81 FR 85996 - Housing Opportunity Through Modernization Act of 2016: Solicitation of Comments on Implementation of Public Housing Income Limit

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Federal Register Volume 81, Issue 229 (November 29, 2016)

Page Range		85996-85997
FR Document		2016-28593
On July 29, 2016, President Obama signed into law the Housing Opportunity Through Modernization Act of 2016 (HOTMA). One of the statutory amendments made by HOTMA adds an income limit to the Public Housing program. This notice informs the public of how HUD proposes to implement that income limit and solicits comments on that methodology.
Federal Register, Volume 81 Issue 229 (Tuesday, November 29, 2016)
[Federal Register Volume 81, Number 229 (Tuesday, November 29, 2016)]
[Notices]
[Pages 85996-85997]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-28593]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5976-N-02]


Housing Opportunity Through Modernization Act of 2016: 
Solicitation of Comments on Implementation of Public Housing Income 
Limit

AGENCY: Office of the Assistant Secretary for Public and Indian 
Housing, HUD.

ACTION: Notice for comment.

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SUMMARY: On July 29, 2016, President Obama signed into law the Housing 
Opportunity Through Modernization Act of 2016 (HOTMA). One of the 
statutory amendments made by HOTMA adds an income limit to the Public 
Housing program. This notice informs the public of how HUD proposes to 
implement that income limit and solicits comments on that methodology.

DATES: Comment Due Date: December 29, 2016.

ADDRESSES: Interested persons are invited to submit comments regarding 
this notice for comment. All communications must refer to the above 
docket number and title. There are two methods for submitting public 
comments.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW., Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov. HUD strongly encourages commenters to submit 
comments electronically. Electronic submission of comments allows the 
commenter maximum time to prepare and submit a comment, ensures timely 
receipt by HUD, and enables HUD to make comments immediately available 
to the public. Comments submitted electronically through the 
www.regulations.gov Web site can be viewed by other commenters and 
interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.
    No Facsimile Comments. Facsimile (fax) comments are not acceptable.
    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying between 8 a.m. and 5 p.m., weekdays, at 
the above address. Due to security measures at the HUD Headquarters 
building, an advance appointment to review the public comments must be 
scheduled by calling the Regulations Division at 202-708-3055 (this is 
not a toll-free number). Individuals with speech or hearing impairments 
may access this number via TTY by calling the Federal Relay Service at 
800-877-8339 (this is a toll-free number). Copies of all comments 
submitted are available for inspection and downloading at 
www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: If you have any questions, please send 
an email to [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    On July 29, 2016, President Obama signed HOTMA into law (Pub. L. 
114-201, 130 Stat. 782). Section 103 places an income limitation on a 
public housing tenancy for families. The law requires that after a 
family's income has exceeded 120 percent of the area median income 
(AMI) for the most recent two consecutive annual reviews, a PHA must 
terminate the family's tenancy within 6 months of the second income 
determination or charge the family a monthly rent equal to the greater 
of (1) the applicable Fair Market Rent (FMR); or (2) the amount of 
monthly subsidy for the unit including amounts from the operating and 
capital fund. A PHA must notify a family of the potential changes to 
monthly rent after one year of the family's income exceeding 120 
percent of the AMI. Pursuant to 24 CFR 960.503, this section does not 
apply to small PHAs that are renting to families with income over 120 
percent of AMI. Each PHA must submit a report annually to HUD about the 
number of families residing in public housing with incomes exceeding 
the applicable income limitation and the number of families on the 
waiting lists for admission to public housing projects. Such reports 
must be publically available.
    Section 103 of HOTMA sets a maximum amount of annual adjusted 
income for a family to occupy a public housing unit at 120 percent of 
the AMI. However, HUD has the ability to adjust that 120 percent if the 
Secretary determines that it is necessary to do so because of 
prevailing levels of construction costs, or unusually high or low 
family incomes, vacancy rates, or rental costs.
    On February 3, 2016, at 81 FR 5677, HUD published an advanced 
notice of proposed rulemaking (ANPR) soliciting public input on various 
questions dealing with the possibility of imposing an income limit for 
public housing.\1\ HUD received 135 comments on the ANPR, from 
individuals, PHAs, tenant advocacy groups, and PHA associations. Some 
opposed an income limit, stating that public housing residents benefit 
from being in mixed-income developments, and that imposing an income 
limit that would apply to everyone would be unfair in areas with high 
rents or low demand for the public housing units. Other commenters 
supported an income limit, stating that encouraging families to move 
out when their income reached a certain level would allow families in 
the most need to move into decent and affordable units.
---------------------------------------------------------------------------

