[Federal Register Volume 59, Number 56 (Wednesday, March 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6754]
[[Page Unknown]]
[Federal Register: March 23, 1994]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing--Federal Housing
Commissioner
24 CFR Parts 880, 881, 883, 884, 886
[Docket No. R-94-1664; FR-3413-F-02]
RIN 2502-AF41
Income Eligibility for Tenancy in New Construction Units
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Final rule.
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SUMMARY: This final rule amends the section 8 Housing Assistance
Payments program regulations for new construction and substantial
rehabilitation to comply with section 151 of the Housing and Community
Development Act of 1992. Section 151 requires that the Secretary
promulgate regulations to implement section 555 of the National
Affordable Housing Act of 1990, which requires that section 8 new
construction and substantial rehabilitation projects assisted under
section 8(b)(2) as it existed before October 1, 1983, and with a
contract for assistance under such section, be reserved for occupancy
by low-income and very low-income families.
EFFECTIVE DATE: April 22, 1994.
FOR FURTHER INFORMATION CONTACT: James J. Tahash, Director, Planning
and Procedures Division, Office of Multifamily Housing Management, room
6182, Department of Housing and Urban Development, 451 Seventh Street,
SW., Washington, DC 20410, telephone (202) 708-3944. Hearing or speech-
impaired individuals may call HUD's TDD number (202) 708-4594. (These
telephone numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:
I. Background
Section 151 of the Housing and Community Development Act of 1992
(1992 HCD Act) requires that the Secretary promulgate regulations
implementing section 555 of the Cranston-Gonzalez National Affordable
Housing Act of 1990 (NAHA). Section 555 of NAHA provides that any
dwelling unit in any housing constructed or substantially rehabilitated
pursuant to assistance provided under section 8(b)(2) of the U.S.
Housing Act of 1937, as that section existed before October 1, 1983,
and with a contract for assistance under that section, be reserved for
occupancy by low-income and very low-income families.
As we stated in the proposed rule published on July 1, 1993 (58 FR
35416), the Department administers six section 8 programs that involve
newly constructed or substantially rehabilitated housing: (1) The
section 8 New Construction Program, 24 CFR part 880; (2) the Section 8
Substantial Rehabilitation Program, 24 CFR part 881; (3) the State
Housing Agencies program (insofar as it involves new construction and
substantial rehabilitation), 24 CFR part 883; (4) the New Construction
Set-Aside for Section 515 Rural Rental Housing Projects Program, 24 CFR
part 884; (5) the Section 202 Loans for Housing for the Elderly or
Handicapped Program, 24 CFR part 885; and (6) the Section 8 Housing
Assistance Program for the Disposition of HUD-Owned Projects (insofar
as it involves substantial rehabilitation), 24 CFR part 886.
Before 1981, owners could rent up to 10 percent (20 percent in the
Set-Aside Program for Rural Rental Housing Projects) of assisted units
to ineligible families. Moreover, before 1984, and except in the
section 202 loan program, the Department's regulations did not require
a reduction in assisted units under the contract until rental to
ineligibles exceeded 10 percent (20 percent in the Set-Aside Program
for Rural Rental Housing Projects).
Section 325(l) of the Housing and Community Development Amendments
of 1981 amended section 8(b)(2) of the U.S. Housing Act of 1937 by
adding the following provision:
Each contract to make assistance payments for newly constructed
or substantially rehabilitated housing assisted under this section
entered into after the date of enactment of the Housing and
Community Development Amendments of 1981 shall provide that during
the term of the contract the owner shall make available for
occupancy by families which are eligible for assistance under this
section, at the time of their initial occupancy, the number of units
for which assistance is committed under the contract.
As a result of the Housing and Community Development Amendments of
1981, the Department implemented the existing regulations governing
section 8 substantial rehabilitation or new construction (except 24 CFR
part 885) which require that owners make available all assisted units
for eligible families for Housing Assistance Payment (HAP) Contracts
entered into pursuant to an Agreement to enter into a HAP Contract
(AHAP) executed on or after October 1, 1981. The existing regulations,
however, exempt owners who entered into an AHAP prior to October 1,
1981, from the statutory requirement that owners make all assisted
units available for leasing by eligible families.
