DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

FALL 2017 STATEMENT OF REGULATORY PRIORITIES

FOR FISCAL YEAR 2018

Introduction

The Regulatory Plan for the Department of Housing and Urban Development (HUD) for Fiscal Year (FY) 2018 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 programs help to provide decent, safe, and sanitary housing, and create suitable living environments for all Americans. 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.

HUD's regulatory plan for FY2018 reflects the leadership and vision of Secretary Carson who has directed HUD, consistent with Executive Order 13771, entitled "Reducing Regulation and Controlling Regulatory Costs," to identify and eliminate or streamline regulation that are wasteful, inefficient or unnecessary. Executive Order 13771 directs that agencies manage the costs associated with the governmental imposition of private expenditures required to comply with Federal regulations. Toward this end, Executive Order 13771 directs that for every one new regulation issued, at least two prior regulations be identified for elimination and requires that the cost of planned regulations be prudently managed and controlled. Consistent with this policy goal, the Secretary has also led HUD's implementation of Executive Order 13777, entitled "Enforcing the Regulatory Reform Agenda." The Executive Order 13777 supplements and reaffirms the rulemaking principles of Executive Order 13771 by directing each agency to establish a Regulatory Reform Task Force to evaluate existing regulations to identify those that merit repeal, replacement, modification, are outdated, unnecessary, or are ineffective, eliminate or inhibit job creation, impose costs that exceed benefits, or derive from or implement Executive Orders that have been rescinded or significantly modified. HUD's Regulatory Reform Task Force has been hard at work to provide recommendations on which regulations to repeal, modify or keep to ensure those that remain effectively manage scarce federal resources, adequately protect low-income families and facilitate the development of affordable housing and provide the provide the opportunity for families to become self-sufficient. As a result, HUD's Fall 2017 Unified Agenda of Regulatory and Deregulatory Actions lists two anticipated regulatory actions and eleven deregulatory actions.

The rules highlighted in HUD's regulatory plan for FY2018 reflect HUD's efforts to fulfill its mission and improve performance, including by removing regulations that HUD has determined are outdated, unnecessary, or are ineffective.

Implementing the Housing Opportunity Through Modernization Act of 2016

Regulatory Priority: Deregulation

The Housing Opportunity Through Modernization Act of 2016 (HOTMA) (Pub. L. 114-201, approved July 29, 2016) amended the United States Housing Act of 1937 (1937 Act) and other housing laws to modify multiple HUD programs, along with the Department of Agriculture's Single Family Housing Guaranteed Loan Program. Significant amendments included setting a maximum income level for continued occupancy in public housing, expanding the availability of Family Unification Program vouchers for children aging out of foster care, changes to the housing quality standards for Section 8 Voucher units, multiple changes to the Project-Based Voucher (PBV) program, modifying requirements for mortgage insurance for condominiums under the Federal Housing Administration, creating a Special Assistant for Veterans Affairs in HUD, and changing the allocation formula for the Housing Opportunities for Persons With AIDS (HOPWA) program.

On October 24, 2016, at 81 FR 73030, HUD issued a notice in the Federal Register announcing which provisions of the statute were self-implementing and which would require further action by HUD. This was followed up by a notice for comment on November 29, 2016 (81 FR 85996) seeking public input on the best way to determine the income limit for public housing residents.

HUD published another notice in the Federal Register on January 18, 2017 (82 FR 5458), utilizing authority granted by HOTMA to implement certain provisions by notice, but also soliciting public comment on HUD's implementation methods. That notice implemented new statutory provisions regarding certain inspection requirements for both housing choice voucher (HCV) tenant-based and PBV assistance (found in - 101(a)(1) of HOTMA), the definition of public housing agency (PHA)-owned housing (- 105 of HOTMA), and changes to the PBV program at large (- 106 of HOTMA) by providing the additional information needed for PHAs and owners to use those provisions. The notice also implemented and provided guidance on the statutory change to the HCV housing assistance payment (HAP) calculation for families who own manufactured housing and are renting the manufactured home space (- 112 of HOTMA).

