19 AM Page 6 of 6 Family Self -Sufficiency (FSS) cityGovernmentn What is the FSS program? Family Self -Sufficiency (FSS) is a voluntary program available to residents of Housing Authority's Public Housing and Section 8 Programs. The purpose of the program is to assist families to improve their economic situations and reduce their dependence on welfare programs. Who can participate? Participants must be receiving Section 8 rental assistance or be living in a Public Housing unit. FSS is for those people who are unemployed or those who are already employed but wanting to increase their income. What do participants do? Departments and Divisions Neighborhood and Development Services Neighborhood Services Housing Authority Application for assistance Area Median Income Guidelines Community resources Family Self - Sufficiency Programs httpsa/icgov.org/city-governmentidepartments-and-divisions/neighborhood-and-development-services/neighborhood-3 1116115, 9:41 AM Page 1 of 5 Families commit to making changes in their lives when Homeownership they enter this program. Each FSS participant works programs with an FSS case manager to create a five-year plan that Housing Authority includes employment goals and identifies training or documents education needs. The FSS family is responsible for: ► Housing Choice • Working towards completion of identified goals Voucher (HCV) • Becoming free of public assistance for one consecutive year before the end of the contract Landlord/owner • Providing information on program progress information • Complying with lease terms Links to rental listings • Living in the Housing Authority jurisdiction for at least 12 months Preference categories FSS staff then works with the family to identify locate Public housing and arrange for the services that they need to ► Community accomplish these goals. The Housing Authority is Development responsible for: ► Housing Inspection • Obtaining supportive services from public and Services private resources • Coordinating availability of resources for ► Neighborhood participating families Outreach • Establishing an escrow account for families when . Development Services credit is earned • Determine if interim goals have been met for ► Building Inspection partial withdrawal of escrow monies Services • Determine if the family has completed the ► Urban Planning contract ► Economic Development What is the FSS escrow account? - MPOlC` � As FSS participants succeed in raising their family income, the portion of their monthly income Sustai ty&ryi contributed toward their rent payment also increases.► Airportrw' ZZ CD The Housing Authority sets up an escrow account for the family and HUD then deposits a percentage of this City Attorney https://icgov.org/city-government/departments-and-divisions/neighborhood-and-development-services/neighborhood-3 11/6/15, 9:41 AM Page 2 of 5 rent increase into an interest-bearing escrow account. If ► City Clerk the family meets its goals within five years and has received no welfare assistance for one year, they are Communications eligible to receive the funds in the escrow account. Cable How successful is the program? r Finance FSS participants have: Accounting • Earned GED/Diplomas ► Finance Administration • Earned training certificates and/or Degrees Information Technology • Obtained employment Services • Started their own businesses • Ended welfare dependence ► Purchasing • Built escrow accounts with an average monthly ► Revenue deposit of $200.00 and an average balance of $2,000.00 Risk Management • Become homeowners ► Fire Department A community partnership ► Human Resources The FSS program maintains community input through ► Human Rights an advisory board called the Planning Coordinating Committee. This board is comprised of persons from Iowa City Public Library public and private sectors, local government, FSS ► Parks and Recreation participants, business and community members. This group works to identify public and private service ► Police Department groups and resources, guide program policy, identify `= Public forks service gaps, recommend new services, maintain positive working relationships with service providers, Administratiow and maintain ongoing outreach to agencies in the - �, community to provide new services. ► Engin 1�3#�ng=.,,._ Equiprrient How do I find out more about FSS? ► Streets For more information please contact: Wastewater Mary Abboud ► Water https://icgov.org/city-government/departments-and-divisions/neighborhood-and-development-services/neighborhood-3 11/6/15, 9:41 AM Page 3 of 5 Housing Authority 410 E Washington Street Iowa City, Iowa 52240 (319) 887-6061 ► Senior Center • Transportation and Resource Management ► Parking ► Solid waste ► Transit Staff directory ► Boards, commissions and committees City Charter City Code ► City Council ► City Manager's Office https://icgov.org/city-government/departments-and-divisions/neighborhood-and-development-services/neighborhood-3 11/6/15, 9:41 AM Page 4 of 5 Program Overview I Oregon Housing and Community Services (OHCS) was directed by the 77th Oregon Legislative Assembly to develop and implement the Housing Choice Landlord Guarantee Program. The Housing Choice Landlord Guarantee Program is designed to provide financial assistance to landlords to mitigate damages caused by tenants as a result of their occupancy under the HUD Housing Choice Voucher Program, also known as Section 8. ............ ................ ............. Eligibility A landlord may apply for financial assistance to reimburse them for qualifying damages. To be eligible Requirements I for the program, landlords must have leased to tenants through the HUD Housing Choice Voucher Program, also known as Section 8. Tenants with Housing Choice vouchers for veterans, also known as Veterans Affairs Supportive Housing or VASH vouchers, are also eligible. The damages to the residence must exceed normal wear and tear, and must have occurred after July 1, 2014. To qualify for program assistance, a landlord must first obtain a judgment against a tenant from a court in an Oregon county, in which either the tenant or the property is located. a) The judgment must be from a circuit court, a small claims department of a circuit court, or a justice court; b) The time frame for appeal of the judgment must have expired without appeal or the judgment must otherwise not be subject to further judicial review. Program assistance is limited to reimbursement for those amounts covered in a final judgment. Claim reimbursements may include expenses related to property damage, unpaid rent, or other damages satisfactorily described and documented in a claim from the landlord to OHCS. Property damage claims must include the following: a) Property damage incurred after July 1, 2014; b) Property damage was caused as a result of a tenant's occupancy, pursuant to a rental agreement under the Housing Choice Voucher Program at the time the damage was incurred; c) Damage to property exceeds normal wear and tear; and d) Expenses for repairs are in excess of $500, but not more than $5,000 per tenancy. Types of Program a) ............ ..................... Partial Reimbursements: Program assistance may be available for damages in amounts less Assistance than $500 when a partial amount is still owed on a judgment that is in excess of $500. For example, if a landlord received a payment of $400 on a $700 judgment on qualifying damages, the landlord may seek reimbursement for the remaining $300 owed to them under the judgment. b) Reimbursements up to $5,000: Program assistance for damages up to $5,000 may be provided on a judgment that is in excess of $5,000. For example, if a landlord has a judgment for $7,000 for qualifying damages, the landlord may see reimbursement for up to $5,000 of the qualifying damages. c'9rn .