LeadingAge NY Meets with Key HUD Staff on Affordable Senior Housing Issues

On Fri., June 27, the LeadingAge NY staff and Housing Cabinet members met with Teresa Bainton, New York State director of Multifamily properties, and other HUD staff to discuss issues related to HUD subsidized senior housing.

Ms. Bainton introduced Tracy Schrager, the new director of project management. In addition, a new organizational structure will be implemented that includes an operations director and a production director in the New York City Hub, and an asset director in the Boston and Baltimore satellite offices.

The following updates were provided by HUD at the meeting:

• HUD is moving forward with their reorganization effort, called Multifamily for Tomorrow (MFT). The project manager position will be eliminated and replaced by the title of account executive that will align the asset management portfolio according to staff expertise. According to a May 5 HUD Washington briefing, three different roles will be established to manage assets based on asset risk and complexity: account executive, senior account executive, and troubled asset specialist. Account executives will manage the non-troubled and non-complex portfolio, senior account executives will handle potentially troubled and complex assets, and troubled asset specialists will focus on multifamily’s most risky and troubled assets. Yet, Ms. Bainton noted that within that reorganization, the current asset management employees in the Buffalo office will remain in their current locations.
• “Wave one” of the reorganization is currently underway. New York State is in “wave four” of the reorganization, which is anticipated to begin at the end of 2015.
• HUD may appeal to the Supreme Court the decision made by the U.S. Court of Appeals which ruled against HUD in the lawsuit on the Performance-Based Contract Administration (PBCA) case.  This decision reversed the earlier decision by the U.S. Court of Federal Claims.  The Court of Appeals ruled that the PBCA Annual Contributions Contracts (ACCs) are procurement contracts and not cooperative agreements that could be issued under a Notice of Funding Available (NOFA). Currently the NYS PBCA contract is held by the New York State Housing Trust Fund Corporation (HTFC) and CGI which has an ACC contract with HUD that has been extended through the end of December. 
• Due to the ACC not being finalized, several HUD projects have not had a Management and Occupancy Review (MOR) for several years. Yet, HUD has started to conduct MORs with properties that have been identified as “troubled properties.”  
• HUD has started to scan important documents in individual property files to be able to transition to off-site management of specific HUD administrative work.
• HUD is not going to approve any more age restriction waivers due to the current belief that the age restriction clause is in federal statute. Currently age waivers are approved on a one-year basis to increase property occupancy, yet once the waiver expires they will not be renewed.
• The Rental Assistance Demonstration (RAD) is a HUD priority, yet projects must be aware that a contact rent that is approved by a local housing authority under RAD may be lower than the current project rents.
• The 2014 Section 202 NOFA is still being worked on and should be coming out soon. There will not be any funding for capital under the NOFA, but it will probably include some Section 8 vouchers that will be coupled with the new construction. There is not funding for Section 202 in the 2015 HUD budget.
• HUD staff is not aware of any new policy directives involving Debt Service Savings (DSS).

In addition to the above updates, LeadingAge NY raised the following issues to Teresa Bainton:

• We are concerned about the possible HAP contract shortfalls that could occur with the 2015 HUD budget resolution and asked for a plan to be put into place if monthly HAP payments can’t be made to properties later in the fiscal year. HUD’s plan to transition project-based rental assistance to a calendar year has the potential for funding to run out on HAP contracts.
• With the Section 202 capital program being eliminated it will be very important for federal and state agencies to work together with providers, developers and lenders to develop affordable senior housing. LeadingAge NY is planning a fall forum on senior housing financing and is requesting participation from HUD New York and HUD Washington staff from the Office of Housing Assistance and Grant Administration that oversees the Section 202 portfolio.
• LeadingAge NY provided HUD with an update on the NYS Senior Supportive Housing Program and some of the innovative programs that were proposed to DOH.
• We continue to be concerned with the lack of funding to renovate PRAC properties. Ms. Bainton recognized the problem yet stated it was a Washington issue.

LeadingAge NY will review the information presented at the meeting to respond to Ben Metcalf, HUD’s deputy assistant secretary, on his request for comments on HUD’s 25 priorities for 2014.  Please let us know if you have any input that you would like us to include.

Contact: Ken Harris, kharris@leadingageny.org, 518-867-8835