Housing and Economic Recovery Act
passes Congress
Its Effect on Affordable Rental Units
- CLICK HERE for overall summary of bill
- CLICK HERE for HUD FAQ on the bill
The Housing and Economic Recovery Act of 2008 was adopted by Congress on July 24, 2008. It includes a number of provisions concerning rental housing.
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.
- Measures 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 elevator buildings.
- Streamlines 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.
