End Junk Fees for Renters Act

— 513 — Department of Housing and Urban Development ENDNOTES 1. At a 1998 Senate hearing, then-HUD Secretary Andrew Cuomo acknowledged that the department “faced a competence gap” and had “the dubious distinction of being the only federal agency designated as ‘high risk’ by the General Accounting [now Government Accountability] Office (GAO),” even referencing the Section 8 rental subsidy as “on the brink of becoming the next savings and loan scandal,” and explained how the department was stepping up enforcement efforts “focused on closing the competence gap by eliminating waste, fraud, and abuse.” See “Testimony of Secretary Andrew Cuomo before the House Appropriations Subcommittee on VA, HUD, and Independent Agencies,” March 25, 1998, https://archives.hud.gov/ testimony/1998/tst32598.cfm (accessed March 4, 2023). 2. H.R. 7984, Housing and Urban Development Act of 1965, Public Law No. 89-117, 89th Congress, August 10, 1965, https://www.congress.gov/89/statute/STATUTE-79/STATUTE-79-Pg451.pdf (accessed March 4, 2023). 3. U.S. Department of Housing and Urban Development, 2023 Budget in Brief, pp. 2 and 7, https://www.hud.gov/ sites/dfiles/CFO/documents/2023_BudgetInBriefFINAL.pdf (accessed March 4, 2023). 4. For example, the Special Applications Center (SAC) located in Chicago, Illinois, was established in 1998 as a division of the Office of Public and Indian Housing to accept, review, and approve all nonfunded, noncompetitive applications and plans for demolition, disposition, and conversion of land subject to an annual contributions contract (ACC) in public housing. 5. The Secretary has delegated full authority for the Administration and enforcement of the Fair Housing Act to the Assistant Secretary of the Office of Fair Housing and Equal Opportunity but also has delegated limited assignment and decision-making authority to the General Counsel. 6. Effectively the HUD Chief Operating Officer and appointed by the President with Senate advice and consent. 7. The Office of Hearings and Appeals (OHA) is an independent adjudicatory office within the Office of the Secretary. Led by a Director who is appointed by the Secretary, it supervises the Administrative Judges of the Office of Appeals, the administrative law judges of the Office of Administrative Law Judges, and the OHA support staff. The HUD Secretary appoints administrative judges and administrative law judges in accordance with the Administrative Procedure Act, 5 U.S.C. Chapter 5, https://www.law.cornell.edu/uscode/text/5/part-I/ chapter-5 (accessed March 4, 2023). 8. HUD currently has a Departmental Equity Assessment Working Group, supported with five FTEs funded by the OSDBU, “as part of the President’s Executive Order 13985, Executive Order On Advancing Racial Equity and Support for Underserved Communities Through the Federal Government.” See U.S. Department of Housing and Urban Development, 2023 Congressional Justifications, p. 35-15, https://www.hud.gov/sites/ dfiles/CFO/documents/2023HUDCongressionalJustificationsFINALelectronicversion.pdf (accessed March 4, 2023), and President Joseph R. Biden Jr., Executive Order 13985, “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government,” January 20, 2021, in Federal Register, Vol. 86, No. 14 (January 25, 2021), pp. 7009–7013, https://www.govinfo.gov/content/pkg/FR-2021-01-25/pdf/2021- 01753.pdf (accessed March 4, 2023). 9. Interestingly, “[t]he 2023 President’s Budget requests $748 thousand for CFBNP, which is $436 thousand less than the 2022 Annualized CR level. The Budget reflects total funding (carryover and new authority) of $1.2 million, $448 thousand less than 2022 total funding.” U.S. Department of Housing and Urban Development, 2023 Congressional Justifications, p. 35-16. 10. See H.R. 558, Stewart B. McKinney Homeless Assistance Act, Public Law No. 100-77, 100th Congress, July 22, 1987, https://www.govinfo.gov/content/pkg/STATUTE-101/pdf/STATUTE-101-Pg482.pdf (accessed March 5, 2023). Later renamed the McKinney–Vento Homeless Assistance Act. 11. Established under the Housing and Community Development Act of 1974, 42 U.S.C. §§ 5301 et seq., https:// www.law.cornell.edu/uscode/text/42 (accessed March 4, 2023). 12. S. 566, Cranston–Gonzalez National Affordable Housing Act, Public Law No. 101-625, 101st Congress, November 28, 1990, Title II, https://www.congress.gov/101/statute/STATUTE-104/STATUTE-104-Pg4079.pdf (accessed March 5, 2023). 