MRVP Bill Sub-Committee Meeting

Thank you for your advocacy on CHAPA priority bills at the Housing Committee hearing on Mass. Rental Voucher Program (MRVP) codification. To continue the work and hone the bill language further, we are setting up a sub-committee meeting on to discuss further.

REGISTER FOR THE MEETING! Registration Required.

MRVP bill 

Agenda:

• Welcome & Introductions
• Discussion on MRVP Bill language in relation to the following issues:
  • Moving to Payment Standard from maximum rent
  • Raising the FMRs
  • Percentage of Tenant Rent Share
  • MRVP Home Inspections
  • Increasing Admin Fee
• Next Meeting

Context for the Discussion:

As discussed at the last Rental Assistance meeting, we have the opportunity to make program changes to MRVP to make it more effective through the MRVP bill, specifically in relation to the topics on:

• Moving to Payment Standard:
  • Moving to a Payment Standard, instead of the current maximum rent will make it easier to use the vouchers by providing flexibility for the rent at which a unit can be leased with MRVP voucher. This will also align MRVP with Sec 8 and make MRVP more competitive.
  • Currently the maximum rent at which an MRVP voucher can be leased is at the area wide FMR set by the HUD. With a payment standard a housing authority can establish the payment standard amount for a unit between 90 percent and 110 percent of the FMR giving more flexibility to use the voucher.
• Raising the FMR
  • With the tight housing market, rents in most cities and towns have risen each year while the FMRs have been made current to the market rents only a few times at lengthy intervals. Raising FMRs to more than 110% or more could be discussed as an option to use the MRVP vouchers more easily (AHVP vouchers can currently be leased upto 110% FMR). 
• Appropriate Percentage of tenant rent share
  • Currently, both Mobile and Project based voucher holder need to pay at least 30% and not more than 40% of their income towards rent in the first year of occupancy. Beyond the first year, more than 40% can be paid - This was established in FY21 budget with the intent that if a participant wants to stay in a unit with a higher rent than allowed by MRVP, they have the option to do so by paying more in the tenant rent share.
  • The appropriate rent share for tenants needs to be discussed that provides flexibility for the tenant without increasing their housing cost burden.
• Inspections for Homes using MRVP vouchers
  • Sec 8 vouchers have inspections for units to be leased while MRVP does not. Having an inspection will help ensure that the unit is safe and compliant with the sanitary code (Sec 8 uses a separate standard than the sanitary code)
  • Need to consider the impact on time to lease and requirements for setting up infrastructure for inspections for this language.
• Increasing Admin Fee
  • The Admin fee can be tied as equivalent to Sec 8 program or simply be increased in amount to $80 or $100.

Clarifying Definitions (courtesy – NeighborWorks Housing Solutions)

• “Maximum Allowable Contract Rent for a Mobile MRVP Voucher (MRVP Notice 2019-02)

Maximum allowable contract rents are the maximum amount an owner may charge as contract rent for a unit under MRVP, regardless of utilities or the household’s income. The maximum allowable contract rent for MRVP mobile vouchers is equal to current area-wide FMR, as determined by HUD.”

• Contract Rent (MRVP Notice 2019-02)

“The contract rent is the total monthly rent specified in the lease and voucher payment contract for a contract unit occupied by a participant, including both the voucher payment from the Administering Agency and the amount of the participant’s tenant rent share. This contract rent cannot exceed the MRVP maximum rent.”

• Fair Market Rent (FMR)

“FMR is determined annually by HUD. HUD breaks Massachusetts into nineteen different regions or areas. Each city and town in an area has the same FMR. FMR is calculated based on unit size. “It is important to note that FMR is not equivalent to a payment standard in the Housing Choice Voucher Program.” (MRVP Notice 2019-02)

“In the Housing Choice Voucher (HCV) program, the FMR is the basis for determining the ‘‘payment standard amount’’ used to calculate the maximum monthly subsidy for an assisted family. In general, the FMR for an area is the amount that would be needed to pay the gross rent (shelter rent plus utilities) of privately owned, decent, and safe rental housing of a modest (non-luxury) nature with suitable amenities and is typically set at the 40th percentile of the distribution of gross rents.”  (Fed Reg Vol 85, No. 158, 8/14/20)

• Payment Standards (CFR 24 Sec. 982.503)

 “The payment standard amounts on the PHA schedule are used to calculate the monthly housing assistance payment for a family (§ 982.505).

“Establishing payment standard amounts. (1)(i) The PHA may establish the payment standard amount for a unit size at any level between 90 percent and 110 percent of the published FMR for that unit size.”

