Yesterday, HUD Secretary Dr. Ben Carson unveiled legislative language for a bill designed to enact a series of sweeping changes to rent structures for individuals currently in affordable housing units. The bill the Secretary proposed is called the "Making Affordable Housing Work Act of 2018".
Under the proposed bill, rent would be raised from 30% to 35% of either monthly gross income or income earned from working at least 15 hours a week at the Federal minimum wage level. This amounts to an increase in rent from $50 to $150 per month. Also, medical and childcare deductions would be eliminated. Additionally, Property Owners and PHAs would be allowed to impose work requirements on tenants (either as individuals or as families, depending on the current occupants of a particular unit). Individuals with disabilities, or who are over the age of 65, would be exempt from any work requirements.
Rent for exempted families (elderly families and disabled families) would be set at either 30% of monthly income or a minimum of $50 per month. However, the proposed bill also establishes a 6 year grace period for exempted families, delaying implementation of the new rent for them as rents increase for other tenants. Additionally, hardship exemptions from the new rent structures will be given to those families which are not elderly or disabled, and who meet certain other criteria outlined in the proposed bill.
The proposed bill also includes a provision for the establishment of "Alternative Family Rent Structures" by the Secretary, PHAs, and Property Owners. These structures can be either tiered rents, stepped rents, or timed escrows. PHAs and Owners must meet certain requirements when establishing "Alternative Family Rent Structures", including the provision of reasonable hardship exemptions for families, appropriateness for the local housing market, and serving substantially the same number of families as the HUD rent structure. The Secretary must also meet similar requirements when establishing alternate rent structures, and the proposed bill makes clear that further standards (for all seeking to implement an alternate rent structure) are to be defined through future HUD regulation. The proposed bill also states that "Alternative Family Rent Structures", regardless of who establishes them, must be implemented in a way so as to not require an additional appropriation of Federal funds.
It should be noted that the Secretary's proposed bill is in line with a draft made public in February, shortly before the White House released President Trump's FY 2019 Budget Proposal. Secretary Carson has long spoken of shifting HUD's priorities towards transitioning families out of affordable housing, and today's proposed bill appears to be a step in that direction. The proposed bill's immediate future is less clear, as it includes a number of provisions which will likely prove to be unpopular with the affordable housing industry, the general public, and Members of Congress.
Read the Proposed Bill