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SR-HA-1 (3) }\A ,.. , JAN 2 6 1999 RM JM 8M MS srepadmn wpd Housmg Authority meeting January 26,1999 Santa Monica, California To HOUSing Authonty From City Staff SubJect Recommendation to Approve RevIsions to the Administrative Plan of the HOUSing Authonty of the City of Santa Monica In order to comply with current Federal regulations. INTRODUCTION This report recommends reVISions to the Administrative Plan of the HOUSing AuthOrity of the City of Santa Monica The recommended revIsions Incorporate mandatory federal requirements as well as discretionary changes to local operatIng poliCies as permitted under federal regulations BACKGROUND The Housmg Authority [s admlnlstered accordmg to applicable federal regulations and requirements Some of these reqUIrements are not mcluded In the Housmg AuthOrity's Admlnlstratrve Plan, last updated In 1992 The Administrative Plan outlines the poliCies and procedures by which the Housmg AuthOrity admInisters the SectIon 8 Program and Its special needs programs Includmg the Family Self SuffiCiency, Shelter Plus Care Program, and Family UnIfication Programs Federal regulatrons require that the Administrative Plan state Housmg Authonty policy on matters for which the HOUSing Authonty IS permItted some discretion to establish local pohcy 1 }\A-t JAN 2 6 1999 - DISCUSSION The following are the recommended reVISions to the Administrative Plan (1) Elimination of Federal Preference categories for the waiting list and (2) Creation of new Local Preference categories for the waiting list Section 8 tenants are currently given preference on the waiting list If they meet one of the three Federal preferences The preferences Include (1) paymg 50% of monthly Income for rent and utilities for a minimum of 90 days, (2) mvoluntary displacement whIch IS defined as displacement to aVOId reprisals, hate Crimes, inaccessibility and diSpOSItion by HUD of a multifamily project, and (3) livIng In substandard housing HUD has eliminated the previously mandatory federal preferences while leaving housing authorities the option of adopting federal preferences as local preferences Staff recommends that the HOUSing Authorrty not adopt the federal preferences as local preferences Rather, staff recommends that the Housmg Authonty adopt a ranking preference for applicants who are residents of Santa Monica or who are working (or hIred to work) In the City of Santa MOnica for a minimum of 36 hours per week Staff further recommends that the Housmg Authonty adopt an additional rankmg preference for tenants partIcIpatIng In the City-funded Tenant Rental ASSIstance Program (TARP) who have chosen to remain In their apartments and terminate their Section 8 assistance A ranking preference Will result In Santa Monica reSidents and workers being placed hIgher on the waiting list The HOUSing Element documents the need for affordable hOUSing for Santa Monrca reSidents and that avaIlability of the Section 8 program as a cntlcal resource 2 to assist needy local resIdents and workers An additional rankmg preference for TARP participants will result In their bemg placed even higher on the waiting list Staff feels that this additional ranking preference is warranted gIven that the T ARP participants were forced to choose between Section 8 and T ARP because their landlord had canceled his or her Section 8 contract Residents who are displaced as a result of a disaster, governmental action or pursuant to the Ellis Act will continue to receive the highest priority assIstance in the Section 8 program (3) Occupancy/Subsidy Standards HUD establishes minimum and maximum apartment occupancy standards and permits local hOUSing authorrtles discretion to operate Within the range of these standards Staff recommends the incorporation of thIS fleXibility Into the Administrative Plan whJle specifying a preferred local standard which strikes a balance between the HUD minimum and maximum standards (4) Information staff may orovlde to property owners regardmg prospective tenants HUD regulations require that the HOUSing AuthOrity Inform prospective landlords that tenant screening IS their responsibility In addition, the HOUSing Authorrty must give the landlord a family's current and prior addresses, If known, and the names and addresses of current and prror landlords HUD regulatIons also allow the HOUSing AuthOrity to prOVIde additional information, If known, regarding tenants' unpaid rent histOry, property damage history and drug trafflckmg hIstory to prospectIve landlords. 