Section 8 Housing Choice Vouchers: Additional Implementation Guidance of the Housing Choice Voucher Mobility Demonstration for Awarded PHAs

AGENCY:

Office of the Assistant Secretary for Public and Indian Housing (PIH), Department of Housing and Urban Development (HUD).

ACTION:

Notice.

SUMMARY:

On July 15, 2020, HUD published a notice (Implementation Notice) implementing the Housing Choice Voucher (HCV) mobility demonstration (demonstration) authorized by the Consolidated Appropriations Act, 2019. The demonstration was later renamed the Community Choice Demonstration (CCD). Through the Implementation Notice, HUD made available up to $50,000,000 to participating Public Housing Agencies (PHAs) to implement housing mobility programs. On April 30, 2021, HUD announced its selection of PHAs that would participate in the demonstration. Those PHAs received $45.7 million in total funding under that award. On April 4, 2022, HUD issued “Section 8 Housing Choice Vouchers: Implementation of the Housing Choice Voucher Mobility Demonstration for Awarded PHAs, Supplementary Notice for Demonstration Participants” (Supplementary Notice) which supplemented the Implementation Notice and described additional policies and flexibilities for PHAs selected to participate in the demonstration. Building on the implementation experience since the Supplementary Notice, HUD has identified further policies and flexibilities necessary to ensure effective PHA participation in the demonstration. Additionally, this notice provides requirements related to recapture and reallocation of funds.

FOR FURTHER INFORMATION CONTACT:

Ryan Jones, Director, Housing Voucher Management and Operations Division, Department of Housing and Urban Development, 451 Seventh Street SW, Room 4214, Washington, DC 20410, telephone number (202) 402-2677. (This is not a toll-free number). HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs. HUD encourages submission of questions about the demonstration to be sent to: HCVmobilitydemonstration@hud.gov.

SUPPLEMENTARY INFORMATION:

I. Background

On July 15, 2020, HUD published the Implementation Notice for the demonstration authorized by the Consolidated Appropriations Act, 2019. (85 FR 42890) Through that Implementation Notice, HUD made available up to $50,000,000 to participating PHAs throughout the country to implement housing mobility programs by offering housing mobility-related services to increase the number of voucher families with children living in opportunity areas. On April 30, 2021, HUD announced that nine lead PHAs would participate in the demonstration and those PHAs were awarded new housing choice vouchers, referred to as Mobility Demonstration Vouchers (MDVs) and housing mobility-related services funding. HUD also announced that an additional four PHAs that applied in partnership with a lead PHA were awarded new housing choice vouchers. Those PHAs were to receive $45.73 million in total funding under that award. Through the demonstration, the awarded PHAs will provide approximately 9,000 families with children with better access to low-poverty neighborhoods, high-performing schools, and other strong community resources.

The Implementation Notice described broad parameters for selected PHAs, including the set of housing mobility-related services that they would likely be required to provide to families participating in the program, the likely research design, and an estimated cost of services per family offered participation in the program. The Implementation Notice also described a required evaluation that would be conducted at the selected PHAs and explained that some aspects of the program and research design would be determined jointly by HUD (including its evaluation contractor and technical assistance provider) in collaboration with the selected PHAs.

On April 4, 2022, HUD supplemented the Implementation Notice with a Supplementary Notice describing policies and flexibilities for PHAs selected to participate in the demonstration. (87 FR 19522) After publication of the Supplementary Notice, one PHA demonstration site (both the lead PHA and its partner PHA), and one partnering PHA, withdrew their participation from the demonstration. As a result of those withdrawals, combined with funding not initially awarded, HUD now has $1,814,262 in MDV assistance and $7,346,290 in funding for housing mobility-related services to be awarded to PHAs previously competitively selected under the Implementation Notice. Additionally, as the demonstration implementation has advanced, HUD and the PHAs have clarified additional policies necessary to promote the goals of the demonstration and have identified policies necessary to execute the evaluation. Finally, HUD has determined it necessary to adjust the anticipated timelines for implementation of the selected mobility-related services (SMRS) treatment arm. This notice describes HUD's determination to delay the SMRS implementation timeline, additional policies necessary to implement the demonstration, and a funding award process.

