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Monday, December 8, 2014

Tips for Labor Compliance on HUD Projects

Any time you use HUD funds, you need to determine labor compliance requirements. This can be a complex and intimidating facet of working with HUD, and your path to compliance may appear a bit cloudy. However, asking the right questions will significantly clarify things. In the next few posts, I provide some key guideposts that will help you navigate labor law as it applies to HUD projects.

Below are the principal categories of labor law that must be addressed when undertaking a government-funded housing or community development project. In this post, I'm going to focus on wages. I will focus on the rest in the upcoming couple posts.

  1. Wages
  2. Contract Conditions
  3. Apprenticeships
  4. Copeland "Anti-Kickback" Act
  5. Contract Work Hours and Safety Standards Act
  6. Equal Employment Opportunity and Section 3
In certain situations, HUD requires that HUD-funded projects pay federal "Davis-Bacon" or "prevailing" wages. These are minimum hourly wage rates by job classification that the federal Department of Labor sets periodically for each geographic area in the country. The wage rates are posted on DOL's website. It is important to figure out whether these wage rates are required early in the development process so that you know how it will affect your budget. To do that, you need to identify the source and amount of your project funding. CDBG or HOME funds will trigger federal Davis-Bacon wages. For CDBG, the federal wage rates apply to contracts over $2,000. For HOME, the federal wage rates apply to a project with 12 or more HOME-assisted units.

Beyond finding out funding sources and amounts, you should ask the following questions.

Who administers your HUD funds? Some pass through entities (most often states, less often localities) may layer their own requirements or their own interpretations of the federal requirements on top of federal law. 

When do you plan to start construction? The effective date of the applicable Davis-Bacon wage rate schedule will be the most recent date that is prior to the construction contract execution date.

What is your building type? The Dept. of Labor (DOL) classifies wage rates by building type- Building, Heavy, Highway and Residential. DOL provides definitions of each on their website. Housing projects with up to four stories will be Residential. Nonresidential public improvements will generally be Highway if they involve streets, sidewalks or trails. If you are unsure of the building type, contact your local HUD Field Office for direction.

Will you use state or local funds that will trigger additional prevailing wages? Many states or localities require use of their own prevailing wage rates in addition to the federal prevailing wages. In these cases, you must use the higher prevailing wage rate for all job classifications. For example, in California, federally-funded public improvement contracts over $2,000 are considered "public works" that trigger state prevailing wages. However, federally-funded low-income affordable housing projects do not trigger state prevailing wages if they meet certain conditions.

If you determine that federal Davis-Bacon prevailing wage rates do apply to your project, go to the DOL website and select: 1) your region; 2) your building type; and 3) your applicable date based on your actual or projected construction contract execution date. Print out the applicable schedule. You will want to attach the schedule to your construction contract and reference it as a requirement, and require it to be attached and referenced in all of the general contractor's subcontracts as well.

On my next post I'll give some tips on contract conditions, including apprenticeships, the Copeland "Anti-Kickback" Act, and the Contract Work Hours and Safety Standards Act.


Thursday, November 13, 2014

Place-based Community Development: How Is It Financed? A Small City Example

As I discussed in my September 2nd Blog Post, the Obama Administration and HUD have placed a heavy emphasis on "place-based" community planning and development as a way to improve low-income communities. This is a strategy to build the capacity of diverse and complimentary local institutions to affect change. The investment focus is on people and place, rather than programs and projects.

As we know, it takes money to make anything like place-based community development happen. So how does that work? My involvement with the North Valley Housing Trust (NVHT) has provided me with a window into the financing aspect. NVHT is based in the City of Chico, California (population 90,000) with a service area of Butte County, California (population 230,000), located about 65 miles north of Sacramento. As such, this effort demonstrates some of the challenges and constraints of financing place-based community development in a small city that is not within a major metro.

Here's some background. Community development financing in California suffered a major blow two years ago when redevelopment agencies were eliminated to address State budget deficits. It could be argued that RDAs took more of a project-oriented approach, rather than place-based. Nonetheless, the impacts on communities across the state have been and will be devastating, especially with regard to the provision of affordable housing. Many cities, such as Chico, relied heavily on RDA funds. At the same time, federal and state housing and community development programs have been severely cut.

NVHT is a local housing trust fund that is attempting to address some of the impacts of recent federal and state budget cuts, while at the same time taking more of a place-based approach. About three years ago, a workgroup composed of representatives from local governments and nonprofits began meeting to develop NVHT's mission, goals and growth strategy. NVHT's purpose is to build a sustainable, locally-controlled fund that is adequately flexible to address the community's greatest housing needs. The workgroup determined that the fund's initial focus should be homelessness.