3 Staff believes that It is the landlord's responsibilIty, as It IS with non-Section 8 prospectIve tenants, to screen prospective Sectron 8 tenants for pnor rent payment histOry, outstanding debts owed to prevIous owners, history of damage to rental properties and polIce records. The Housing Authonty actively encourages landlords to screen prospective Section 8 tenants (5) Determination of who will receive assistance If/when a family breaks uo In lieu of a court order, HUD regulatrons require that the Admmlstratlon Plan descnbe the Housing Authonty's POliCY, regarding who retains the Section 8 subsidy when the family household breaks up Staff recommends that the Housmg Authonty, In Instances where there IS no legal determination, allow family members to attempt to come to a mutual agreement If a mutual agreement can not be made, staff recommends that Section 8 staff make the decIsion as to who retains the subsidy based pnmanly on the following factors (In no order of preference) (1) who retains custody ofthe children or, If the children are separated, who retains custody of the youngest child, (2) which adult remains In the umt, (3) the adult listed as head of household when the subsidy was Initiated, and (4) recommendations of social service professionals (6) Length of time a tenant may be absent from his or her unit HUD regulations restnct the number of consecutive days that a tenant may be absent from his or her unrt to 180 days The 180 day time penod IS largely mtended for Section 8 4 tenants who require nursing home care However, the regulations do not restnct the reason for extended absences from a Unit to nursing home or other medical and rehabilitative care. Housing assistance payments terminate If the family IS absent for longer than the maximum penod permitted and the term of the Section 8 contract and the lease also terminate A Section 8 tenant IS required to promptly notify the Housing Authonty of absence from his or her unIt and to provIde any InformatIon or certificatIon required by the SectIon 8 program to validate on-going Section 8 eligibility durmg the absence Tenants are required to maintain their umts dunng their absence, pay utIlitIes, and not sub-lease theIr unit or allow anyone to live In the Unit The Section 8 program retains the nght to Inspect a family's unit dunng absence to venfy the compliance with the program's absence reqUirements At Its discretion I the HOUSing Authonty may allow absence for a lesser penod of time Staff recommends establishing an absence penod of 180 days for medical reasons and an absence penod of 90 days for non-medical reasons Staff feels that the 180 penod IS necessary In order to accommodate the needs of the large Section 8 senior and disabled population In Santa MOnica Non-medical absences generally Involve out-of-state and out- of-country family VIsitS. Staff feels that the length of non-medical absences should be limited In order to best utilize the limited funding assistance available to the Section 8 program Staff recommends that exceptions to the 90 day non-medical limit be made due to extenuatmg cIrcumstances 5 (7) Establlshmg mInimum rent HUD regulattons require that a household pay a minimum rent between $25 and $50 per month Staff recommends that the Housing Authority adopt a mmlmum rent of $25 The average amount of rent paid by a Section 8 household IS $240 per month Tenants paymg the minimum rent are restricted to those who have no Income and those who receive General Assistance, Staff feels that requmng a higher amount would create an undue burden on the poorest SectIon 8 tenants (8) Denial or termination of assistance for violent crime or drug related actiVity HUD regulations state that rental assistance may be denied to or terminated for a Section 8 applicant or Section 8 partICipant upon eVidence of the commiSSion of a violent crimInal or drug related activity Violent criminal activity mcludes any criminal activity that has as one of ItS elements the use, attempted use, or threatened use of physical force agamst a person or property Drug related cnmlnal activity means the manufacture, sale or dlstnbutlon of a controlled substance or the use and possessIon of a controlled substance Exceptions to the drug related use and possession may be made If the person IS no longer engaged In the Illegal use of drugs and the unacceptable behaVior IS no longer eVident and the person has successfully completed a drug or, If also applicable, an alcohol rehabilitation program Verrficatlon of these circumstances must be proVided by the applicant Staff currently request and receive information from the Santa MOnica Police Department (SMPD) regarding the number and nature of SMPD calls to speCific addresses In Santa MOnica Staff uses thiS information to confirm information received from other sources 6 regardmg complaints about SectIon 8 tenants Staff has used the Information obtained from SMPD to augment specific complaints received from owners, management firms and neighbors about the activIties of Section 8 tenants In many cases, the polrce call mformatlon received from SMPD has been sufficient to terminate Section 8 participants The Section 8 program currently does not require that a cnmlnal background check be done for Section 8 applicants and participants Federal and State regulations are unclear as to whether a Housing AuthOrity which does not own or manage property IS entitled to cnmmal background Information In addition, the fact that almost half of our Section 8 population are seniors, limits both the need and utility of requiring cnmlnal background checks for all participants