II. Changes to SMRS Implementation Timeline

The Implementation Notice estimated that HUD would implement a second treatment arm that would receive a subset of the services offered under comprehensive mobility-related services (CMRS) in years three through six of the demonstration. HUD has since determined that it will delay the implementation of the SMRS in order to perform additional analysis of the preliminary data being used to develop the SMRS interventions. HUD will publish an additional Federal Register document describing any revisions to the timelines and research design for the introduction of the SMRS.

III. Regional PBV Plan

The Implementation Notice described that PHAs that received funding for the development of a Regional Project-based Voucher Plan (RPBVP) would develop the plan throughout the first three years of the demonstration. The plan would then be submitted to HUD at the beginning of the fourth year of the demonstration, which is May 1, 2025. Given the demands of the initial planning period for the demonstration and implementation, HUD recognizes that PHAs may not have had adequate time to develop their RPBVP. Therefore, HUD is extending the deadline of the RPBVP to the start of the seventh year of the demonstration, which is May 1, 2027.

In addition, the RPBVP was an optional component of the Implementation Notice and is not being studied as part of the evaluation. HUD recognizes that PHAs may wish to reconsider their participation in this optional component. Therefore, HUD is allowing those PHAs awarded funding for this component to withdraw from their obligations to develop a RPBVP. PHAs wishing to withdraw from the RPBVP component must submit a written letter to HUD requesting withdrawal. Written requests can be submitted via email to HCVmobilitydemonstration@hud.gov. HUD will only allow withdrawal from the RPBVP component for PHAs that have not already incurred substantial expenses ( i.e., more than 60 percent of awarded RPBVP funds) under the RPBVP for which they are requesting reimbursement by HUD. PHAs must submit their withdrawal request prior to the May 1, 2027 deadline for plan submission. All awarded and unexpended funds from any site that withdraws from the RPBVP component will be reallocated in accordance with Section VIII of this notice.

At this point in the demonstration, HUD also recognizes that sites that initially did not apply for RPBVP funding may have identified a new need to develop a RPBVP. Therefore, HUD is also allowing PHAs that were not initially awarded RPBVP funds to request funding for this component. Lead PHAs wishing to request RPBVP funds for a demonstration site must submit a written letter to HUD requesting funding. In the request, the PHA must demonstrate that it will be able to expend the requested funds and submit a final RPBVP by the May 1, 2027, deadline. Written requests can be submitted via email to HCVmobilitydemonstration@hud.gov.

IV. Extension of the Demonstration Participant Enrollment Period

As described in the Implementation Notice, PHAs would enroll families through year six of the demonstration, which would conclude on April 30, 2027. However, the Consolidated Appropriations Act, 2019 authorized the demonstration through October 1, 2028. In order to provide PHAs more time to enroll families and meet their commitments, HUD is extending the participation period for PHAs through the statutorily authorized date of October 1, 2028. This participation period extension is optional, and PHAs must inform HUD in writing if they want to extend their participation period. PHAs may elect to enroll families through April 30, 2028, or may extend for a lesser period of time by enrolling families through December 31, 2027.

V. Mobility Demonstration Vouchers

Families with children receiving voucher assistance through an MDV that agree to participate in the demonstration are randomly assigned to a treatment group that receives housing mobility-related services or a control group that receives HCV program services already offered by the PHA to all HCV applicants and participants. Although most participants in the demonstration are existing voucher holders, each PHA has received an allocation of MDVs. Families that receive an MDV are required by statute to participate in the demonstration. A family is considered to be participating in the demonstration if they initially enrolled in the study and were randomly assigned to either the treatment or control group. A family that was participating in the demonstration and subsequently withdraws from the study, or no longer has children in the household, may continue to use their MDV. PHAs are encouraged, however, to provide a regular turnover voucher to such families in order to provide the MDV to a family with children actively enrolled in the study.