The Department believes that the purpose of section 555 of NAHA was
to remove the exemption for owners who entered into an AHAP prior to
October 1, 1981. Accordingly, this final rule change requires that
owners make available all assisted units for eligible families for all
HAP Contracts, regardless of when the Owner entered into the AHAP.
The Section 8 Housing Assistance Program for the Disposition of
HUD-owned Projects (24 CFR part 886, subpart C) involves existing
housing in addition to substantially rehabilitated housing. The
Additional Assistance Program for Projects with HUD-Insured and HUD-
Held Mortgages (24 CFR part 886, subpart A) involves only existing
housing. Under both subparts, the assistance is project based.
In implementing the existing regulations, the Department previously
determined administratively that project-based assistance should be
treated similarly to new construction and substantial rehabilitation
for the purposes of this rule. As such, any contracts entered into
after October 3, 1984 (the effective date of the current regulations)
already are subject to the requirement that Owners make available all
assisted units for eligible families. Since application of this final
rule to an owner of existing housing is not mandated by section 555 of
NAHA, this rule would not affect the obligation of a section 8 project
owner of existing housing assisted under part 886 who executed a
Contract before October 3, 1984.
Finally, this rule does not change the section 202 loan program
regulations. The changes in this rule are consistent with the current
regulations for the section 202 handicapped housing program, and so no
changes are necessary for that program. Moreover, no regulations
currently exist on this matter for the Section 202 elderly housing loan
program. However, the Department is preparing a separate regulation
amending part 885 which, among other matters, will incorporate this
amendment into that part.
II. Discussion of Public Comments
The Department received one public comment from a housing
development authority in response to the proposed rule published on
July 1, 1993 (58 FR 35416). The commenter suggested that the Department
exempt rural housing developments from the 100% occupancy by income
eligible families requirement since there is a limited number of 50-80%
of median income eligible tenants to fill the units.
The Department appreciates the difficulty that some rural housing
developments may experience with regard to filling projects with income
eligible families. However, section 555 of NAHA does not provide for an
exemption for rural housing developments, and so the Department does
not have the discretion to create such an exemption. Moreover, the
regulations which allow an owner to rent to an ineligible family if the
owner is temporarily unable to fill all units with eligible families
remain unchanged by this final rule. Finally, the regulations continue
to allow formerly eligible tenants who are currently income ineligible
to continue to remain in their units subject to paying the market rent.
III. Other Matters
A. Environmental Impact
At the time of publication of the proposed rule, a finding of no
significant impact with respect to the environment was made in
accordance with HUD regulations in 24 CFR part 50 that implement
section 102(2)(C) of the National Environmental Policy Act of 1969 (42
U.S.C. 4332). The proposed rule is adopted by this final rule without
change. Accordingly, the initial finding of no significant impact
remains applicable, and 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.
B. Executive Order 12612, 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 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. Specifically,
the rule is directed to owners of multifamily housing projects, and
will not impinge upon the relationship between the Federal Government
and State and local governments. As a result, the rule is not subject
to review under the order.
C. Executive Order 12606, the Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this 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. No significant change in existing HUD policies or programs will
result from promulgation of this rule, as those policies and programs
relate to family concerns.
D. Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)) has reviewed and approved this rule, and in so doing
certifies that this rule will not have a significant economic impact on
a substantial number of small entities. This rule reflects a statutory
requirement which applies to all section 8 newly constructed or
substantially rehabilitated housing without regard to the size of
entities involved.
E. Regulatory Agenda
This final rule was listed as sequence number 1543 in the
Department's Semiannual Agenda of Regulations published on October 25,
1993 (58 FR 56402, 56431) in accordance with Executive Order 12291 and
the Regulatory Flexibility Act.
F. The Catalog of Federal Domestic Assistance Program Number is 14.156
List of Subjects
24 CFR Part 880
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements.