    \1\ The comment period was originally 30 days, but the comment 
period was re-opened for an additional 30 days at 81 FR 12613.
---------------------------------------------------------------------------

    There were also many suggestions on how to impose an income limit. 
Commenters asked for a maximum income based on the AMI or a percentage 
over the income limits for admission into public housing. Some 
commenters said that incorporating local housing conditions into the 
income limit would be too complicated, while others stated that not 
taking local conditions into account would be unfair to families. Some 
commenters stated that families reaching an income limit should be 
given a few months to find new housing, while others suggested families 
be allowed a period of several years. Some commenters noted that having 
an income limit did allow families with a greater need to move in, 
while others wrote that forcing the highest-income tenants out would 
increase the amount of subsidy a PHA would pay and decrease their 
ability to provide affordable housing.
    Some of these comments and questions were made moot by the passage 
of HOTMA. However, as HUD exercises the discretion available in the new 
statute, HUD has taken into account the views and suggestions already 
submitted for the ANPR in its initial methodology factoring in local 
housing costs. HUD is providing for 30 days of public comment.

[[Page 85997]]

II. Proposed Method of Determining Income Limit

    HUD calculates low-, very low-, and extremely low-income limits for 
the public housing program. These income limits are used for assessing 
program eligibility. Very low-income (VLI) limits are preliminarily 
calculated as 50 percent of the estimated area median family income. 
VLI limits include several adjustments to align the income limits with 
program requirements including:
    1. High Housing Cost Adjustment. The 4-Person VLI limit is 
increased if it would otherwise be less than the amount at which 35 
percent of it equals 85 percent of the annualized two-bedroom Section 8 
40th percentile FMR (this adjusts income limits upward for areas where 
rental housing costs are unusually high in relation to median income).
    2. Low Housing Cost Adjustment. If the 4-person VLI limit exceeds 
80 percent of the U.S. median family income, and the two bedroom 40th 
percentile FMR is affordable (less than or equal to 30 percent of the 
preliminary VLI limit), the VLI limit will be reduced to the greater of 
80 percent of U.S. median family income or the amount at which 30 
percent of it equals the two-bedroom 40th percentile FMR. This adjusts 
income limits downward for areas of unusually high median family 
incomes.
    3. State Non-Metro Median Family Income Adjustment. The 4-person 
VLI limit is also adjusted if it would otherwise be lower than 50 
percent of the State non-metro median family income; and
    4. Ceilings and Floors for Changes. In lieu of holding income 
limits harmless, HUD does not allow income limits to decrease or 
increase more than 5 percent. The VLI limits are calculated for every 
FMR area, so there may be subareas for metropolitan statistical areas 
(MSAs).
    For the purpose of determining the income limit, including any 
adjustments, HUD will use the VLI limit as the basis of the 120 percent 
income limit (by multiplying the VLI limit by a factor of 2.4). For 
those areas without an adjustment, the result is an income limit of 120 
percent of AMI. For areas where HUD has made an adjustment to the VLI 
limit, the result of the multiplier will be higher or lower than 120 
percent of AMI, depending on the adjustments made. For example, for the 
Los Angeles MSA, HUD's income limit methodology results in a high 
housing cost adjustment, therefore, the income limit for families 
residing in this area is 167 percent of AMI, due to the higher housing 
costs in this MSA.
    HUD's income limits were developed by HUD's Office of Policy 
Development and Research, and are updated annually. Information about 
HUD's income limits and HUD's methodology for adjusting income limits 
as part of the income limit calculation can be found at: https://www.huduser.gov//datasets/il/il16/index_il2016.html.

III. Request for Comments

    HUD is seeking comments on the methodology described above. 
Specifically, HUD seeks comments on the following questions:
    1. Does the methodology adequately consider local housing costs and 
make appropriate adjustments for higher housing costs?
    2. What other factors should HUD consider when determining whether 
to make adjustments to the income limit? Please provide specific 
examples of circumstances that are not captured in HUD's proposed 
methodology.