13. S. 1, Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, Public Law No. 91-646, 91st Congress, January 2, 1971, https://www.congress.gov/91/statute/STATUTE-84/STATUTE-84-Pg1894.pdf (accessed March 4, 2023). “The URA establishes the minimum Federal requirements for the acquisition of real property for Federally-funded programs and projects, and for the relocation of persons who must move from — 514 — Mandate for Leadership: The Conservative Promise their homes, businesses, or farms as a direct result of acquisition, rehabilitation, or demolition for a Federally- funded program or project.” U.S. Department of Housing and Urban Development, HUD Exchange, “49 CFR Part 24–URA Regulations,” published February 2005, https://www.hudexchange.info/resource/804/ura-and- real-property-acquisition-policies-act-49-cfr-part-24/ (accessed March 4, 2023). HUD is one of the 18 federal departments and agencies that “are subject to the Uniform Act.” U.S. Department of Transportation, Federal Highway Administration, “Uniform Relocation Assistance and Real Property Acquisition for Federal and Federally Assisted Programs,” Federal Register, Vol. 84, No. 243 (December 18, 2019), pp. 69466–69521, esp. p. 69484, https://www.govinfo.gov/content/pkg/FR-2019-12-18/pdf/2019-25558.pdf (accessed March 4, 2023). 14. H.R. 3219, Native American Housing Assistance and Self-Determination Act of 1996, Public Law No. 104-330, 104th Congress, October 26, 1996, https://www.congress.gov/104/plaws/publ330/PLAW-104publ330.pdf (accessed March 4, 2023). 15. U.S. Department of Housing and Urban Development, 2023 Congressional Justifications, p. 6-1. The U.S. Housing Act of 1937 (Wagner–Steagall Act) established the origins of locally chartered housing agencies that administer federal funding for various rental assistance programs—a quintessentially progressive New Deal–era policy that expanded the administrative state’s powers to the housing market—with the primary legislative intent of eradicating slum housing in urban areas, boosting jobs, and providing housing for the working poor. 42 U.S.C. §§ 1437 et seq., https://www.law.cornell.edu/uscode/text/42 (accessed March 4, 2023). A decade later, the Housing Act of 1949 codified federal standards for housing livability—a rationale that HUD and federal legislators have continued to use to justify federal intervention in housing—establishing as a national policy objective the provision of a minimum standard of housing quality for all Americans. This legislation also statutorily established many of the rural housing programs that are administered at USDA and expanded programs facilitating the removal of slum housing in urban areas. 42 U.S.C. §§ 1441 et seq., https:// www.law.cornell.edu/uscode/text/42 (accessed March 4, 2023). 16. U.S. Department of Housing and Urban Development, 2023 Congressional Justifications, pp. 1-2 and 2-2. 17. The National Housing Act of 1934 established the FHA and the statutory authority for the secondary market. The main stated premise was to stimulate jobs and facilitate the housing and construction sector during the Great Depression. 42 U.S.C. §§ 1701 et seq., https://www.law.cornell.edu/uscode/text/12 (accessed March 4, 2023). 18. 42 U.S.C. §§ 2000d et seq., https://www.law.cornell.edu/uscode/text/42 (accessed March 4, 2023). 19. 29 U.S.C. §§ 701 et seq., https://www.law.cornell.edu/uscode/text/29 (accessed March 4, 2023). 20. HUD’s Departmental Enforcement Center (DEC) is led by a Director. It was established in 1998 as part of a broader effort to streamline and consolidate functions at HUD and was later merged with the Office of General Counsel. The DEC “is comprised of the Office of the Director, the Compliance Division, the Operations Division and five Satellite Offices” and describes its mission as “assuring the highest standards of ethics, management and accountability in the resolution of HUD's troubled properties.” U.S. Department of Housing and Urban Development, Departmental Enforcement Center, “Program Offices: Departmental Enforcement Center,” https://www.hud.gov/program_offices/enforcement (accessed March 4, 2023). 21. H.R. 5334, Housing and Community Development Act of 1992, Public Law No. 102-1017, 102nd Congress, October 28, 1992, Title X, https://www.congress.gov/102/statute/STATUTE-106/STATUTE-106-Pg3672.pdf (accessed March 4, 2023). 22. H.R. 8588, Inspector General Act of 1978, Public Law No. 95-452, 95th Congress, October 12, 1978, https://www. congress.gov/95/statute/STATUTE-92/STATUTE-92-Pg1101.pdf (accessed March 4, 2023). 23. Guiding questions: What immediate administrative reforms of HUD and its programs can be made with high probability of success? What short-term legislative reforms can be proposed that, in tandem with administrative reforms, would achieve the HUD vision/mission objective? What HUD offices should be eliminated and/or realigned to reduce any redundancy that may persist in programmatic functions? 24. Wholly aside from reforms that would require legislation, the next Administration must ensure that key political appointees are able to acquit themselves as change agents to execute administrative reforms. Otherwise, whether because of a sheer lack of skill and expertise or simply a lack of will and philosophical alignment with reforms, staff may frustrate the efforts of committed political appointee staff and leadership to execute substantive administrative reforms. To achieve the policy and regulatory reforms outlined in this chapter, political appointees must be carefully placed in positions that reflect not only technical, market/ industry, and operational expertise, but also a shared will and commitment.

