New City Manager

Attachment

Set forth below are direct quotes from the report along with HUD's clarification and/or correction:

SECTION 8 ANALYSIS REPORT: HUD's first point regarding reduction of vouchers was that they would not seriously consider a reduction of voucher levels while the City maintains a local preference for Middletown residents. Said another way, it 's hard to argue that you want less vouchers when you specifically target giving new vouchers to people living in the City. HUD stated that the local preference for Middletown residents must be removed before any further discussion about reduction of vouchers would occur.

When we discussed the possibility of partial voucher transfers, HUD referred us to HUD Notice PIH 2007-06 (HA), issued on March 7, 2007. Although this Notice lists a 2009 expiration date, HUD still operates under this Notice. In Paragraph 3: Eligibility, the Notice states that "All transfers of vouchers must be total permanent divestitures of one PHA's HCV program to one or more receiving PHA's. The Department will not approve voluntary partial transfers unless there is a substantiated compelling reason. (Emphasis added) The transfer must be between PHA's within the same metropolitan area, within the same non-metropolitan county, or within the same state where HCV program administration is voluntarily shifted from a city or county PHA to its state PHA or from a state PHA to one or more of its county or city PHA 's."

HUD's reliance upon a "substantiated compelling reason " started the staff process that lead to the creation of this report. If a substantiated compelling reason is required to transfer vouchers and HUD won't permit partial transfers while the City remains high in poverty, what else could be used as a compelling reason to gain HUD approval?

HUD RESPONSE: At no time did HUD officials make statements concerning reduction of vouchers relative to the City's local preference for Middletown residents. HUD's discussion with city staff centered upon deconcentrating poverty by expanding MPHA's jurisdictional boundaries from its current city limits (if legally pennissible) to include all of Butler County, reconsidering local preferences, consideration of higher payment standards in non-impacted areas in Butler County and reviewing the rent reasonableness system to ensure rental rates are accurately measured. It was suggested that this be reviewed in consultation with the Butler Metropolitan Housing Authority ("BMHA"). MPHA currently administers the program in the City of Middletown and families are ported to BMHA should the families choose to move outside of the city but within Butler County. An expansion of MPHA's boundaries would end the current portability arrangement and result in BMHA and MPHA co-existing within the county. This arrangement exists with Panna MHA and Cuyahoga MHA and fonnerly existed with Hamilton and Cincinnati MHA.

HUD Notice 2007-6, "Process for Public Housing Agency Voluntary Transfers of Housing Choice Vouchers, Project-Based Vouchers and Project-Based Certificates" issued March 7, 2007 does spell out the process for the pennanent transfer of a Housing Choice Voucher Program to another PHA. As noted in the report the transfer must be between PHA's within the same 7 metropolitan area, within the same non-metropolitan county, or within the same state where HCV program administration is voluntarily shifted. The Notice goes on to state that "The Department will not approve voluntary partial transfers unless there is a substantiated compelling reason". The Notice does not define substantiated compelling reason but in its limited use thus far, it has not been the intent to reduce the number of vouchers that serve a community's needy households.

Middletown should not act in anticipation that such a transfer request would be granted when the sole purpose is to reduce housing assistance to those in need in Middletown. Currently MPHA has around 1,500 families being served by the program as well as a lengthy waiting list. A partial or total transfer of the program to another PHA would not necessarily result in a reduction in the families served by the program but rather a change in administration of the program to another PHA.

SECTION 8 ANALYSIS REPORT: HUD's next point was that if we operated our program similar to the Parma program, we would keep all vouchers active, provide service to over 1600 low income families, be compliant with HUD program requirements, retain administrative income from the vouchers, execute the Master Plan objectives, and still achieve the reduction of vouchers within the City that we seek. Parma has 57 active vouchers within the City limits for 80,000 residents. HUD stated that until we utilize the regulations to reduce vouchers being used within the City, they would not seriously consider a reduction in voucher levels. Said another way, HUD stated that we must "help ourselves with all of the regulatory tools available, and then if you still have problems, come talk to us again. "

HUD RESPONSE: HUD's discussion about Parma operating within a larger jurisdiction with the ability of its participants to lease throughout the County was not in the context of HUD agreeing that Middletown should seek to reduce voucher holders, but rather that poverty deconcentration might be furthered by broadening jurisdiction and choice. In addition, statements in the report seem to indicate that Parma is typical of city programs and is one of the only other city programs in the nation. Parma is not typical -it was created by a federal desegregation court order. Many hundreds of municipal housing agencies are in operation across the nation. Michigan, for example, is one state with predominantly municipal housing agencies, and most vouchers are used within the City's boundaries.

