Federal Rental Alignment

This July 27th, the White House’s Domestic Policy Council (DPC) is announcing the launch of two Federal ‘alignment pilots’ in a total of ten states to better serve low-income families that rent, while reducing regulatory burden on affordable housing developers and owners. At a Rental Alignment Conference at the White House, Federal, State, local, and private-sector stakeholders will kick-off these pilots and will discuss progress being made on a number of other administrative solutions to better align and utilize affordable rental housing programs administered by the Department of Housing and Urban Development, the Department of Agriculture, and the Department of the Treasury.  The administrative solutions that are being proposed for implementation can be found here. 

For owners, developers, tenants, and local communities working to create and preserve affordable housing, federal funds often make up a significant share of a property’s financing structure. However, owners and developers can be burdened by overlapping administrative requirements associated with those federal affordable housing programs. Having affordable housing programs supported and administered separately by different Federal Departments has generally been good for the rental housing field, as different programs respond to different needs. However, over time, developers and owners of affordable housing have become increasingly reliant on multi-layered finance and subsidy structures. But these programs have not always been designed well to work with each other. 

Responding to this need for better coordinated Federal rental policy, last year the White House’s Domestic Policy Council established the interagency Rental Policy Working Group.  As part of its coordinating efforts, the Rental Policy Working Group has engaged State, local, individual and private stakeholders to identify administrative changes that could increase overall programmatic efficiency and further enhance the ability of communities to create and preserve affordable housing.  Through this process, recommendations have been developed to align physical inspections, financial reporting, appraisals, market studies, capital needs assessment, energy efficiency, fair housing enforcement compliance, subsidy layering reviews, and tenant income certifications.

Of these opportunities, two in particular – physical inspections and subsidy layering reviews – were deemed to be particularly ripe for immediate implementation as the redundancies were glaringly obvious.  A property that has multiple Federal funding sources may be subject to duplicative physical inspections using multiple physical inspection standards. Similarly, most Federal housing programs require agencies to certify that all subsidies provided to a particular affordable housing development do not exceed its costs with each program performing a nearly similar review of these multiple subsidy sources. Through the launch of pilots, where local solutions can be supported, tested, and potentially taken to scale, Federal, State, local, and private partners can begin to realize cost and time savings, as well as to enable program dollars to be put to use more quickly, ensuring that low-income families can continue to have access to affordable rental housing when it is needed most.

The upcoming Rental Alignment Conference will discuss the pilots being launched in ten states, as well as the future direction of other key cost- and time-saving administrative alignments that will help ensure affordable rental housing’s continued success in serving our most rent-burdened and at-risk families.  We look forward to your feedback. 

Derek Douglas is the Special Assistant to the President for Urban Affairs