Aligning Federal Multifamily Rental Policy

In August 2012, the White House Domestic Policy Council’s Rental Policy Working Group (RPWG) met with stakeholders and participants in a day-long event organized to discuss progress and next steps in aligning and coordinating federal multifamily rental policy. The U.S. Departments of Housing and Urban Development (HUD), Treasury, and Agriculture (USDA), participated in the event, whose focus was the recently released interim evaluation report on the initiatives underway by state, local, and private stakeholders to implement administrative changes that could increase intergovernmental coordination and enhance communities’ ability to create and preserve affordable housing. The event continues a conversation begun in July 2010, when leading thinkers and practitioners from across the affordable housing sector were brought together in Washington DC to identify opportunities to better align affordable housing rental programs administered through different federal and state agencies.

The RPWG and stakeholders identified several components essential to rental policy alignment: physical inspections, subsidy layering reviews, financial reporting, appraisals and market studies, capital needs assessment tools, energy efficiency standards, fair housing compliance enforcement, improved data sharing on owner defaults, and income reporting/definitions. A paper recommending a series of opportunities for implementation across these various topics was published at the end of 2011.

During her opening remarks at the August 2012 alignment conference, Acting Assistant Secretary Erika Poethig of HUD’s Office of Policy Development and Research put it simply: “As we increased the number of resources and tools available [for affordable rental housing], it increased the complexity. This initiative is not just about the development of new tools and processes, but about streamlining regulations and mechanisms.” The recent rise in the use of multiple layers of federal funding in affordable rental housing has been the impetus for the Alignment effort. Those responsible for complying with government requirements for funding are often inundated with duplicative requirements and other administrative burdens. Addressing these issues will improve not only efficiency in affordable rental housing, but also support the larger goal of preserving affordable housing.

Two of the alignment efforts in particular – physical inspections and subsidy layering reviews – were the focus of the recent progress outcome evaluation released concurrently with the August conference. Six states (MI, MN, OH, OR, WA, WI) were selected for the physical inspection pilot, and seven states (MI, NV, NC, OH, PA, SC, WI) for the subsidy layering review pilot. Representing both pilot programs, panelists from Ohio, North Carolina, Minnesota and Oregon discussed their experience with the pilot, highlighting both challenges and benefits. Each panelist confirmed the interim evaluation report’s claim that the pilot program is having a measurable beneficial impact. The pilots helped create lines of communication between federal, state, and local government or strengthen existing ones. Further, panelists indicated the pilot was already resulting in cost and time savings, or had that potential. For example Karen Hassan of Minnesota Housing noted that implementing a HOME waiver as part of the subsidy layering review pilot increased opportunities for alignment and saved $40,000 in just one agency. Memoranda of understanding were signed with each of the states for the pilot efforts.

While the pilots garnered significant attention, eight other initiatives are achieving the goals of the broader Alignment effort as well. The panel focused on some examples such as market studies and capital needs assessments, which are expected to improve accessibility by introducing better, standardized training and methodology to those fields. Additionally, the standardization of energy efficiency measures assists conservation efforts by providing a more uniform basis for comparisons across different properties.

In the final panel, which included HUD employees and previously uninvolved local and state housing agency representatives, the discussion focused on the next steps for the pilot programs. The panel was forward-looking and discussed new innovations that would be rolled out as a result of lessons learned in the first pilot. A soon to be released upgrade to HUD’s physical inspection data system will open up this “best-in-class” software to state Housing Finance Agencies who will be able to download the software onto their laptops and tablets and warehouse their inspection data in HUD’s system. Bryan Zises from the Illinois Housing Development Authority and Doug Ryan, Montgomery County Housing Opportunities Commission spoke of the work occurring in their states. Both have been working towards greater cooperation in preparation for the expansion of the pilot program. Illinois has already created a common tenant income certification form to streamline its process. In addition, they have worked toward collecting data using the same platform and have shared calendars amongst agencies to coordinate inspections and other administrative procedures.

The August RPWG meeting both celebrated the success of the Rental Policy Alignment pilot efforts to-date, validating continued implementation and expansion of the two pilots, and endorsed future endeavors to align other federal policies in affordable rental housing.