Key Points

1) The payment standard decrease was unnecessary. With it, the program generates a surplus of about $66,000 for 2010; without the decrease the HRA surplus is reduced by about half. See analysis of the HRA’s projections.

2) The HRA has no resident advisory board so its agency plan changes implementing the subsidy reduction violated 42 U.S.C. §§ 1437c-1(c)(2) and (g)(2).

3) The HRA board approved the reductions without considering the adverse effects on residents and without even considering use of unrestricted program funds to reduce the adverse effects, contrary to HUD’s policies set out in Notice 2009-44. (Apparently, the HRA also failed to consider the adverse consequences to the community, such as the impact on the community of withholding the voucher funds and not spending them in the community and the impact on HRA’s 2011 voucher budget, which should be based upon vouchers in use, up to the authorized level times the cost of those vouchers. See e.g., Pub. L. No. 111-117 (Dec. 16, 2009), the Consolidated Appropriations Act, 2010.)

4) HUD approved the agency plan changes in spite of the violations of statute and HUD policy.

5) HUD granted the waiver of 24 C.F.R. § 982.505(c)(3) without considering the adverse effects on residents, in violation of its own policies set out in Notice 2009-44. HUD did note that prior to the change, 42% of voucher holders were already paying more than 30% of income for rent. The change cannot help but increase that percentage dramatically; but in violation of its responsibilities under 42 U.S.C. § 1437f(o)(1)(E), HUD deferred any consideration of adverse effects until next year.

6) HUD’s actions in approving the plan amendment and waiving the regulation violated its obligations under 42 U.S.C. § 3608 to consider the effects of its actions on the disproportionate number of voucher holders who are disabled (30%).