� Qualifying damages a) Attorney fees, court costs, and interest; �, b include b) -... l Loss of rental income during the time required for repairs to witfisect two quali property damage; c) Lease -break fees; r k d) Pre -judgment and/or post -judgment interest; posa1 e) Other costs related to lease violations by a tenant such as reparrbbor, nIerials,� fees, etc. R _.............. .... _...... Continued- .... .... ........... _.. ........ ....... ................... .. ................................ ..... 12t Oregon Housing and Community Services 1 725 Summer St. NE, Salem, OR 97301 1 (503) 986-2000 1 Revised 04/30/2015 lcwLHOUw N6 w"R Nrry A landlord may not seek, accept or retain program assistance from the department for amounts already paid for qualifying damages by the tenant or by a third party. If, after submitting a claim for program assistance, a landlord receives payment for any claimed damages from a tenant or a third party, the landlord must notify the department within ten (10) days of such payment. A landlord must provide restitution to the department for overpaid program assistance within forty-five (45) days. The department will maintain a record of program assistance provided to a landlord to assist in determining if there has been an overpayment of program assistance. Program Delivery A landlord must submit a claim for program assistance to the Department within one year of obtaining a judgment against a qualified tenant. The time frame for appeal of the judgment must have expired without appeal or the judgment must otherwise not be subject to further judicial review. The application is available online at http://www.oregon.gov/ohcs/Pages/housing- choicelandlord-guarantee-assistance.aspx. After submission of the application, OHCS will notify applicants if the application is incomplete within ten (10) days. OHCS will process applications and payments to landlords within forty-five (45) days. After receiving assistance, a landlord must file a satisfaction of judgment within thirty (30) days in the amount of any program assistance received from the department in the court from which the judgment against the tenant was obtained. A copy of this filed satisfaction of judgment must be delivered to the department within forty (40) days of the landlord's receipt of the program assistance. Tenants whose landlords have received a judgment against them and submitted claims for assistance will be requested to repay the assistance. OHCS will contact tenants to request repayment, and will assist in creating reasonable repayment plans. OHCS may waive or suspend debt owed by tenants as circumstances dictate. OHCS may also send the debt to the Department of Revenue for collection. Program Assistance Landlords who are considering renting to Housing Choice Voucher tenants who have had judgments filed against them may contact OHCS to determine whether the tenant is in compliance. Landlords should contact Iand lord.guarantee@oregon.gov, or 1-800-453-5511 (choose option 8), and should expect a response within two (2) business days. To receive this information, the landlord will need to provide a tenant's name and the judgment number. For more information Individuals with questions about the program should contact: Ernest Kirchner, Program Analyst Ernest. Kirchner@oregon.gov, or 1-800-453-5511 (choose option 8). r.� Oregon Housing and Community Services 1 725 Summer St. NE, Salem, OR 97301 1 (503) 986-2000 1 Revised 04/30/2015 6QULL NOUf1N6 M�ORI'UNITT Reasons Why participation in the federally funded Housing Choice Voucher program should remain voluntary 1. Our Housing Authority already does a really good job In 2014 the Housing Authority had a 98% utilization rate of vouchers and 97% utilization of public housing. (I, pg. 4) In fact, the Iowa City Housing Authority has had an average of 97% for the last 11 years while managing more vouchers than the Cedar Rapids Housing Authority. (1272 vs 1265) The Housing Authority achieved a "high performance status" in 2014. (1, pg. 4) According to the waiting lists, there are thousands of people who want to have a voucher. (1, pg. 10-11) We allow a generous 120 days to secure a unit and give some extensions. In the only study done by HUD of Section 8 success rates done after 2001, the average national success rate was 69%. (6) In a very tight market the average success rate of utilizing a voucher was 61 %. Iowa City could be considered a very tight market. Only 12% of voucher holders in our service area have trouble renting a unit. (4, pg. 51) Reasons include: • Bad credit history • A criminal record • Poor past landlord references or eviction • Insufficient security deposit • "No Smoking" and "No Pet" policies • Applying for a unit that is no longer available or is considered unaffordable by Housing Authority rules All of these reasons would still be cause for non-success in renting even if Section 8 was considered a protected class. When a voucher is returned unused, it is given to someone else on the waiting list resulting in our high utilization rate of 98-99%. Therefore, unlike other cities, there is no problem with Section 8 voucher holders obtaining a unit in the Iowa City area. 2. Section 8 is a voluntary Federal program Many renters are just as impoverished but choose not to apply for a voucher. Voucher holders could be considered those who were the most motivated, or persistent, or those best assisted by social service agencies. To be eligible for Section 8 a household must be below 50% of area median income (AMI), however our Housing Authority ensures that 75% of new admissions have income less than 30% AMI. (2, pg. 15) How many households could be eligible for Section 8 vouchers? About 30% of all households in Iowa City have income less than $20k per year which is less than half median income ($42k). (3, pg. 11). This is about 10,600 households. More than half are in the over 25 age group so are less likely to be students. All of these households could apply for Section 8 vouchers. In Iowa City the supply of rental units considered affordable to Wuseholds making less than 30% AMI does not come close to accommodating all who need them. Aaordabl! bnits and choice should be reserved for the vast majority who are competing for these units. Makin1 ic#iO4voucha holders a more favored group may be considered discriminatory against those who are eligilil�tt chose n apply.c..) y Additionally, 42% of Iowa City households who are renters pay more than 50% of income forli sinRnd a considered severely cost burdened. (3, pg. 22) This would include 27.7% of Whites, 31.Bf� 4% to cks, 29.9°ro Asians, and 36% of Hispanics. (4, pg. 45) By definition this would not include anyone on."' ction who pays 30% of income for rent. Making Section 8 holders a more favored group may be considered discriminatory towards the severely cost burdened people who are not participating in the program. 