ReqUIring cnmlnal background checks probably can not be done selectively and therefore all applicants and participants would have to undergo a background check Staff recommends that the HOUSing Authonty not requrre that crlmmal background checks be required for Section 8 applicants or partiCipants Staff belreves that the current information received from SMPD IS suffiCient to validate complamts received from other sources and to proceed With denial and termination If warranted (9) Tenant-caused HOUSing Qualrty Standards Violation The HOUSing Authonty IS required to Inspect a unit to ensure that It meets Housmg Quality Standards (HaS) before a family can receive rental assistance and at least annually thereafter. The Housmg Authonty's Inspection protocols follow HUD reqUirements and staff use the HUD Inspection forms to document the results of the InspectIon HaS defiCienCies whIch cause a Unit to fall an inspection must be corrected by the responSible party whether 7 or not the responsible party IS the owner or the tenant If the deficiencies are not corrected wlthrn the specified time frame, the Housmg Authonty ceases payment to the owner New HUD regulations require that the tenant must malntam tenant supplied appliances and utilities and IS also responsible for any Housmg Quality Standards (HQS) violations caused by a family member or guest HUD regulations allow that Section 8 assistance can be termmated If the household does not marntam tenant supplied appliances and utilities or correct HOS violations after a reasonable penod of time Staff recommends that the HOUSing Authority adopt a policy which requires that tenants correct tenant-caused deficiencies which are not of an emergency nature within 30 days of an inspectIon or wIthIn a staff approved extension FaIlure to make the reqUIred repaIrs within the reqUired time frame will result rn termmatlon of assistance to the household. (10) Grounds for demal or termination of assistance HUD regulations give the Housmg Authority discretionary chOice to deny or terminate Section 8 assistance for the follOWing reasons (a) The family violates any family obligations under the program, (b) Any member of the family has ever been eVicted from public hOUSing for any reason; (c) Any HOUSing Authonty has ever termmated assistance under the Certificate or Voucher program for any member of the famIly, 8 (d) The family currently owes rent or other amounts to the Housing Authonty or to another Housing Authonty In connection with Section 8 or public housing assistance, (e) The family has not reimbursed any Housing Authonty for claims paid under an Old Rule Contract, (f) The family breaches an agreement to pay amounts owed to an Housing Authority, including amounts paid to an owner by an Housmg Authority on behalf of the family, (g) The family has engaged In or threatened abusive or violent behavior toward Housing Authority personnel, (h) The famIly IS engaged In 1IIegal use of a controlled substance or abuse of alcohol, (I) Persons who have been eVicted from publIc housing, Indian housing, Section 8, or Section 23 programs for drug-related cnmlnal activity are Ineligible for three years following the date of the eViction The Housing Authority may waive thiS restnctlon If (I) The family member(s) who engaged In the Illegal activity has/have successfully completed an Housing Authority approved rehabilitation program and has/have not engaged In such activity for at least one year, OR (II) The family member(s) who engaged In the illegal actiVIty has/have not lived with the family for at least one year 9 (Ill) Exceptions may be made to this criterion If the person IS no longer engaged In the Illegal use of drugs or abuse of alcohol and the unacceptable behavior IS no longer eVIdent and the person has successfully completed a drug or alcohol rehabilitation program Verification of these circumstances must be provided by the applicant In deciding whether to deny or temllnate assistance because of action or failure to act by members of the family, the HOUSIng Authority has discretion to conSider all of the circumstances In each case, Includmg . The senousness of the case, . The extent of participation or culpability of indiVidual family members, . The length of time since the violation occurred and the family's record SInce, and . The effects of denial or termination of assistance on other family members who were not Involved In the action or failure to act As a condition of continued assIstance for other family members, the Housmg Authority may Impose a requirement that family members who participated In or were culpable not reside m the Unit Staff recommends that the HOUSing AuthOrity adopt all the options listed above regarding denial and/or termination of assistance 10 (11) Dlsaooroval of Section 8 property owners New HUD regulations gIve Housmg Authontles the option to deny participation In the Section 8 program to owners who have . Been barred by HUD or other Housing Authorities from participation In the Section 8 prog ram . Violated a Section 8 contract . Committed fraud, bnbery