SECTION 8 ANALYSIS REPORT: Staff recommends reducing the payment standard to 90% of FMR within the City of Middletown and setting the payment standard at 100% outside of the City of Middletown.

HUD RESPONSE: MPHA's payment standards are currently set at 100% of the FMR. In accordance with 24 CFR 982.505 9(c) (3) when the payment standard amount is decreased during the term of the HAP contract, the lower payment standard amount generally must be used to calculate the monthly housing assistance payment for the family beginning at the effective date of the family's second regular reexamination following the effective date of the decrease in the payment standard amount. Movers and new admissions within the city would be effected 8 immediately; however, payment standard amounts for families under HAP contracts cannot be reduced until the second reexamination.

HUD does monitor rent burdens of families assisted by the program and can require a PHA to increase payment standard amounts within the basic range when 40% or more of families occupying a particular unit size pay more than 30% of monthly adjusted income as the family share. It may well be that one payment standard within Middletown is not appropriate particularly if it is reduced. A geographic payment standard for different parts of Middletown can be set to tailor it to the market areas of the City. But if the City is lowering the payment standard for the sole purpose of eliminating the ability of units to be leased in Middletown, as seems to be the case, this would be directly counter to the program's intent and HUD this will closely monitor rent burden and success rates and will direct the City to increase the payment standard if appropriate.

In addition, if use of vouchers outside Middletown is done through portability, then Middletown's payment standard is not used; the receiving PHA's payment standards are used. For example, if a Middletown participant ports to Warren County, Warren MHA's payment standard is used. If Middletown continues to administer its program only in the City and a Middletown participant ports to an area within Butler County then BMHA's payment standard is used. Middletown cannot set a payment standard for an area outside of which it does not execute HAP contracts. If Middletown chose to operate throughout Butler County, then it could set a payment standard for that area.

SECTION 8 ANALYSIS REPORT: Under the MPHA Current Administrative Plan, Section XVI/(d): The dwelling unit shall be in compliance with HUD lead based paint regulations, 24 CFR, Part 35, issued pursuant to the Lead Based Paint Poisoning Prevention Act, 42 USC 28001, and owner shall provide a certification that the dwelling is in accordance with such HUD regulations. Recommended Changes:

The current plan language does little to document compliance with HUD regulations and/or Ohio lead based paint law. From a compliance standpoint and a policy standpoint, MPHA should expand the requirements for lead based paint compliance. As discussed above, this issue impacts almost 19000 housing units in Middletown, occupied primarily by low income families. We document compliance with all of our other HUD programs, and we need do so here as well. MPHA will require that a lead based paint risk assessment be completed for any housing units constructed prior to 1978 before HQS inspections are scheduled. Iflead based paint is discovered on assessment, the owner must abate each lead based paint suiface before commencement of assistance. If the unit is already occupied, the abatement must be completed within 30 days of notification to the owner. If the owner does not complete the abatement, the unit is in violation of HQS standards until the reduction is complete and no HAP payments will be made until the abatement is complete and a passing lead based paint clearance is submitted to the PHA.

HUD RESPONSE: The Housing Choice Voucher Program is subject to the following subparts of 24 CPR Part 35: Subpart A, Disclosure; Subpart B, General Lead-Based Paint Requirements 9 and Definitions for All Programs; Subpart M, Tenant-Based Rental Assistance; and Subpart R, Methods and Standards for Performing Lead Hazard Evaluation and Reduction Activities. Lead based paint performance requirements are included as part of the Housing Quality Standards ("HQS") inspections and must be met before a unit can be assisted or continue to be assisted where the unit and family are subjected to these requirements.

MPHA is proposing to require a risk assessment for any housing unit constructed prior to 1978 before the HQS inspection. If lead based paint is discovered on assessment, the owner must abate each lead based paint surface before commencement of assistance.

