BROADCAST EMAIL – Regulatory Update

August 20, 2019

1)  Management Fees Published for Fiscal Year 2020

Yesterday, Rural Development (RD) published a Procedural Notice (PN) 526 announcing final management fees for Fiscal Year (FY) 2020. Management fees will vary from state to state because RD has based the increase on HUD’s Operating Cost Adjustment Factor (OCAF) which varies based on location in the country and is applied to each state’s current maximum fee. (View Attachment 3-F, Chapter 3 of HB-2-3560 (page 55-56) for the chart listing each state’s management fee adjustment for FY 2020.)

As a reminder of the background, RD previously introduced OCAF as the base and CARH had requested that additional add-on fees should also be part of the management fee calculation. The additional add-on fees have not yet been agreed to by RD. Although management fees for FYs 2016-2020 have been based on OCAF, we will continue to advocate for add-on fees in addition to the use of OCAF for the base of the fees.  At CARH’s Annual Meeting and Legislative Conference in June, the Management Committee formed a special subcommittee to work with the new national RD office staff on this issue.

2) HUD Announces Proposed Fair Housing Disparate Impact Rule

Also yesterday, HUD published a Proposed Rule entitled, “HUD’s Implementation of the Fair Housing Act’s Disparate Impact Standard” in the Federal Register. In August 2018, CARH, along with several other affordable housing providers, sent a comment letter that responded to HUD’s request seeking comments on reconsideration of the current disparate impact rule. We expect to submit further comments on this latest proposal. The changes in the proposed rule appear to bring HUD rules in line with the Supreme Court’s decision Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. That decision created a refined test for demonstrating disparate impact violations that puts more focus on demonstrating a “robust” causal connection between the challenged policy and the harm alleged, and showing that the challenged practice constitutes an “arbitrary, artificial and unnecessary” barrier to housing for persons in protected classes, among other changes in Inclusive Communities. The decision also created a refined test for demonstrating disparate impact violations that puts more focus on demonstrating a “robust” causal connection between the challenged policy and the harm alleged, and showing that the challenged practice constitutes an “arbitrary, artificial and unnecessary” barrier to housing for persons in protected classes, among other changes. Comments are due on October 18, 2019.

Please contact the CARH national office at carh@carh.org or 703-837-9001 should you have questions or concerns.