3. If Section 8 is a protected class, then students (or occupation) could also be a protected class We read in City Steps 2016-2020 that "Iowa City is committed to serve the needs of low and moderate income residents. Households with incomes less than 50% AMI, particularly those with incomes less than 30% AMI are particular priorities." (4, pg. 95) Half of the population of Iowa City is under age 25, 34% are age 18-24 (3, pg. 4) and many are college students. The University is trying to entice more young people to come to Iowa City for the economic health of the city. The housing needs of impoverished students should not be discounted just because they are students. According to the City Steps document, non -related students do account for the most cost burdened and severely cost burdened population in the city. (4, pg. 27, 36) We should not assume that all students are supported by parents. Should students be a protected class in Iowa City? They are in Eugene, OR (7) and College Park, MD (8). 4. Disparate impact Some say that disparate impact is the reason that the city should declare Section 8 to be a protected class. Others say that we should wait to see how the Supreme Court rules on this theory later this year. Prior court rulings regarding landlords have been mixed. Interesting statistics in ICHA Participation rates by race of head of household (HO 1-1), individual and family: • White: 59% of vouchers and public housing (1, pg. 8) with 79.7% population (6, pg. 38) • Black: 38% of vouchers and public housing (1, pg. 8) with 5.6% population (6, pg. 38) • "All other race": 3% of vouchers and public housing (1, pg. 8) with 5.3% Hispanic population (6, pg. 38) and 6.9% Asian population (6, pg. 38) Blacks, Hispanics, and Asians are about equal in population and about equal in being severely cost burdened (4, pg. 42-46) but there is a large difference in use of Section 8 vouchers. (1, pg. 8) The waiting list shows an even more pronounced difference in participation rates. (l, pg. 11) To make Section 8 a protected class in Iowa City may be considered discriminatory against students and "all other races" - at least at this time. 5. Constitutional issues are not settled; there is no agreement about Section 8 being a lawful source of income The 2010 State of Iowa civil rights ordinance does not include lawful source of income as a rationale for protective class status. The Iowa City Fair Housing Law does already include public source of income as a protected class, however Section 8 is not included. Section 8 has been held to not represent a source of income to the individual because it has no specific value and is a source of income to the landlord to whom it is directly paid. It is not reportable as income. This issue is far from settled nationally. By 2014 there were 12 states, Washington D.C., and about 25 municipalities that included source of income as specifically protected but not all include housing vouchers. This list includes Iowa City. Wisconsin and California protect source of income but exclude housing vowhers. Wisconsin courts ruled that it would be wrong to allow a state to make a voluntary fede ,Xogr w mart t ry without the Congress clearly stating that that was its intent. A California appellate court t i& ar wner's t to not participate in the Section 8 program finding that neither the tenant's voucher, norwtilousxgpa is made under the program constitute "income" of the tenant. In debates about whether statestMi ciWs ca ke laws more restrictive than federal law, the Supremacy Clause of the U.S. Constitution ha n et ad as a g precedence. In looking at the beginning of Section 8_ it is seen that Congress viewed Seidjon 8 as a voI_n�ry federal program in which landlords would function as usual in the private marketplace. i7.° Section 8 was enacted by Congress in 1974 with the goals of increasing the availability of affordable housing and maintaining landlord autonomy in the selection of tenants and management decisions. There is no direct requirement in the federal law or in HUD regulations that mandates landlord participation. In 1987 the Section 8 program was felt by some to not be working well and two new regulations were added. One regulation known as "take one, take all" stipulated that if a landlord took one Section 8 tenant they must not refuse others. The second regulation was known as "the endless lease' and denied landlords the possibility of ending a Section 8 lease for management reasons. Both of these regulations were repealed by Congress in 1996 because they made the situation worse for Section 8 tenants trying to get a rental unit. • Is Section 8 a source of income to a tenant? • Should local government enact legislation that conflicts with federal law? • Is Section 8 helping to increase the availability of affordable housing or is it a flawed federal program? (The work of Howard Husock, expert on housing and urban policy, could be considered including his book America's Trillion Dollar Housing Mistake: The Failure of American Housing Policy.) 6. The Housing Authority is in a larger area than Iowa City Iowa City's population of about 68,000 is a fraction of the urban area of 103,000 and Johnson County at 109,000. Similarly Iowa City accounts for about 68% of voucher use. (1, pg. 6) Many area residents find housing is less expensive in Coralville, North Liberty, Tiffin, and the smaller towns outside of Iowa City. Use of vouchers in all surrounding areas should be encouraged as should the building of affordable housing in those areas. Some landlords own property in Iowa City and another municipality and could end up with different rules for different buildings. 7. Penalizing landlords Courts have held that landlords may be able to prove a business necessity for not accepting Section 8 by showing that administrative costs of participating are too high. There may be some reluctance on the part of landlords who would fear damages beyond the security damage deposit and the lack of time or resources to pursue judgments. Indeed in the Iowa City Public Housing program, costs every year to maintain and repair units can be $3200- $3700 per unit per year including units that are not turning over. (1, pg. 7) This would represent about one third of rents collected. Private landlords may also be paying one fourth to one third of rents as property tax and would not make money with those kinds of maintenance costs. It is not unusual for landlords to raise rates yearly as needed to cover costs and tenants choose to renew a lease or not as desired. It could be possible that Fair Market Rent could be exceeded disqualifying a Section 8 tenant from renewing. We note that Fair Market Rent decreased between 2014 and 2015. All 1 bedroom, 2 bedroom etc. units are not equal in size, age, amenities, finishes, or locations. (This is similar to different brands of hotels.) Fair Market Rent cannot adjust for these differences. Older, less fancy units will always be closer to meeting Fair Market Rent. Mandating Section 8 participation will not lower the cost of doing business. Note that since Fair Market Rate is an average, some landlords who accept Section 8 may getting paid more than a unit is worth. !E' c7N • Doctors are not mandated to accept Medicare or Medicaid patients. • Should landlords be mandated to participate in a voluntary federal program? I If a Housing Choice Voucher participant's employment is terminated they have the option t+o-�k rev employment to regain the lost income but if a Housing Choice Voucher participant is termingtdd frau the �"" Housing Choice Voucher program they don't have that option. There is a waiting period before they can reapply to participate in the program again. In many cases when the tenant's voucher is terminated they are unable to, or choose not to, pay rent. This unpaid rent is not covered by the Housing Choice Voucher program. Despite what some people believe, the payment of rent from the Housing Choice Voucher program is not guaranteed. No current protected class requires a separate contract. The Housing Choice Voucher program requires landlords to agree to and sign a separate Housing Assistance Payments Contract (HAP Contract). Landlords who currently participate in the program sign this contract because they choose too. They know some of the terms in the HAP Contract may alter the original lease agreement signed by the landlord and tenant. If the Housing Choice Voucher program is deemed a protected source of income, the requirement to sign the HAP Contract should be eliminated. 