Urban Update: Aligning Federal Rental Housing Policy

The White House’s Domestic Policy Council (DPC) established an interagency Rental Policy Working Group in early 2010 to respond to the need for better coordination of Federal rental policy.  The White House hosted two gatherings in July 2010 to solicit suggestions for improved rental policy coordination from affordable rental housing developers and managers and from State and local officials.  These stakeholders identified many issue areas where administrative changes could increase overall programmatic efficiency and reduce the burdens on the public.  The objective was to seek better alignment of rental policy among three agencies that have significant affordable housing programs (Department of Housing and Urban Development, Department of Agriculture and Department of the Treasury) in order to reduce costs and paperwork obligations for property owners, developers, managers, and State and local governments.  The meetings explored a broad range of issues and ideas.  The notes from those meetings are available here.

The Rental Policy Working Group and alignment leaders assembled interagency teams to consider the recommendations provided by participants in the July gatherings.  They tasked the teams to survey current policy and, in consultation with State and local agencies and stakeholder groups, to find opportunities for greater Federal alignment.  The areas that were identified as in particular need of Federal coordination included physical inspections, operating budgets and financial reporting, and appraisals and market studies.  The teams are also working on capital needs assessment, energy efficiency, compliance, subsidy layering, and tenant income definition.

Many of the issues raised at the July gatherings reflect the simple fact that much Federal funding to support affordable rental housing flows through programs administered separately by the three Federal Departments.   Each Department receives funds based on its Department’s appropriations and each Department administers programs authorized by their respective legislative committees.  This decentralized administration of rental housing policy has generally been good for the rental housing field, as different programs respond to different needs and draw on the different strengths of the agencies that administer them.  It is also true; however, that separate programs and budget streams have created, over time, some inconsistencies and needless overlaps in administrative requirements.  As developers and owners of affordable housing become more sophisticated, they increasingly rely on multi-layered finance and subsidy structures, which are supported by multiple Federal programs.  These multiple sources of support bring with them overlapping certifications, reporting, and other duplications that can cause unnecessary complexity and cost.  In keeping with the Administration’s efforts to identify and use less burdensome tools for achieving policy ends, the interagency Rental Policy Working Group will be seeking ways to align the various rental housing programs with each other and within their own Departments. 

Derek Douglas is the Special Assistant to the President for Urban Policy in the Domestic Policy Council.

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