[Federal Register Volume 81, Number 114 (Tuesday, June 14, 2016)]
[Rules and Regulations]
[Pages 38581-38585]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-13684]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 578

[Docket No. FR-5476-I-03]
RIN 2506-AC29


Continuum of Care Program--Increasing Mobility Options for 
Homeless Individuals and Families With Tenant-Based Rental Assistance

AGENCY: Office of the Assistant Secretary for Community Planning and 
Development, HUD.

ACTION: Interim rule.

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SUMMARY: On July 31, 2012, HUD published an interim rule entitled 
``Homeless Emergency Assistance and Rapid Transition to Housing: 
Continuum of Care Program.'' The Continuum of Care (CoC) program is 
designed to address the critical problem of homelessness through a 
coordinated community-based process of identifying needs and building a 
system of housing and services to address those needs. This rule amends 
the CoC program regulations to allow individuals and families to choose 
housing outside of a CoC's geographic area, subject to certain 
conditions, and to retain the tenant-based rental assistance under the 
CoC program. In addition to allowing individuals and families to choose 
housing outside of the CoC's geographic area, this interim rule exempts 
recipients and subrecipients from compliance with all nonstatutory 
regulations when a program participant moves to flee domestic violence, 
dating violence, sexual assault, or stalking. This relaxation of 
conditions is consistent with the Violence Against Women 
Reauthorization Act of 2013, directing greater protections for victims 
of domestic violence, dating violence, sexual assault, or stalking.

DATES: 
    Effective date: July 14, 2016.
    Comment due date: August 15, 2016.

ADDRESSES: Interested persons are invited to submit comments regarding 
this rule to the Regulations Division, Office of General Counsel, 451 
7th Street SW., Room 10276, Department of Housing and Urban 
Development, Washington, DC 20410-0500. Communications must refer to 
the above docket number and title. There are two methods for submitting 
public comments. All submissions must refer to the above docket number 
and title.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW., Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov. HUD strongly encourages commenters to submit 
comments electronically. Electronic submission of comments allows the 
commenter maximum time to prepare and submit a comment, ensures timely 
receipt by HUD, and enables HUD to make them immediately available to 
the public. Comments submitted electronically through the 
www.regulations.gov Web site can be viewed by other commenters and

[[Page 38582]]

interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.

    Note:  To receive consideration as public comments, comments 
must be submitted through one of the two methods specified above. 
Again, all submissions must refer to the docket number and title of 
the rule.

    No Facsimile Comments. Facsimile (fax) comments are not acceptable.
    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the 
above address. Due to security measures at the HUD Headquarters 
building, an advance appointment to review the public comments must be 
scheduled by calling the Regulations Division at 202-708-3055 (this is 
not a toll-free number). Individuals with speech or hearing impairments 
may access this number through TTY by calling the Federal Relay Service 
at 800-877-8339 (this is a toll-free number). Copies of all comments 
submitted are available for inspection and downloading at 
www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Norm Suchar, Director, Office of 
Special Needs Assistance Programs, Office of Community Planning and 
Development, Department of Housing and Urban Development, 451 7th 
Street SW., Washington, DC 20410-7000; telephone number 202-708-4300 
(this is not a toll-free number). Hearing- and speech-impaired persons 
may access this number through TTY by calling the Federal Relay Service 
at 800-877-8339 (this is a toll-free number).

SUPPLEMENTARY INFORMATION: 

