Daily Rules, Proposed Rules, and Notices of the Federal Government
Section 808(e) of the Fair Housing Act (42 U.S.C. 3608(e)) requires HUD to administer its programs relating to housing and urban development in a manner to affirmatively further fair housing (AFFH). HUD carries out this obligation by requiring its program participants to affirmatively further fair housing. AFFH means undertaking affirmative efforts to overcome barriers to fair housing choice and reduce segregation of persons on the basis of race, national origin, and other protected classifications. HUD has funded a number of voucher mobility programs, for example, which pair Housing Choice Vouchers with mobility counseling to facilitate greater housing choice and overcome the effects of historic patterns of segregation. One such regional voucher mobility program
Multifamily housing assisted by or with financing insured by HUD is subject to the Fair Housing Act's AFFH requirement. Through this proposed demonstration, HUD seeks to encourage investment in multifamily housing and promote the availability of affordable housing units in a manner that reduces racial segregation and increases geographic and economic mobility in the Baltimore SMSA. For its multifamily housing programs that insure financing for multifamily housing development, HUD will offer incentives to make more affordable housing available in mixed-income, integrated communities. In addition, HUD will require that this new affordable housing is made available to Housing Choice Voucher holders, expanding housing options for these families.
HUD proposes to make available incentives for Federal Housing Administration (FHA) insured financing to developers in order to encourage the production and availability of more affordable housing units in areas identified as communities of opportunity in the Baltimore SMSA. Eligible areas are those in which the regional mobility program, established under the
This demonstration would be open to multifamily owners and developers pursuing FHA mortgage insurance under the section 221(d)(4) program or other FHA multifamily finance programs for properties to be developed in eligible areas in the Baltimore SMSA. For such owners and developers who agree to set aside a percentage of newly constructed or rehabilitated two- or three-bedroom units for nonelderly families holding Housing Choice Vouchers, either under a project-based voucher contract or offered at rents less than or equal to the Fair Market Rent (FMR) for the Baltimore SMSA, and in order to encourage the construction of more affordable housing for these voucher holders, HUD proposes to offer one or a combination of the following incentives:
• Lowering the mortgage insurance premium (MIP);
• Lowering the occupancy/vacancy rate when establishing the project's anticipated budget; or
• Establishing a procedure that results in greater or more frequent surplus cash distributions for projects containing a specified number of affordable units. The incentives offered would be subject to any constraints of current and future program and budget authorities and would be commensurate with the number of affordable units set aside in the property, which in no case would be less than 10 percent of the newly constructed or rehabilitated units in that property. HUD will provide, in the notice soliciting applications, which incentives will be available based on the percentage of affordable units that are set aside.
Owners, developers, and lenders seeking to participate in the demonstration described in this notice must:
• Certify that they meet all other requirements for FHA-insured financing, comply with the terms of the demonstration, and comply with HUD's nondiscrimination and equal opportunity requirements;
• Submit an affirmative fair housing marketing plan satisfactory to HUD for both the market-rate units and the units that will be affordable to Housing Choice Voucher holders in Baltimore City and throughout the Baltimore SMSA (a satisfactory affirmative fair housing marketing plan must include marketing of affordable units to Housing Choice Voucher holders in Baltimore City through the
• Agree to not establish local residency preferences for properties that receive incentives pursuant to this demonstration; and
• Maintain statistics on the race and ethnicity of applicants and occupants for both the affordable and market rate units
HUD has estimated that a total of 1,200 to 1,500 units in multifamily housing properties may be made available per year in the Baltimore SMSA. If 10 percent of those units were set aside as affordable and available for vouchers holders under HUD's Housing Choice Voucher program, the demonstration would yield approximately 120 to 150 affordable units per year. HUD will offer the above incentives for not more than 300 affordable units per year, and will carefully monitor the demonstration to determine whether it is succeeding in increasing available affordable housing units in
One of the principal purposes of the demonstration is to determine whether the incentives that HUD is proposing to provide developers and owners of multifamily housing properties results in the availability of more affordable housing to low-income persons in a manner that reduces racial segregation and increases geographic and economic mobility. HUD will, therefore, undertake an evaluation of the demonstration to determine whether the demonstration could serve as a model that could be successful nationwide or, alternatively, whether modifications to the demonstration are needed.
In accordance with section 470 of the Housing and Urban-Rural Recovery Act of 1983 (42 U.S.C. 3542), HUD is seeking comment on the demonstration for a period of 60 days, before commencing the demonstration. After the close of the public comment period, and following full consideration of comments submitted, HUD will publish another notice that will advise of the commencement of the demonstration, the specific incentives that HUD would offer multifamily housing owners and developers for properties to be developed in communities of opportunity in the Baltimore SMSA, as identified for the
During the comment period, HUD invites comment on all aspects of the demonstration, but specifically solicits