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Regulatory Waivers for Public Housing Programs To Assist With Transition to Asset Management

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




This notice advises the public of a process for seeking expedited waivers of HUD program regulations to assist public housing agencies (PHAs) as they convert to asset management. This notice, which concerns regulations governing HUD's Office of Public and Indian Housing (PIH), does not apply to: PHAs with less than 250 units that do not elect to convert to asset management, Indian and Tribally Designated Housing Entities (TDHEs), local tribal governments, or PHAs that administer only the Section 8 Housing Choice Voucher program (“Section 8-only PHAs”). The expedited regulatory waiver process applies only to waivers of PIH program regulations applicable to PHAs.

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Gregory A. Byrne, Director, Financial Management Division, Real Estate Assessment Center, Office of Public Housing Programs, Department of Housing and Urban Development, 550 12th Street, SW., Room 2202, Washington, DC 20410-5000; telephone number (202) 475-8632. Persons with hearing or speech impairments may Start Printed Page 9349access this number via TTY by calling the Federal Information Relay Service at (800) 877-8339.

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I. Background

On September 19, 2005 (70 FR 54984), HUD published a final rule in the Federal Register amending the regulations of the Public Housing Operating Fund Program at 24 CFR part 990. The final rule provides a new formula for distributing operating subsidy to PHAs. The final rule also requires PHAs with 250 or more public housing units to convert to asset management; PHAs with less than 250 units may elect, but are not required, to convert. While 24 CFR part 990, as revised by the final rule, directs the conversion to asset management, it does not address all aspects of the organizational and business requirements related to converting public housing to a project-based model.

PHAs and their representatives have expressed concern that the transition to asset management necessitates extensive PHA organizational changes, which may require the waiver of certain HUD regulatory requirements. Waivers of HUD regulations are handled on a case-by-case basis. Under section 7(q) of the Department of Housing and Urban Development Act (42 U.S.C. 3535(q)), a regulated party that seeks a waiver of a HUD regulation must submit a written waiver request to HUD that specifies the need for the waiver. In accordance with 24 CFR 5.110, upon determination of good cause, HUD may, subject to statutory limitations, waive provisions of title 24 of the Code of Federal Regulations. HUD's authority to grant waivers is limited to non-statutory requirements. Accordingly, HUD regulations that repeat statutory requirements may not be waived.

The Secretary has delegated regulatory waiver authority for PIH programs to the Assistant Secretary for Public and Indian Housing (see the delegation of authority published on September 16, 2003 (68 FR 54240)). The Assistant Secretary will respond to all waiver requests in writing. Each quarter, HUD will publish in the Federal Register a summary of all waivers granted during the preceding period and the name of each applicant PHA.

II. Expedited Regulatory Waiver Process

This notice addresses concerns raised by PHAs by announcing an expedited process for HUD to respond to PHA requests for waivers of regulations to assist in the conversion to asset management. The waiver process announced in this notice does not suspend the normal waiver-granting process.

A. Eligible PHAs

PHAs converting to asset management in accordance with 24 CFR part 990 (including PHAs with less than 250 units electing to convert to asset management) are eligible to request regulatory waivers using the expedited process announced in this notice. This notice does not apply to: PHAs with less than 250 units that do not elect to convert, TDHEs, local tribal governments, or PHAs that administer only the Section 8 Housing Choice Voucher program (“Section 8-only PHAs”). PHAs, TDHEs, and local tribal governments ineligible to request regulatory waivers using the expedited procedures of this notice may submit waiver requests for HUD's consideration on a case-by-case basis using customary waiver procedures.

B. Eligible Regulatory Requirements

Under the expedited regulatory waiver procedures announced in this notice, HUD will consider requests for waivers of non-statutory PIH program regulations applicable to PHAs (as noted above, statutory requirements may not be waived). The expedited process is particularly designed to address waiver requests for non-statutory program requirements that are uniquely different from requirements applicable to operators of other HUD-subsidized housing programs.

For example, while many PHAs have indicated the need to streamline the rules regarding the calculation of rent, such rules are statutory (and essentially equivalent to those that govern other HUD-subsidized housing programs, such as Section 8 project-based housing). Accordingly, HUD may not consider waiver requests for such statutory provisions. On the other hand, the current requirement that PHAs conduct annual inspections in accordance with Uniform Physical Condition Standards (UPCS) is not statutory (nor required of operators of HUD subsidized housing) and therefore is eligible for waiver under this notice.