8. Overview of problem The concern about considering Section 8 as a protected class was first raised in a report attempting to analyze impediments to fair housing in Iowa City. (The city strongly objected to this report because it seemed to focus instead on impediments to affordable housing, which was seen as a different topic.) Fair Housing complaints are handled by the Human Rights Commission. Last year there were 52 complaints and 4 were related to housing. It is not known how many (if any) of the 4 had to do with Section 8 voucher use. In City Steps 2016-2020 we read in several places "It should be noted that non-white groups have very small sample sizes and are therefore more prone to error. For each cost burden level, white households represent more than 82-88% of the jurisdiction as a whole, significantly influencing the overall trend". (4, pg. 39, 43, 45) With very small sample sizes, policy should be made cautiously while noting trends. There are large numbers of the Iowa City population who are cost burdened in housing and are low income. Looking at a map of Iowa City of LMI (low and moderate income) concentrations, it appears that half of the acreage of town is included in that designation. (4, pg. 87) Indeed, older and less expensive housing exists in those areas. The rest of the town is already developed, leaving only the fringes and surrounding communities as possible places for more affordable housing. Making Section 8 a protected class does not address the problems of increasing affordable housing or achieving public transportation to less expensive areas. Making Section 8 a protected class would infringe on landlord rights, may have unintended consequences, and could even be illegal. Iowa City may have many issues to work on but Section 8 utilization of vouchers is not one of them. 0 c :> -- f-:, w IV M References: 1. Housing Authority Annual Report 2015, April 7, 2015 http://www.icg_o v.orWsite/CM Sv2/fi le/housinp_/Annual ReportFY I 5scann ing_pdf 2. Iowa City Housing Authority 5 -Year Plan 2015-2019, April 2015 http://www.ic og v.orizJsite/CMSv2/file/housing/lAO22FY2015-2020vl.pdf 3. Update to the 2007 Affordable Housing Market Analysis for the Iowa City Urbanized Area January 2015 http://mpojc.orz/docs/file/adm inistration/FINALAffordableHousingUpdate-02022015.pdf 4. City Steps 2016-2020 May 15, 2015 http://www.ic og v.orgjsite/CMSv2/file/planninWcommDev/citySteps/CitySteps2Ol6-20205 15 14.pdf 5. Iowa City Consolidated Annual Performance and Evaluation Report for FYI 4, September 2014 http://w ww.ic og v.org/site/CMSv2/file/planning/commDev/FYI4CAPERFINAL.pdf 6. http: //www.huduser.org//portal/publications/pubasst/sec 8s uccess.html 7. http://www.thco.ore 8. http://mdrealtor.org ✓Housin rograins/Fairflousing.aspx S -s C) C7% C d N CITY OF IOWA CITY MEMORANDUM Date: January 13, 2016 To: Geoff Fruin, Assistant City Manager From: Human Rights Coordinator/Equity Director Stefanie B wers� Housing Authority Administrator Steve J. Rackis L j'�-✓'' Re: Staff Recommendation on including Housing Choice Voucher and other rental subsidies in the definition of Public Assistance Source of Income under the Human Rights Ordinance. Introduction: On February 17, 2015, the Human Rights Commission made a recommendation to the City Council to include Housing Choice Voucher (Section 8) in the definition of Public Assistance Source of Income under the City's fair housing laws." Including Housing Choice Voucher (HCV) or other rental subsidies in the definition would make it unlawful to refuse to rent or lease a rental housing unit to a person based only on their use of a HCV or rent subsidy. It would also prohibit directly or indirectly advertising, or in any other manner indicating or publicizing that a person is not welcome or not solicited because of use of a HCV or other rental subsidy. Background: The Housing Choice Voucher Program is funded by the U.S. Department of Housing and Urban Development (HUD) to increase affordable housing choices for low-income persons/families. It allows holders of a HCV to rent (lease) affordable privately owned rental units. The Iowa City Housing Authority administers the program and the Veteran's Affairs Supportive Housing Vouchers (VASH) for Johnson County, Iowa County and Washington County (North of Highway 92). Under the Housing Choice Voucher Program, a person generally pays 30% of their adjusted monthly income for their portion of the rent. Monthly incomes are adjusted if specific deductions apply. Minimum rent is $50 at the initial lease -up and a participant is not allowed to pay more than 40% of their monthly adjusted income towards their rent. An inspection of the housing unit is required prior to the Iowa City Housing Authority rental assistance payment. There is no cost to the landlord for the inspection. Over the last year the Housing Choice Voucher Program has paid approximately $6.5 million in housing assistance payments to landlords in Johnson County. The vouchers in use, as of December 15, 2015, in Iowa City (851) represented 4.8% of the total number of rental units in Iowa City (18,193). The total number of available HCV and VASH for the Iowa City Housing Authority is 1,292. As part of the City of Iowa City 2014 Impediments to Fair Housing, a survey was conducted that found 31% or 63 individuals out of 210 HCV clients surveyed believed that HCV was the most common reason for discrimination in the area of housing in Johnson County. ' Public Assistance Source of Income currently excludes rent subsidies. See Human Rights Ordinance §2-1-1. January 13, 2016 Page 2 Over the last several months staff in the Human Rights Office and Neighborhood & Development Services Department (includes the Iowa City Housing Authority) evaluated this recommendation. Staff wanted to know whether the inclusion would adversely affect individuals who have lower incomes but are not participating in the program, or create any unforeseen consequences to affordable housing in Iowa City. On May 26, staff met with the Greater Iowa City Area Apartment Association at their monthly meeting to discuss and received questions from them on the recommendation. On July 21, the Greater Iowa City Area Apartment Association stated they are not in support of the recommendation to include HCV in the definition of Public Assistance Source of Income via correspondence sent to the City Manager. Feedback from landlords: The Greater Iowa City Area Apartment Association in its correspondence of July provides 8 reasons for "why participation in the federally funded Housing Choice Voucher Program should remain voluntary." The 8 reasons are italicized and a brief staff response follows each reason. A copy of the correspondence is attached to this memo. 1. Our Housing Authority already does a really good job. A high utilization rate is helpful but it does not take into account whether applicants who use HCV are able to obtain rental units that would fit within their financial means throughout Iowa City. Currently 408 landlords participate in the Housing Choice Voucher Program and HCV/VASH utilization is 101.3%. Staff support for the inclusion of HCV in the definition of Public Assistance Source of Income is based on the fact that a person regardless of HCV status should be able to apply and be accepted for housing if they can afford the unit and meet the landlord's criteria. Those who hold a HCV are not being considered for affordable rental units because there are some landlords who refuse to consider them as applicants for their housing units. A high utilization rate does not prove that persons are able to rent housing units of their choice or in an area of their choice. 