The changes to the HQS inspection process and HUD lead based paint requirements that MPHA is proposing to implement far exceed the requirements required by the regulations. HUD regulations exempt certain units from lead based paint requirements. Exempt units include units where a child under the age of six does not reside or is not expected to reside as well as efficiency units and Single Room Occupancy ("SRO") units. In addition, in the HCY program, risk assessments are only required where a child has been identified as having an environmental intervention blood lead level. To implement the changes that MPHA is proposing to require as part of HQS inspections would involve a variation to the HQS acceptability criteria and require HUD approval as provided in 24 CFR 982.401 (a) (4) (i).

Be advised that this office would not entertain such a proposal as it would severely restrict housing choice. Roughly 75% of rental occupied housing in Middletown would be impacted by such a change.

SECTION 8 ANALYSIS REPORT: For units constructed prior to 1978, owners must complete and submit the MPHA Lead Paint Owner's Certification, Housing Choice Voucher Program as part of the Request for Tenancy Approval (RTA). The lead based paint inspector must be licensed by the State of Ohio, and failure to supply the inspectors credentials and the completed Certification will be considered an incomplete RTA for purposes of review. Staff recommends that the following Certification be adopted by MPHA as part of the Request for Tenancy Approval process to fully document lead based paint compliance.

HUD RESPONSE: The form being proposed for use would incorporate standards that exceed HQS, as stated above, which this office will not consider. The referenced forms in the HUD Guidebook are only for units where a risk assessment is required, i.e. where a child is determined to have had an elevated blood lead level -not for all units.

SECTION 8 ANALYSIS REPORT: While the City does not employ a rental registration ordinance to regulate rental units, having a City Building Inspector perform initial inspections is advantageous in three ways. First, the timing, paperwork and other problems being experienced with initial inspections would be alleviated by direct scheduling between Consoc and the City on these inspections. Second, the inspector is a certified lead based paint risk assessor by the State of Ohio and this serves as a quality control check that proper lead based paint inspections are being performed and paperwork is being turned in with the Request for Tenancy Approval for 10 new units. Finally, the inspector is also trained on inspecting to the standards in the International Property Maintenance Code, the local property code. Under 24 CFR § 982.306(c)(6), the PHA may deny approval of an assisted tenancy when the owner has a history or practice of renting units that fail to meet State or local housing codes. Utilizing the City's code enforcement software, the inspector can run a report of prior violations by any owner or address to determine if such a history or practice exists. Where appropriate, documentation and reporting would be submitted to the program administrator for potential denial of the owner based on past practices.

HUD RESPONSE: MPHA is proposing to use the International Property Maintenance Code in conducting its HQS inspections. As noted above, this change to the inspection process would involve a variation to the HQS acceptability criteria and require HUD approval as provided in 24 CFR 982.401 (a) (4) (i).

A modification to MPHA's HQS inspections using portions of the International Property Maintenance Code was approved by this office in 2002. Any further modifications would require HUD approval.

SECTION 8 ANALYSIS REPORT: Local Preferences [24 CFR 982.207; HCVp. 4-16J

The PHA is permitted to establish local preferences and to give priority to serving families that meet those criteria. HUD specifically authorizes and places restrictions on certain types of local preferences. HUD also permits the PHA to establish other local preferences, at its discretion. Any local preferences established must be consistent with the PHA plan and the consolidated plan, and must be based on local housing needs and priorities that can be documented by generally accepted data sources.

HUD RESPONSE: Changes to the occupancy policies and preferences will require a modification to the 2010 PHA Plan submitted to this office. MPHA may not adopt the modification until a meeting of the Board of Commissioners/City Council is held and the meeting at which the modification is adopted is open to the public. Additionally, the modifications cannot be implemented until notification of the modification is provided to HUD and approved by HUD in accordance with the review procedures provided in 24 CFR 903.23 .

SECTION 8 ANALYSIS REPORT: The City has supported Hope House for years. We are utilizing HOME funds in 2010 to assist with $80,000 in renovations for the new Women's Shelter on Girard. The shelter will be a transitional shelter for 3-6 months to allow victims of domestic violence the opportunity to safely get away from their abuser and to rebuild their lives. We have recommended a local preference for victims of domestic violence. We have also recommended a large reduction in vouchers operating within the City. If it would be appropriate, expanding the number of vouchers in the SRO program would use more of the City of Middletown vouchers in support of victims of domestic violence. It would also mean that fewer vouchers are being used as regular rentals throughout the City. J J

HUD RESPONSE: The SRO Program is funded by HUD through the Office of Community and Planning Development. The ACC is separate and apart from the ACC for the Housing Choice Voucher Program. The subsidy is project based and has nothing to do with the Housing Choice Voucher Program. Vouchers are not used in SRO projects

 

MiddletownUSA

Over the past five years we have had many long and heated debates and discussions about the Section 8 Program on this blog and it’s effect on the City of Middletown.

