[Federal Register Volume 72, Number 40 (Thursday, March 1, 2007)]
[Notices]
[Pages 9348-9350]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-3625]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5128-N-01]


Regulatory Waivers for Public Housing Programs To Assist With 
Transition to Asset Management

AGENCY: Office of the Assistant Secretary for Public and Indian 
Housing, HUD.

ACTION: Notice.

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SUMMARY: This notice advises the public of a process for seeking 
expedited waivers of HUD program regulations to assist public housing 
agencies (PHAs) as they convert to asset management. This notice, which 
concerns regulations governing HUD's Office of Public and Indian 
Housing (PIH), does not apply to: PHAs with less than 250 units that do 
not elect to convert to asset management, Indian and Tribally 
Designated Housing Entities (TDHEs), local tribal governments, or PHAs 
that administer only the Section 8 Housing Choice Voucher program 
(``Section 8-only PHAs''). The expedited regulatory waiver process 
applies only to waivers of PIH program regulations applicable to PHAs.

FOR FURTHER INFORMATION CONTACT: Gregory A. Byrne, Director, Financial 
Management Division, Real Estate Assessment Center, Office of Public 
Housing Programs, Department of Housing and Urban Development, 550 12th 
Street, SW., Room 2202, Washington, DC 20410-5000; telephone number 
(202) 475-8632. Persons with hearing or speech impairments may

[[Page 9349]]

access this number via TTY by calling the Federal Information Relay 
Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    On September 19, 2005 (70 FR 54984), HUD published a final rule in 
the Federal Register amending the regulations of the Public Housing 
Operating Fund Program at 24 CFR part 990. The final rule provides a 
new formula for distributing operating subsidy to PHAs. The final rule 
also requires PHAs with 250 or more public housing units to convert to 
asset management; PHAs with less than 250 units may elect, but are not 
required, to convert. While 24 CFR part 990, as revised by the final 
rule, directs the conversion to asset management, it does not address 
all aspects of the organizational and business requirements related to 
converting public housing to a project-based model.
    PHAs and their representatives have expressed concern that the 
transition to asset management necessitates extensive PHA 
organizational changes, which may require the waiver of certain HUD 
regulatory requirements. Waivers of HUD regulations are handled on a 
case-by-case basis. Under section 7(q) of the Department of Housing and 
Urban Development Act (42 U.S.C. 3535(q)), a regulated party that seeks 
a waiver of a HUD regulation must submit a written waiver request to 
HUD that specifies the need for the waiver. In accordance with 24 CFR 
5.110, upon determination of good cause, HUD may, subject to statutory 
limitations, waive provisions of title 24 of the Code of Federal 
Regulations. HUD's authority to grant waivers is limited to non-
statutory requirements. Accordingly, HUD regulations that repeat 
statutory requirements may not be waived.
    The Secretary has delegated regulatory waiver authority for PIH 
programs to the Assistant Secretary for Public and Indian Housing (see 
the delegation of authority published on September 16, 2003 (68 FR 
54240)). The Assistant Secretary will respond to all waiver requests in 
writing. Each quarter, HUD will publish in the Federal Register a 
summary of all waivers granted during the preceding period and the name 
of each applicant PHA.

II. Expedited Regulatory Waiver Process

    This notice addresses concerns raised by PHAs by announcing an 
expedited process for HUD to respond to PHA requests for waivers of 
regulations to assist in the conversion to asset management. The waiver 
process announced in this notice does not suspend the normal waiver-
granting process.

A. Eligible PHAs

    PHAs converting to asset management in accordance with 24 CFR part 
990 (including PHAs with less than 250 units electing to convert to 
asset management) are eligible to request regulatory waivers using the 
expedited process announced in this notice. This notice does not apply 
to: PHAs with less than 250 units that do not elect to convert, TDHEs, 
local tribal governments, or PHAs that administer only the Section 8 
Housing Choice Voucher program (``Section 8-only PHAs''). PHAs, TDHEs, 
and local tribal governments ineligible to request regulatory waivers 
using the expedited procedures of this notice may submit waiver 
requests for HUD's consideration on a case-by-case basis using 
customary waiver procedures.

B. Eligible Regulatory Requirements

    Under the expedited regulatory waiver procedures announced in this 
notice, HUD will consider requests for waivers of non-statutory PIH 
program regulations applicable to PHAs (as noted above, statutory 
requirements may not be waived). The expedited process is particularly 
designed to address waiver requests for non-statutory program 
requirements that are uniquely different from requirements applicable 
to operators of other HUD-subsidized housing programs.
    For example, while many PHAs have indicated the need to streamline 
the rules regarding the calculation of rent, such rules are statutory 
(and essentially equivalent to those that govern other HUD-subsidized 
housing programs, such as Section 8 project-based housing). 
Accordingly, HUD may not consider waiver requests for such statutory 
provisions. On the other hand, the current requirement that PHAs 
conduct annual inspections in accordance with Uniform Physical 
Condition Standards (UPCS) is not statutory (nor required of operators 
of HUD subsidized housing) and therefore is eligible for waiver under 
this notice.