I. Background

    The Continuum of Care (CoC) program is authorized by the McKinney-
Vento Homeless Assistance Act (McKinney-Vento), as amended by the 
Homeless Emergency Assistance and Rapid Transition to Housing Act of 
2009, which is Division B of Public Law 111-22, approved May 20, 2009 
(HEARTH Act). The purposes of the CoC program is to promote 
communitywide commitment to the goal of ending homelessness; provide 
funding for efforts by nonprofit providers and by State and local 
governments to quickly rehouse homeless individuals and families while 
minimizing the trauma and dislocation caused to homeless individuals, 
families, and communities by homelessness; promote access to and 
effective utilization of mainstream programs by homeless individuals 
and families; and optimize self-sufficiency among individuals and 
families experiencing homelessness. Section 1504 of the HEARTH Act 
directs HUD to establish regulations for the CoC program. (See 42 
U.S.C. 11301 note.) On July 31, 2012, at 77 FR 45422, HUD published an 
interim rule to establish, in 24 CFR part 578, the regulatory framework 
for the CoC program and the CoC planning process.
    Continuum of Care not only is the name of the program, but refers 
to the body responsible for carrying out the duties under the CoC 
program. In order to be eligible for funds under the CoC program, 
representatives from relevant organizations within a geographic area 
must establish a CoC. Representatives from relevant organizations 
include nonprofit homeless assistance providers, victim service 
providers, faith-based organizations, governments, businesses, 
advocates, public housing agencies, school districts, social service 
providers, mental health agencies, hospitals, universities, affordable 
housing developers, law enforcement, and organizations that serve 
veterans and homeless and formerly homeless individuals. Where these 
organizations are located within the geographic area served by the CoC, 
HUD expects a representative of the organization to be a part of the 
CoC.
    Although HUD issued its July 31, 2012, rule for effect, HUD also 
sought public comment, and at the end of the public comment period on 
October 1, 2012, HUD had received 551 public comments. HUD received 
valuable feedback from the public comments. However, HUD did not 
immediately move to the next rule stage because HUD wanted to examine 
how the interim regulations worked in practice. HUD has gained valuable 
information on where modifications may need to be made to its existing 
CoC regulations, not only on the basis of public comments received, but 
also on the basis of experience with the existing regulations to date.

II. This Rule

    This rule focuses on a narrow area of the existing CoC program 
regulations and that is the ability of an individual or family with 
tenant-based rental assistance funded through the CoC program to choose 
housing, outside of a CoC's geographic area, subject to certain 
conditions, and to retain the tenant-based rental assistance under the 
CoC program if the program participant moves outside the CoC's 
geographic area.
    McKinney-Vento and the CoC program regulations provide that CoC 
program grant funds may be used for rental assistance for homeless 
individuals and families. Rental assistance includes tenant-based 
rental assistance, project-based rental assistance, or sponsor-based 
rental assistance. With respect to tenant-based rental assistance, 
Sec.  578.51 of the CoC program regulations states that tenant-based 
rental assistance is rental assistance in which program participants 
choose housing of an appropriate size in which to reside. However, the 
CoC program regulations limit use of tenant-based rental assistance to 
within the CoC's geographic area. This limitation was determined 
reasonable because to serve individuals and families outside of the 
CoC's geographic area may impose greater burden and cost on the 
recipient providing the assistance. The only exception in the CoC 
program regulations to the limitation for retention of tenant-based 
rental assistance is for program participants who are victims of 
domestic violence, dating violence, sexual assault, or stalking who are 
at imminent threat of further harm. These participants, however, must 
have complied with all other obligations of the program and must 
reasonably believe that they are imminently threatened by harm from 
further violence if they remain in the assisted dwelling unit.
    Commenters on the July 2012 interim rule advised that the exception 
to retention of tenant-based rental assistance to the CoC's geographic 
area was too narrow. HUD received comments, generally, about high-cost 
housing markets and the difficulty that providers are having in 
locating affordable units within their CoC's geographic area because of 
the high cost of housing. A commenter stated that the requirement to 
use CoC program funds within the CoC's geographic area would cause 
undue hardship for clients and subrecipients due to the difficulty and 
time required to find affordable units in high-cost areas of their 
State. HUD also received comments about how the limitation requiring 
CoC program funds to be used within the CoC's geographic area 
restricted tenant-choice and limited opportunities for program 
participants to identify affordable housing. In response to these 
concerns, several commenters proposed, as a partial solution, that the 
regulation be changed to permit program participants to use CoC program 
funds to rent units outside of the CoC's geographic area.
    In light of the comments received on increasing mobility in the CoC 
program, and HUD's recently issued Affirmatively Furthering Fair 
Housing final rule,