I agree that it is a confusing issue to discuss because there are many different types of HUD housing in the Middletown area.

I will also agree that I and Nelson Self, over the years, may have overwhelmed you with facts about these different HUD programs, if so we do apologize to you, because our real intent was to inform you and give you the real facts of these programs and not what you were hearing from those at City Hall.

I will also admit that I did not know how to scan and upload these original documents to this site so you had proof of the information we were trying to covey about the huge amount of misinformation you were receiving for City Hall. For this we also apologize.

However while I and Nelson Self may have failed to communicate our message on this very difficult and confusing issue in a clear and concise manner...the true facts of the Section 8 Program remain the same...the citizens of Middletown have been terribly misinformed about this program and it’s impact on this community.

Since 2010, HUD, CONSOC, Section 8 Program, the landlords and the tenants have been used as a whipping post, and blamed for all the current problems in Middletown. If we could just get rid of THOSE PEOPLE everything would be just ducky.

The facts clearly show that this entire situation was caused by a…..
TOTAL FAILURE, IN SEVERAL KEY DEPARTMENT, AND THE LACK OF VISION AND LEADERSHIP AT CITY HALL OVER THE PAST 15 YEARS                                  

 

processor, I hope you'll indulge, perhaps humor me, on my attempt to answer your question. I am not an expert on HUD Section 8, but like the school levy, assimilated rapidly, the statutes and processes associated with funding new buildings. Likewise, I thank Ms. Moon for her work and dissemination of factual data.

To your question, legally, since Middletown leaders requested the addition section 8 vouchers, as it appears to me, HUD has indicated legally, there are options for Middletown, but none which would negatively negate their desired wish to reduce vouchers they already had requested. To do so, would be a violation of federal law. To be clear, as HUD appears to have communicated, Middletown can move, or have moved, the full administration of the vouchers to alternative sources of administration.

By doing so, Middletown would lose the administrative fee of 10 percent, of thereabouts. But, that would not mitigate nor remove the legally bound vouchers already in place at the city's request. As the city has also relied previously upon NSP, NSP2 grants, in the future, grant requests could be impacted upon the city's action.

One would assume if the city made an attempt to arbitrary reduce its vouchers by 50-60%, without HUD's approval, HUD would automatically take action, move the current vouchers to the newly appointed administrator, and the city and HUD enter into a legal war costing the city's insurer hundreds of thousands in legal fees, and undoubtedly impact the city's credit rating, reviewed in July, associated with potential liabilities.

My take away from the HUD letter and accompanying Section 8 piece authored by UC is Middletown faces enormous housing stock problems in all sectors for many, many years, including commercial. The land bank ends in December of 2014. One would suspect many vacated houses will be siting empty, with no wrecking ball funding to be found. That negatively hastens, and worsens, an already dismal financial picture for property tax valuation going forward.

In sum processor, I don't think legally, the cit can undo what it did, and get rid of excess vouchers it needs based upon its socio economic demographics, as the voucher administration will just be moved to Hamilton, and the federal money that follows. HUD would say, as they did in the report, 'congrats Middletown, for taking care of your poor.' And, they provided the answer on the chicken and egg, who came first. They said Middletown's poor determined voucher need which HUD accommodated, and not vouchers given, brought in poverty.

Council has the answer. Spend hundreds of thousands in legal fees fighting the federal government, or accept their error made, and live with the consequence. Regardless, housing stock overabundance will remain for years, and without the previous wrecking ball provided by the federal government and state.

Welcome Mr. Adkins to the job of building a city to 25,000.       

processor....I forgot about a previous reference by someone that Middletown appealed the HUD ruling and one assumes, audit. A HUD expert would have to find that answer associated with what that entails; does it stay any administrative movement, can Middletown reduce its vouchers while appealing, to get off the Section 8 Kingpin of Ohio throne, I don't know. Perhaps July 1 will provide an answer, if Middletown no longer has administration is moved to Hamilton.