C. Waiver Request Process

    Eligible PHAs that wish to obtain a regulatory waiver under the 
expedited process described in this notice must submit their waiver 
request to the following email address: <a href="/cdn-cgi/l/email-protection#9dcdd5c2dceeeef8e9c2d0fcf3fcfaf8f0f8f3e9c2d8e5edf8f9f4e9f8f9c2cafcf4ebf8efc2cdeff2fef8eeeeddf5e8f9b3faf2eb"><span class="__cf_email__" data-cfemail="c4948c9b85b7b7a1b09b89a5aaa5a3a1a9a1aab09b81bcb4a1a0adb0a1a09b93a5adb2a1b69b94b6aba7a1b7b784acb1a0eaa3abb2">[email protected]</span></a>. The e-mail request must contain the 
following:
    <bullet> A list of the HUD regulations from which the PHA 
specifically requests relief;
    <bullet> An Adobe Acrobat PDF copy of the Board Resolution 
approving the request for the waiver(s);
    <bullet> A statement of the reason (need) and good cause for the 
waiver(s), which specifically addresses how the granting of the 
requested regulatory waiver(s) would facilitate the PHA's conversion to 
asset management; and
    <bullet> A statement that the PHA will make any necessary changes 
in its policies and procedures required to implement the waiver(s), if 
approved.

Please note that, while HUD is not requiring PHAs to modify their 
policies and procedures prior to applying for these waivers, PHAs are 
to certify that they will modify them accordingly prior to 
implementation, if HUD approves the waiver request. To the extent that 
any such changes require resident and/or public notice under 24 CFR 
part 966 (governing public housing lease and grievance procedures), the 
PHA certifies to meeting those procedural requirements prior to 
implementation. Under part 966, modifications to rules and regulations 
that are required to be incorporated by reference in leases are subject 
to comment by affected tenants. Specifically, Sec.  966.5 provides that 
PHAs ``shall give at least 30-day written notice to each affected 
tenant setting forth the proposed modification, the reasons therefor, 
and providing the tenant an opportunity to present written comments 
which shall be taken into consideration by the PHA prior to the 
proposed modification becoming effective.''
    Under the expedited waiver process contained in this notice, HUD 
will review and either approve or disapprove the requests within 30 
days of receipt of a complete submission package. HUD reserves the 
right to withhold or reject a waiver request due to a PHA's operating 
performance or due to other matters.

III. Examples of Possible Regulatory Requirements to be Considered for 
Waivers

    The following are examples of non-statutory PIH regulatory 
requirements that have been identified by PHAs as possibly impacting 
their conversion to asset management. In addition, the following 
regulations are not required of operators of HUD's subsidized housing 
programs. The following list of regulatory requirements is not 
exhaustive, but is designed to assist PHAs in identifying the types of 
PIH program requirements that HUD may

[[Page 9350]]

consider waiver requests for under this notice.

A. 24 CFR 902.60(d) (Management Operations and Resident Service and 
Satisfaction Information)

    HUD plans to revise the Public Housing Assessment System (PHAS) 
along the lines of an asset management model, which will result in 
different scoring and tracking mechanisms than HUD currently utilizes. 
While the PHAS is mostly rooted in statute (section 6(j) of the Housing 
Act of 1937 (42 U.S.C. 1437d(j)), there is no statutory requirement 
that PHAs submit to annual evaluations. Hence, for PHAs that request 
and show good cause, HUD will waive the requirement to submit a 
management operations certification, and will also waive the resident 
satisfaction survey, for a PHA's final year prior to required 
conversion to project-based budgeting and accounting (i.e., PHAs with 
fiscal years ending June 30, 2007, September 30, 2007, December 31, 
2007, and March 31, 2008). HUD will not waive the independent physical 
inspection (conducted on all PHAs that score less than 80 on the 
previous year's inspection) or the requirement to submit a Financial 
Data Schedule (FDS). For purposes of scoring, HUD may, on a case-by-
case basis, consider several alternatives that provide a PHAS score 
based on all four indicators, including: (1) Carrying over the PHA's 
entire PHAS score from the previous year, or (2) carrying over only the 
management assessment and resident satisfaction scores and tabulating 
new physical condition and financial condition scores.

B. 24 CFR 902.43 (a)(4) (Annual Inspections)

    Section 6(f) of the United States Housing Act of 1937 requires PHA 
annual inspections. Waivers will be considered relating to the conduct 
of PHA annual inspections in accordance with Uniform Physical Condition 
Standards (UPCS). A PHA would still be required to conduct annual 
inspections; however, in accordance with section 6(f), it could perform 
those inspections in accordance with laws, standards, or state or local 
codes that the Secretary, upon granting the waiver, determines meet or 
exceed the UPCS. In requesting a waiver of the UPCS inspection 
requirement, the PHA must indicate the alternative inspection standards 
it intends to use and why such alternative standards meet or exceed the 
UPCS. PHAs are still subject to Real Estate Assessment Center physical 
inspections using UPCS at the frequency contained in 24 CFR part 902.

C. 24 CFR Part 964 (Tenant Participation)

    Part 964 establishes various requirements for PHAs pertaining to 
tenant (resident) participation. HUD will consider requests for waivers 
relating to such issues as: the role of jurisdiction-wide resident 
councils (as these are not mandated by law), PHA roles in resident 
participation activities, requirements concerning resident council 
membership, election procedures, and uniform bylaws.

    Dated: February 22, 2007.
Paula O. Blunt,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. E7-3625 Filed 2-28-07; 8:45 am]
BILLING CODE 4210-67-P


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