2. Section 8 is a voluntary federal program. The Housing Choice Voucher is a voluntary federal program. However, the practice of landlords refusing to consider persons/families solely on the basis that they would use a HCV to offset their rent costs has already made all low-income families without assistance a "more favored group" than persons/families receiving assistance from a HCV. There is an assumption that persons who receive rental subsidies are not cost burdened. The inclusion of HCV in the definition of Public Assistance Source of Income levels the field for all low-income families because landlords would be required to treat all applicants equally. 3. If Section 8 is a protected class, then students (or occupation) could also be a protected class. The purpose of including HCV in the definition of Public Assistance Source of Income is to create more housing opportunities for those who use a HCV. In general when "students" are a protected characteristic it is usually to counteract the policies and practices of landlords who prefer not to rent to students based on arbitrary beliefs that students will bother other residents and damage property as opposed to their socio-economic status. January 13, 2016 Page 3 4. Disparate Impact. The U.S. Census Bureau, 2009-2013 5 -Year American Community Survey reports that the racial and ethnic demographics of Iowa City is as follows. These percentages are compared to the Iowa City Housing Authority head of household racial and ethnic demographics for HCV participants for calendar year 2015. U.S. Census Bureau, 2009-2013 White = 57, 207 (82.5%) Black/African American = 3, 825 (5.5%) American Indian and Alaska Native = 257 (.37%) Asian = 4,913 (7.0%) Native Hawaiian and Pacific Islander =164 (.2390) Hispanic/Latino = 3,627 (5.2%) HCV Participants as of November 24, 2015 White = 724 (56.8%) Black/African American = 509 (39.9%) American Indian and Alaska Native = 7 (.5%) Asian = 14 (1.1%) Native Hawaiian and Pacific Islander = 5 (.4%) Hispanic = 48 (3.8%) Under the Fair Housing Act "Disparate Impact" is a legal doctrine that states that "a policy may be considered discriminatory if it has a disproportionate adverse impact against any group based on race, national origin, color, religion, sex, familial status, or disability when there is no legitimate, non- discriminatory business need for the policy."2 There is no indication that including HCV in the definition of Public Assistance Source of Income would cause disparate impacts on persons based on race, national origin, color, religion, sex, familial status or disability. 5. Constitutional issues are not settled, there is no agreement about Section 8 being a lawful source of income. The current definition of Public Assistance Source of Income is defined in the Human Rights Ordinance as "income and support derived from any tax supported federal, state or local funds." The recommendation if approved would add HCV and other rental subsidies to the list of other named bases for support. Across the country 12 states, 9 counties and 18 cities include rent subsidies in their fair housing laws and have done so without any challenge from HUD. Marion is the only city in Iowa that currently provides protection; the Iowa Civil Rights Act (state) and the Fair Housing Act (federal) do not.3 Even though neither the appellate courts in Iowa nor the federal appellate court for Iowa have ruled on this issue, a strong case can be made that there is no preemption and/or that there is no conflict between a local ordinance that makes landlord participation mandatory and the federal law that makes it voluntary. 6. The Housing Authority is in a larger area than Iowa City. Iowa City's fair housing laws currently offer greater protection than exists at the state or federal level and so landlords with properties in other areas are already working with different fair housing laws. Including HCV in the definition of Public Assistance Source of Income does not create an administrative burden to landlords with properties outside of Iowa City 4 Landlords should be using the same application process for accepting/rejecting potential tenants regardless of where the property exists. Z National Fair Housing Alliance Disparate Impact, http://www.nationalfairhousing.org/PublicPolicy/DisparateImpact/tabid/4264/Default.aspx. 3 See Landlord Discrimination Against Section 8 Vouchers Outlawed by David Mark Simpson Santa Monica Daily Press. May 7, 2015. The Iowa City Housing Authority's jurisdiction is Johnson County, Iowa County, and Washington County (North of Highway 92). Most persons who hold a HCV reside in Johnson County and this percentage "mirrors where the general population resides in Johnson County. January 13, 2016 Page 4 7. Penalizing Landlords. The Housing Assistance Payments (HAP) Contract is a regulatory requirement.s 8. Overview of Problem. Every resident or potential resident to this community should be allowed the opportunity to apply for and reside in a housing unit of their choice. Across the country 12 states, 9 counties and 18 cities include rent subsidies in their fair housing laws and have done so without any challenge from HUD. Even though neither the appellate courts in Iowa nor the federal appellate court for Iowa have ruled on this issue, a strong case can be made that there is no preemption and/or that there is no conflict between a local ordinance that makes landlord participation mandatory and the federal law that makes it voluntary. Recommendation: It is staffs recommendation that the City Council amend the Human Rights Ordinance to include "HCV and similar rent subsidy programs" in the definition of Public Assistance Source of Income. If a person who uses a HCV applies to rent a housing unit but does not meet the landlord's selection criteria required for all applicants, the application can be denied for those reasons. But if the person meets the selection criteria required for all applicants a landlord cannot refuse to rent to that person. To refuse to rent (lease) to a person because the person will use a rental subsidy is not a practice that supports the values of this community and is contrary to our commitment to fair housing. 5 The main regulation for this program is 24 Code of Federal Regulations Part 982.451— 982.456. 