The Department of Housing and Urban Development (HUD) is seeking to revise its rules to address the thousands of over-income families living in public housing.

While these households may not be breaking any existing rules, they are creating a very difficult situation. Their presence prevents qualified low-income families from accessing needed public housing units.

Read Hud's Notice.

The proposed new rules come after HUD’s Office of Inspector General (OIG) last year identified approximately 25,000 public housing families with incomes slightly, moderately or, in some cases, substantially above the income limits that qualified them for initial admission.

The over-income residents initially qualified for public housing, but their incomes have increased to exceed the limits. Yet, they have remained in public housing.

In one case, a four-person household in a New York City Housing Authority unit was found to have an annual income of $497,911 in November 2013 while the low-income threshold was $67,100. The household had been admitted to the public housing program in November 1988, and it had been over income since at least 2009. Three members of the household earned income. The member with the highest income earned $275,757. In addition, the head of the household owned real estate that produced $790,534 in rental income between 2009 and 2013. As of July 2014, the family paid an income-based ceiling rent of $1,574 monthly for its public housing unit, according to the OIG report.

In a letter to public housing authorities (PHAs) on Sept. 3, 2015, HUD strongly recommended that local PHAs adopt reasonable policies that clearly define “over income,” provide a safety net for fluctuating incomes, and offer protections for hardship cases.

About 1.1 million families currently reside in public housing across the U.S. To qualify for public housing, local PHAs certify applicants’ incomes are sufficiently low for admission. In addition, HUD requires PHAs to conduct annual reviews of their residents’ incomes for purposes of calculating the proper level of subsidy for each household.

However, current law and regulation do not require eviction or termination of residency in circumstances when a household’s income increases significantly and consistently over time, even if that family pays full market rent and receives no subsidy at all. Given the urgent need for affordable rental housing in many communities, HUD is considering ways to possibly limit public housing residency to those households that actually require housing assistance.

In anticipation of a proposed rulemaking, HUD said it is specifically soliciting comment on the following issues:

1. How should HUD define income that “significantly” exceeds the income limit for public housing residency? Should such higher amount be determined by dollar amount, by a percentage, or as a function of the current income limit, and what should the amount be?

2. Should area cost of living and family finances be taken into consideration when determining whether an individual or family no longer needs public housing assistance? Are there limits to the circumstances in which said data should be requested and applied in a determination?

3. What period of time in which an individual or family has had income that significantly exceeds the income limits should be determined as indicative that the individual or family no longer needs public housing assistance?

4. How should local housing market conditions or housing authority wait list data be considered?

5. What period of time should be allowed for an individual or family to find alternative housing?

6. Are there exceptions to eviction or termination of tenancy that HUD should consider beyond those listed in HUD’s regulation?

7. Should HUD allow over-income individuals or families to remain in public housing, while paying unsubsidized or fair market, rent? How would such a provision impact PHA operations and finances?

8. Should HUD require a local appeals process for individuals or families deemed over- income?

9. Where over-income policies have been implemented, what were the results to public housing residents and PHAs? What were the specific positive and negative impacts?

10. What financial impact would over-income policies have on PHA operations, and how can any negative impacts be mitigated?

11. What are the potential costs and benefits to public housing residents and PHAs that could result from the forcible eviction of public housing tenants?

12. What evidence currently exists in favor of or against the adoption of this type of policy?