June 27, 2011
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On June 23, the House Insurance, Housing, and Community Opportunity Subcommittee held a hearing on its discussion draft of the Section 8 Savings Act of 2011 (SESA).  SESA includes many of the provisions included in the December 2010 draft of the Section 8 Voucher Reform Act (SEVRA) released by the House Financial Services Committee Democratic leadership at the end of the 111th Congress.

Among other changes, SESA in its current form would:

  • Reduce the frequency of income recertification from annually to every three years for tenants on fixed incomes;
  • Simplify deductions;
  • Base rent on a tenant’s income from the previous year; and
  • Require inspections biennially instead of annually, as currently required.

Unlike previous versions of SEVRA, SESA does not include provisions that would:

  • Permit housing authorities to project-base an additional 5 percent, above the current 20 percent cap, of its vouchers or funds for supportive housing; 
  • Allow owner-managed site-based waiting lists; or
  • Allow housing authorities, without first seeking HUD approval, to increase the payment standard to 120 percent of the Fair Market Rent (FMR) as a reasonable accommodation for persons with disabilities.
 
SESA also does not include any provisions related to the Moving-to-Work (MTW) demonstration program.  MTW allows selected PHAs to waive most public housing and Section 8 program requirements.  There are currently 35 MTW agencies.  Subcommittee member Gary Miller (R-CA) stated in his opening statement that he believes any bill passed by the Committee must expand MTW.  Miller referenced HUD’s August 2010 report that found that under MTW, housing authorities are serving more families, improving residents’ quality of life, and preserving housing.  He asked the hearing’s first panelist, HUD Assistant Secretary for Public and Indian Housing Sandra Henriquez, if she thought that if MTW was expanded, housing authorities could do a better job of helping people in need of assistance.  Henriquez replied that she agreed with HUD’s report but added that HUD is bringing in a contractor to evaluate the program. 
 
Witnesses on behalf of the Council of Large Public Housing Authorities (CLPHA), the National Association of Housing and Redevelopment Officials (NAHRO), the National Leased Housing Association (NLHA), and the Public Housing Authorities Directors Association (PHADA) all testified in support of expanding MTW and witnesses on behalf of the Center on Budget and Policy Priorities and the National Low-Income Housing Coalition (NLIHC) testified against expanding MTW.
 
HUD Secretary Shaun Donovan has previously voiced support for an expansion of MTW, provided it comes with appropriate measurement and analysis and includes tenant protections.  NCSHA also supports authorizing HUD to admit more PHAs into the MTW program, with appropriate income targeting safeguards and improved monitoring.
 
The discussion draft includes a demonstration program for rent policies.  The demonstration would allow HUD to determine the effectiveness of different rent policies, which may include providing income disregards, Family Self-Sufficiency (FSS) accounts, and policies under which families pay amounts different from 30 percent of their adjusted income for rent, to encourage families to obtain employment, increase their incomes, and achieve economic self-sufficiency.
 
Chairwoman Judy Biggert (R-IL) said she is particularly interested in the FSS program and a SESA provision to expand it to include tenants in Section 8 project-based units, subject to voluntary owner participation.  Biggert asked Henriquez if the FSS program is effective.  Henriquez replied that it is and that it should be extended and expanded.  Biggert introduced the Family Self-Sufficiency Act of 2011, H.R. 34, earlier this year.  Senate Housing, Transportation, and Community Development Subcommittee member Jack Reed (D-RI) is expected to introduce FSS legislation soon.
 
HUD testified, and all of the other witnesses agreed, that housing authorities should be given the flexibility to increase the number of project-based units by an additional 5 percent for supportive housing.  Many witnesses also questioned why SESA does not include the voucher renewal funding policy language from the last version of SEVRA.  The provision would base funding on the leasing and voucher costs for the prior calendar year.  The witnesses argued that a predictable funding formula is necessary to make the voucher program more stable.  NCSHA supports both increased flexibility to project base vouchers and an improved voucher funding allocation formula.
 
It is unclear what, if any, changes will be made to the discussion draft before it is introduced.  The Subcommittee has not released a timeline for introducing the bill and moving it to markup.  A companion bill has not been introduced in the Senate.