Three key partnerships provided a solid foundation upon which NVHT could grow: the City of Chico, 3CORE (a local CDFI), and the North Valley Community Foundation (NVCF). The City provided staffing and guidance to get the effort off the ground, as well as a place to convene stakeholders. As a certified Community Development Financial Institution (CDFI), 3CORE leveraged bank relationships and programs such as the State of California COIN network, which offers state tax credits to CDFI investors. As a successful and respected local foundation, NVCF has played the important role of 501c3 fiduciary and grant applicant, and has provided an exposure platform to donors.

Working together, the City, 3CORE and NVCF, along with a broad network of nonprofits, were able to raise $650,000 in COIN investments, and about $20,000 in other contributions. Many of the initial contributions came from participating Workgroup members, since the trust was just establishing itself. Not only were these initial contributions important to get things started, they had the added benefit of deepening Workgroup members' commitment. The COIN Investments and locally-raised funds positioned NVHT to apply for a $500,000 Local Housing Trust Fund Program matching grant from the State of California. On October 28th, NVHT was awarded this grant. NVHT is now moving forward with a strategic outreach plan, and will begin convening its permanent board at the beginning of next year.

The local housing trust fund is truly a place-based initiative. It is only possible through the commitment of local expertise, experience, partnerships and capital. At the same time, it cannot truly thrive without federal, state and/or regional investment. State programs (COIN and the Local Housing Trust Fund Program) were essential to making it happen, and the federal CDFI program may play a role in the future. This is especially the case for smaller cities and rural areas that attract less attention from CRA lenders and large foundations. Funds raised to date are a drop in the bucket compared to the need, but we have demonstrated that local institutions can step up to the plate and deliver, and that they need more tools in order to have greater impact.

Our next step is to more fully involve local businesses, particularly the health care sector, and the community at large. We plan to use the State grant to produce 4-5 units that will help individuals transition out of homelessness. This will be supplemented by supportive services funded through donations. We will also be working with the local housing authority to potentially provide some targeted rental assistance. Our goal is to demonstrate early success in order to earn greater trust from current and future contributors.

This is a fledgling real-world example of how place-based community development can work in a small city. If you want to see examples of implementing a more expansive vision for place-based community development financing, check out the HUD Secretary's Awards for Public-Philanthropic Partnerships. The website shows how some foundations, businesses and financial institutions are stepping up to play a major role in reshaping neighborhoods. Also see this PD&R Edge article for additional background.

