Moving to Work (MTW) 2022 Proposed Annual Plan - Brief Summary

Moving to Work (MTW) 2022 Proposed Annual Plan - Brief Summary

Since 2008, Santa Clara County Housing Authority (SCCHA) has introduced nationally recognized changes to its affordable housing programs through the Moving to Work (MTW) demonstration program. MTW is a federal initiative established by Congress that encourages selected housing authorities to propose and implement, upon the U.S. Department of Housing and Urban Development (HUD) approval, locally-designed changes to the way affordable housing programs are administered.

The goals of the MTW program are:

  • To increase cost effectiveness in housing program operations;
  • To promote participants’ economic self-sufficiency; and
  • To expand participants’ housing choices.

 

SCCHA has prepared its draft annual MTW plan to describe how the Agency plans to implement its MTW demonstration program for Fiscal Year 2022, from July 1, 2021 to June 30, 2022. In the plan, SCCHA seeks approval from HUD to add the following activities:

 

Re-Propose Activity 2016-01: Restriction on Head of Household Changes.

This activity, as originally approved in the FY2016 Plan, applied to cases where a Head of Household leaves Section 8 assistance and transfers his or her voucher to a remaining family member. These transfers typically occur when the Head of Household has a higher income and no longer requires the assistance but wants to pass on their voucher to a younger family member who has no or low income (referred to as a ‘legacy’ transfer). The activity required participation in the Family Self Sufficiency (FSS) program for the new Head of Household.

 

The Re-Proposed activity will clarify that the new Head of Household must enroll in the new, 10-year time-limited Focus Forward Program (FFP) . This will support participants’ development of economic self-sufficiency and enable the Housing Authority to serve more families. Hardship clauses will exempt certain families from this activity such as when the current Head of Household leaves due to family break-up or when the remaining family member(s) has/have minor children. (MTW Statutory Objectives: Increase Cost Effectiveness, Increase Housing Choices, and Increase Self-Sufficiency)

 

Re-Propose Activity 2019-01: Graduation Bonus

For Housing Choice Vouchers (HCVs), the amount of rent that participants pay mostly depends on how much income they earn. As participants’ income rises, they will generally be required to pay more of their rent, reducing the amount that the Housing Authority pays. HUD regulations require that participants whose income increases to the point where SCCHA pays zero rental assistance to be placed on a 180-day “clock” for assistance termination.

 

The original approved Activity 2019-01 changed these requirements in three ways:

  • The threshold housing assistance level was changed from $0 to $99;
  • The 180-day time period was for program termination was changed to 60 days; and
  • Upon termination from the Section 8 program, the family would receive a Graduation Bonus payment.

 

SCCHA’s re-proposal of this Activity revises the activity threshold from a fixed dollar amount of the family’s monthly rent portion to a threshold based on the family’s total annual income.  SCCHA plans to re-propose the activity so that Section 8 households whose annual income reaches 80% or greater of Area Median Income (AMI) will be paid the Graduation Bonus and removed from the Section 8 program after 60 days. This will increase voucher turnover, allowing SCCHA to serve more families, and allow SCCHA to provide more assistance to needier families. This change will also align the activity with the Family Self-Sufficiency Program and the Focus Forward Program (expected to be launched in 2021) in that both of those programs identify program graduates as households earning 80% or more of the Area Median Income. (MTW Statutory Objectives: Increase Housing Choices and Increase Self-Sufficiency)

 

Re-Propose Activity 2020-05: Eliminate the 40% of Income Cap at Initial Leasing

Before the COVID-19 pandemic, HUD regulations prevented participants from entering in a lease with a landlord if the family would pay more than 40% of their monthly income toward rent. As part the COVID-19 temporary HUD waivers, SCCHA lifted the monthly rent limit at initial leasing of a unit from 40% to 50% of a family’s monthly income. The agency included the new 50% cap as a technical amendment in the FY2020 MTW Plan to sunset the activity on June 30, 2021, unless they make the activity permanent. SCCHA proposes to make the 50% limit permanent in the FY2022 MTW Plan. In the expensive Bay Area housing market, many unassisted families pay more than 40% of their monthly income towards rent. The old 40% cap in some cases made it more difficult for our families to find housing. Since SCCHA implemented the temporary MTW activity through December 31, 2020, 165 families were able to lease a unit that they would not have been able to under HUD regulations. The activity will be an optional choice for families and SCCHA will advise voucher holders to look for and rent units they can afford. (MTW Statutory Objectives: Increase Housing Choices)

 

Homeownership and Asset Limitations for Eligibility (2022-01)

This activity would, with certain exceptions, make the following households ineligible for Section 8 program participation with SCCHA:

  • Families who own and have a legal right to occupy a home in the Bay Area or neighboring counties; and
  • Families who have $100,000 per family member or more in assets.

