**Appendix M:**

**Detailed Instructions for Completing the Rental Assistance Assessment
Plan**

# Project-based or Tenant-based Assistance

A.  **General.** The Restructuring Plan must identify whether a project
    will receive tenant- or project-based Section 8 assistance after
    restructuring. This decision should be made as early as possible in
    the process of developing the Restructuring Plan. For some projects,
    project-based assistance must be renewed; for others, the PAE must
    develop a Rental Assistance Assessment Plan (RAAP) which briefly
    explains the PAE's conclusion about the type of assistance.

B.  **Reporting Requirements.** The PAE must report semi-annually to
    OMHAR on those projects that either:

    1.  Renew project-based assistance despite tenant support for
        tenant-based assistance during the tenant consultation process,
        or

    2.  Renew with tenant-based assistance.

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A.  **Mandatory Project-Based Assistance**.** **There are three
    situations in which renewal of project-based Section 8 assistance is
    mandatory:

    1.  [Projects in tight rental markets]{.underline}. The market-wide
        vacancy rate is 6 percent or below.

        a.  If the project is in a city that is included in the Census
            Bureau statistics on rental vacancy rates for the 75 largest
            metropolitan areas, then the annual rate published on the
            Internet by the Census Bureau will be used to determine if
            the project is located in a tight rental market.

        b.  If the city is not included in one of the 75 largest
            metropolitan areas, then the Census Bureau statistics on
            rental vacancy rates for the state in which the project is
            located will be used to make this determination.

        c.  The Census Bureau annual statistics are published in
            February for the preceding year. The 1998 annual statistics
            are included in Appendices T and U. The PAE will use the
            most recent annual information available when making the
            determination of the rental vacancy rate. Quarterly reports
            published by the Census Bureau will not be considered. To
            find the needed statistics on the Internet, go to:

            i.  web address
                *[http://www.census.gov/hhes/www/hvs.html]{.underline}*

            ii. choose "Annual Statistics 1999," or other years as they
                become available, and

            iii. select Table 5 for the Rental Vacancy Rates of the 75
                 largest metropolitan areas direct link
                 *[http://www.census.gov/hhes/www/housing/hvs/annual99/ann99t5.html]{.underline}*
                 or Table 3 for the Rental Vacancy Rates by State direct
                 link
                 *[http://www.census.gov/hhes/www/housing/hvs/annual99/ann99t3.html]{.underline}*.

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    1.  [Projects predominantly occupied by elderly or disabled
        families]{.underline}. At least 50% of units are occupied by the
        elderly or by disabled families.

        a.  "Elderly" is defined as a family whose head, spouse, or sole
            member is a person who is at least 62 years of age; or two
            or more persons who are at least 62 years of age living
            together; or one or more persons who are at least 62 years
            of age living with one or more live-in aides.

        b.  A household is considered a "disabled family" in accordance
            with the Section 8 program's definitions.

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    1.  [Cooperative housing projects]{.underline}. * *The project is
        owned by a nonprofit cooperative ownership housing corporation
        or nonprofit cooperative housing trust.

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A.  **Rental Assistance Assessment Plan**. The PAE must develop a Rental
    Assistance Assessment Plan (RAAP) for projects that do not qualify
    for mandatory renewal of project-based Section 8 assistance. The PAE
    determines whether to renew project-based assistance, provide
    residents with tenant-based assistance, or renew a portion of the
    units with project-based assistance and convert the remaining units
    to tenant-based vouchers. The PAE makes this decision only after
    consulting with the affected residents, the project owner and local
    government officials. The PAE may allow up to five years for
    conversion to tenant-based assistance, if a transition period is
    needed for the project's financial viability. The RAAP must assess
    how converting to tenant-based assistance or extending project-based
    assistance will impact each of the eight factors listed below. A
    **brief** narrative description of the comments received and the
    PAE's analysis must be included in the Restructuring Plan. The
    importance of each factor should be determined in the context of
    each project.

    1.  [Tenants\' ability to find adequate, available, decent,
        comparable, and affordable housing in the local
        market]{.underline}. Even if the market-wide vacancy rate is
        6.0% or higher, the vacancy rate in the affordable housing
        sub-market may be below 6.0%.

    2.  [The types of tenants residing in the project]{.underline}. A
        project may not meet the definition of elderly and disabled
        housing but because it has a large minority of elderly and
        disabled residents it may be advisable to maintain its
        project-based status. In addition, the property may serve large
        families or families with children in an area where there may be
        a shortage of that particular type of rental unit.

    3.  [Local housing needs identified in the Community Development
        Block Grant Consolidated Plan and local market vacancy
        trends]{.underline}. Any relevant excerpts from the Consolidated
        Plan should be attached to the RAAP. It will indicate whether
        the community is experiencing a shortage of affordable housing
        alternatives.

    4.  [The cost of providing assistance]{.underline}. Compare the
        Section 8 cost per unit assisted using the tenant-based payment
        standard to the Section 8 cost per unit assisted using
        project-based Section 8.

    5.  [The project\'s long-term financial stability]{.underline}.
        Consider what impact the future loss of rental assistance caused
        by existing residents moving from the property will have on the
        owner's ability to generate enough cash flow to adequately
        maintain the property, fund any required operating deficit
        account, and support the property's overall debt obligation.

    6.  [Residents\' ability to make reasonable choices about their
        individual living situations]{.underline}. As a general
        guideline, tenant-based Section 8 assistance should provide
        project residents with adequate affordable housing choices if at
        least 30% of the standard quality rental units in the relevant
        local housing submarket have rents less than the applicable FMR.
        The FMR is set so that 40% of the standard quality units cost
        less for rent and utilities than the local FMR for the
        applicable metropolitan area or non-metropolitan county. This
        guideline adds a neighborhood or submarket dimension to
        assessing the ability of residents to make housing choices using
        tenant-based assistance.

    7.  [Neighborhood quality]{.underline}. Consider both the impact of
        the stability of the project's tenancy with project-based
        assistance, and the tenants' desire and ability to pursue other
        housing options. Consider the impact of the housing stock in
        areas with low poverty rates (e.g., less than 20%) and where the
        project promotes housing opportunities for minorities.

    8.  [The project's ability to compete in the
        marketplace]{.underline}. Consider how the inability to provide
        rental assistance to tenants might impact the owner's ability to
        market the property to future replacement tenants.