24 CFR Part 881
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements.
24 CFR Part 883
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements.
24 CFR Part 884
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements, Rural areas.
24 CFR Part 886
Grant programs--housing and community development, Lead poisoning,
Rent subsidies, Reporting and recordkeeping requirements.
Accordingly, 24 CFR parts 880, 881, 883, 884, and 886 are amended
as follows:
PART 880--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW
CONSTRUCTION
1. The authority citation for 24 CFR part 880 is revised to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 1437f note, and
3535(d).
2. Section 880.504(d) is revised to read as follows:
Sec. 880.504 Leasing to eligible families.
* * * * *
(d) Applicability. In accordance with section 555 of the Cranston-
Gonzalez National Affordable Housing Act of 1990, paragraphs (a) and
(b) of this section apply to all Contracts. An owner who had leased an
assisted unit to an ineligible family consistent with the regulations
in effect at the time will continue to lease the unit to that family.
However, the owner must make the unit available for occupancy by an
eligible family when the ineligible family vacates the unit.
PART 881--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR
SUBSTANTIAL REHABILITATION
3. The authority citation for 24 CFR part 881 is revised to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 1437f note, and
3535(d).
4. Section 881.504(d) is revised to read as follows:
Sec. 881.504 Leasing to eligible families.
* * * * *
(d) Applicability. In accordance with section 555 of the Cranston-
Gonzalez National Affordable Housing Act of 1990, paragraphs (a) and
(b) of this section apply to all contracts. An owner who had leased an
assisted unit to an ineligible family consistent with the regulations
in effect at the time will continue to lease the unit to that family.
However, the owner must make the unit available for occupancy by an
eligible family when the ineligible family vacates the unit.
PART 883--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--STATE
HOUSING AGENCIES
5. The authority citation for 24 CFR part 883 is revised to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 1437f note, and
3535(d).
6. Section 883.605(d) is revised to read as follows:
Sec. 883.605 Leasing to eligible families.
* * * * *
(d) Applicability. In accordance with section 555 of the Cranston-
Gonzalez National Affordable Housing Act of 1990, paragraphs (a) and
(b) of this section apply to all contracts. An owner who had leased an
assisted unit to an ineligible family consistent with the regulations
in effect at the time will continue to lease the unit to that family.
However, the owner must make the unit available for occupancy by an
eligible family when the ineligible family vacates the unit.
PART 884--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW
CONSTRUCTION SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING
PROJECTS
7. The authority citation for 24 CFR part 884 is revised to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 1437f note, and
3535(d).
8. Section 884.223(d) is revised to read as follows:
Sec. 884.223 Leasing to eligible families.
* * * * *
(d) Applicability. In accordance with section 555 of the Cranston-
Gonzalez National Affordable Housing Act of 1990, paragraphs (a) and
(b) of this section apply to all contracts. An owner who had leased an
assisted unit to an ineligible family consistent with the regulations
in effect at the time will continue to lease the unit to that family.
However, the owner must make the unit available for occupancy by an
eligible family when the ineligible family vacates the unit.
PART 886--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--SPECIAL
ALLOCATIONS
9. The authority citation for 24 CFR part 886 is revised to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 1437f note, and
3535(d).
10. Section 886.329(d) is revised to read as follows:
Sec. 886.329 Leasing to eligible families.
* * * * *
(d) Applicability. In accordance with section 555 of the Cranston-
Gonzalez National Affordable Housing Act of 1990, paragraphs (a) and
(b) of this section apply to all contracts involving substantial
rehabilitation. These paragraphs apply to all other Contracts executed
on or after October, 3, 1984. An owner who had leased an assisted unit
to an ineligible family consistent with the regulations in effect at
the time will continue to lease the unit to that family. However, the
Borrower must make the unit available for occupancy by an eligible
family when the ineligible family vacates the unit.
Dated: March 15, 1994.
Nicolas P. Retsinas,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 94-6754 Filed 3-22-94; 8:45 am]
BILLING CODE 4210-27-P
