House unanimously passes major reforms to federal rental assistance program – now onto Senate

Earlier this year the U.S. House of Representatives unanimously passed (by a vote of 427 Yeas to 0 Nays) H.R. 3700, “Housing Opportunity through Modernization Act” (HOTMA). HOTMA proposes the first major reform to the federal rental assistance program in eighteen years. The bill eases administrative burdens for housing agencies and owners, while delivering more efficient and flexible assistance to low-income households and helping to preserve public housing.

The Congressional Budget Office estimates that these “modernizing” reforms to rental assistance will reduce spending by $311 million over five years. According to analysis by the Center on Budget and Policy Priorities, these savings will enable HUD to help all families currently receiving assistance at a lower cost and serve more families for the same amount of spending.

The core of the bill mostly affects individuals receiving federal rental assistance or those residing in public housing. The bill:

  • Expands access to low-poverty areas by allowing housing authorities to use more project-based housing vouchers in high-opportunity areas. In 2014, only 13 percent of families with children participating in the voucher program lived in neighborhoods where fewer than 10 percent of residents were poor;
  • Raises the percent of an agency’s voucher assistance that the agency can project-base in areas where vouchers are difficult to use;
  • Streamlines rules for determining tenant rents;
  • Makes households that exceed new income and assets limits ineligible for assistance;
  • Places households with tenant-based vouchers and who are at risk of experiencing homelessness in homes more quickly by streamlining  the process for inspecting units in emergencies;
  • Encourages work by delaying rent increases for tenants who start employment or whose earnings rise because they get better-paying jobs;
  • Facilitates the use of project-based vouchers in Low Income Housing Tax Credit properties by extending the contract term for these vouchers from 15 to 20 years;
  • Preserves public housing by giving agencies the flexibility to transfer operating funds to capital funds for renovation projects;
  • Alters how tenant incomes are calculated by increasing deduction thresholds for medical and disability expenses for tenants in public housing or receiving rental assistance;
  • Addresses rural housing instability by creating the Multifamily Housing Revitalization Program to provide affordable rural housing and speeds up approval of rural housing loan guarantees;
  • Eases restrictions on the purchase of condominiums with Federal Housing Administration insurance.

Many of the provisions in H.R. 3700 have received prior congressional consideration. This is not the first time members of Congress have sought to update outdated aspects of federal rental assistance programs. The House’s passage of the bill is particularly exciting because of the unanimous bi-partisan support. Having passed in the House, the bill has moved to the Senate where it awaits consideration.

To learn more about the bill’s reforms, check out CBPP’s comparison between HOTMA and current law. For a more thorough analysis, read CBPP’s blog and the National Low Income Housing Coalition’ blog.