Opinion ID: 1946648
Heading Depth: 1
Heading Rank: 2

Heading: The Federal HCVP

Text: In 1937, Congress inaugurated a major Federal effort to provide decent and affordable housing for low-income people by enacting the United States Housing Act (P.L. 75-412). The thrust of that Depression-era statute, aimed not only at the development of additional housing stock but also job creation and slum clearance, was to provide Federal funding to enable State or local public housing agencies (PHAs) to construct and manage public housing projects. For about thirty years, public housing facilities constructed with Federal funds and owned and operated by PHAs were the dominant source of governmental housing assistance for low-income families. Not everyone was enamored with that approach, of concentrating on the development of often large publicly-owned structures to provide low-cost housing. From the beginning, the alternative of using public funds to subsidize the rental of apartments in private structures had been urged, i.e., to use and expand the stock of privately owned housing rather than depend upon publicly owned and operated facilities. Congress moved in that direction in 1965 when, as part of the Housing and Urban Development Act of 1965 (P.L. 89-117), it authorized a new program under which PHAs, through contracts with private owners, could lease apartment units in existing private apartment buildings and then sublease those units to current public housing tenants. Although other mechanisms were permitted, it was anticipated that the PHA would pay the negotiated market rent to the landlord, the low-income tenant would pay a minimum rent based on an income formula to the PHA, and the Government would make up the difference. Known as the Section 23 program because it took life from a new § 23 added to the 1937 United States Housing Act, this was an attempt to permit greater utilization of the private housing stock and give PHAs more flexibility in providing housing for different kinds of families. See House Report No. 365 to accompany H.R. 7984, May 21, 1965, 1965 U.S. Code Cong. & Admin.News. 2614, 2625. This was obviously a voluntary program. Congress made clear that the housing must freely be made available, since eminent domain will not be used. Id. In 1970, Congress expanded the § 23 program by allowing PHAs to lease units in newly constructed buildings, not just already-existing ones. See Housing and Urban Development Act of 1970 (P.L. 91-609). A voucher-type program came into full play, as the new centerpiece of Federal low-income housing policy, with the Housing and Community Development Act of 1974 (P.L. 93-383). Although that Act is often viewed as the progenitor of the Section 8 voucher program, it was more in the nature of, and was referred to as, a rental certificate program. [1] In contrast to the lease and sublease approach under the § 23 program, the new program called for a direct lease, in compliance with requirements of the Act, between the landlord and the low-income family. The tenant would pay directly to the landlord an amount of rent equal to 25% of his/her adjusted income. The PHA would enter into a separate contract with the landlord to pay the difference between that amount and the agreed rent, in the form of housing assistance payments. As noted in the HCVP Guidebook published by HUD, that program grew rapidly and became popular with Congress, local governments, owners, and low income families because it provided assistance quickly, allowed families both a better choice of housing and anonymity, dispersed low-income families throughout the community, did not create community objection to public projects, and was relatively inexpensive per family assisted. See HUD, Housing Choice Voucher Program Guidebook, 1-3. Congress tinkered with the certificate/voucher program frequently during the 1980s and 1990s in an attempt to provide greater flexibility in it, and, until 1998, HUD had at least two alternative programs operating at the same time  the certificate program emanating from the 1974 Act and the voucher program emanating from the Housing and Community Development Act of 1987. The difference between the two programs was largely that there was no fair market rent limitation in the voucher program, nor was there a cap on the percentage of their own income that tenants could pay toward rent. In 1994 and 1995, HUD attempted by regulation to combine aspects of the two programs that did not have different statutory requirements. In 1998, through the Quality Housing and Work Responsibility Act of 1998 (P.L. 105-276), Congress merged the certificate and voucher programs, and eventually, the certificate program was phased out. What survives is the HCVP that is now before us. The statutory basis for the program, found in 42 U.S.C. § 1437f., is supplemented by HUD regulations found in 24 CFR Part 982. HCVP remains part of a multifaceted Federal housing program authorized under 42 U.S.C. §§ 1437 through 1440. In creating the various Federal housing assistance programs, Congress declared, in pertinent part, that it was the policy of the United States to promote the general welfare by using Federal funds and credit to assist the States and their political subdivisions to address the shortage of housing affordable to low-income families. See § 1437(a)(1). Congress recognized that the Federal Government could not provide housing for all, or even most, American citizens through its direct action alone and that the goal of providing decent and affordable housing required the efforts of Federal, State, and local governments, and by the independent and collective actions of private citizens, organizations, and the private sector. Id. at § 1437(a)(4). The essence of HCVP is that HUD provides the funding to local PHAs, which administer the program in accordance with an Administrative Plan that the PHA must adopt and which must conform to HUD regulations. As set forth in the HUD regulations and the testimony in this case of William Murphy, on behalf of the Montgomery County Housing Opportunities Commission  the county PHA  HCVP works this way. HUD establishes fair market rents for each market area in the U.S. The local PHAs then must adopt a schedule that establishes voucher payment standard amounts for each fair market rent area within its jurisdiction. Subject to discretionary waiver by HUD, the payment standard must be between 90% and 110% of the relevant fair market rent. A family may lease an apartment for more or less than the payment standard, but that standard governs the amount of PHA housing assistance. The base amount of rent that must be paid by the family is the greater of 30% of its adjusted income or 10% of gross income, but, if the total rent exceeds the PHA payment standard, the family must pay that difference as well. See 24 CFR § 982.503, 505, 515; HUD, Housing Choice Voucher Program Guidebook, 1-6. In conformance with criteria set forth in HUD regulations, the PHA, pursuant to its Administrative Plan, selects and qualifies prospective low-income tenants. In Montgomery County, the PHA was assisting fewer than 5,400 families and had a waiting list of about 10,000 eligible families. When a family is actually selected from the waiting list, they complete an application to assure eligibility based on income and lack of criminal background. [2] If the family is approved, the PHA provides information about the program, including information on Federal, State, and local equal opportunity laws, how to select a unit, and a list of landlords or other parties known to the PHA who may be willing to lease a unit to the family, or help the family find a unit. 24 CFR § 982.301(b). The family receives a HUD voucher from the PHA, which is good for at least 60 days and may be renewed, and a form that the family uses to request PHA approval of an assisted tenancy. The family then attempts to find an apartment and negotiate the rent and other terms of a lease. There is no direct requirement in the Federal law or HUD regulations that a landlord participate in HCVP or accept Section 8 vouchers; nor, subject to certain Federal, State, or local anti-discrimination provisions, must a participating landlord accept a particular tenant. [3] Indeed, under HUD regulations, the landlord is responsible for screening prospective Section 8 tenants and may consider a family's background and tenancy history with respect to payment of rent and utility bills, caring for the apartment, respecting the rights of other residents, drug-related or other criminal activity, and compliance with other essential conditions of tenancy. See 24 CFR § 982.307(a). If the landlord and tenant reach agreement, the tenant presents to the PHA a request for tenancy approval. In order to approve the tenancy, the PHA must determine (1) after an inspection of the apartment, that it meets the housing quality standards established by HUD in 24 CFR § 982.401, (2) that the rent is reasonable, i.e., that it falls within certain HUD-established guidelines set forth in 24 CFR § 982.507, and (3) that the lease conforms to HUD requirements. In that last regard, the lease must be either the standard lease used by the landlord for nonassisted tenancies or a model lease prepared by HUD and must include, in either case, a HUD-prepared addendum that sets forth certain rights of the tenant and landlord. If the tenancy is approved, the PHA enters into a standard housing assistance payment agreement with the landlord under which the PHA will pay the appropriate housing assistance supplement to the landlord.