— 509 — Department of Housing and Urban Development 3. Repeal the Affirmatively Furthering Fair Housing (AFFH) regulation reinstituted under the Biden Administration30 and any other uses of special-purpose credit authorities to further equity.31 4. Eliminate the new Housing Supply Fund.32 l The Office of the Secretary should recommence proposed regulation put forward under the Trump Administration that would prohibit noncitizens, including all mixed-status families, from living in all federally assisted housing.33 HUD’s statutory obligations include providing housing for American citizens who are in need. HUD reforms must also ensure alignment with reforms implemented by other federal agencies where immigration status impacts public programs, certainly to include any reforms in the Public Charge regulatory framework administered by the U.S. Department of Homeland Security (DHS). Local welfare organizations, not the federal government, should step up to provide welfare for the housing of noncitizens. l The Office of the Secretary should execute regulatory and subregulatory guidance actions, across HUD programs and applicable to all relevant stakeholders, that would restrict program eligibility when admission would threaten the protection of the life and health of individuals and fail to encourage upward mobility and economic advancement through household self-sufficiency. Where admissible in regulatory action, HUD should implement reforms reducing the implicit anti-marriage bias in housing assistance programs,34 strengthen work and work-readiness requirements,35 implement maximum term limits for residents in PBRA and TBRA programs,36 and end Housing First37 policies so that the department prioritizes mental health and substance abuse issues before jumping to permanent interventions in homelessness.38 Notwithstanding administrative reforms, Congress should enact legislation that protects life and eliminates provisions in federal housing and welfare benefits policies that discourage work, marriage, and meaningful paths to upward economic mobility. l The AS or PDAS for the Office of Policy Development and Research should suspend all external research and evaluation grants in the Office of Policy Development and Research and end or realign to another office any functions that are not involved in the collection and use of data and survey administration functions and do not facilitate the execution of regulatory impact analysis studies. — 510 — Mandate for Leadership: The Conservative Promise l FHA leadership should increase the mortgage insurance premium (MIP) for all products above 20-year terms and maintain MIP for all products below 20-year terms and all refinances. FHA should encourage wealth-building homeownership opportunities, which can be accomplished best through shorter-duration mortgages.39 Ideally, Congress would contemplate a fundamental revision of FHA’s statutory restriction of single-family housing mortgage insurance to first-time homebuyers.40 This would include (with support from HUD leadership): 1. Moving the Home Equity Conversion Mortgages (HECM) program once again to its own special risk insurance fund. 2. Revising loan limit determinations. 3. Providing statutory flexibility for shorter-term products that amortize principal earlier and faster. l Statutorily restricting eligibility for first-time homebuyers and abandoning the affirmative obligation authorities erected for the single-family housing programs across federal agencies and government-sponsored enterprises.41 l The HUD Secretary should move the HUD Real Estate Assessment Center (REAC) from PIH to the Office of Housing, which already implements property standards in its multifamily housing lending programs through the multifamily accelerated processing (MAP) lending guidelines. Giving HUD the authority to streamline the enforcement of compliance with housing standards across the federal government and flexibility for physical inspections through private accreditation should also be considered. l HUD should maintain its requested budget authority for modernization initiatives that are applicable to the Office of the Chief Information Officer and program offices across the department. LONGER-TERM POLICY REFORM CONSIDERATIONS42 Congress has charged HUD principally with mandates for construction of the nation’s affordable housing stock in addition to setting and enforcing standards for decent housing and fair housing enforcement. Regardless of intent, HUD’s efforts have yielded mixed results at best. Even today, more than a half-century after Congress put enforcement of so-called fair housing in the hands of the HUD bureaucracy, implementation of this policy is muddled by the repeated applica- tion of affirmative race-based policies. Also, the production mandate for HUD’s

— 509 — Department of Housing and Urban Development 3. Repeal the Affirmatively Furthering Fair Housing (AFFH) regulation reinstituted under the Biden Administration30 and any other uses of special-purpose credit authorities to further equity.31 4. Eliminate the new Housing Supply Fund.32 l The Office of the Secretary should recommence proposed regulation put forward under the Trump Administration that would prohibit noncitizens, including all mixed-status families, from living in all federally assisted housing.33 HUD’s statutory obligations include providing housing for American citizens who are in need. HUD reforms must also ensure alignment with reforms implemented by other federal agencies where immigration status impacts public programs, certainly to include any reforms in the Public Charge regulatory framework administered by the U.S. Department of Homeland Security (DHS). Local welfare organizations, not the federal government, should step up to provide welfare for the housing of noncitizens. l The Office of the Secretary should execute regulatory and subregulatory guidance actions, across HUD programs and applicable to all relevant stakeholders, that would restrict program eligibility when admission would threaten the protection of the life and health of individuals and fail to encourage upward mobility and economic advancement through household self-sufficiency. Where admissible in regulatory action, HUD should implement reforms reducing the implicit anti-marriage bias in housing assistance programs,34 strengthen work and work-readiness requirements,35 implement maximum term limits for residents in PBRA and TBRA programs,36 and end Housing First37 policies so that the department prioritizes mental health and substance abuse issues before jumping to permanent interventions in homelessness.38 Notwithstanding administrative reforms, Congress should enact legislation that protects life and eliminates provisions in federal housing and welfare benefits policies that discourage work, marriage, and meaningful paths to upward economic mobility. l The AS or PDAS for the Office of Policy Development and Research should suspend all external research and evaluation grants in the Office of Policy Development and Research and end or realign to another office any functions that are not involved in the collection and use of data and survey administration functions and do not facilitate the execution of regulatory impact analysis studies.