As provided in the Implementation Notice, after October 1, 2028, MDVs will no longer be restricted to the purposes of the demonstration. The MDVs will then become part of a PHA's regular HCV program and continue to be available to the PHA upon turnover. However, due to the statutory language authorizing them, these vouchers will continue to be restricted to families with children (age 17 or younger).

VI. Eligible Uses of Funds

Throughout the implementation of the demonstration, PHAs and HUD have identified additional uses of housing mobility-related services funding that will increase effective program implementation, especially the SMRS. These uses of housing mobility-related services funds were not directly addressed by the Implementation Notice or the Supplementary Notice. For the purposes of transparency and clarity, HUD has included a discussion of these uses of funds in this notice.

PHAs participating in the demonstration must recruit and enroll families into the study. In the Supplementary Notice, HUD provided that each PHA site ( i.e., an individual PHA or the lead PHA and its partner) may use up to $40,000 each year for staff time and expenses related to recruitment and enrollment. After working closely with PHAs to understand their current time commitment for these activities, HUD is increasing the eligible amount up to $80,000 each year.

Under the Implementation Notice, HUD provided that PHAs may use up to $250,000 of their funding award for start-up costs. Many participating PHAs used their funds for start-up costs related to the CMRS. Based on the level of effort required for CMRS planning, HUD recognizes PHAs may need additional start-up funds to assist in planning for the SMRS. PHAs may use up to an additional $100,000 for SMRS start-up expenditures, upon written approval from HUD.

PHAs may use their existing housing mobility-related services funding award to pay for these activities. PHAs must update their annual expenditure plans to reflect the amount of funds they intend to use for these purposes and begin immediately reporting these expenditures on their invoices and in HUD's Voucher Management System (VMS).

VII. Demonstration Withdrawal and Recapture of Funds

In 2023, one PHA site (both the lead PHA and its partner PHA), and one partnering PHA, voluntarily withdrew from the demonstration prior to enrollment of any families. These PHAs remitted their funding award to HUD, and HUD has recaptured the funds. This recapture included $3,218,700 in housing mobility-related services funding and $1,814,262 in remaining funding for MDVs.

HUD now establishes criteria for withdrawal—whether voluntary withdrawal on behalf of the PHA or termination of PHA participation by HUD—to help ensure impacts to families and landlords are effectively mitigated since all participating PHAs are well into enrollment. Participating PHAs that wish to request to voluntarily withdraw from the demonstration must submit a letter in writing, with an associated board resolution, recommending withdrawal to HUD. The letter must state the key reasons for withdrawal from the demonstration and a proposed plan for mitigating the impact on participating families and landlords. Upon receipt of the letter, HUD will review the PHA's request. In determining whether voluntary withdrawal will be approved, HUD will consider the PHA's rationale, the impact on participating families and landlords, including any evidence that the PHA's withdrawal from the demonstration would have an unlawful discriminatory effect on participating families or otherwise violate civil rights requirements, and the research evaluation. HUD will make its best efforts to honor the PHA's request.

Adherence to the Implementation Notice, Supplemental Notice, this Notice and the Statement of Responsibilities is critical to ensuring the success of the demonstration. PHAs that have been materially non-compliant with demonstration requirements may be terminated from the demonstration and have their funding recaptured. HUD will issue a notice of corrective action to PHAs found to be in material non-compliance with demonstration requirements, as defined in the Statement of Responsibilities. PHAs will have no fewer than six months to cure any material non-compliance. If after six months, the PHA is found to continue to be in material non-compliance, HUD may issue a notice of intent to terminate the PHA's participation in the demonstration. The PHA may respond to that notice and ask HUD to reconsider its determination.