This activity would allow SCCHA to direct its limited resources to those who are neediest. The following Bay Area and neighboring counties are included in this activity: Alameda, Contra Costa, Marin, Merced, Napa, San Francisco, San Mateo, Santa Clara, Santa Cruz, San Benito, Solano, and Stanislaus. As of December 31, 2020, 14 current participants own property located in one of these counties. These homeowners would not be impacted by the activity but future applicants who own homes in any of the above listed counties would be denied assistance if the activity is approved.

 

The asset limitation is also being proposed for similar reasons; even in the expensive Bay Area, $100,000 per family member is a significant amount of resources and denying assistance to these higher-asset families allows SCCHA to better target its resources.  (MTW Statutory Objectives: Increase Cost Effectiveness)

 

Waive Full-Time Student Income Exclusion for Families Which Earn 80% or More of the Area Median Income  (2022-02)

For families which earn 80% or more of AMI, this activity would allow SCCHA to count 100% of the income of program participants who qualify as full-time students.  Current HUD regulations require SCCHA to only count $480 of the income of full-time students, regardless of how much their family earns.  This has led to some outlier cases where people who earn more than six figures qualify as full-time students, while only $480 of their salary counts towards SCCHA’s income calculation. Eliminating this exclusion will allow SCCHA to better target its resources towards the neediest families. (MTW Statutory Objective: Increase Cost Effectiveness and Increase Housing Choices)

 

Mainstream Turnover Voucher Issuance Flexibility (2022-03)

This activity would increase SCCHA’s flexibility in issuing Mainstream vouchers, which are special vouchers set aside for non-elderly persons with disabilities. SCCHA was awarded 190 new Mainstream vouchers since 2018 with a preference for those who are homeless, institutionalized, or at risk of homelessness or institutionalization according to the strict HUD definitions. The Notice of Funding Availability for these vouchers encouraged public housing agencies to work with partner agencies in their jurisdiction, especially the agency responsible for the local Continuum of Care to receive referrals of the applicants who meet these preferences. When SCCHA was awarded these vouchers, it entered in an agreement with the Santa Clara County Office of Supportive Housing to make referrals of eligible applicants and provide case management for these clients. However, for turnover vouchers, a recent HUD notice requires that the vouchers be issued to qualified families on SCCHA’s waiting list. SCCHA staff are not best suited to verify and document whether waiting list applicants with a family member with disabilities meet the HUD definitions of homelessness, at risk of homelessness, or are institutionalized or at risk of institutionalization. Staff are therefore seeking to continue to partner with and accept Mainstream referrals from its partner agency, for both new and turnover Mainstream vouchers.

(MTW Statutory Objectives: Increase Housing Choices)

 

Modified Project Based Voucher (PBV) Contract Rents (2022-04)

HUD regulations require housing authorities to set the contract rents of Project Based Voucher (PBV) units to the lowest of:

  1. 110% of the Fair Market Rent (FMR);
  2. The reasonable rent; or
  3. The owner-requested rent.

 

For high-cost areas, this regulation essentially allows PBV project owners to consistently have contract rents set at 110% of the FMR, which is more money per voucher than HUD pays to SCCHA, and is usually much higher than the rents allowed under the tax credit program. This means that some projects, over the years and decades of receiving PBV assistance, will receive much more rental revenue (in some cases millions of dollars more) than they need.

 

This activity would allow SCCHA to set PBV contract rents at a lower amount than the three amounts identified above. SCCHA staff are working with the same consultant who created the PBV Underwriting Tool for right-sizing PBV project proposals to determine the best amount at which to set PBV contract rents. It will meet with local affordable housing developers to review the proposed activity and obtain feedback from them in crafting the policy.

(MTW Statutory Objectives: Increase Cost Effectiveness)

 

Public Hearing

 

SCCHA will hold a public hearing on the proposed MTW Plan via Zoom on Friday, March 12, 2021 from 11:00 a.m. to 12:00 p.m. You must register to attend this public hearing. For Registration information please visit: https://www.scchousingauthority.org/about-sccha/moving-to-work

A preliminary draft of the MTW Plan will be available for review at https://www.scchousingauthority.org/about- sccha/moving-to-work and public comments on the plan will be accepted from February 22, 2021 – March 24, 2021.

Comments may be submitted electronically to: John.Lo@scchousingauthority.org or by U.S. mail to the attention of John Lo, Senior Housing Policy Analyst, 505 West Julian Street San Jose, CA 95110.

The final proposed FY2021 MTW Annual Plan will be presented to the SCCHA Board of Commissioners for approval on April 1, 2021 and will be submitted to HUD for final approval no later than April 15, 2021.

In accordance with the Rehabilitation Act of 1973, the Housing Authority will make reasonable efforts to accommodate persons with disabilities. Please call (408) 275-8770 at least three days in advance of the public hearing if you require special accommodations. TDD/TTY users call 408-993-3041.