PBRA Contracts at Risk of Short Funding

On Feb. 24, the U.S. Department of Housing and Urban Development (HUD) posted a revised version of Fiscal Year 2013 Budget Proposal - PBRA Summary, a document sent direct to LeadingAge following a meeting held on Feb. 16 to discuss the administration’s reduced funding request for FY13 Section 8 project-based rental assistance renewals. Contact Julie Martin for additional assistance.

HUD Secretary Donovan told stakeholders in a briefing that this reduced funding request for PBRA was a very difficult choice to make but was necessary in the context of the larger fiscal freeze mandated under the Budget Control Act.

Further, he indicated that this reduction in funding will mean that approximately 70% of PBRA contracts will be funded for less than twelve months at the time of their annual funding renewal cycle. This will not result in a repeat of the payment disruptions that occurred during 2006 and 2007.

The original and revised documents outline assumptions of administrative changes underway this year as well as assumptions of proposed changes for next year that could be used to offset the reduction and make assurances that the proposed short-funding of contracts, if accepted by Congress, would not result in gaps or delays in payment.

Changes were not substantive, but the content is certainly the subject of significant concern.  Both documents begin:

"The administration’s funding request for the Section 8 Project Based Rental Assistance Program (PBRA) for Fiscal Year (FY) 2013 was reduced from FY2012 enacted levels. The department faced a number of difficult budget choices this year and the decision to reduce funding levels for PBRA was made only after carefully determining that this reduction would not interrupt payments to owners or reduce the number of families served."

It is concerning that during tough budget times HUD would revert to old practices in funding its Project-Based Section 8 Program, practices which it, itself, criticized in the past. Some have dubbed this as “HUD Project-Based Section 8 Funding: Back to the Future”

Aging Services of Washington / LeadingAge’s position

While we understand HUD’s imperatives to reduce the cost of the Section 8 program and appreciate their explanations, we are not supporting the measures outlined in the fact sheet including:

• Short funding.
• The change in the medical deduction.
• The claim to residual receipts as off sets for future rent increases.
• The minimum rent increase, although hardship exemptions should alleviate that concern.

LeadingAge will continue to meet with HUD and with senators and representatives working to obtain funding for full 12-month contracts for all properties, to ensure that residual receipts policies do not put properties at risk or threaten future service coordinator or refinancing commitments, and to mitigate medical deduction proposals that could result in untenable rent increases for seniors.

Submit your examples

In the meantime, members are encouraged to submit any examples of the detrimental impacts these policies could have on operations and residents, and to communicate with their elected officials messages about the value and importance of their programs and the impacts these proposals could have on residents.