If HUD accepts a PHA's request to voluntarily withdraw or determines that the termination of participation is necessary, HUD will work closely with the PHA and the evaluator to develop a process by which the PHA will carefully end their participation and implement their plan for mitigating the impact on participating families and landlords. The plan must include consultation from any enrolled families to ensure that they are successfully transitioned out of the program. After that date, the PHA will submit final invoices to PIH CCD staff and complete final reporting in VMS, the PIH Information Center (PIC)/Housing Information Portal (HIP) and the demonstration's Service Delivery Tool. HUD's Financial Management Center (FMC) will reconcile and process any final invoices and determine the amount of the remaining grant funds. HUD FMC will then recapture the remaining funds from the PHA.

VIII. Additional Allocation and Reallocation of Funds

As mentioned in the Supplemental Notice, after the funding awards made on April 30, 2021, HUD had $4,127,590 in remaining housing mobility-related services funding. After the withdrawal of one PHA site, and one partner PHA, HUD has a total of $7,346,290 in housing mobility-related services funding and $1,814,262 remaining in funding for MDVs.

In any cases where a PHA that is part of a partnership site withdraws from the demonstration, but HUD allows the remaining PHA to continue their participation, HUD will reallocate the site's remaining housing mobility-related services funding, any awarded RPBVP funds and voucher assistance to the remaining PHA to support their continued participation in the demonstration, as they will assume the responsibilities of the withdrawn PHA.

In all other cases, for housing mobility-related services funding, HUD will reallocate funding in two ways: (1) HUD will equally distribute a portion of the remaining funding to all participating demonstration sites; and/or (2) HUD may reserve a reasonable amount of remaining funding to be distributed to sites based on need or for new RPBVP funding, by request. HUD will review requests for need-based funding from sites in accordance with the process described below. HUD may reallocate funding, as needed, throughout the remainder of the demonstration to ensure that sites have the necessary support and to maximize utilization of available funding.

In reallocating voucher assistance for MDVs, HUD will only reallocate recaptured voucher amounts based on need. Selected demonstration sites were required to demonstrate their need for MDVs in their initial applications for demonstration funding. In cases where one PHA withdraws from a partner site, HUD will reallocate recaptured voucher assistance from the withdrawn PHA to the remaining PHA, based on the entire site's determination of need presented in its initial application. For all other recaptured voucher assistance, HUD will reallocate to other demonstration PHAs based on their jurisdictional need and, when necessary, will prioritize the awards to sites with the highest number of enrolled families.

Any recaptured RPBVP funds due to a site withdrawing from their participation in the RPBVP component, voluntarily withdrawing from the demonstration, or having their participation in the demonstration terminated, will be recaptured and reallocated. Any unexpended RPBVP funds remaining after a site completes its plan will also be recaptured and reallocated.

PHAs wishing to request additional housing mobility-related services funding or voucher assistance under the demonstration must submit a request in writing to HUD. The request must include a narrative describing the need for additional funding, as well as a projected budget for the remainder of the demonstration showing the full expenditure of the requested funds or utilization of the voucher assistance. If applicable, the request should also include an amendment of the program budget for the current year.

IX. Continued Housing Mobility-Related Services at Demonstration End

Upon the October 1, 2028 statutory end date of the demonstration, HUD will work with sites to process final invoices and complete final reporting in VMS, PIC/HIP and the demonstration's Service Delivery Tool. After the demonstration ends, sites will be allowed to use remaining housing mobility-related services funds to continue providing any CMRS services, as described in the Implementation Notice and subsequent notices, to any family participating in a housing mobility program at the site. HUD will provide guidance to sites on invoicing procedures for these funds.

Any waivers and/or alternative requirements implemented by HUD, specific to the demonstration, will terminate upon the October 1, 2028 end date. In addition, any special uses of HCV funding or program flexibilities expressly allowed under the demonstration ( e.g., the use of non-MDV housing assistance payments for security deposits) will also terminate upon the October 1, 2028 end date. After the end of the demonstration, PHAs may continue to use their awarded housing mobility-related services funds, but the provision of services must be in accordance with normal HCV program rules.