New Developments: ICYMI: News of Note from HUD

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April was a busy month for affordable housing in Washington, DC. There were several prominent congressional hearings on the Department of Housing and Urban Development budget and housing finance reform, the confirmation of Mark Calabria as FHFA director, a flurry of activity around Opportunity Zones and some high-profile fair housing news (see David A. Smith’s The Guru Is In for more details). Given the burst of activity, you would not be blamed if you missed some of these recent developments at HUD. Rather than dig into the bigger news, I thought it would be helpful to highlight some of the below-the-radar activity that may have a significant impact on multifamily housing development and operations.

Section 3
Last year, NH&RA convened a working group of developers to meet with HUD on potential changes to Section 3 of the Housing and Urban Development Act of 1968. The goal behind Section 3 is to ensure that employment and other economic opportunities generated by federal financial assistance for housing and community development programs is, to the greatest extent feasible, directed toward low- and very low-income persons, particularly recipients of government assistance. On April 4, HUD published new proposed Section 3 regulations and I am pleased to share that many of our recommendations were incorporated into the proposed new rule. Highlights include:

  • Counting the proportion of total hours worked rather than counting the number of new hires.
  • Counting hours worked by employees of “Section 3 business concerns” towards Section 3 requirements (irrespective of whether the individual worker qualifies).
  • The creation of a new category of “Targeted Section 3 Workers” that includes YouthBuild participants, residents of HUD-assisted housing and low-income persons residing within specified distances from the project (requirements vary slightly by program).

The proposed rule would also align many reporting requirements with standard business practices and create some compliance safe harbors. Public comments are due on the proposed rule on June 2.

REAC
There has been a lot of ballyhoo in NH&RA’s Property Management and Asset Management forums on the implementation of new Real Estate Assessment Center (REAC) inspection protocols and REAC’s new proposed scoring model. In incremental news, HUD has indicated in a recent meeting attended by our Policy Director Kaitlyn Snyder that it will launch a volunteer pilot program in HUD’s Region 3 to allow properties to be inspected and assigned an advisory score utilizing the new protocols. NH&RA members are encouraged to participate as the pilot program will assist in the development of the new REAC scoring model and is a great opportunity to anticipate future internal changes companies will need to make to address organizational changes before the rules become mandatory. The voluntary pilot program will be rolled out to additional HUD regions later this year. We are also excited to announce that HUD Deputy Assistant Secretary for REAC Donald “DJ” Lavoy will be joining NH&RA at our 2019 Asset Management Conference on June 3-4 in Minneapolis to participate on the “Managing Your Management Company: Supervising the Internal and Third-Party Inspections” panel discussion.

Staffing News
Finally, we welcome back John Garvin to FHA, who has returned to HUD to serve as special advisor to FHA Commissioner & Acting Deputy Secretary Brian Montgomery. Garvin served as senior advisor to FHA commissioner/acting deputy assistant secretary for Multifamily Housing Programs in the George W. Bush Administration and previously served as the president & CEO of the Texas Affiliation of Affordable Housing Providers. In recent years, John has served as a consultant advising on numerous multifamily housing programs.

Thom joined National Housing & Rehabilitation Association (NH&RA) in 2004 and currently serves as its as Executive Vice-President and Executive Director. NH&RA is a national trade association and peer-network for affordable housing and tax credit developers and related professionals including: investors, lenders, public agencies and professional advisers. Thom directs the association’s day-to-day operations including legislative and regulatory advocacy, committee activities, conferences and events, publications, financial management and strategic planning. Thom also serves as the Executive Director of the Tennessee Developers Council, a state-wide trade association for affordable housing developers and professionals active in Tennessee. In 2013 he spearheaded the launch of NH&RA's Preservation through Energy Efficiency Project, a major educational initiative supported by the John D. and Catherine T. MacArthur Foundation. Thom also serves on the Board of Directors for International Center for Appropriate & Sustainable Technology (iCAST) as well as the Advisory Board for its ResourceSmart program, a turn-key, cost-effective, green rehab provider for multifamily affordable and market-rate housing communities and nonprofit facilities. Thom is a frequent speaker at affordable housing, sustainable development and tax credit industry events and has been published in a variety of industry journals including Tax Credit Advisor, Independent Banker, and the Novogradac Journal of Tax Credit Housing. Thom also serves as the Associate Publisher of Tax Credit Advisor, a monthly magazine for tax credit and affordable housing professionals and is an Executive Vice-President at Dworbell Inc., a boutique association management and communications firm in Washington, DC. Thom was previously employed at a national lobbying firm focusing on financial services and technology issues. Prior to moving to Washington, Thom worked in media relations in the New York State Assembly and as a research assistant for New Hampshire Governor Jeanne Shaheen. Thom graduated Magna Cum Laude from Tufts University with a double major in Political Science and History.