IV. Environmental Impact Certification

    This notice does not direct, provide for assistance or loan and 
mortgage insurance for, or otherwise govern or regulate real property 
acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction; or establish, revise, or provide for 
standards for construction or construction materials, manufactured 
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this 
notice is categorically excluded from environmental review under the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321).

    Dated: November 17, 2016.
Jemine Bryon,
General Deputy Assistant, Secretary for Public and Indian Housing.
[FR Doc. 2016-28593 Filed 11-28-16; 8:45 am]
BILLING CODE 4210-67-P
85996 Federal Register / Vol. 81, No. 229 / Tuesday, November 29, 2016 / Notices

Dated: November 22, 2016. No Facsimile Comments. Facsimile because of prevailing levels of
Richard W. Mattison (fax) comments are not acceptable. construction costs, or unusually high or
Records Management Program Chief, Mission Public Inspection of Public low family incomes, vacancy rates, or
Support, Federal Emergency Management Comments. All properly submitted rental costs.
Agency, Department of Homeland Security. comments and communications
On February 3, 2016, at 81 FR 5677,
[FR Doc. 2016–28612 Filed 11–28–16; 8:45 am] submitted to HUD will be available for
HUD published an advanced notice of
BILLING CODE 9110–13–P public inspection and copying between
8 a.m. and 5 p.m., weekdays, at the proposed rulemaking (ANPR) soliciting
above address. Due to security measures public input on various questions
at the HUD Headquarters building, an dealing with the possibility of imposing
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT advance appointment to review the an income limit for public housing.1
public comments must be scheduled by HUD received 135 comments on the
[Docket No. FR–5976–N–02] ANPR, from individuals, PHAs, tenant
calling the Regulations Division at 202–
708–3055 (this is not a toll-free advocacy groups, and PHA associations.
Housing Opportunity Through
number). Individuals with speech or Some opposed an income limit, stating
Modernization Act of 2016: Solicitation
of Comments on Implementation of hearing impairments may access this that public housing residents benefit
Public Housing Income Limit number via TTY by calling the Federal from being in mixed-income
Relay Service at 800–877–8339 (this is developments, and that imposing an
AGENCY: Office of the Assistant a toll-free number). Copies of all income limit that would apply to
Secretary for Public and Indian comments submitted are available for everyone would be unfair in areas with
Housing, HUD. inspection and downloading at high rents or low demand for the public
ACTION: Notice for comment. www.regulations.gov. housing units. Other commenters
SUMMARY: On July 29, 2016, President FOR FURTHER INFORMATION CONTACT: If supported an income limit, stating that
Obama signed into law the Housing you have any questions, please send an encouraging families to move out when
Opportunity Through Modernization email to HOTMAquestions@hud.gov. their income reached a certain level
Act of 2016 (HOTMA). One of the SUPPLEMENTARY INFORMATION: would allow families in the most need
statutory amendments made by HOTMA to move into decent and affordable
I. Background units.
adds an income limit to the Public
Housing program. This notice informs On July 29, 2016, President Obama There were also many suggestions on
the public of how HUD proposes to signed HOTMA into law (Pub. L. 114– how to impose an income limit.
implement that income limit and 201, 130 Stat. 782). Section 103 places
Commenters asked for a maximum
solicits comments on that methodology. an income limitation on a public
income based on the AMI or a
DATES: Comment Due Date: December housing tenancy for families. The law
percentage over the income limits for
29, 2016. requires that after a family’s income has
exceeded 120 percent of the area admission into public housing. Some
ADDRESSES: Interested persons are commenters said that incorporating
invited to submit comments regarding median income (AMI) for the most
recent two consecutive annual reviews, local housing conditions into the
this notice for comment. All income limit would be too complicated,
communications must refer to the above a PHA must terminate the family’s
tenancy within 6 months of the second while others stated that not taking local
docket number and title. There are two conditions into account would be unfair
methods for submitting public income determination or charge the
family a monthly rent equal to the to families. Some commenters stated
comments.
1. Submission of Comments by Mail. greater of (1) the applicable Fair Market that families reaching an income limit
Comments may be submitted by mail to Rent (FMR); or (2) the amount of should be given a few months to find
the Regulations Division, Office of monthly subsidy for the unit including new housing, while others suggested
General Counsel, Department of amounts from the operating and capital families be allowed a period of several
Housing and Urban Development, 451 fund. A PHA must notify a family of the years. Some commenters noted that
7th Street SW., Room 10276, potential changes to monthly rent after having an income limit did allow
Washington, DC 20410–0500. one year of the family’s income families with a greater need to move in,
2. Electronic Submission of exceeding 120 percent of the AMI. while others wrote that forcing the
Comments. Interested persons may Pursuant to 24 CFR 960.503, this section highest-income tenants out would
submit comments electronically through does not apply to small PHAs that are increase the amount of subsidy a PHA
the Federal eRulemaking Portal at renting to families with income over 120 would pay and decrease their ability to
www.regulations.gov. HUD strongly percent of AMI. Each PHA must submit provide affordable housing.
encourages commenters to submit a report annually to HUD about the
comments electronically. Electronic number of families residing in public Some of these comments and
submission of comments allows the housing with incomes exceeding the questions were made moot by the
commenter maximum time to prepare applicable income limitation and the passage of HOTMA. However, as HUD
and submit a comment, ensures timely number of families on the waiting lists exercises the discretion available in the
receipt by HUD, and enables HUD to for admission to public housing new statute, HUD has taken into
make comments immediately available projects. Such reports must be account the views and suggestions
asabaliauskas on DSK3SPTVN1PROD with NOTICES

