[Federal Register Volume 88, Number 91 (Thursday, May 11, 2023)]
[Rules and Regulations]
[Pages 30442-30506]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-09693]
[[Page 30441]]
Vol. 88
Thursday,
No. 91
May 11, 2023
Part III
Department of Housing and Urban Development
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24 CFR Parts 5, 92, 93, et al.
Economic Growth Regulatory Relief and Consumer Protection Act:
Implementation of National Standards for the Physical Inspection of
Real Estate (NSPIRE); Final Rule
Federal Register / Vol. 88 , No. 91 / Thursday, May 11, 2023 / Rules
and Regulations
[[Page 30442]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 5, 92, 93, 200, 570, 574, 576, 578, 882, 884, 886,
902, 965, 982, 983, and 985.
[Docket No. FR-6086-F-03]
RIN 2577-AD05
Economic Growth Regulatory Relief and Consumer Protection Act:
Implementation of National Standards for the Physical Inspection of
Real Estate (NSPIRE)
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, Office of the Assistant Secretary for Community Planning
and Development, Office of the Assistant Secretary for Public and
Indian Housing, U.S. Department of Housing and Urban Development (HUD).
ACTION: Final rule.
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SUMMARY: This final rule establishes a new approach to defining and
assessing housing quality: The National Standards for the Physical
Inspection of Real Estate (NSPIRE). This rule is part of a broad
revision of the way HUD-assisted housing is inspected and evaluated.
The purpose of NSPIRE is to strengthen HUD's physical condition
standards and improve HUD oversight through the alignment and
consolidation of the inspection regulations used to evaluate HUD
housing across multiple programs. This final rule also incorporates
provisions of the Economic Growth and Recovery, Regulatory Relief and
Consumer Protection Act that will reduce administrative burden on small
rural public housing authorities (PHAs).
DATES: This final rule is effective July 1, 2023, except amendments to
the following parts, which are effective October 1, 2023: 24 CFR part
92 (instructions 4 through 7); 24 CFR part 93 (instructions 9 and 10);
24 CFR part 200 (instructions 12 and 13); 24 CFR part 570 (instruction
15); 24 CFR part 574 (instruction 17); 24 CFR part 576 (instruction
19); 24 CFR part 578 (instruction 21); 24 CFR part 882 (instructions 23
and 24); 24 CFR part 884 (instruction 26); 24 CFR part 886
(instructions 29 through 31); 24 CFR part 982 (instructions 45 through
55); 24 CFR part 983 (instructions 57 through 61); and 24 CFR part 985
(instructions 62 through 65). For more information, see SUPPLEMENTARY
INFORMATION.
FOR FURTHER INFORMATION CONTACT: Tara J. Radosevich, Real Estate
Assessment Center, Office of Public and Indian Housing, Department of
Housing and Urban Development, 550 12th Street SW, Suite 100,
Washington, DC 20410-4000, telephone number 202-708-1112 (this is not a
toll-free number), [email protected]. HUD welcomes and is
prepared to receive calls from individuals who are deaf or hard of
hearing, as well as individuals with speech or communication
disabilities. To learn more about how to make an accessible telephone
call, please visit: https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.
SUPPLEMENTARY INFORMATION:
Effective Dates
This rule has two effective dates:
1. Amendments to 24 CFR parts 5, 902, and 965 are effective on July
1, 2023. These amendments implement the NSPIRE regulations at 24 CFR
part 5, subpart G and affect the Public Housing regulations.
2. Amendments to 24 CFR parts 92, 93, 200, 570, 574, 576, 578, 882,
884, 886, 982, 983 and 985 are effective on October 1, 2023. These
amendments affect the Multifamily Housing regulations, the Housing
Choice Voucher regulations, the Project-Based Voucher regulations,
Section 8 Moderate Rehabilitation regulations and the Community
Planning and Development (CPD) programs such as HOME Investment
Partnerships Program (HOME), the Housing Trust Fund (HTF), Housing
Opportunities for Persons with AIDS (HOPWA), Emergency Solution Grants
(ESG) and Continuum of Care (COC) regulations. Participants and owners
subject to these regulations are subject to the Code of Federal
Regulations as it exists on the publication date of this rule, and are
not subject to the regulatory changes being made by this rule on July
1, 2023, until October 1, 2023.