Monday, October 27, 2014

Tips for working with HUD's new consolidated plan format

For HUD entitlement grantees submitting a consolidated plan ("ConPlan") this year or later, HUD has implemented a new format and process, called the "eCon Planning Suite". Gone are the long narratives with redundant section headings, and the incomprehensible CHAS tables. ConPlans can now be created and submitted within IDIS online, on forms with specific questions and prompts. Here are some tips on efficiently completing your ConPlan in the eCon Planning Suite and meeting HUD requirements.
  • The IDIS form has numerous screens, so it is easy to get disoriented. You can export the entire application to Word (button at the top of the main menu). That way you will have everything in one document. You can write your narratives in Word, proof-read and spellcheck, and then paste them back into IDIS. It's also a good idea to have the Word doc as a backup in case there are website problems. You can also use Word to copy and paste questions for consultation with others, as described below.
  • The IDIS form includes a section where you describe your process of consulting with others on the ConPlan (government agencies, nonprofits, etc.). In addition, you are required to get input on a number of sections. I recommend you copy and paste these questions from your Word version into emails and send to those you want to consult with early in the process. A list:
    • NA-10- Organizations serving victims of domestic violence, and serving low-income families with children
    • NA-40, MA-30- local Continuum of Care, shelters
    • NA-45- Organization serving persons with HIV/AIDS
    • NA-50- Public Works Dept.- need for public facilities, services and improvements
    • MA-25- Housing Authority- public housing units
    • MA-35- Organizations serving persons with special needs, mental disabilities
    • MA-45- Economic development organizations, CDFIs, community colleges- economic impacts, workforce needs and training
  • HUD has saved you a lot of time by pre-populating most of the tables with data from the Census, Labor Dept., and other sources. However, be aware, the data is old- 2011 old. Most communities have changed quite a bit since the low-point of the recession, so you need to make readers aware that this is not realtime information. It is a point-in-time snapshot. You might want to explain this in the introduction staff reports, and describe some ways that the community has changed in the last three years. You can add 2012 Census information, but it is still old. I will save time by using what is provided and providing a narrative in the introduction.
  • HUD has launched a companion mapping tool called CPD Maps to help you research demographic, economic and housing data. You can then easily upload thematic maps and spreadsheets to the IDIS ConPlan form as attachments. A feature that I am using compares your local geographic area to larger geographic areas, such as a city to the county, state and nation. To do this, click on "Data Toolkit" on the menu bar, then enter the geographies into the popup window. After you download the spreadsheet, first select your target jurisdiction on the Control Panel tab (cell shaded green). Then on each of the other tabs, you can select the geographies to compare to your jurisdiction among the pull down list in each column header. The HUD Exchange website has posted guidance on using CPD Maps.  
  • Community outreach is an essential part of the ConPlan, and HUD has emphasized the importance of reaching out to low-income, special needs and racial minority groups in its guidance. They have warned that if this is not done adequately, you may be required to go back and redo that section. There are a number of questions about outreach in the new IDIS form. Some recommendations:
    • Translate fliers into 2-3 of the other non-English languages in your area and distribute them to local housing and service providers, local government offices and libraries. Electronic media will not reach many low-income, homeless and/or non-English speakers. Use trusted communication channels for the groups you are trying to reach.
    • Plan at least a couple workshops targeted to low-income groups and hold them where they live. For example, I will have a workshop at a transitional housing complex for formerly homeless families, and a workshop at an SRO, where many of the residents have disabilities. In the past, we have also done workshops at the emergency shelter and affordable housing complexes. 
    • In addition to the focused workshops, hold at least a couple general community meetings.
    • Develop an email address list and send out regular e-newsletters to update on progress and remind about upcoming meetings. I have found that direct emails are much more effective than Facebook or Twitter for temporary outreach campaigns like ConPlans or Housing Elements.
    • Document everything for HUD- fliers, emails, ads, sign-in sheets, agendas and notes.
  • Remember that your first year's Annual Plan is included in the ConPlan. This is section "AP" in the IDIS main index. HUD hasn't issued 2015 allocations yet, so you will need to use your best projection for the budget. See the CPD Notice 14-015 for more information about the allocation and Annual Plan schedule.
Find additional guidance on using the new eCon Planning Suite here. Good luck with it! I think you'll find it much less cumbersome than the old ConPlan format.

Monday, October 6, 2014

The Latest HUD Developments for Continuums of Care

Just last month, HUD issued their 2014 Continuum of Care (CoC) Notice of Funding Availability (NOFA), making available $1.83 billion nationwide to fight homelessness. CoCs have to act quickly to secure these funds, as applications are due October 30th. In addition, CoCs are required to implement new 2014 HUD Data Standards for their Homeless Management Information Systems (HMIS) this month.

Here's the skinny on this year's CoC NOFA:

  • The Collaborative Application (former Exhibit 1) is not required, as this is covered by the 2013 Application for fiscal years 2013 and 2014.
  • The Project Applications (new and renewal) and related attachments are required.
  • The Priority Listing and related attachments is required. As was the case for the 2013 Application, CoCs must rank their project applications and group them in Tiers 1 and 2. Find your Annual Renewal Demand and Tier 1 Allocation (ARD minus 2%) here. The full ARDs are anticipated to be funded, but HUD is requiring the Priority Listing just in case they need to make cuts. 
  • Project Applicants must be informed of their Priority Listing rank at least 10 days prior to the application due date of October 30th.
  • Don't forget that you need to make the public aware of the opportunity to submit project applications by posting a newspaper or website notice.
More information and resources on the 2013 and 2014 NOFAs can be found here.

You can find information on the 2014 HUD Data Standards here

Tuesday, September 16, 2014

Is your community prepared to receive federal funds to fight homelessness?

One of the few positive trends in affordable housing over the last five years is the reduction in chronic homelessness nationwide. The U.S. Department of Housing and Urban Development's (HUD) definition of chronic homelessness is individuals that have been homeless for more than one year or that have had four or more episodes of homelessness in the past three years. In addition, HUD recently reported a decrease in homelessness among veterans since 2010.

How did this happen? Starting about 10 years ago, a consensus began building among the White House, Congress, and state and local governments, that ending chronic homelessness should be prioritized. As more programs began to demonstrate success in reversing the trend of growing chronic homelessness, more decision-makers got on-board (i.e. the Housing First model). Now there is general agreement among a majority of lawmakers, administrators and activists that homelessness is not good for the economy, it wastes public resources, and that there are proven models to reduce it.

