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HUD Extends PHAS Tenant Accounts Receivable Adjustment in the Management Assessment Subsystem to 2023 PHAS Assessments

On April 11, HUD published Notice PIH 2024-09pihn entitled, “Extension of the Adjustment to Tenant Accounts Receivable (TAR) Sub-indicator under the Management Assessment Subsystem (MASS) Indicator for the fiscal year 2023 Public Housing Assessment System (PHAS) assessment cycle.” The notice announces that HUD will extend its 2022 adjustment for assessing TARs in PHAS for agencies with fiscal year ends up to December 31, 2023.

Ordinarily, HAs would receive 5 points if their TARs were below 1.5 percent, 2.5 points if their TARs were between 1.5 percent and less than 2.5 percent, and no points if TARs were 2.5 percent or more. As a result of rent collection difficulties during the COVID-19 pandemic, HUD amended these standards in 2022 and awarded 5 points to HAs with TARs at 20 percent or less, 2.5 points when TARs were between 20 percent and less than 40 percent, and no points when TARs were higher than 40 percent. A table in the notice is confusing, apparently referring to tenant rents collected rather than tenant rents receivable. The new notice extends these revised standards to agencies with fiscal year ends on December 31, 2023, or earlier, 5 months before publication of this notice.

PHADA has communicated serious concerns with elevated TARs resulting from the pandemic and has advocated for relief concerning TARs scoring in PHAS with HUD Secretary Marcia L. Fudge, with leaders of Congressional appropriations committees, and most recently with Acting Secretary Adrianne Todman and top HUD-PIH officials. While extending this relief for an additional year is encouraging, HUD also announced in its notice that, “HUD intends to return to the regular scoring methodology for TAR for PHAs with fiscal years ending in 2024.” PHADA does not share HUD’s sanguine attitude that, for example, agencies with TARs of 20 percent in the fall of 2023 will be able to reduce those receivables below 1.5 percent by the fall of 2024.

HUD also observes that, “The long-term sustainability of the Public Housing program depends on families paying and PHAs collecting rent, so it is important that PHAs continue to work to improve tenant rent collection.” PHADA agrees with the Department and, as a result, has urged HUD to end its efforts to impose a permanent requirement for 30-day lease termination notices on HAs. That proposed rule would probably increase TARs balances by at least one more month of unpaid rent for families in default, tending to add to already historically high TARs.

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