MRVP Bill Summary

MRVP Bill text (H.1428/ S898):

Chapter 121B of the General Laws, as appearing in the 2018 Official Edition, is hereby amended by adding the following section:-

Section 61. (a) The department shall, subject to appropriation, establish and administer through administering agencies, the Massachusetts Rental Voucher Program also known as MRVP, a program of rental assistance for eligible low-income, very low-income, and extremely low-income households through mobile and project-based vouchers for the purpose of obtaining decent, stable, and affordable housing and promoting economically mixed housing. The department shall issue the number of vouchers anticipated to completely utilize, but not exceed the appropriation for this program; provided further, that the department shall establish the amounts of the mobile and project-based vouchers so that the appropriation in this item shall not be exceeded by payments for rental assistance and administration.

(b) To be eligible to receive assistance under this section, a household shall have a net income that does not exceed 80 percent of the area median income, as determined by the U.S. Department of Housing and Urban Development. The department may award mobile vouchers to eligible households occupying MRVP project-based units that shall expire due to the non-renewal of project-based rental assistance contracts. Households shall meet eligibility requirements as required in this section and applicable regulations and guidance issued by the department. Not less than 75 percent of the vouchers shall be targeted to households whose income at initial occupancy does not exceed 30 percent of the area median income.

(c) A payment standard is the amount used by an administering agency to calculate the maximum amount of the MRVP subsidy. Except as provided under paragraph (d), the payment standard for each size of a dwelling unit in a market area shall not exceed 110 percent of the fair market rent, or Small Area Fair Market Rent as established annually by the U.S. Department of Housing and Urban Development, for the same size of dwelling unit in the same market area and shall be not less than 100 percent of that fair market rent, except that no administering agency shall be required as a result of a reduction in the fair market rent to reduce the payment standard applied to a household continuing to reside in a unit for which the household was receiving assistance under this section at the time the fair market rent was reduced. The department shall allow administering agencies to request exception payment standards within fair market rental areas subject to criteria and procedures established by the department.

(d) The department may require an administering agency to submit the payment standard of the administering agency to the department for approval, if the payment standard is less than 100 percent of the fair market rent or exceeds 110 percent of the fair market rent, except that an administering agency may establish a payment standard of not more than 120 percent of the fair market rent where necessary as a reasonable accommodation for a person with a disability, without approval of the department. An administering agency may use a payment standard that is greater than 120 percent of the fair market rent as a reasonable accommodation for a person with a disability, but only with the approval of the department. In connection with the use of any increased payment standard established or approved pursuant to either of the preceding two sentences as a reasonable accommodation for a person with a disability, the department may not establish additional requirements regarding the amount of adjusted income paid by such person for rent.

(e) A household that receives tenant-based assistance under this section, with respect to any dwelling unit, shall not pay for rent more than 30 per cent of the monthly adjusted net income of the household; except that households receiving tenant-based assistance under this section may pay more than 30 per cent of the monthly adjusted net income of the household, at their option, in excess of the payment standard for the voucher, provided that this amount may not exceed 40 per cent of the monthly adjusted net income of the household in the first year of occupancy; provided further that the department shall adjust household rent for those paying separately for utilities.

(f) The rent for dwelling units for which a housing assistance payment contract is established under this subsection shall be reasonable in comparison with rents charged for comparable dwelling units in the private, unassisted local market.

(g) For each dwelling unit for which a housing assistance payment contract is established under this section, the administering agency shall inspect the unit before any assistance payment is made to determine whether the dwelling unit meets the minimum standards of fitness for human habitation as required by the State Sanitary Code. These requirements cannot be waived. Each administering agency providing assistance under this section shall, for each assisted dwelling unit, make inspection not less often than biennially during the term of the housing assistance payments contract for the unit to determine whether the unit is maintained in accordance with the requirements of this paragraph.

(h) Effective as of January 1, 2022, the monthly administrative fee for all vouchers administered under this section shall be not less than the administrative fee rates for the Housing Choice Voucher Program, as established annually by the U.S. Department of Housing and Urban Development$80.00 per voucher, per month.

(i) The department shall maintain and administer a single voucher management system and shall collect data on the utilization of rental vouchers in each fiscal year under this program. This data shall include, but not be limited to: the location and value of each voucher-assisted unit; the number and average value of mobile and project-based vouchers currently distributed in the Commonwealth, in each county, and in each municipality; the household size; age of the head of household and each member of the household; the race and ethnicity of each household; the income and source of income of each household. The department shall report to the House and Senate Committees on Ways and Means and Joint Committee on Housing annually on the utilization of rental vouchers in each fiscal year under this program.  The department shall collect and report on the data collection as required under Chapter 334 of the Acts of 2006.

(j) The department shall promulgate regulations and guidance to implement this section.

(k) Any unspent funding appropriated for this program through budget line-item 7004-9024 in any fiscal year shall not revert, but shall be made available for the purposes of the item in the next fiscal year.