Many of the statutory provisions in HOTMA are intended to streamline administrative processes and reduce burdens on PHAs and private owners. The January 18, 2017, notice implemented provisions that reduced the number and frequency of inspections required before allowing a family to move into a unit, limited the definition of PHA-owned housing and therefore reduced requirements for getting third parties involved in inspections, and reduced some of the requirements for submission to HUD for PHAs looking to project-base voucher assistance in projects currently under contract or previously assisted under a different form of assistance. Other provisions in HOTMA not yet implemented increase a PHA's ability to access databases to ease the burden of verifying income and also allow a family to self-certify as to the value of their assets when their assets are valued at less than $50,000.

HUD further intends to implement the new HOTMA provisions in such a way as to align policies and procedures across program offices, to include multifamily programs and programs that are administered by the Office of Community Planning and Development. Alignment will reduce disparities between the programs and better enable PHAs and owners to use multiple forms of assistance to best serve their communities.

HUD intends to complete this rulemaking in Fiscal Year 2018.

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 pursued in FY 2018. HUD expects that the neither the total economic costs nor the total efficiency gains will exceed $100 million.

HUD Office: Offices of the Assistant Secretary for Public and Indian Housing, Assistant Secretary for Housing, and Assistant Secretary for Community Planning and Development, HUD.

Rulemaking Stage: Proposed Rule

Priority: Significant

Legal Authority: 42 U.S.C. 1437a; 42 U.S.C. 1437f; 42 U.S.C. 3535(d); Pub. L. 114-201, 130 Stat. 782

CFR Citation: 24 CFR parts 5, 92, 574, 576, 583, 850, 880, 882, 884, 886, 891, 960,982, 983

Legal Deadline: None

Abstract:

Through this rule, HUD proposes to codify the changes the Housing Opportunity Act of 2016 (HOTMA) made to the U.S. Housing Act of 1937 that affect the Section 8 Project-Based Rental Assistance (PBRA), Housing Choice Voucher (HCV) and Public Housing programs. The areas most impacted by HOTMA include unit inspections in the HCV program, project-based voucher assistance in the HCV program; income and rent calculations for Public Housing, HCV, and multifamily housing programs, and operating fund and capital fund flexibility in public housing.

HUD CPD programs that have mimicked provisions in the U.S. Housing Act of 1937 that were changed by HOTMA will also be affected. Alignment will reduce disparities between the programs and better enable PHAs and owners to use multiple forms of assistance to best serve their communities.

Statement of Need

HOTMA provided HUD the authority to implement some statutory changes by notice, but not all of the changes included that authority. For those changes that were implemented by notice, HUD must make conforming changes to the regulations.

Alternatives: None

Anticipated Costs and Benefits

Many of the changes included additional flexibilities for public housing agencies (PHAs) and private owners, such as allowing for alternative inspection methods to reduce duplicative inspections, reducing paperwork requirements for project-basing vouchers in PHA-owned properties, and allowing for longer-term housing assistance payments contracts. The rule will also provide for more timely reviews of significant changes in family income to ensure the effective provision of assistance.

Compliance costs are expected to be minimal and one-time as PHAs and owners shift their practices to meet the new requirements.

Risks:

Reduced oversight of unit quality could increase the amount of poor housing quality, but the increased flexibilities will allow HUD, PHAs, and private owners to better direct resources to entities that pose higher risks, improving the overall quality and effectiveness of the programs.

TIMETABLE:

ACTION DATE FR CITE

Federal Register Notice 10/24/2016 81 FR 73030

Federal Register Notice 01/18/2017 82 FR 5458

Next Action 06/00/2018

Regulatory Flexibility Analysis Required: No

Small Entities Affected: No

Government Levels Affected: State, Local

Federalism Affected: No

Energy Affected: No

International Impacts: No

Agency Contact:

Danielle Bastarache

Deputy Assistant Secretary, Office of Policy, Programs and Legislative Initiatives

Department of Housing and Urban Development, Office of Public and Indian Housing

451 Seventh Street SW., Room 3178

Washington, DC 20410

Phone: 202 402-5264

RIN: 2577-AD03