I. Background
On January 13, 2021, HUD published the ``Economic Growth Regulatory
Relief and Consumer Protection Act: Implementation of National
Standards for the Physical Inspection of Real Estate (NSPIRE)''
proposed rule (``proposed rule'') in the Federal Register.\1\ In the
NSPIRE proposed rule, HUD proposed to align and consolidate its
inspection standards and procedures and incorporate provisions of the
Economic Growth and Recovery, Regulatory Relief and Consumer Protection
Act (Pub. L. 115-174) for all of HUD's programs. Specifically, HUD
proposed to revise 24 CFR part 5 to become the focal point of
consolidated standards, and proposed changes to other regulations to
cross-reference to the new streamlined part 5 standards.
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\1\ 86 FR 2582.
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The proposed rule also sought to consolidate, update, and improve
the Housing Quality Standards (HQS) and the Uniform Physical Condition
Standards (UPCS) to prevent standards and procedures from becoming out
of date. In addition, the rule proposed to implement the Economic
Growth and Recovery, Regulatory Relief and Consumer Protection Act
(``Economic Growth Act'') to implement an alternate performance
indicator and rating system for the Public Housing Assessment System
(PHAS) and Section 8 Management Assessment Program (SEMAP).
HUD's proposed rule and this final rule were informed by HUD's
NSPIRE Demonstration. On August 21, 2019, HUD established through
notice \2\ the implementation of the NSPIRE demonstration to develop a
new inspection model for HUD programs. Through the demonstration, HUD
built updated standards, procedures, and scoring methodologies. The
NSPIRE Standards and procedures for the demonstration were first
published on HUD's website in August 2019 and were subject to and
improved through stakeholder feedback and test inspections. The
Demonstration will continue for enrolled properties until
implementation of this rule for the relevant program, or as otherwise
announced by notice.
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\2\ ``Notice of Demonstration To Assess the National Standards
for the Physical Inspection of Real Estate and Associated
Protocols,'' 84 FR 43536.
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For additional background, please see the proposed rule.
II. NSPIRE Final Rule and NSPIRE Notices
Consistent with the proposed rule, this final rule will create a
unified inspection protocol for three different overarching programs:
programs for housing assisted under the U.S. Housing Act of 1937 other
than section 8 of the Act (``public housing''), programs previously
under the Housing Quality Standards regulations at 24 CFR 982.401 (HQS
regulations), and programs previously covered under 24 CFR part 5,
subpart G (``Multifamily housing''). CPD programs and regulations are
included because these programs pointed to the HQS program regulations.
This final rule maintains a regulatory framework that streamlines,
consolidates, and aligns inspection standards over 14 sections of
regulations for HUD's programs. This new framework for inspection
focuses on inside the building, outside the building and
[[Page 30443]]
within the units of HUD housing and ensures that they are
``functionally adequate, operable, and free of health and safety
hazards.'' Because of the scope of changes to the inspection process,
HUD is setting a different implementation date for HUD's programs to
create as smooth a transition as possible.
A. Implementation Timeline
This rule will be implemented in two phases. On July 1, 2023,
Public Housing will transition to NSPIRE. On October 1, 2023, the
Multifamily Housing programs, Housing Choice Voucher (``HCV'') and
Project Based Voucher (``PBV'') programs, and the CPD programs included
in this rulemaking will transition to NSPIRE.
Public Housing regulations will be amended on July 1, 2023, and
Public Housing program participants will be required to comply with
this final rule and use the NSPIRE standards starting July 1, 2023. HUD
will prioritize PHAs with a fiscal year end of June 30, 2023, to
receive their next inspection under the updated regulations. Because
the universe of Public Housing properties is smaller than those
participating in Multifamily Housing programs, HUD is better able to
prioritize and complete inspections of these properties first under
NSPIRE, and then launch inspections in Multifamily Housing programs in
October.