[[Page 38583]]

which emphasizes the importance of housing choice,\1\ HUD has 
determined to amend the CoC program regulations to allow all 
individuals and families receiving tenant-based rental assistance being 
paid for with CoC program funds (program participants) to choose 
housing outside of the CoC's geographic area and to retain their 
tenant-based rental assistance if they move outside of the CoC's 
geographic area, subject to the following conditions:
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    \1\ See Affirmatively Furthering Fair Housing final rule, 
published on July 16, 2015, at 80 FR 42272.
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     The decision of a program participant to choose housing or 
move outside of the CoC's geographic area is one that is made in 
consultation between the program participant and the recipient or 
subrecipient.
     The recipient or subrecipient may decline a program 
participant's request to choose housing or move outside of the CoC's 
geographic area if the recipient or subrecipient is unable to comply 
with all CoC program requirements in the geographic area where the 
housing selected by the program participant is selected, including 
ensuring the housing meets required safety and quality standards (at 
the time of publication of this rule compliance with Housing Quality 
Standards (HQS) is required), carrying out environmental reviews where 
necessary, calculating the program participant's income for determining 
rent contributions, conducting an annual assessment of the program 
participant's service needs, making supportive services available for 
the duration of the program participant's residence in the project, 
ensuring supportive services are provided in compliance with all State 
and local licensing codes, and providing monthly case management in the 
case of rapid rehousing (RRH) projects. The only reason the provider 
may decline a program participant's request to choose housing or move 
outside of the CoC's geographic area is that the recipient or 
subrecipient cannot reasonably meet all statutory and regulatory 
program requirements. If the program participant's request to move is 
declined, but the program participant believes the provider could have 
reasonably accommodated the request, the program participant may 
contact the CoC or HUD directly.
     The receiving CoC (the CoC with jurisdiction over the 
geographic area to which the program participant seeks to move) is not 
involved in the decision to allow a program participant to move. Since 
discretion to move rests with the program participant, in consultation 
with the recipient or subrecipient providing the tenant-based rental 
assistance, with the goal being continuation of service by the original 
recipient or subrecipient, the receiving CoC may not prohibit the 
program participant from moving into its geographic area.
     The program participant remains in the Homeless Management 
Information System of the CoC where the program participant is enrolled 
for assistance.
    In brief, this rule provides the opportunity for persons who are 
experiencing homelessness to have access to additional possible housing 
options while still maintaining their tenant-based rental assistance 
from the recipient within the CoC where they were determined eligible 
for, and began receiving assistance. This rule will accomplish this by 
allowing program participants to use their tenant-based rental 
assistance in an area outside of the CoC's geographic area where the 
household presented for, and was determined eligible for CoC program-
funded tenant-based rental assistance. While this interim rule allows 
for expanded mobility, HUD anticipates that tenant-based rental 
assistance will be used principally within the CoC's geographic area.
    With respect to a CoC program participant who has tenant-based 
rental assistance and is fleeing imminent threat of further harm from 
domestic violence, the existing regulations allow such participant to 
move outside of the CoC's geographic area, but the program 
participant's move is subject to the program participant having 
complied with all program requirements during their residence in the 
CoC's geographic area. This rule would exempt the recipient or 
subrecipient from regulatory requirements (such as providing monthly 
case management for RRH projects and conducting an annual assessment of 
the service needs of the program participant that has moved), but the 
recipient or subrecipient would not be exempt from statutory 
requirements such as participating in HMIS, ensuring housing meets 
quality standards, and ensuring the educational needs of children are 
met. This amendment would facilitate ensuring the safety needs of 
victims of domestic violence, dating violence, sexual assault, or 
stalking by imposing less burdensome requirements on recipients and 
subrecipients while still ensuring that the housing that will be 
occupied by the victim of domestic violence, dating violence, sexual 
assault, or stalking meets all statutory requirements, including 
minimum quality standards.
    Specific Request for Comment: HUD seeks input from providers on the 
impact of exempting recipients or subrecipients from nonstatutory 
regulatory requirements when a program participant is fleeing imminent 
threat of further harm from domestic violence, dating violence, sexual 
assault, or stalking, and moves to another CoC's geographic area.
    HUD also seeks input on exempting recipients or subrecipients from 
non-statutory regulatory requirements when any program participant, not 
just a program participant fleeing imminent threat of further harm from 
domestic violence, dating violence, sexual assault, or stalking, wishes 
to move outside of the CoC's geographic area, in order to support 
mobility of tenants that may be moving to access better job 
opportunities, schools, or other resources.