2015 - 2016 Board: President — Chris Villhauer Vice -President — Tony Vespa Secretary — Michelle Lamkins Treasurer — Mark Ruggeberg David Kacena Jim Houghton Blaine Thomas Celeste Holloway Greater Iowa City Area Apartment Association P.O.Box 1765 Iowa City, IA 52244 www.gicaa.org July 21, 2015 City of Iowa City Tom Markus, City Manager 410 E. Washington Street Iowa City, IA 52240 Dear Mr. Markus, This correspondence is concerning a recommendation to the City Council to include Housing Choice Voucher (Section 8) in the definition of Public Assistance Source of Income. The Greater Iowa City Apartment Association is a local non-profit organization whose membership includes owners of rental property, managers of rental units, or those associated with either. Many of our members currently participate in the Housing Choice Voucher program and have a great working relationship with Housing Administrator, Steven Rackis and his staff. We have enjoyed having Mr. Rackis as a guest speaker at our meetings many times. The Greater Iowa City Apartment Association helps to promote Fair Housing education in order to achieve equal housing opportunities for all. The attached information explains why the choice to participate in this federally funded program should remain voluntary by both tenants and landlords. The Greater Iowa City Apartment Association would like to work with the Iowa City Housing Authority, the Human Rights Commission, and any other group or commission that you, or the City Council, feel would be beneficial in working towards the housing goals of the City of Iowa City. If you have any questions please let me know. Thank you for your time. Sincerely, Chris Villhauer President . Greater Iowa City Apartment Association apartmentassoc(a)&Lnail.com www. is caa.org Better Landlording Through Education Reasons Why participation in the federally funded Housing Choice Voucher proms should remain voluntary 1. Our Housing Authority already does a really good job In 2014 the Housing Authority had a 98% utilization rate of vouchers and 97% utilization of public housing. (I, pg. 4) In fact, the Iowa City Housing Authority has had an average of 97% for the last 11 years while managing more vouchers than the Cedar Rapids Housing Authority. (1272 vs 1265) The Housing Authority achieved a "high performance status" in 2014. (1, pg. 4) According to the waiting lists, there are thousands of people who want to have a voucher. (1, pg. 10-11) We allow a generous 120 days to secure a unit and give some extensions. In the only study done by HUD of Section 8 success rates done after 2001, the average national success rate was 69%. (6) In a very tight market the average success rate of utilizing a voucher was 61 %. Iowa City could be considered a very tight market. Only 12% of voucher holders in our service area have trouble renting a unit. (4, pg. 51) Reasons include: • Bad credit history • A criminal record • Poor past landlord references or eviction • Insufficient security deposit • "No Smoking" and "No Pet" policies • Applying for a unit that is no longer available or is considered unaffordable by Housing Authority rules All of these reasons would still be cause for non-success in renting even if Section 8 was considered a protected class. When a voucher is returned unused, it is given to someone else on, the waiting list resulting in our high utilization rate of 98-99%. Therefore, unlike other cities, there is no problem with Section 8 voucher holders obtaining a unit in the Iowa City area. 2. Section 8 is a voluntary Federal program Many renters are just as impoverished but choose not to apply for a voucher. Voucher holders could be considered those who were the most motivated, or persistent, or those best assisted by social service agencies. To be eligible for Section 8 a household must be below 50% of area median income (AMI), however our Housing Authority ensures that 75% of new admissions have income less than 30% AMI. (2, pg. 15) How many households could be eligible for Section 8 vouchers? About 30% of all households in Iowa City have income less than $20k per year which is less than half median income ($42k). (3, pg. 11). This is about 10,600 households. More than half are in the over 25 age group so are less likely to be students. All of these households could apply for Section 8 vouchers. In Iowa City the supply of rental units considered affordable to households making less than 30% AMI does not come close to accommodating all who need them. Affordable units and choice should be reserved for the vast majority who are competing for these units. Making Section 8 voucher holders a more favored group may be considered discriminatory against those who are eligible but choose not to apply. Additionally, 42% of Iowa City households who are renters pay more than 50% of income for housing and are considered severely cost burdened. (3, pg. 22) This would include 27.7% of Whites, 31.4% of Blacks, 29.9% of Asians, and 36% of Hispanics. (4, pg. 45) By definition this would not include anyone on Section 8 who pays 30% of income for rent. Making Section 8 holders a more favored group may be considered discriminatory towards the severely cost burdened people who are not participating in the program. 3. If Section 8 is a protected class, then students (or occupation) could also be a protected class We read in City Steps 2016-2020 that "Iowa City is committed to serve the needs of low and moderate income residents. Households with incomes less than 50% AMI, particularly those with incomes less than 30% AMI are particular priorities." (4, pg. 95) Half of the population of Iowa City is under age 25, 34% are age 18-24 (3, pg. 4) and many are college students. The University is trying to entice more young people to come to Iowa City for the economic health of the city. The housing needs of impoverished students should not be discounted just because they are students. According to the City Steps document, non -related students do account for the most cost burdened and severely cost burdened population in the city. (4, pg. 27, 36) We should not assume that all students are supported by parents. Should students be a protected class in Iowa City? They are in Eugene, OR (7) and College Park, MD (8). 4. Disparate impact Some say that disparate impact is the reason that the city should declare Section 8 to be a protected class. Others say that we should wait to see how the Supreme Court rules on this theory later this year. Prior court rulings regarding landlords have been mixed. Interesting statistics in ICHA Participation rates by race of head of household (HO 1-1), individual and family: • White: 59% of vouchers and public housing (1, pg. 8) with 79.7% population (6, pg. 38) • Black: 38% of vouchers and public housing (1, pg. 8) with 5.6% population (6, pg. 38) • "All other race": 3% of vouchers and public housing (1, pg. 8) with 5.3% Hispanic population (6, pg. 38) and 6.9% Asian population (6, pg. 38) Blacks, Hispanics, and Asians are about equal in population and about equal in being severely cost burdened (4, pg. 42-46) but there is a large difference in use of Section 8 vouchers. (1, pg. 8) The waiting list shows an even more pronounced difference in participation rates. (1, pg. 11) To make Section 8 a protected class in Iowa City may be considered discriminatory against students and "all other races" - at least at this time. 5. Constitutional issues are not settled; there is no agreement about Section 8 being a lawful source of income The 2010 State of Iowa civil rights ordinance does not include lawful source of income as a rationale for protective class status. The Iowa City Fair Housing Law does already include public source of income as a protected class, however Section 8 is not included. Section 8 has been held to not represent a source of income to the individual because it has no specific value and is a source of income to the landlord to whom it is directly paid. It is not reportable as income. This issue is far from settled nationally. By 2014 there were 12 states, Washington D.C., and about 25 municipalities that included source of income as specifically protected but not all include housing vouchers. This list includes Iowa City. Wisconsin and California protect source of income but exclude housing