The Housing Choice Voucher (HCV), Project Based Voucher (PBV),
Section 8 Moderate Rehabilitation Program, HOME, HTF, HOPWA, ESG and
CoC regulations will be amended on October 1, 2023, and program
participants will be required to comply with this final rule and begin
using the NSPIRE standards on October 1, 2023. These programs are
unique because inspections are done by PHAs, program participants, and
participating jurisdictions (PJs) and not by HUD. These entities will
need additional time to update forms and implement technological
solutions. Therefore, programs that follow HQS will continue to follow
HQS and will not need to comply with these regulations until October 1,
2023.
The Multifamily Housing programs will also begin to use the NSPIRE
standards starting on October 1, 2023. After Uniform Physical Condition
Standards (UPCS) inspections were delayed due to the COVID-19 pandemic,
HUD has committed to providing Multifamily Housing program participants
one more UPCS inspection before the transition to NSPIRE. HUD intends
to meet this goal by the end of the 2023 Federal fiscal year.
Therefore, HUD will transition Multifamily Housing programs to NSPIRE
on October 1, 2023. Part 5, subpart G, as it existed before this rule,
provided at Sec. 5.703 for the physical condition standards for
Multifamily Housing and authorized HUD at Sec. 5.705 to establish UPCS
through notice. On July 1, 2023, when Public Housing transitions to
NSPIRE, these regulations will be overwritten by the new part 5,
subpart G. To enable Multifamily to continue using UPCS, HUD will delay
the effective date for Multifamily Housing such that Multifamily
Housing program participants are not subject to the new part 5, subpart
G until October 1, 2023. Part 5, subpart G as it exists on the
publication date of this rule, prior to the changes which will be made
on July 1, 2023, will apply to Multifamily Housing until September 30,
2023.
Further transition information will be provided in three core
``Subordinate Notices'' which will follow this final rule. These core
Subordinate Notices are the NSPIRE Standards notice, the NSPIRE Scoring
notice, and the NSPIRE Administrative notice. HUD will also issue
additional notices on the NSPIRE Standards for the HOME, HTF, ESG,
HOPWA, and CoC programs. PIH will issue additional Departmental notices
to implement the Small Rural Assessment requirements under part 902,
subpart H and part 985. The function of each of these notices is
provided in more detail below. All updated Standards and Scoring
methodologies will be published--as required by this rule--through a
Federal Register notice at least once every 3 years with the
opportunity for public comment prior to implementation.
B. NSPIRE Standards Subordinate Notice
This rulemaking establishes at 24 CFR 5.705(a) that HUD will
establish Standards through a subordinate Federal Register notice. HUD
proposed standards through notice in the Federal Register with request
for comments on June 17, 2022 (``Proposed NSPIRE Standards
notice'').\3\ These proposed standards were developed in consideration
of the NSPIRE Demonstration and feedback received in response to that
demonstration. The notice sought comments on the proposed NSPIRE
Standards and included thirteen specific questions for public input,
including questions related to mold, safe drinking water, requirements
for a permanent heating source, minimum temperature, electrical
outlets, deficiency correction time frames, and pest infestation. The
individual NSPIRE Standards, posted on HUD's website,\4\ provided
detailed descriptions of housing components and hazards for inspection
with descriptions of potential deficiencies and correction timeframes.
The notice also proposed an update to the list of life-threatening
conditions covered by the Housing Opportunity Through Modernization Act
of 2016 (``HOTMA''). The comment period for the Proposed NSPIRE
Standards notice closed on August 1, 2022. HUD will publish the final
NSPIRE Standards notice before the effective date of this rule, which
will consider feedback received in the NSPIRE proposed rule, the NSPIRE
Demonstration, and the proposed NSPIRE Standards.
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\3\ ``Request for Comments: National Standards for the Physical
Inspection of Real Estate and Associated Protocols,'' 87 FR 36426.
\4\ Available at: www.hud.gov/sites/dfiles/PIH/documents/6092-N-02nspire_propose_standards.pdf.
