[Federal Register Volume 62, Number 46 (Monday, March 10, 1997)]
[Proposed Rules]
[Pages 10786-10787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5737]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 982
[Docket No. FR-4149-P-01]
RIN 2577-AB73
Section 8 Rental Voucher and Certificate Programs Restrictions on
Leasing to Relatives
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would limit the circumstances under which a
landlord could lease a unit with Section 8 certificate or voucher
assistance to a relative of the landlord. It would permit such leasing
only if an HA determines that the leasing would accommodate a person
with disabilities. The rule is intended to reduce the potential for
misuse of Section 8 assistance. It would reduce the likelihood of
families that have the ability to assist a family member from seeking
Federal rental assistance and, thereby, would help to direct scarce
Federal financial assistance to the more needy.
DATES: Comment due date: May 9, 1997.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Office of the General Counsel, Rules Docket
Clerk, room 10276, Department of Housing and Urban Development, 451
Seventh Street, SW., Washington, DC 20410-0500. Comments should refer
to the above docket number and title. Facsimile (FAX) comments are not
acceptable. A copy of each communication submitted will be available
for public inspection and copying during regular business hours (7:30
a.m. to 5:30 p.m. Eastern time) at the above address.
FOR FURTHER INFORMATION CONTACT:Gerald Benoit, Director, Operations
Division, Office of Rental Assistance, Public and Indian Housing,
Department of Housing and Urban Development, Room 4220, 451 Seventh
Street, SW., Washington, DC 20410, telephone (202) 708-0477. Hearing or
speech impaired individuals may call HUD's TTY number (202) 708-4594 or
1-800-877-8399 (Federal Information Relay Service TTY). (Other than the
``800'' number, these are not toll-free numbers.)
SUPPLEMENTARY INFORMATION:
I. Discussion
Currently, neither the statute nor HUD regulations place any
restriction on an owner leasing a unit with Section 8 certificate or
voucher assistance to a relative. All parties, of course, would have to
meet requirements generally applicable to any certificate or voucher
assisted tenancy. These requirements include: the applicant meets
income and other eligibility requirements; the applicant is selected in
appropriate order from the HA's waiting list; the unit meets housing
quality standards, and the rent to the owner is reasonable.
This policy of no restrictions on leasing with assistance to
relatives has been in effect since the inception of the Certificate
Program in the mid-1970s. Historically, it has been viewed by the
Department as consistent with an over-arching policy of promoting
maximum housing choice for assisted families.
The Department does not have systematic data on the extent to
which, or the circumstances under which, owners have been leasing to
family members. Nonetheless, it must be recognized that a policy of
allowing leasing between closely related individuals creates a
potential for misallocation of scarce program resources. It can
encourage families that can house family members to seek and obtain
Federal assistance that otherwise would be available for more needy
families. In short, it can shift, too readily, responsibility for
housing a close relative from a relative with available housing or
financial resources to the Federal Government.
Recent newspaper articles have described a number of examples of
relatives leasing to other relatives with
[[Page 10787]]
Section 8 assistance. The Department's review of these cases did not
disclose any violation of program requirements. In a number of the
examples the total rent received by an owner, from the assisted tenant
and the HUD subsidy, was lower than rent the owner previously charged
for the unit. In addition, a number of examples involved seriously ill
close family members. Other examples, however, did appear to involve
owners who should have had the financial ability to assist a close
family member, but were nonetheless receiving Section 8 assistance
payments.
Section 982.306 of title 24 CFR sets out the restrictions on a
housing agency (HA) approving a unit based on facts concerning the
owner. The Department proposes to amend Sec. 982.306 so that an HA may
not approve a unit for lease if the owner is the parent, child,
grandparent, grandchild, sister, or brother of the certificate or
voucher holder that is seeking to rent the unit. (Under
Sec. 982.306(e), ``owner'' includes a principal or other interested
party.) The HA, however, could still approve the unit for lease, if the
HA determines that approving the unit would provide reasonable
accommodation for a family member who is a person with disabilities.