vouchers. Wisconsin courts ruled that it would be wrong to allow a state to make a voluntary federal program mandatory without the Congress clearly stating that that was its intent. A California appellate court upheld an owner's right to not participate in the Section 8 program finding that neither the tenant's voucher, nor the housing payments made under the program constitute "income" of the tenant. In debates about whether states and cities can make laws more restrictive than federal law, the Supremacy Clause of the U.S. Constitution has been cited as taking precedence. In looking at the beginning of Section 8_ it is seen that Congress viewed Section 8 as a voluntary federal program in which landlords would function as usual in the private marketplace. Section 8 was enacted by Congress in 1974 with the goals of increasing the availability of affordable housing and maintaining landlord autonomy in the selection of tenants and management decisions. There is no direct requirement in the federal law or in HUD regulations that mandates landlord participation. In 1987 the Section 8 program was felt by some to not be working well and two new regulations were added. One regulation known as "take one, take all" stipulated that if a landlord took one Section 8 tenant they must not refuse others. The second regulation was known as "the endless lease' and denied landlords the possibility of ending a Section 8 lease for management reasons. Both of these regulations were repealed by Congress in 1996 because they made the situation worse for Section 8 tenants trying to get a rental unit. • Is Section 8 a source of income to a tenant? • Should local government enact legislation that conflicts with federal law? • Is Section 8 helping to increase the availability of affordable housing or is it a flawed federal program? (The work of Howard Husock, expert on housing and urban policy, could be considered including his book America's Trillion Dollar Housiniz Mistake: The Failure of American Housing Policy.) 6. The Housing Authority is in a larger area than Iowa City Iowa City's population of about 68,000 is a fraction of the urban area of 103,000 and Johnson County at 109,000. Similarly Iowa City accounts for about 68% of voucher use. (1, pg. 6) Many area residents find housing is less expensive in Coralville, North Liberty, Tiffin, and the smaller towns outside of Iowa City. Use of vouchers in all surrounding areas should be encouraged as should the building of affordable housing in those areas. Some landlords own property in Iowa City and another municipality and could end up with different rules for different buildings. 7. Penalizing landlords Courts have held that landlords may be able to prove a business necessity for not accepting Section 8 by showing that administrative costs of participating are too high. There may be some reluctance on the part of landlords who would fear damages beyond the security damage deposit and the lack of time or resources to pursue judgments. Indeed in the Iowa City Public Housing program, costs every year to maintain and repair units can be $3200- $3700 per unit per year including units that are not turning over. (1, pg. 7) This would represent about one third of rents collected. Private landlords may also be paying one fourth to one third of rents as property tax and would not make money with those kinds of maintenance costs. It is not unusual for landlords to raise rates yearly as needed to cover costs and tenants choose to renew a lease or not as desired. It could be possible that Fair Market Rent could be exceeded disqualifying a Section 8 tenant from renewing. We note that Fair Market Rent decreased between 2014 and 2015. All 1 bedroom, 2 bedroom etc. units are not equal in size, age, amenities, finishes, or locations. (This is similar to different brands of hotels.) Fair Market Rent cannot adjust for these differences. Older, less fancy units will always be closer to meeting Fair Market Rent. Mandating Section 8 participation will not lower the cost of doing business. Note that since Fair Market Rate is an average, some landlords who accept Section 8 may be getting paid more than a unit is worth. • Doctors are not mandated to accept Medicare or Medicaid patients. • Should landlords be mandated to participate in a voluntary federal program? If a Housing Choice Voucher participant's employment is terminated they have the option to seek new employment to regain the lost income but if a Housing Choice Voucher participant is terminated from the Housing Choice Voucher program they don't have that option. There is a waiting period before they can reapply to participate in the program again. In many cases when the tenant's voucher is terminated they are unable to, or choose not to, pay rent. This unpaid rent is not covered by the Housing Choice Voucher program. Despite what some people believe, the payment of rent from the Housing Choice Voucher program is not guaranteed. No current protected class requires a separate contract. The Housing Choice Voucher program requires landlords to agree to and sign a separate Housing Assistance Payments Contract (HAP Contract). Landlords who currently participate in the program sign this contract because they choose too. They know some of the terms in the HAP Contract may alter the original lease agreement signed by the landlord and tenant. If the Housing Choice Voucher program is deemed a protected source of income, the requirement to sign the HAP Contract should be eliminated. 8. Overview of problem The concern about considering Section 8 as a protected class was first raised in a report attempting to analyze impediments to fair housing in Iowa City. (The city strongly objected to this report because it seemed to focus instead on impediments to affordable housing, which was seen as a different topic.) Fair Housing complaints are handled by the Human Rights Commission. Last year there were 52 complaints and 4 were related to housing. It is not known how many (if any) of the 4 had to do with Section 8 voucher use. In City Steps 2016-2020 we read in several places "It should be noted that non-white groups have very small sample sizes and are therefore more prone to error. For each cost burden level, white households represent more than 82-88% of the jurisdiction as a whole, significantly influencing the overall trend". (4, pg. 39, 43, 45) With very small sample sizes, policy should be made cautiously while noting trends. There are large numbers of the Iowa City population who are cost burdened in housing and are low income. Looking at a map of Iowa City of LMI (low and moderate income) concentrations, it appears that half of the acreage of town is included in that designation. (4, pg. 87) Indeed, older and less expensive housing exists in those areas. The rest of the town is already developed, leaving only the fringes and surrounding communities as possible places for more affordable housing. Making Section 8 a protected class does not address the problems of increasing affordable housing or achieving public transportation to less expensive areas. Making Section 8 a protected class would infringe on landlord rights, may have unintended consequences, and could even be illegal. Iowa City may have many issues to work on but Section 8 utilization of vouchers is not one of them. References: 1. Housing Authority Annual Report 2015, April 7, 2015 http://www.icgo v.orgisite/CM Sv2/fi le/housing/Annual ReportFYI5scann inQ.pdf 2. Iowa City Housing Authority 5-Year Plan 2015-2019, April 2015 http://www.ic og v org/site/CMSv2/file/housinWIA022FY2015-2020vl.pdf 3. Update to the 2007 Affordable Housing Market Analysis for the Iowa City Urbanized Area January 2015 http://myoic.oriz/docs/file/adm inistration/FINALAffordableHousingUpdate-02022015.pdf 4. City Steps 2016-2020 May 15, 2015 http•//www is og v org/site/CMSv2/file/planning,/commDev/citySteps/CitySteps2Ol6-20205 15 14 pdf 5. Iowa City Consolidated Annual Performance and Evaluation Report for FY14, September 2014 htlp:Hw ww.ic og v org/site/CMSv2/file/planninWcommDev/FYI4CAPERFINAL.pdf 6. http: //www.huduser.org/portal/publications/pubasst/sec 8s uccess.html 7. http://www.fhco.ore 8. http://mdrealtor.org✓HousinjzPrograins/Fairflousiniz.asi)x x CITY OF IOWA CITY 410 East Washington Street Iowa City, Iowa 52240-1826 (319)356-5000 (319)356-5009 FAX www.icgov.org LATE HANDOUTS: Information submitted between distribution of packet on Thursday and close of business on Friday. Regular Agenda: ITEM 8 TCDD FUNDRAISING — See additional correspondence ITEM 9 WASHINGTON STREET RECONSTRUCTION MARKETING EXPENSES — See additional correspondence_. -.