How do un-brand a city from the damage already done by the way processor, to reputation. Bring in a consultant for reputation management, alter the city name?

Acclaro,
Am I understanding you correctly that the only right HUD has is contractual? That the city signed a contract with HUD? If so, do you have, or can you obtain the contract?

processor; I know contract law very well. I didn't have the time to go into the weeds on HUD federal title sections, nor intend to.

As there are two parties to the agreement, it is clear HUD would not agree to reduce the vouchers to a number less than current, which will render the ordinance moot. For the city, it would therefore be: accept what you have, or you have nothing, including other federal grant support. My opinion of course. I would also believe landlords would assert compensatory claims against the city and tort, for violations associated with public policy. And, the damage to Middletown's reputation is soiled further.

Vouchers did not ruin Middletown processor, the lack of economic development has. If the city wants zero vouchers, go for it.      

Acclaro, you are correct about the lack of emphasis on Economic Development over the past 15 years (or longer).

The planners and bureaucrats have brought Middletown: the downtown mall, the Maple Pork (Park) housing subdivision, extravagant NSP housing activities, the de-emphasis of housing rehabilitation, the de-emphasis of the First-Time Buyer Downpayment/Closing Cost Assistance Program, Lake Middletucky, extravagant expenditures of limited funds for downtown demolitions and other real estate deals, the loss of thousands of dollars on foreclosed HUD homes conveyed to the city, the scrapping of 2007-08 efforts to meaningfully involve local realtors and mortgage bankers in HUD-assisted homeownership endeavors, etc. etc.

Once again, take a drive through Ward 2 neighborhoods to observe the devastation of the wrecking ball. Also, please note that hundreds of thousands of housing revolving loan funds were emptied to provide for the Ohio Moving Forward blitzkrieg. The future is bleak. It's time for Forbes Magazine to do an update on the conditions in Middletown.

Acclaro,
Most contracts have end dates and/or out clauses. Just because there is a contract doesn't mean that there is no way out of it. Also, if the contract doesn't stipulate the number of vouchers HUD may have little recourse if the city chooses to reduce the number of vouchers. I don't understand on what basis a landlord could sue the city if the number of vouchers are reduced. The city doesn't have contracts with individual landlords.

The huge number of vouchers certainly did not, by themselves, cause Middletown's problems, however they are not helping turn the city around. The city is turning into one big housing project with all of their typical ills and is further eroding Middletown's image and chance of turning around. It's our money going to support the additional police service required not to mention the costly issues this causes the school system.

processor, I don't disagree with your position, and indeed, share it, that it was unwise to elevate Section 8 vouchers. I also completely agree that by having the highest percent in Ohio doesn't create a healthy brand image.

Tenants under federal law, and for that matter, state, have rights. Undoubtedly, HUD would have concerns associated with individuals (tenants), and would assume, without contract review, there to be a provision which would allow for some degree of transitional time for any decrease. If all cities decided at once, at end of year term, to abolish their vouchers, chaos would be expected. I suspect the feds factored that in their calculus.

I would also expect there to be an addendum for some aspect of automatic renewal, unless there to be fraud, misappropriation of funds, neglect, et al. I have not read any contract with a tenant nor landlord, but suspect, there would be a class action suit brought by the landlords if the funds went away, whether they prevailed or not. I recall Mr. Picard stating it would be a costly battle. As this problem has been known for some period of time, why is the remedy of extinguishing a one year contract only coming forth now, and not 3-4 years ago?

I understood the city was offering residents in the program an opportunity to move to another area, and make use of the voucher, which had little impact. If Hamilton receives the vouchers and opens property, it would seem the problem corrects itself.      

Acclaro -

Ohio recipients of HCV funds are statutorily required to file a multi-year Consolidated Plan with the HUD Cleveland Area Office. If memory serves me correctly, said Consolidated Plan covers either a three- or five-year period.

The HCV Annual Action Plan that I noted in prior posts, is required to be submitted to the HUD Cleveland Area Office for each individual year of a multi-year Consolidated Plan. I don't know which year the city is currently operating under. And, if I recall, didn't HUD deny approval of a new Annual Plan or Consolidated Plan in the past few years?

The best answer to this is to contact HUD Cleveland Area Office legal counsel or senior administrative staff.

Thank you. Perhaps the term is ending, and all will be transferred to Hamilton.