This does not mean that general homelessness has been reduced in every community, and many communities are seeing more of it now than ever before. While federal funding for fighting homelessness has been steady over the last five years, it has not increased adequately to address the impacts of the recession and growing inequity on those living near the edge of homelessness. However, recent progress does show what can happen when all levels of government, local nonprofits and citizens get on the same page to support strategies that work.

So you may ask yourself whether your community is positioned to take advantage of the recent federal interest in ending homelessness. To do so, one must understand where the federal priorities are currently and anticipate where they will be over the next few years.

The principal federal funding program to address homelessness is HUD's Continuum of Care Program. In 2009, the HEARTH Act was passed to consolidate the former McKinney-Vento programs and prioritize funding to communities that coordinate resources for maximum efficiency and efficacy. The organizations that coordinate services and apply for funds are called Continuums of Care (CoCs). Their memberships consist of all entities that collaborate within a local geography (usually a County) to combat homelessness: government agencies, nonprofits, civic groups, etc.

The CoC Interim Rule (24 CFR Part 578; Vol. 77, No. 147) laid out HEARTH Act requirements for CoCs. These requirements include: establishment of a board or governing body, Lead Agency, and a Collaborative Applicant that submits the application to HUD on behalf of the COC; conducting a homelesess census every two years; and implementation of a Homeless Management Information System (HMIS). The HMIS provides a method to consistently measure the characteristics of the homeless population, available services, and progress toward goals.

The following are areas where CoCs should prepare to meet potential future HUD regulations and guidelines.

1.  Become familiar with Proposed HMIS Rule (24 CFR Parts 91, 576, 580 and 583; Vol. 76; No. 237).  It includes specific guidance on operating HMIS, including administration and development of data quality, security and privacy plans. Develop policies and procedures that adhere to the Proposed HMIS Rule, and the 2014 HMIS Data and Technical Standards.

2.  Establish a Governance Charter for the CoC that lays out the roles and responsibilities of the governing body (or board), committees, the Lead Agency, the Collaborative Applicant and the HMIS Lead Agency.

3.  Plan for a Coordinated Assessment System. This is a method of organizing the intake and assessment of homeless individuals across the CoC to maximize efficiency of services. The idea is to eliminate duplicative intake processes and better serve individuals through coordination.

Communities that undertake these steps will enhance their competitiveness to receive federal funds in the coming years. Feel free to let me know if you have specific questions about undertaking these steps.

Thursday, September 4, 2014

Did you forget about the 2013 Final HOME Rule? A focus on monitoring

If you use or advocate for the use of HOME funds, you'd probably like to forget about the 2010-2011 period- the recession, the debt limit wars, the media focus on nonperforming projects, the slashed budgets. That all led to the 2013 Final HOME Rule.

I had conveniently put it out of my memory when I was preparing a scope of work to conduct some rental project monitoring. But then it was brought to my attention- Participating Jurisdictions (PJs) actually don't have to do a complete site inspection every year for projects with more than 25 units anymore. That was the old rule that was still stuck in my head.

The monitoring component of the 2013 Final HOME Rule for rental projects is actually an improvement on the old regulations, from the PJ perspective. It allows for a more flexible and streamlined process that gives the PJ more discretion on where they choose to spend their time. This is a welcome change given that the timeline requirements for completing projects was significantly ratcheted up while administrative funding was cut.

The monitoring requirements are found in Section 92.504 of the 2013 Final HOME Rule. Here is the skinny on what's new:

  • At construction completion, the PJ must inspect the property for completion and compliance with the property standards found in Section 92.251 [92.504(d)(i)].
  • Ongoing site inspections do not have to be conducted every year, but can be done once every three years as long as there is no reason to follow up on non-compliance issues [92.504(d)(ii)].
  • The property owner must annually certify to the PJ that the property is suitable for occupancy and that it is in compliance with code and the HOME property standards found in Section 92.251 [92.504(d)(ii)(C)].
  • The PJ must annually examine the financial condition of HOME-assisted projects with 10 or more units for financial viability [92.504(d)(iii)(2)].
A couple recommendations:
  • Take a look at your old property inspection forms and make necessary revisions to bring them in line with the new HOME Rule Section 92.251 property standards. HUD has made a number of revisions to these standards. 
  • Start your financial condition examination with a review of the property's most recent audited operating statement.