------ ITEM 10 HOUSING CHOICE VOUCHER— See additional correspondence Info Packet of 1/28: Memorandum from City Manager: CIT (Crisis Intervention Team) Training in San Antonio, Texas Q Marian Karr From: Tom Markus Sent: Thursday, January 28, 2016 3:36 PM To: Marian Karr Subject: FW: GICAA - Housing Choice Voucher Attachments: GICAA letter to Mr. Markus - January 28, 2016.pdf For the agenda item. -----Original Message ----- From: cammd5@mchsi.com [mailto:cammd5@mchsi.comj Sent: Thursday, January 28, 2016 3:32 PM To: Tom Markus Cc: apartmentassoc@gmail.com Subject: GICAA - Housing Choice Voucher Mr. Markus, Please find attached correspondence from the Greater Iowa City Apartment Association concerning the recommendation to the City Council to include Housing Choice Voucher (Section 8) in the definition of Public Assistance Source of Income. This correspondence is concerning the January 13, 2016 memorandum from Stefani Bowers, Human Rights Coordinator/Equity Director and Steve Rackis, Housing Authority Administrator, sent to Assistant City Manager, Geoff Fruin. Please include this in the City Council packet along with previous correspondence from The Greater Iowa City Apartment Association dated July 21, 2015 and January 13, 2016. Sincerely, Chris Villhauer President Greater Iowa City Apartment Association apartmentassoc@email.com www.gicaa.ore 2015 - 2016 Board: President — Chris Villhauer Vice -President — Tony Vespa Secretary — Michelle Lamkins Treasurer — Mark Ruggeberg David Kacena Jim Houghton Blaine Thomas Celeste Holloway Greater Iowa City Area Apartment Association P.O.Box 1765 Iowa City, IA 52244 www.gicaa.org January 28, 2015 City of Iowa City Tom Markus, City Manager 410 E. Washington Street Iowa City, IA 52240 Dear Mr. Markus, The Greater Iowa City Apartment Association is a local non-profit organization whose membership includes owners of rental property, managers of rental units, or those associated with either. This correspondence is concerning the January 13, 2016 memorandum from Stefani Bowers, Human Rights Coordinator/Equity Director and Steve Rackis, Housing Authority Administrator, sent to Assistant City Manager, Geoff Fruin. The respondents to the survey cited represent less than 17% of the population participating in the Housing Choice Voucher program. Iowa City is currently over 100% utilization of their vouchers. Other cities have felt the need to propose mandating the Housing Choice Voucher program due to low utilization of vouchers. City Staffs concern of whether the inclusion would adversely affect individuals who have lower incomes but are not participating in the program, or create any unforeseen consequences to affordable housing in Iowa City is a valid concern. I encourage you to please review the information we submitted on July 21, 2015 and January 13, 2016. We want to reach out again and let you know The Greater Iowa City Apartment Association would like to work with the Iowa City Housing Authority, the Human Rights Commission, and any other group or commission that you feel would be beneficial in working toward the housing goals of the City of Iowa City. Sincerely, 4- �. �4a4 Chris Villhauer President Greater Iowa City Apartment Association anartmentassocna.¢mail.com www. icg aa.org Better Landlording Through Education IU Marian Karr From: Tom Markus Sent: Thursday, January 28, 2016 4:56 PM To: Marian Karr Subject: FW: Housing Choice Voucher Update From: Johnson County Affordable Homes Coalition [mailto:jcaffordablehomes=gmail.com@mail68.atl91.mcsv.net] On Behalf Of Johnson County Affordable Homes Coalition Sent: Thursday, January 28, 2016 3:33 PM To: Tom Markus Subject: Housing Choice Voucher Update Happy Thursday! Important News Alert! View this email in vour browser All of our neighbors need an affordable home. Housing Choice Voucher Update Hi Tom! Please attend and consider speaking at an upcoming City Council meeting in Iowa City on February 2nd at 7:00 pm. A vote will be held on whether or not to include the Housing Choice Voucher (Section 8) in the definition of Public Assistance Source of Income under the City's fair housing laws. Essentially, including the voucher in the definition would make it unlawful to refuse to rent or lease a rental housing unit to a person solely on their use of a HCV or rent subsidy. Opponents of the change will be numerous and vocal - please try to come to the Council meeting! More details, including correspondence between concerned parties and City Council, are available here. You will find that the information starts on page 89! This is a civil rights issue, and we hope that you will come out to voice your support for this issue! P.S. Click on the links below to like our Facebook or to stay up to date with our website! 0 C Copyright © 2016 Johnson County Affordable Homes Coalition, All rights reserved. You are receiving this email because you signed up at an event or meeting. Our mailing address is: Johnson County Affordable Homes Coalition 322 East Second Street Iowa City, IA 52240 Add us to your address book Want to change how you receive these emails? You can gpdate your preferences or unsubscribe from this list T f� "e . /6 Marian Karr From: Harry Olmstead <Harryo3@aol.com> Sent: Tuesday, February 02, 2016 2:43 PM To: Marian Karr Cc: Kristopher Ackerson; Tracey Achenbach; Stefanie Bowers; Steven Rackis; Tom Markus; Geoff Fruin; Simon Andrew Subject: Marion: Please distribute to City Council members. Mayor Throgmorton and distinguished members of the Iowa City Council: I first want to thank you for increasing the line item in the city budget from $50,000 a year to $100,000 a year for curve cut maintenance, repair, and replacement knowing that Iowa City must come into compliance with the Americans with Disabilities Act. Also, I support making Housing Choice Vouchers and other rental subsidies in Iowa City a protective class. Having served on the Human Rights Commission I'm aware of how important it is for the City to serve and protect it's residentsand now serving on the Housing and Community Development Commission I am even more aware of how government can and should respond to the needs of it's residents I realize that there is opposition but this shouldn't even be an issue here tonight because we must make certain that those who are the most vulnerable in our community are protected to insure they have clean, safe, and affordable housing. I hope you agree and will support this issue. Respectively, Harry Olmstead 1951 Hannah Jo Ct Iowa City, Iowa 52240 319-338-2931