2008 Housing and Economic Recovery Act passes Congress
Its Effect on Affordable Rental Units
Housing and Economic Recovery Act of 2008
was adopted by Congress on July 24, 2008.
It includes a number of provisions concerning rental
Changes to Tenant Based Vouchers
There are changes concerning both tenant-based vouchers used in units that receive Low Income Housing Tax Credits
Changes to Project-based Vouchers
Public housing agencies currently are allowed to "project-base" -- or attach to particular structures -- up to 20 percent of their vouchers. Families have the right to move with the next available tenant-based voucher after a year. The changes make it easier for local government and owners to use the project-base vouchers (PBV) option to provide affordable rental opportunities in mixed income settings.
the 25 percent limit on the share of units that may receive
PBV assistance based on the "project" rather
than per "building," as is now the case. (The bill does not
change the current exceptions to the 25% limit, which does not apply to
projects that primarily assist the elderly, people with disabilities or
families receiving supportive services.)
- The initial contract term may be up to 15 years (matching the LIHTC compliance period), and
PHAs and owners may agree at any time, including in the initial
contract, to extend the term for up to 15 years at each expiration
subject to certain conditions. (The initial term had been 10
years and HUD rules permit an extension agreement only in the last year
of any term.)
- PHAs may set
reasonable rents up to 110 percent
of the HUD Fair Market Rent in units with Low Income Housing Tax
Credits, even if this rent level exceeds the maximum rent under the
LIHTC program, and may allow PHAs to agree in advance not to reduce the
rent below the initial rent during the term of the contract.
- Permits PBVs
to be used in cooperatives and in
subsidy layering and environmental reviews for PBVs used in existing
buildings, and eliminates duplicative reviews when a state or local
agency has conducted a subsidy layering review as part of allocating
tax credits or grant funds for construction or rehabilitation.
are additional PBV changes included in the House or Senate SEVRA bills
that would further improve the PBV option. For more
on the SEVRA provisions, see http://www.cbpp.org/3-10-08hous-tables.pdf
starting at page 16.