III. Justification for Interim Rulemaking

    In accordance with its regulations on rulemaking at 24 CFR part 10, 
HUD, generally, publishes its rules for advance public comment.\2\ 
Notice and public procedures may be omitted, however, if HUD determines 
that, in a particular case or class of cases, notice and public comment 
procedures are ``impracticable, unnecessary, or contrary to the public 
interest.'' (See 24 CFR 10.1.)
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    \2\ The Administrative Procedure Act (5 U.S.C. Subchapter II) 
(APA), which governs Federal rulemaking, provides in section 553(a) 
that matters involving a military or foreign affairs function of the 
United States or a matter relating to Federal agency management or 
personnel or to public property, loans, grants, benefits, or 
contracts are exempt from the advance notice and public comment 
requirement of sections 553(b) and (c) of the APA. In its 
regulations in 24 CFR 10.1, HUD has waived the exemption for advance 
notice and public comment for matters that relate to public 
property, loans, grants, benefits, or contracts, and has committed 
to undertake notice and comment rulemaking for these matters.
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    In this case, HUD has determined that it would be contrary to the 
public interest to delay these two amendments to the existing CoC 
regulations. HUD's work, subsequent to the July 2012, CoC interim rule 
on improving the voucher portability process, and the enactment of the 
Violence Against Women Act of 2013 \3\ emphasized to HUD the need to 
provide for mobility for participants in its programs and not 
terminating tenant-based assistance. As noted in HUD's Streamlining the 
Portability Process final rule,\4\ and in HUD's Affirmatively 
Furthering Fair Housing final rule, mobility allows individuals or 
families

[[Page 38584]]

greater choice in living in the areas of their choice. As noted in the 
preamble, this interim rule would allow program participants, in 
consultation with their service providers, to move to outside of a 
CoC's geographic area of service. The consultation is necessary because 
the goal is to strive for and ensure continued CoC service to the 
program participant. The interim rule removes the prohibition that only 
allowed individuals and families who are victims of domestic violence, 
dating violence, sexual assault, or stalking to move outside of the 
CoC's geographic area of service. Additionally, this rule removes 
additional requirements imposed on individuals and families who are 
victims of domestic violence, dating violence, sexual assault, or 
stalking seeking to move outside of CoC's geographic area of service, 
which may delay the ability of such individuals or families to move to 
a safe location.
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    \3\ Public Law 113-4, approved March 7, 2013.
    \4\ See final rule published on August 20, 2015, at 80 FR 50564.
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VI. Findings and Certifications

Regulatory Review--Executive Orders 12866 and 13563

    Under Executive Order 12866 (Regulatory Planning and Review), a 
determination must be made whether a regulatory action is significant 
and, therefore, subject to review by the Office of Management and 
Budget (OMB) in accordance with the requirements of the order. 
Executive Order 13563 (Improving Regulations and Regulatory Review) 
directs executive agencies to analyze regulations that are ``outmoded, 
ineffective, insufficient, or excessively burdensome, and to modify, 
streamline, expand, or repeal them in accordance with what has been 
learned.'' Executive Order 13563 also directs that, where relevant, 
feasible, and consistent with regulatory objectives, and to the extent 
permitted by law, agencies are to identify and consider regulatory 
approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public. This rule was determined to be a ``significant 
regulatory action,'' as defined in section 3(f) of Executive Order 
12866 (although not an economically significant regulatory action, as 
provided under section 3(f)(1) of the Executive order).
    HUD expects it will receive few requests from program participants 
who are not domestic violence victims to move outside of the CoC's 
geographic area where they are currently residing. HUD does expect some 
requests will arise from program participants residing with the 
jurisdictions of CoCs that cover small geographic areas. HUD expects no 
increase or decrease in the number of requests from program 
participants who are victims of domestic violence as these program 
participants already have this flexibility. For these reasons, HUD 
believes the impact of this rule would be minimal, but the flexibility 
to move provided would align with two major HUD rulemakings: HUD's 
Affirmatively Furthering Fair Housing final rule and HUD's Violence 
Against Women Act 2013 final rule, to be issued later this year.
    The docket file is available for public inspection in the 
Regulations Division, Office of General Counsel, Department of Housing 
and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 
20410-0500. Due to security measures at the HUD Headquarters building, 
please schedule an appointment to review the docket file by calling the 
Regulations Division at 202-708-3055 (this is not a toll-free number). 
Individuals with speech or hearing impairments may access this number 
via TTY by calling the Federal Relay Service at 800-877-8339 (this is a 
toll-free number).

Environmental Impact

    This rule covers tenant-based rental assistance. Accordingly, under 
24 CFR 50.19(b)(11), this rule is categorically excluded from 
environmental review under the National Environmental Policy Act of 
1969 (42 U.S.C. 4321).

Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) 
(UMRA) establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and on the private sector. This interim rule does not 
impose a Federal mandate on any State, local, or tribal governments, or 
on the private sector, within the meaning of UMRA.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) generally 
requires an agency to conduct a regulatory flexibility analysis of any 
rule subject to notice and comment rulemaking requirements, unless the 
agency certifies that the rule will not have a significant economic 
impact on a substantial number of small entities. This rule solely 
addresses the ability of individuals and families participating in the 
CoC program and who have tenant-based rental assistance to move outside 
of a CoC's geographic service area but continue to be serviced by that 
CoC or under the CoC program.
    Notwithstanding HUD's determination that this rule will not have a 
significant effect on a substantial number of small entities, HUD 
specifically invites comments regarding any less burdensome 
alternatives to this rule that will meet HUD's objectives as described 
in this preamble.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on State and local 
governments and is not required by statute, or the rule preempts State 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive order. This interim rule does not have 
federalism implications and does not impose substantial direct 
compliance costs on State and local governments nor preempt State law 
within the meaning of the Executive order.

List of Subjects in 24 CFR Part 578

    Community facilities, Continuum of Care, Emergency solutions 
grants, Grant programs--housing and community development, Grant 
program--social programs, Homeless, Rural housing, Reporting and 
recordkeeping requirements, Supportive housing programs--housing and 
community development, Supportive services.

    Accordingly, for the reasons described in the preamble, HUD amends 
24 CFR part 578 to read as follows:

PART 578--CONTINUUM OF CARE PROGRAM

0
1. The authority citation for part 578 continues to read as follows:

    Authority:  42 U.S.C. 11371 et seq., 42 U.S.C. 3535(d).

0
2. In Sec.  578.51, paragraph (c) is revised to read as follows:


Sec.  578.51  Rental assistance.

* * * * *
    (c) Tenant-based rental assistance. Tenant-based rental assistance 
is rental assistance in which program participants choose housing of an 
appropriate size in which to reside. Up to 5 years' worth of rental 
assistance may be awarded to a project in one competition.
    (1) When necessary to facilitate the coordination of supportive 
services, recipients and subrecipients may require program participants 
to live in a specific area for their entire period of participation, or 
in a specific structure for the first year and in a specific area for 
the remainder of their period of participation. Program participants 
who are receiving rental assistance in

[[Page 38585]]

transitional housing may be required to live in a specific structure 
for their entire period of participation in transitional housing.
    (2) Program participants who have complied with all program 
requirements during their residence retain the rental assistance if 
they move.
    (3) Program participants who have complied with all program 
requirements during their residence, who have been a victim of domestic 
violence, dating violence, sexual assault, or stalking, who reasonably 
believe they are imminently threatened by harm from further domestic 
violence, dating violence, sexual assault, or stalking (which would 
include threats from a third party, such as a friend or family member 
of the perpetrator of the violence) if they remain in the assisted 
unit, and who are able to document the violence and basis for their 
belief, may retain the rental assistance and move to a different 
Continuum of Care geographic area if they move out of the assisted unit 
to protect their health and safety. These program participants may move 
to a different Continuum of Care's geographic service area even if the 
recipient or subrecipient cannot meet all regulatory requirements of 
this part in the new geographic area where the unit is located. The 
recipient or subrecipient, however, must be able to meet all statutory 
requirements of the Continuum of Care program either directly or 
through a third-party contract or agreement.
    (4) Program participants other than those described in paragraph 
(c)(3) of this section may choose housing outside of the Continuum of 
Care's geographic area if the recipient or subrecipient, through its 
employees or contractors, is able to meet all requirements of this part 
in the geographic area where the program participant chooses housing. 
If the recipient or subrecipient is unable to meet the requirements of 
this part, either directly or through a third-party contract or 
agreement, the recipient or subrecipient may refuse to permit the 
program participant to retain the tenant-based rental assistance if the 
program participant chooses to move outside of the Continuum of Care's 
geographic area.
* * * * *

    Dated: May 24, 2016.
Harriet Tregoning,
Principal Deputy Assistant Secretary for Community Planning and 
Development.
     Approved on: May 24, 2016.
Nani A. Coloretti,
Deputy Secretary.
[FR Doc. 2016-13684 Filed 6-13-16; 8:45 am]
 BILLING CODE 4210-67-P