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C. NSPIRE Scoring and Administrative Subordinate Notices
This rulemaking establishes at 24 CFR 5.705(b) that HUD will
establish scoring methods through a Federal Register notice. The
proposed NSPIRE Scoring notice was published in the Federal Register on
March 28, 2023.\5\ It will be final and effective before HUD begins
inspections under NSPIRE. The NSPIRE Scoring notice will outline the
methodology for weighting the deficiencies found during inspections
using the NSPIRE Standards notice and scoring those deficiencies for
each program . It will discuss the gradations and severity levels of
the new scoring system, including thresholds for potential enforcement
action.
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\5\ 88 FR 18268.
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The NSPIRE Administrative notice will be published as a final
notice shortly following this final rule. This notice will replace all
UPCS guidance that HUD's Real Estate Assessment Center (REAC)
previously issued including the Compilation Bulletin for RAPID 4.0,
Version 3, Inspector Notices, and other web-based guidance on
requesting appeals, exigent health and safety reporting, and other
inspection process topics. This subordinate notice will outline the
updated NSPIRE process for inspections, submitting evidence of
deficiency correction, technical reviews, administrative referrals and
other administrative requirements changing with the final NSPIRE rule.
It will also include the process HUD will use to gather resident
feedback on property conditions. In an additional notice, HUD will
provide
[[Page 30444]]
guidance for PHAs on the new small rural assessment processes.
D. NSPIRE Implementation and PHAS Score Transition for Public Housing
Authorities
With the implementation of the NSPIRE rule, REAC will begin
performing physical inspections using the NSPIRE Standards after the
effective date of the rule for each program. Recognizing that there may
be operational or system transition issues in the initial year of
NSPIRE implementation, HUD is specifying in the regulation at Sec.
5.705(c)(1) that an inspection ``shall be conducted no earlier than 6
months before and no later than 6 months after the date marking the
anniversary of the previous inspection'' for a period of one year after
the effective date of this rule. After this transition period, the time
frame will return to ``no earlier than 3 months before and no later
than 3 months after the date marking the anniversary of the previous
inspection'' or at a time period approved by HUD upon a PHA's or
owner's good cause request.
For PHAS scores issued after this rule is effective, REAC will use
scores calculated as described in the subordinate NSPIRE Scoring notice
and aggregate these scores on a unit-weighted basis as described in
Sec. 902.25 to create the Physical Assessment Sub-system (PASS)
indicator score. Additional information about NSPIRE and PHAS Score
transition, including PHAs rated as Troubled, will be provided in the
subordinate NSPIRE Administrative notice.
E. Other NSPIRE Notices
HUD's Office of Community Planning and Development will issue
separate notices before October 1, 2023, (``CPD NSPIRE notices'') to
implement the rule for the individual programs, which generally do not
adopt the methods in the three ``core'' Subordinate Notices discussed
above, and provide guidance for how the NSPIRE Standards cover
differing CPD program situations, such as homebuyer acquisition or
where assistance is tied to a bedroom in shared housing. These notices
will be published before the effective date of the rule. Also with this
rule, HUD will issue a Departmental notice to provide guidance for the
Small Rural PHAS and SEMAP scoring processes. At a later date, HUD will
publish a third additional notice to implement a process for collecting
and utilizing resident feedback as part of the inspection process.
III. Changes Made at the Final Rule Stage
In response to public comments, and in further consideration of
issues addressed at the proposed rule stage, HUD is publishing this
final rule with the following changes from the proposed rule.
Section 5.703 National Standards for the Condition of HUD Housing
Affirmative Requirements at Sec. 5.703
In the proposed rule, HUD requested comment on the addition of
affirmative requirements for ground-fault circuit interrupter (GFCI)
outlets, an arc-fault circuit interrupter (AFCI); heating, ventilation,
and air conditioning (HVAC) related to a permanent heating source;
guardrails; and interior lighting. The final rule includes requirements
for GFCI outlets near a water source, a permanent heating source for
certain climate zones, guardrails, and permanent lighting in some
living areas. In some cases, these requirements only apply to habitable
rooms of the unit. HUD defines a habitable room as it is typically
defined in model codes: a room in a building for living, sleeping,
eating, or cooking, but excluding bathrooms, toilet rooms, closets,
hallways, storage or utility spaces, and similar areas. Additional
detail on the affirmative requirements will be provided in the NSPIRE
Standards and Administrative notices. HUD makes the following changes
from the proposed rule to the NSPIRE affirmative requirements:
Application of Affirmative Requirements to Inside and Outside at Sec.
