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March 13, 2006

Regulations Division

Office of General Counsel

U.S. Department of Housing and Urban Development

451 Seventh Street, S.W.

Room 10276

Washington, DC 20410-0500

Re: Docket FR-4551-P-02, HUD-2006-0001

Renewal of Expiring Section 8 Project-Based Assistance Contracts

Dear Counsel:

The National Low Income Housing Coalition (NLIHC) is a membership
organization whose members include nonprofit housing providers, homeless
service providers, fair housing organizations, state and local housing
coalitions, public housing agencies, private developers and property
owners, housing researchers, local and state government agencies,
faith-based organizations, residents of public and assisted housing and
their organizations, and concerned citizens. While our members include
the wide spectrum of housing interests, we do not represent any segment
of the housing industry. Rather, we focus exclusively on what is in the
best interests of people who receive and those who are in need of
federal housing assistance.

These comments are offered as complements to those provided in a letter
sent by the National Housing Law Project and signed by NLIHC and a
number of other national organizations.

## **Requirements for Opt-outs, Contract Expirations, and Contract Terminations (Section 401.602)**

***[Required Notice: Section 602(a)]{.underline}***

**When Notice Is Required, Section 602(a)(1)(ii):**

HUD should not eliminate the requirement to provide tenants a new
12-month notice at the time an owner reverses course and decides not to
undergo Mark to Market restructuring, even though the owner did give a
12-month notice regarding the expiration of a section 8 project-based
contract indicating an initial intent to restructure.

Such an initial notice suggests to tenants that they will be able to
continue to live in their units because the owner wants to renew the
section 8 project-based contract. If after an initial notice of contract
"expiration" and election to restructure, an owner chooses to opt out,
tenant protection provisions of the law \[Sec. 514(d) of MAHRA\] require
a 12-month notification of "termination" of the contract.

Similarly, HUD should not eliminate the requirement to provide tenants a
new 12-month notice at the time an owner's request for Mark to Market
restructuring is rejected, as proposed at Section 602(a)(1)(ii)(B).

Although not part of the proposed rule change, Part 402 regulations
(pertaining to properties ineligible for Mark to Market restructuring)
should also adopt the principle requiring a new notice at the time an
owner decides to terminate a contract after initially giving notice
indicating intent to renew an expiring contract.

**120-day Notice of Intent to Opt Out, Section 602(a)(1)(iii):**

We fully support providing tenants with a 120-day notice reminding them
that a contract is expiring when owners who originally intended to
restructure decide not to or are rejected.

**Content of Notice, Section 602(a)(3):**

To facilitate compliance by owners and monitoring by tenants and
advocates, Section 602(a)(3) should contain in one place the required
contents of a notice as stated in the statute \[Section 8(c)(8)\] and
HUD's *Section 8 Renewal Policy Guide*. As required by statute, (a)(3)
should require notices to state that: contract renewal is an available
option; HUD will provide residents tenant-based rental assistance if the
contract is terminated; and, tenants may choose to remain in their
current unit or move to another unit. Also, as provided in the *Renewal
Guide*, the notice should require a certification that the owner will
accept enhanced vouchers, thereby honoring a tenant's right to remain.
In addition, the notice should be dated and specify the date the
contract expires.

Although not part of the proposed rule change, Part 402 regulations
(pertaining to properties ineligible for Mark to Market restructuring)
should adopt the above notice content suggestions.

**Providing Notice:**

Section 602 should specify the means of providing notice to tenants in
order to ensure effectiveness. *Renewal Guide* provisions should be
codified in the regulations, requiring notice to be: on letterhead and
signed; delivered directly to each unit or mailed to each tenant; and,
translated for limited-English speakers. In addition, notice should be
posted for the 12-month period in one or more places frequented by
tenants such as lobbies and project offices. OTAG grantees and other
known tenant advocate organizations should also receive notices.

**Calculating Time Period of Notice:**

Section 602 should clarify that the time period (of 12 months or 120
days) should not begin until the tenant receives the notice, or until
one week after the first class postmark. This will eliminate the problem
of an owner appearing to be in compliance by backdating notices.

***[Remedies for Noncompliance With Notice Requirements: Section
602(b)]{.underline}***

**Improper Notice:**

In addition to the provisions of Section 602(b) regarding inadequate
notice (not providing any notice or providing notice in an untimely
manner) other defects should be listed such as those discussed above
regarding the content of the notice and the way in which notice is
delivered.

**Remedies for Improper Notice:**

Whenever inadequate notice is provided, HUD should inform the owner and
tenants:

-   Of the notice's specific deficiencies, making it clear that a new
    notice must be delivered before the 12-month or 120-day notice clock
    starts again.

-   That the project-based contract can be extended if necessary because
    the 12-month or 120-day clock has to be restarted due to improper
    notice.

-   That the law prohibits the owner from raising rent or evicting
    tenants until 12 months have passed since the provision of proper
    notice.

Until there is a valid termination of the contract (12 months after
proper notice), HUD should not provide enhanced vouchers to the owner
because this would provide undue financial reward.

Owners who still fail to provide proper notice after being informed of
deficiencies by HUD should be subject to civil monetary penalties under
applicable HUD regulations.

These suggestions regarding improper notice and remedies should also be
adopted in Part 402.

### Need for Regulations Pertaining to Enhanced Vouchers

HUD should issue regulations governing enhanced vouchers in order to
address numerous issues such as: tenants' right to remain and owners'
obligation to accept enhanced vouchers; eligibility of tenants to
receive assistance without re-screening; resolution of family and unit
size mismatches; and, rent, security deposit, and HQS disputes. Of
particular urgency is the need to ensure that enhanced voucher
assistance is provided far enough in advance of the contract termination
date so that tenants who wish to move have adequate time to search for
alternative housing.

NLIHC appreciates the opportunity to comment on the proposed regulatory
changes.

Sincerely,

Sheila Crowley

President