Affordable housing industry leaders discussed some of the latest news coming out of the Department of Housing and Urban Development (HUD) at a panel devoted to the federal agency at AHF Live in November.
With Julian Castro taking over as HUD secretary this past summer, Shel Schreiberg, senior partner at the Pepper Hamilton law firm, said the agency’s two primary targets for the remainder of the Obama administration will be the maturing inventory and making the Federal Housing Administration (FHA) work with the low-income housing tax credit (LIHTC).
“Shaun Donovan was probably the smartest HUD secretary we’ve ever had,” said Schreiberg. “But there are still good people at HUD.”
HUD’s decision to switch the project-based rental assistance program funding cycle from fiscal year to calendar year to result in more predictable funding raised some concerns.
“Where I disagree with HUD is how to handle project-based Sec. 8 renewals,” said Denise Muha, executive director of the National Leased Housing Association. “Rental subsidy is 84 percent of the budget and getting bigger while everything else is getting squeezed.”
Muha said HUD is creating a gap by underfunding the project-based rental assistance in fiscal year 2015 to go to the calendar year cycle.
“They are drawing a line in the sand for fiscal year 2016. You have to fund the full amount in 2016,” Muha said. “Both the Senate and the House acknowledge that it’s not enough. There will be a time when it’s going to come to light that there’s not enough money for one contract here or one contract there. If you don’t fund vouchers, you affect people.”
She urged owners and developers with Sec. 8 projects to make sure their legislators know where those developments are, meet the residents, and hear their stories.
Dan Burke, HUD’s multifamily hub director in Chicago, provided an update on some of the agency’s latest initiatives, including its Multifamily for Tomorrow plan.
“This reorganization is a real rebuilding of the organization from the ground up in the sense that we’re going to a new business model and geographic model,” said Burke. “One of the compelling reasons to recognize FHA’s changes is to make it leaner and more effective moving forward in light of how we have aged in place.”
HUD’s Office of Multifamily Housing is pursuing four initiatives: the underwriter model, the account executive model, workload sharing, and streamlined organizational structures. There also is a new five-region field structure.
Headquarters and the Southwest Region have launched under the new model, with the teams complete and training underway. The Midwest Region transformation has started, and Burke said HUD was actively interviewing in-house employees as well as outside candidates for about 100 new jobs.
The Southeast Region relaunch is slated for spring/summer 2015, Northeast Region relaunch is slated for summer/fall 2015, and the West Region will see changes in 2016.
Other positive news, said Burke, is the FHA Tax Credit Pilot program, which has seen average processing times drop from 76 to 59 days since last year. Dedicated LIHTC teams are expected to be created in production and asset management in the five regions.
The Rental Assistance Demonstration program received initial applications for 180,000 public housing and mod-rehab units proposing to undertake $6 billion in capital repairs, and HUD has closed/converted 58 projects with more than 5,000 units, said Burke.
Burke said the Sec. 8 Renewal Guide is in substantial revision and currently under review, adding that it has some very beneficial changes for preservation within it.
Another focus for HUD right now is energy efficiency. Burke encouraged the affordable housing owners in the audience to join the Department of Energy and HUD’s Better Buildings Challenge to cut energy waste and help families save on their utility bills. Affordable and market-rate owners who sign on to the challenge must be committed to cutting their portfolios’ energy use by 20 percent in 10 years.