to the public. Comments submitted publically available. already submitted for the ANPR in its
electronically through the Section 103 of HOTMA sets a initial methodology factoring in local
www.regulations.gov Web site can be maximum amount of annual adjusted housing costs. HUD is providing for 30
viewed by other commenters and income for a family to occupy a public days of public comment.
interested members of the public. housing unit at 120 percent of the AMI.
Commenters should follow the However, HUD has the ability to adjust 1 The comment period was originally 30 days, but

instructions provided on that site to that 120 percent if the Secretary the comment period was re-opened for an
submit comments electronically. determines that it is necessary to do so additional 30 days at 81 FR 12613.

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Federal Register / Vol. 81, No. 229 / Tuesday, November 29, 2016 / Notices 85997

II. Proposed Method of Determining percent of AMI, due to the higher HUD is seeking approval from the Office
Income Limit housing costs in this MSA. of Management and Budget (OMB) for
HUD calculates low-, very low-, and HUD’s income limits were developed the information collection described
extremely low-income limits for the by HUD’s Office of Policy Development below. In accordance with the
public housing program. These income and Research, and are updated Paperwork Reduction Act, HUD is
limits are used for assessing program annually. Information about HUD’s requesting comment from all interested
eligibility. Very low-income (VLI) limits income limits and HUD’s methodology parties on the proposed collection of
are preliminarily calculated as 50 for adjusting income limits as part of the information. The purpose of this notice
percent of the estimated area median income limit calculation can be found is to allow for 60 days of public
family income. VLI limits include at: https://www.huduser.gov//datasets/ comment.
several adjustments to align the income il/il16/index_il2016.html. DATES: Comments Due Date: January 30,
limits with program requirements III. Request for Comments 2017.
including: HUD is seeking comments on the ADDRESSES: Interested persons are
1. High Housing Cost Adjustment. The methodology described above. invited to submit comments regarding
4-Person VLI limit is increased if it Specifically, HUD seeks comments on this proposal. Comments should refer to
would otherwise be less than the the following questions: the proposal by name and/or OMB
amount at which 35 percent of it equals 1. Does the methodology adequately Control Number and should be sent to:
85 percent of the annualized two- consider local housing costs and make Colette Pollard, Reports Management
bedroom Section 8 40th percentile FMR appropriate adjustments for higher Officer, QDAM, Department of Housing
(this adjusts income limits upward for housing costs? and Urban Development, 451 7th Street
areas where rental housing costs are 2. What other factors should HUD SW., Room 4176, Washington, DC
unusually high in relation to median consider when determining whether to 20410–5000; telephone 202–402–3400
income). make adjustments to the income limit? (this is not a toll-free number) or email
2. Low Housing Cost Adjustment. If Please provide specific examples of at Colette.Pollard@hud.gov for a copy of
the 4-person VLI limit exceeds 80 circumstances that are not captured in the proposed forms or other available
percent of the U.S. median family HUD’s proposed methodology. information. Persons with hearing or
income, and the two bedroom 40th speech impairments may access this
percentile FMR is affordable (less than IV. Environmental Impact Certification number through TTY by calling the toll-
or equal to 30 percent of the preliminary This notice does not direct, provide free Federal Relay Service at (800) 877–
VLI limit), the VLI limit will be reduced for assistance or loan and mortgage 8339.