The Department specifically invites comments on whether there should be
other exceptions to the general policy.
When implemented, the policy would apply to new admissions and to
moves with continued assistance. HUD would add to HAP contract forms a
simple certification by the owner that the owner is not a parent,
child, grandparent, grandchild, sister, or brother of any member of the
family. HUD would also add a comparable certification to the rental
certificate and rental voucher.
II. Findings and Certifications
Environmental Impact
A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations at 24 CFR Part 50,
which implement section 102(2)(C) of the National Environmental Policy
Act of 1969 (42 U.S.C. 4332). The Finding of No Significant Impact is
available for public inspection between 7:30 a.m. and 5:30 p.m.
weekdays in the Office of the Rules Docket Clerk at the above address.
Regulatory Planning and Review
This proposed rule has been reviewed in accordance with Executive
Order 12866, issued by the President on September 30, 1993 (58 FR
51735, October 4, 1993). Any changes to the proposed rule resulting
from this review are available for public inspection between 7:30 a.m.
and 5:30 p.m. weekdays in the Office of the Rules Docket Clerk at the
above address.
Regulatory Flexibility Act
The Secretary has reviewed this proposed rule before publication
and by approving it certifies, in accordance with 5 U.S.C. 605(b) (the
Regulatory Flexibility Act), that this proposed rule does not have a
significant economic impact on a substantial number of small entities
because it simply restricts leasing with assistance between certain
related individuals and does not otherwise restrict or impose burdens
on the use or availability of Section 8 rental certificate or rental
voucher assistance.
Unfunded Mandates Reform Act
The Secretary has reviewed this proposed rule before publication
and by approving it certifies, in accordance with the Unfunded Mandates
Reform Act of 1995 (2 U.S.C. 1532), that this proposed rule does not
impose a Federal mandate that will result in the expenditure by State,
local, and tribal governments, in the aggregate, or by the private
sector, of $100 million or more in any one year.
Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this proposed rule will not have substantial direct
effects on States or their political subdivisions, or the relationship
between the Federal Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
The proposed rule does not alter the relationship between HUD and the
HAs. Rather, it simply amends one of the conditions for receipt of
Federal assistance.
Family Impact
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this proposed rule does
not have potential for significant impact on family formation,
maintenance, and general well-being, and, thus, is not subject to
review under the Order. This proposed rule furthers the purposes of the
Executive Order by revising program requirements to recognize the
primary right and responsibility of families themselves to assist needy
family members and by increasing the likelihood that Federal assistance
is limited to those circumstances where it is most needed.
Catalog
The Catalog of Federal Domestic Assistance numbers are 14.855 and
14.857.
List of Subjects in 24 CFR Part 982
Grant programs--housing and community development, Housing, Rent
subsidies, Reporting and recordkeeping requirements.
Accordingly, 24 CFR part 982 is proposed to be amended as follows:
PART 982--SECTION 8 TENANT-BASED ASSISTANCE: UNIFIED RULE FOR
TENANT-BASED ASSISTANCE UNDER THE SECTION 8 RENTAL CERTIFICATE
PROGRAM AND THE SECTION 8 RENTAL VOUCHER PROGRAM
1. The authority citation for part 982 continues to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d).
2. In Sec. 982.306, paragraphs (d) and (e) are redesignated as
paragraphs (e) and (f) and a new paragraph (d) is added to read as
follows:
Sec. 982.306 HA disapproval of owner.
* * * * *
(d) The HA must not approve a unit if the owner is the parent,
child, grandparent, grandchild, sister, or brother of any member of the
family, unless the HA determines that approving the unit would provide
reasonable accommodation for a family member who is a person with
disabilities.
* * * * *
Dated: December 24, 1996.
Kevin Emanuel Marchman,
Acting Assistant Secretary for Public and Indian Housing.
[FR Doc. 97-5737 Filed 3-7-97; 8:45 am]
BILLING CODE 4210-33-P