Tuesday, September 2, 2014

Viewing housing beyond the four walls, and what it has to do with Ferguson and HUD

In America, we generally suppress discussions about inequity. We don't want to believe it exists, but it's always bubbling beneath the surface. Then a volcano erupts, seemingly out of nowhere to those who aren't paying attention, and we wonder why. In the wake of the latest eruption in Ferguson, racism and upward mobility have been more closely analyzed as factors in recent media coverage. Those factors should lead to a more holistic analysis of housing; that is, housing as a place, not just a product.

Five years ago, the Great Recession and the bailouts precipitated the 99% vs. 1% demonstrations. Due to these demonstrations and the widely felt economic pain, people started paying more attention to the huge income disparities in this country, not only in terms of current wealth, but more importantly in terms of unequal wealth growth over the last 30 years. Here's a powerful illustration.

To date, our national political leaders have proposed narrow, high-impact policies, such as tax credits for low-income households and an increase in the minimum wage. These are targeted measures that put money in people's pockets and make a significant economic impact. These policies address income inequality in the short-term, but they do not adequately address how we got here- the lack of income mobility. For example, do wage-based tax breaks or wage minimums help you climb to the next rung of economic success?

With Ferguson, questions about race and disparity between neighborhoods have invited a more expansive and constructive discussion. What does where you live have to do with income mobility? As it turns out, it has a lot to do with it. Neighborhoods provide residents with varying levels of access- to quality schools, jobs, recreation, clean air, healthy foods, and to the rest of the city with affordable transportation. Maybe most importantly, neighborhoods have social networks. If those networks include connections to people actively involved in politics, education or business, the residents will generally be much better off. The quality of these neighborhood social networks have an even greater impact on access for residents of low-income neighborhoods with poor public transportation.

We need to look at housing as an access point to opportunity, not just as a commodity. For example, we should be looking at more than housing affordability to gauge the affordability of living in a particular location. A study by the New York Citizens Budget Commission has been making the rounds lately, showing that New York City is actually one of the more affordable cities to live in even though it has one of the most expensive housing markets (summary from The Huffington Post). That's because transportation costs were figured into the equation, and NYC has the best public transportation system in the nation.

Within this framework of neighborhood access and assets, our nation's housing policies can make a big difference, and HUD has actually been leading the way in changing the approach from a federal level. The Obama Administration has been pushing an approach that focuses on place rather than solely focusing on programs. The Administration is really big on what is known as "place-based community and economic development", and it is advocated by think tanks such as Policy Link.

The idea is that sustainable, positive community change is only possible when we invest in local institutions in a strategic and coordinated way- schools, community colleges, libraries, community development corporations, etc. These institutions are usually run by community members, and therefore they know what the community needs and can draw on their social networks to meet those needs. This opens mentoring opportunities and career paths to residents. The White House Office of Urban Affairs found that "sustained exposure to disadvantaged neighborhoods is associated with a 60-80% decrease in the odds of high school graduation (see White House link below)." In addition, place-based investments have a better chance for sustained success than programs instituted from outside entities. This is because investments are placed in people and institutions that stay in the community and grow in capacity.

HUD and other federal agencies have made some important first steps to implement place-based strategies. Agencies such as DOT and HUD are actually coordinating research and planning to offer their resources to communities, which really hasn't happened in the past. Still, we have a long way to go, as Ferguson demonstrates. Since place-based strategies apply the philosophy of bringing more control and decision-making to the local level, I would hope that there is enough common ground to be found between the Left and the Right to advance it after Obama leaves office, but that will be challenging given today's polarized political environment. Success will only come with a sustained commitment at the federal, state, regional and local levels.

Here are some links where you can find out more about HUD and other federal efforts to implement place-based development.

White House's Neighborhood Revitalization Initiative
Summary of HUD's Choice Neighborhoods Initiative
HUD Promise Zones
Summary of the HUD/DOT Location Affordability Portal
HUD Location Affordability Portal

Friday, August 22, 2014

Welcome to HUD Info Exchange!

This is a blog to provide information about how the U.S. Department of Housing and Urban Development (HUD) works. The goal is to provide a resource for those working with HUD programs to improve their communities.

HUD has recently improved their formerly bewildering and byzantine website under the new domain name Even with the improvements, it can be challenging to search and find specific information, and it can take a long time to receive a response if you call or email HUD with questions. This is an open blog where I and others can provide information and respond to your questions. Hopefully it will build a small community with a knoweldge base that is helpful to anyone using HUD programs.

Please check out my HUD Quick Links below!