or any other corrupt or cnmlnal act In connection with a federal hOUSing program . Engaged In drug trafficking. . A history or practice of noncompliance with HOUSing Quality Standards (HQS) . Violated Fair HOUSing laws or gUidelines . Failed to pay real estate taxes, fines or assessments 11 Staff recommends that the Housmg Authonty approve the following owner participation restrictions DISAPPROVAL OF OWNERS/PARTICIPATION RESTRICTIONS BREACH MAXIMUM PENALTY Collecting excess rent 1 yea r Unallowed charges for services or amenities 1 yea r Collecting HAP on unit not occupied by participant 3 years Failure to correct serious HQS defICienCies resultmg In 3 or more abatements over 12 months In vanous units or 3 abatements In 1 year the same Unit dunng one contract term Failure to prOVide owner-supplied utilitIes or services 1 year Fraudulent Claim 1 yea r DISCrimination In provIsion of services or Violation of Fair HOUSing rules 1 year HUD debarment/suspension Until HUD reinstates CommIssion of fraud, bribery or any other corrupt or criminal act In connection With a federal hOUSing program Permanent Engaging In drug trafficking 3 years (12) Process of reVISIon of the voucher payment standard For vouchers the rental subSidy provided for the tenant IS the difference between 30% of the family's adjusted Income and the applicable standard The rent for a voucher holder's apartment can exceed the FMR if the voucher holder IS Willing to pay the difference. The payment standard IS set by the HOUSing AuthOrity The payment standard can not exceed the FMR or the Exception Rent standards If applicable Currently, the Santa MOnica 12 voucher payment standard equals the Exception Rent standards The HousIng Authority has the discretIon to review and If necessary, revise the subsidy standard for the Voucher program on an annual basis The HousIng Authorrty must establish a policy regarding how often the payment standard IS to be reviewed and If necessary, revised by staff Staff recommends that the payment standard be revIewed and revised, If necessary, by staff on an annual basIs The recommended time frame mirrors the time frame that HUD uses to adjust the FMR I n the Voucher Program, the rental subsidy prOVided for the tenant IS the d,.fference between 30% of the household's adjusted Income and the applicable payment standard The rent for the umt may exceed the Fair Market Rent (FMR) If the household IS wlllmg to pay the difference The payment standard IS set by the Section 8 program and can not exceed either the FMR or HUD approved exception rents Currently the Voucher Payment Standards mirror the HUD approved exceptIon rents HUD regulations reqUire that the Housing Authorrty must set a policy regardIng how often the payment standard IS to be reviewed and, If need be, revised by staff Staff recommends that the Voucher Payment Standards be revIewed on an annual basIs or more frequently If circumstances warrant an expedited review 13 ~- (13) Homeless Transitional Housmg Program(s) Set-a-slde To enhance the transition from homelessness to permanent housmg, staff recommends the creation of a Homeless Transitional Housmg Program set-a-slde which will provide a lImIted number of certIficates or vouchers to clients of City of Santa MOnica funded non- profit homeless transitional housmg program(s) that are located wlthm the City of Santa Monica To be eligible, a person must be referred by an eligible agency, must have successfully completed the reqUIrements of that agency(s)and must be otherwIse eligible for Section 8 assistance. When available, the HA Will set-a-slde 20 certificates or vouchers on an annual baSIS for a penod not to exceed five years The City of Santa MOnica non-profit funded homeless transitional housmg program(s) Will be selected by the SMHA through a Request for Proposal (RFP) process Certificates or vouchers are made available from eXisting allocations to the SMHA Section 8 program To be eligible for the homeless transitional set-a-slde program, the head of household must agree to partICipate In the SMHA Family Self SuffiCiency (FSS) program and must sign a Contract of PartiCipation In the form prescrrbed by HUD A referred family m which the head of household IS eIther a senlor or a person With disabilities IS conSidered to have met the FSS requirement In addition, to be eligible, the head of household must have successfully completed any and all of the requirements of the City of Santa MOnica non~ profit funded homeless transitional housmg program(s). ThiS requirement must be docu mented In wrrtmg by the referrmg City of Santa MOnica non-profit funded homeless transitional housing program(s) 14 FINANCIAL/BUDGETARY IMPACTS There are no financial or budgetary impacts that result from the approval of thiS staff report RECOMMENDATION Staff recommends that the Housing Authority adopt the reVISions to the Administrative Plan of the Housmg Authorrty of the City of Santa MOnica Prepared by Jeff Mathieu, Director, Resource Management Department Bob Moncrief, Housmg and Redevelopment Manager Peter Mezza, Housing Coordinator 15