C. Waiver Request Process

Eligible PHAs that wish to obtain a regulatory waiver under the expedited process described in this notice must submit their waiver request to the following email address: The e-mail request must contain the following:

  • A list of the HUD regulations from which the PHA specifically requests relief;
  • An Adobe Acrobat PDF copy of the Board Resolution approving the request for the waiver(s);
  • A statement of the reason (need) and good cause for the waiver(s), which specifically addresses how the granting of the requested regulatory waiver(s) would facilitate the PHA's conversion to asset management; and
  • A statement that the PHA will make any necessary changes in its policies and procedures required to implement the waiver(s), if approved.

Please note that, while HUD is not requiring PHAs to modify their policies and procedures prior to applying for these waivers, PHAs are to certify that they will modify them accordingly prior to implementation, if HUD approves the waiver request. To the extent that any such changes require resident and/or public notice under 24 CFR part 966 (governing public housing lease and grievance procedures), the PHA certifies to meeting those procedural requirements prior to implementation. Under part 966, modifications to rules and regulations that are required to be incorporated by reference in leases are subject to comment by affected tenants. Specifically, § 966.5 provides that PHAs “shall give at least 30-day written notice to each affected tenant setting forth the proposed modification, the reasons therefor, and providing the tenant an opportunity to present written comments which shall be taken into consideration by the PHA prior to the proposed modification becoming effective.”

Under the expedited waiver process contained in this notice, HUD will review and either approve or disapprove the requests within 30 days of receipt of a complete submission package. HUD reserves the right to withhold or reject a waiver request due to a PHA's operating performance or due to other matters.

III. Examples of Possible Regulatory Requirements to be Considered for Waivers

The following are examples of non-statutory PIH regulatory requirements that have been identified by PHAs as possibly impacting their conversion to asset management. In addition, the following regulations are not required of operators of HUD’s subsidized housing programs. The following list of regulatory requirements is not exhaustive, but is designed to assist PHAs in identifying the types of PIH program requirements that HUD may Start Printed Page 9350consider waiver requests for under this notice.

A. 24 CFR 902.60(d) (Management Operations and Resident Service and Satisfaction Information)

HUD plans to revise the Public Housing Assessment System (PHAS) along the lines of an asset management model, which will result in different scoring and tracking mechanisms than HUD currently utilizes. While the PHAS is mostly rooted in statute (section 6(j) of the Housing Act of 1937 (42 U.S.C. 1437d(j)), there is no statutory requirement that PHAs submit to annual evaluations. Hence, for PHAs that request and show good cause, HUD will waive the requirement to submit a management operations certification, and will also waive the resident satisfaction survey, for a PHA's final year prior to required conversion to project-based budgeting and accounting (i.e., PHAs with fiscal years ending June 30, 2007, September 30, 2007, December 31, 2007, and March 31, 2008). HUD will not waive the independent physical inspection (conducted on all PHAs that score less than 80 on the previous year's inspection) or the requirement to submit a Financial Data Schedule (FDS). For purposes of scoring, HUD may, on a case-by-case basis, consider several alternatives that provide a PHAS score based on all four indicators, including: (1) Carrying over the PHA's entire PHAS score from the previous year, or (2) carrying over only the management assessment and resident satisfaction scores and tabulating new physical condition and financial condition scores.

B. 24 CFR 902.43 (a)(4) (Annual Inspections)

Section 6(f) of the United States Housing Act of 1937 requires PHA annual inspections. Waivers will be considered relating to the conduct of PHA annual inspections in accordance with Uniform Physical Condition Standards (UPCS). A PHA would still be required to conduct annual inspections; however, in accordance with section 6(f), it could perform those inspections in accordance with laws, standards, or state or local codes that the Secretary, upon granting the waiver, determines meet or exceed the UPCS. In requesting a waiver of the UPCS inspection requirement, the PHA must indicate the alternative inspection standards it intends to use and why such alternative standards meet or exceed the UPCS. PHAs are still subject to Real Estate Assessment Center physical inspections using UPCS at the frequency contained in 24 CFR part 902.

C. 24 CFR Part 964 (Tenant Participation)

Part 964 establishes various requirements for PHAs pertaining to tenant (resident) participation. HUD will consider requests for waivers relating to such issues as: the role of jurisdiction-wide resident councils (as these are not mandated by law), PHA roles in resident participation activities, requirements concerning resident council membership, election procedures, and uniform bylaws.

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Dated: February 22, 2007.

Paula O. Blunt,

General Deputy Assistant Secretary for Public and Indian Housing.

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[FR Doc. E7-3625 Filed 2-28-07; 8:45 am]