to the greater of 80 percent of U.S. insurance for, or otherwise govern or FOR FURTHER INFORMATION CONTACT:
median family income or the amount at regulate real property acquisition, Kevin Stevens, 451 7th Street SW.,
which 30 percent of it equals the two- disposition, leasing, rehabilitation, Washington, DC 20410; email
bedroom 40th percentile FMR. This alteration, demolition, or new KevinL.Stevens@hud.gov; or telephone
adjusts income limits downward for construction; or establish, revise, or 202–402–2673. This is not a toll-free
areas of unusually high median family provide for standards for construction or number. Persons with hearing or speech
incomes. construction materials, manufactured impairments may access this number
3. State Non-Metro Median Family housing, or occupancy. Accordingly, through TTY by calling the toll-free
Income Adjustment. The 4-person VLI under 24 CFR 50.19(c)(1), this notice is Federal Relay Service at (800) 877–8339.
limit is also adjusted if it would categorically excluded from SUPPLEMENTARY INFORMATION: This
otherwise be lower than 50 percent of environmental review under the notice informs the public that HUD is
the State non-metro median family National Environmental Policy Act of seeking approval from OMB for the
income; and 1969 (42 U.S.C. 4321). information collection described in
4. Ceilings and Floors for Changes. In Dated: November 17, 2016. Section A.
lieu of holding income limits harmless,
Jemine Bryon,
HUD does not allow income limits to A. Overview of Information Collection
General Deputy Assistant, Secretary for Public
decrease or increase more than 5 Title of Information Collection: FHA
and Indian Housing.
percent. The VLI limits are calculated Single Family Model Mortgage
[FR Doc. 2016–28593 Filed 11–28–16; 8:45 am]
for every FMR area, so there may be Documents.
BILLING CODE 4210–67–P
subareas for metropolitan statistical OMB Approval Number: 2502—New.
areas (MSAs). Type of Request: Approval of a new
For the purpose of determining the collection of information.
DEPARTMENT OF HOUSING AND
income limit, including any Form Number: N/A.
URBAN DEVELOPMENT
adjustments, HUD will use the VLI limit Description of the need for the
as the basis of the 120 percent income [Docket No. FR–5913–C–34] information and proposed use:
limit (by multiplying the VLI limit by a This notice advises of FHA’s review
factor of 2.4). For those areas without an 60-Day Notice of Proposed Information and proposed revisions to the Single
adjustment, the result is an income limit Collection: FHA Single Family Model Family Model Forward Mortgage
of 120 percent of AMI. For areas where Mortgage Documents document. Similar to FHA’s review of
HUD has made an adjustment to the VLI its multifamily mortgage transactional
asabaliauskas on DSK3SPTVN1PROD with NOTICES

AGENCY: Office of the Assistant
limit, the result of the multiplier will be Secretary for Housing—Federal Housing documents, healthcare facilities
higher or lower than 120 percent of Commissioner, HUD. transactional documents, and hospital
AMI, depending on the adjustments ACTION: Correction; notice. transactional documents, FHA is
made. For example, for the Los Angeles reviewing its Single Family mortgage
MSA, HUD’s income limit methodology SUMMARY: This notice corrects the transactional documents to determine
results in a high housing cost document HUD published at 81 FR where revisions and updates may be
adjustment, therefore, the income limit 84608, November 23, 2016. HUD is needed. This notice presents one
for families residing in this area is 167 amending both paragraphs on page 4. document that FHA has identified for

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Document Created: 2016-11-29 00:33:03
Document Modified: 2016-11-29 00:33:03
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice for comment.
Contact		If you have any questions, please send an email to [email protected]
FR Citation		81 FR 85996