Increase Occupancy of Existing Affordable Housing by Simplifying the Qualification Process
Regulatory requirements for federally subsidized housing programs— such as the Low-Income Housing Tax Credit program (LIHTC) and Project-Based Section 8 Vouchers (PBV) — force households in crisis to wait months to be successfully approved for housing placements while affordable housing units sit vacant.
These policy proposals will simplify the affordable housing qualification process for all federal housing programs, primarily focusing on PBV and LIHTC, to move eligible households into vacant units more quickly. The current timeframe now is over a month, usually multiple months, to move a tenant into a unit. This should be shortened to a period of weeks, ideally days, for people in crisis. Shortening the approval process will mean more people housed for longer periods of time in housing that already exists.
Challenge and Opportunity
Income verifications
Income verifications are cumbersome, and most agencies require people to apply in person, often waiting for hours to be seen. Typically, applicants must return multiple times with additional required paperwork. The longer this takes, the more likely the original paperwork submitted will become stale, creating a vicious cycle of delay.
Eliminate mandatory in-person meetings: Agencies should be required to provide a phone-based mobile platform for applicants and allow digital submission of all documents. Pronto Housing, which has developed such an app, reports that when given the option 80% of housing applicants work on their applications between 7 pm and 1 am and on holidays and weekends. This will create fair access for people who work inflexible jobs that do not allow time off or prevent computer access.
Create “presumed-eligible” criteria: Households that are presumed eligible would have income qualification documentation waived at initial move-in. Possible criteria could include: recipients of other federal income-based programs such as Supplemental Nutritional Assistance Program (SNAP), Temporary Assistance for Need Families (TANF), Medicaid, or Low Income Home Energy Assistance Program (LIHEAP); severely disabled; chronically homeless; or seriously mentally ill. This should be achieved via executive processes within each agency. Los Angeles’s Community Development Block Grant (CDBG)-funded pilot program could be a model.
Allow access to HHS EIV: Allow all federal housing programs access to the Health and Human Services (HHS) Enterprise Income Verification (EIV) system. EIV, which the Department of Housing and Urban Development (HUD) currently uses but LIHTC and the Department of Agriculture (USDA) do not, provides information on employment status, unemployment, and Social Security benefits. Using this system across agencies would remove the need for applicants to submit redundant documents such as pay stubs and social security statements.
Inspections
In-person inspections required for Section 8 vouchers (both project-based and tenant-based) are completed by short-staffed Public Housing Agencies (PHAs). These inspections, even if done promptly, can expire before a tenant becomes income-qualified, creating a second vicious cycle of delay.
Waive inspections for new construction: For new construction or rehabilitation, where units are already inspected by local building officials, licensed architects, and contractors, allow reliance on a Certificate of Occupancy or certificate from a licensed architect. Those documents should be good for 12 months.
Plan of Action
At least one important proposal (access to EIV), and possibly more, will require legislation. None of these proposals require new funding, although the mobile-based application system may require some technical assistance funding to PHAs, which could be implemented under HUD’s existing Technical Assistance grant program.
1. Eliminating in-person meetings: HUD can make an administrative change requiring PHAs to implement a mobile-based application system, and then help them implement the program through technical assistance grants. For LIHTC projects, implementation of a mobile system would require action by the Internal Revenue Service (IRS). The IRS should be able to encourage adoption for LIHTC projects and provide guidance through an executive process even if a mandate for mobile access would require legislation.
2. Presumed eligibility: Establish cross-agency criteria for presumed eligibility at different income levels. The Biden Administration should direct HUD to develop criteria for presumed eligibility for affordable housing, seeking input from the IRS and USDA.
3. Access to EIV system: New legislation would be required to allow the IRS and USDA to access the HHS EIV system. Despite this hurdle, it would ultimately save all agencies time and money to have a unified system of income verification. This has been a topic of discussion among federal employees at these agencies for over a decade, yet the legislative action required has been a barrier that needs to be tackled.
4. Waive inspections for new construction: For new construction or rehabilitation, HUD should be able to implement a waiver of the inspection requirement at minimum as an emergency measure for households in crisis via executive/administrative action.
Counterarguments to the above proposals might include (i) the difficulty in changing existing systems and processes, (ii) the possibility of accepting an over-income tenant and (iii) the possibility of moving a tenant into an unsafe unit. With regards to the possibility of accepting an over-income tenant, the income verification process has skewed too far to the extreme of counting every penny and worrying that someone who is low income one month could be wealthy the next month. The sad reality of economic mobility in this country is that people who are low income mostly stay in that position and the risk of moving in with someone who is over-income is very low. The risk of having an eligible person give up on the process because it is currently too difficult is much higher. With regards to an unsafe housing unit, this is a serious issue that should not be minimized. However, new construction or rehabilitation under local building official oversight runs almost no risk of being unsafe and the Covid-era measures HUD has used for inspections are now years into testing.
Conclusion
Given the extent of the housing crisis throughout the United States, it is a tragedy that affordable units sit vacant for months due to complex paperwork requirements. Directly addressing the realities of access for low-income persons and treating homelessness like a true crisis by prioritizing housing access over paperwork will increase occupancy throughout the country by moving households into vacant units faster.
This idea of merit originated from our Housing Ideas Challenge, in partnership with Learning Collider, National Zoning Atlas, and Cornell’s Legal Constructs Lab. Find additional ideas to address the housing shortage here.