DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Statement of Regulatory Priorities

The Regulatory Plan for the Department of Housing and Urban Development (HUD) for Fiscal Year (FY) 2010 highlights the most significant regulations and policy initiatives that HUD seeks to complete during the upcoming fiscal year. As the federal agency that serves as the nation's housing agency, committed to addressing the housing needs of Americans, promoting economic and community development, and enforcing the nation's fair housing laws, HUD plays a significant role in the lives of families and in communities throughout America. The Department's program and initiatives help to provide decent, safe, and sanitary housing, and create suitable living environments for all Americans. HUD expands housing opportunities for Americans by enforcing fair housing laws that operate to eliminate housing discrimination. HUD also provides housing and other essential support to a wide range of individuals and families with special needs, including homeless individuals, the elderly, and persons with disabilities.

Secretary Donovan has directed that HUD must have a balanced, comprehensive national housing policy, one that supports and preserves sustainable homeownership, but also provides affordable rental housing, with a focus on preservation of developments that are integral to sustainability, such as those adjacent to significant transportation options, or with great access to jobs. Increasing the availability of affordable rental housing provides a means of addressing the increase in homelessness.

HUD's Regulatory Plan for FY2010 reflects one step in achieving this balanced, comprehensive national housing policy, and is based on major legislation recently enacted that supports such a policy.

Priority: Preserving and Expanding Affordable Rental Housing and Increasing Homeownership

The Housing and Economic Recovery Act of 2008 (HERA) establishes a Housing Trust Fund to be administered by HUD, for the purpose of providing grants to states to increase and preserve the supply of rental housing for extremely low- and very low-income families, including homeless families, and to increase homeownership for extremely low- and very low-income families. Although the Housing Trust Fund supports both increases in rental housing and homeownership, the primary focus of the Housing Trust Fund is rental housing for extremely low- and very low-income households, since HERA provides that no more than 10 percent of each formula allocation may be expended on homeownership.

HERA charges HUD to establish, through regulation, the formula for distribution of Housing Trust Fund grants to states. HERA specifies that only certain factors are to be part of the formula, and it designates certain factors as priority factors. In addition to the charge to establish a formula by rule, the statute also directs HUD to issue regulations to carry out the statutory requirements applicable to use of Housing Trust Fund grants. Eligible trust fund activities include production, preservation, and rehabilitation of housing for rental housing and homeownership through new construction, acquisition, and acquisition and rehabilitation.

Regulatory Action: Housing Trust Fund - Allocation Formula and Program Requirements

HUD will issue two rules, as provided by statute. The first rule will address the formula by which Housing Trust Fund grant will be allocated to the states. The second rule will provide for implementation of the program requirements. Both rules will provide the opportunity for public comment. The Housing Trust Fund represents a bipartisan enactment of possibly the most significant new federal housing production program since the creation of the HOME Investment Partnerships program in 1990. Capitalization of this fund through appropriations and regulatory implementation will constitute a major step toward increasing the supply of affordable housing.

Priority: Expanding Affordable Housing by Building Upon Success

The HOME Investment Partnerships (HOME) Program, authorized by the Cranston-Gonzales National Affordable Housing Act, is the largest federal block grant to state and local governments designed exclusively to create affordable housing for low-income households. Each year, the HOME program allocates approximately $2 billion among the states and hundreds of localities nationwide. The program was designed to reinforce several important values and principles of community development, including empowering people and communities to design and implement strategies tailored to their own needs and priorities; emphasizing the importance of consolidated planning, which expands and strengthens partnerships among all levels of government and the private sector in the development of affordable housing; and, through matching funds, mobilizing community resources in support of affordable housing. HOME is a highly successful program through which nearly 912,000 affordable housing units for low- and very low-income households have been provided since 1992.

Regulatory Action: HOME Investment Partnerships - Improving Performance and Accountability; Updating Property Standards and Instituting Energy Efficiency Standards

The Department will publish significant proposed amendments to the HOME Program regulations. These regulations were last revised in 1996. This proposed rule would establish new performance standards for the use of HOME program funds, including establishing expeditious but responsible use of funds to provide new affordable housing opportunities, and would ensure that future HOME units are energy efficient and incorporate green building techniques.

Priority: Housing the Homelessness

The Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009 (HEARTH Act) was enacted on May 20, 2009. The HEARTH Act reauthorizes the homeless assistance programs administered by HUD under the McKinney-Vento Homeless Assistance Act, and consolidates these programs into a single grant program. The consolidated program, which consists of an Emergency Solutions Grant program, a Continuum of Care program, and a Rural Housing Stability program, is designed to ensure that the range of needs of homeless persons continue to be addressed while providing for consolidated application and administration to ease administrative burden and improve coordination among providers and, consequently, increase the effectiveness of responding to the needs of homeless persons.

In addition to consolidating HUD's Supportive Housing Program, Shelter Plus Care, and the Moderate Rehabilitation/Single Room Occupancy Program into a single Continuum of Care program, key features of the HEARTH Act include: revising HUD's definition of homelessness by including people at imminent risk of losing their housing, as well as families or youth who live in precarious situations and are unlikely to become stable; establishing the Rural Housing Stability Assistance Program, which provides rural communities with greater flexibility in using homeless assistance funds to address the needs of homeless people or those in the worst housing situations in their communities; authorizing that up to 20 percent of funds may be used to prevent homelessness or rapidly re-house people who become homeless through the new Emergency Solution Grants; and codifying HUD's Continuum of Care process, established administratively by HUD in 1995.

Regulatory Action: Homeless Emergency Assistance and Rapid Transition to Housing Program; Consolidation of HUD Homeless Assistance Programs

The HEARTH Act directs HUD to implement this program through rulemaking. HUD will issue two rules to implement this new program. The definition of homelessness, which is key to ensuring that the goals and objectives of the new statute are met, will be issued first as a separate rule for comment. HUD will follow this single issue rule with a larger rule that provides for HUD's implementation of the program requirements. The funding for this new program and HUD's implementation through rulemaking, as directed by statute, will provide communities with new resources and better tools to prevent and end homelessness.

Aggregate Costs and Benefits

Executive Order 12866, as amended, requires the agency to provide its best estimate of the combined aggregate costs and benefits of all regulations included in the agency's Regulatory Plan that will be made effective in calendar year 2010. HUD expects that the neither the total economic costs nor the total efficiency gains will exceed $100 million. HUD anticipates that, over the next twelve months, only one rule included in its Regulatory Plan, the Housing Trust Fund will have an economically significant impact. HUD's choice of an allocation formula has an impact on the distribution of over $100 million of transfers. The two additional rules on the Regulatory Plan are not anticipated to have an economically significant impact. HUD believes that the HOME Investment Partnerships will impose only minor costs in the form performance standards and economically insignificant benefits in the form of energy savings. The Homeless Emergency Assistance and Rapid Transition to Housing Program will lead to greater efficiency in the administration of housing assistance programs, but these savings are not expected to be economically significant.

The Priority Regulations That Comprise HUD's FY 2010 Regulatory Plan

A more detailed description of the priority regulations that comprise HUD's FY 2010 Regulatory Plan follows.