CARH’S BROADCAST E-MAIL – Legislative Update

August 11, 2015

As CARH members know from previous broadcast emails over the last year (July 20, 2015, July 9, 2015, December 14, 2014, September 12, 2014), the Administration in its Fiscal Year (FY) 2015 budget request and again in its FY 2016 budget request, asked Congress to include language which would prohibit Rural Development (RD) from renewing Rental Assistance (RA) contracts more than once during a fiscal year. Other recommendations that the Administration requested under the auspices of controlling RA spending were rejected by Congress. However, the “re-renewal language” was agreed to in FY 2015 and remains in the proposed spending bills for FY 2016. CARH and a cross section of other affordable housing groups and groups representing residents have vigorously opposed the re-renewal language. We have been advising RD and Congressional offices that RD controls rents, that re-renewals were part of RD’s budget containment strategy, and that shortages were inevitable, regardless of what RD was stating. RD used re-renewals to keep rents set at state-wide averages in many RD offices and then re-renewed contracts for the remaining term of the contract. The language prohibiting re-renewals prevented RD from renewing a second time, yet RD had no apparent plan to address needed processing changes. And now, many properties and residents that can least afford it, are being told that there is no RA.

In June, RD sent many borrowers a letter informing them that specific properties were or would very shortly run out of money. In that letter, RD gave borrowers “servicing” options which amounted to using existing resources needed for other costs to instead pay tenant rent. RD also recently agreed that in instances where the only alternative was to increase rents, Letter of Priority Entitlement (LOPE) letters would be made available to residents in those complexes. In June, RD stated that “only” 50 properties were affected.  However, CARH is beginning to hear from members across the country that borrowers are seeing from MINC that they are close to running out of money before the end of the fiscal year.

CARH understands that in the first quarter of the new Fiscal Year (October 1, 2015 to January 1, 2016) over 700 properties will be impacted! Attached, for CARH members use, are instructions that you can use to determine your RA needs from today through the end of your current contract.

It is imperative that this re-renewal language be deleted from the FY 2016 appropriations bills. Yesterday, CARH together with over 26 organizations throughout the country, sent the attached letter and corresponding attachments to Tony Hernandez, Administrator of the Rural Housing Service. Similar letters were also sent to the House and Senate Appropriations Committees.

It is important that we also have grassroots support for our efforts.  CARH members are urged to:

1. Contact your members of Congress and tell them that the renewal language needs to be eliminated for FY 2016 and additional funds allocated for FY 2015. Click here to contact your Senators and click here to contact your Representatives.  Even if you do not believe that your properties will be impacted in FY 2015 and the first quarter of FY 2016, at some point during your RA contract next year, you will be impacted.  (Due to the following members’ position on key committees, it is especially, important that you contact these members):
   • Jerry Moran (R-KS), Chairman, Senate Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration
   • Jeff Merkley (D-OR), Ranking Member, Senate Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration
   • Thad Cochran(R-MS), Chairman, Senate Appropriations Committee
   • Barbara A. Mikulski (D-MD), Vice-Chair, Senate Appropriations Committee
   • Robert Aderholt (R-AL), Chairman, House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration
   • Sam Farr (D-CA), Ranking Member, House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration
   • Harold Rogers (R-KY), Chairman, House Appropriations Committee
   • Nita Lowey(D-NY), Ranking Member, House Appropriations Committee
2. Urge your residents to contact their members of Congress and well and tell them the impact of losing RA.
3. You may certainly cut and paste from the letters to the House and Senate committees attached above, but it is important that you tell the story of your individual properties. For example, if you are in the process of preservation transactions with Housing Credits and using other sources of funding, explain the impact that a loss of RA would have on those transactions.
4. Congress is in recess until after Labor Day. Many members of Congress are in their districts and this is the perfect opportunity to tell your story. Invite them to your properties and or offices so that they can see first-hand what this re-renewal language will do.

Please keep CARH’s national office updated of any meetings that you may schedule as well as outcome of these meetings. We will also keep CARH members informed of any developments that may occur with this issue. CARH’s board of directors will be meeting in Washington D.C. on September 17-18, 2015, and this will be one of the top items on our agenda during our meetings on Capitol Hill and with the national RD staff.

If you have any questions, please contact CARH at 703-837-9001 or carh@carh.org.