5.703(b) and (c)
In this final rule, HUD is clarifying that some of the affirmative
requirements not only apply to ``Units'' but also apply to Inside and
Outside requirements. This final rule applies the requirements for
smoke detectors, carbon monoxide detectors, GFCI outlets, guardrails,
and lighting to Inside, and applies the requirements for GFCI outlets
and guardrails to Outside. HUD also added pipes to the non-exhaustive
list of components that provide domestic water in Sec. 5.703(b).
Smoke Detector Requirement at Sec. 5.703(b)(1) and (d)(3)
In the proposed rule, HUD proposed to require that properties
follow the National Fire Protection Association Standard (NFPA) 72 or
successor standards, consistent with existing statutory obligations.
This final rule removes the reference to NFPA 72 and instead lists
requirements consistent with NFPA 72. HUD also provides that following
these requirements satisfies the specifications of NFPA 72. HUD also
adds that properties must follow these standards and additional
standards established by HUD through Federal Register notification.
This clarifies that HUD may adjust its Standards to include additional
requirements in the future, such as future added statutory
requirements.
Safe Water Requirement at Sec. 5.703(d)(1)
HUD is removing the requirement that water be ``potable'' from the
proposed rule and instead requiring that water must be ``safe.'' After
consideration of comments and further deliberation, HUD believes that
these two words are, for the purposes of this rule, duplicative and it
is not necessary to use both. HUD is also clarifying that this ``safe''
requirement applies to drinking water in the kitchen and bathroom and
clarifies that the requirement that the unit have ``hot and cold''
running water applies in both the bathroom and the kitchen.
Sanitary Facility and Kitchen Area Requirements at Sec. 5.703(d)(2) &
(d)(4)
In the proposed rule, HUD requested comment on whether to define a
``sanitary facility'' and ``kitchen area.'' After considering comments,
HUD has included additional language in the regulations for both terms
at the final rule stage; this new language serves the same function as
the definition suggested in the proposed rule for comment. HUD is
requiring that sanitary facilities (or bathrooms) include a sink, a
bathtub or shower, and an interior flushable toilet. HUD is removing
the requirement that the sanitary facility be ``adequate for personal
hygiene and the disposal of human waste'' because listing these
elements adequately covers this same requirement. HUD is also requiring
that kitchens must include a sink, cooking appliance, refrigerator,
food preparation area, and food storage area.
Removal of the Occupancy Requirement Related to Children of the
Opposite Sex From Sec. 5.703(d)(5)
In this final rule, HUD is removing the requirement at Sec.
5.703(d)(5) for units assisted under HCV or PBV that children of
opposite sex may not be required to occupy the same bedroom or living/
sleeping room. HUD views the restriction based on gender to be
unnecessary and unrelated to physical conditions, and wanted to provide
more flexibility to families and PHAs to determine the number of
bedrooms needed as part of determining the payment standard. Removal of
the term
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``opposite sex'' is also consistent with the January 20, 2021,
Executive Order on ``Preventing and Combating Discrimination on the
Basis of Gender Identity or Sexual Orientation.'' This language also
avoids the implication that PHAs must inquire about gender identity to
determine occupancy.
Addition of Carbon Monoxide Detection Requirement at Sec. 5.703(d)(6)
Section 101, ``Carbon Monoxide Alarms or Detectors in Federally
Assisted Housing'' of Title I of Division Q, Financial Services
Provisions and Intellectual Property, of the Consolidated
Appropriations Act, 2021, Public Law 116-260, 134 Stat. 2162 (2020)
(``2021 Consolidated Appropriations Act'') included amendments to
sections 3(a) and 8 of the United States Housing of 1937 (42 U.S.C.
1437a(a) and 42 U.S.C. 1437f) (1937 Act), section 202(j) of the Housing
Act of 1959 (12 U.S.C. 1701q(j)), and Section 811(j) and 856 of the
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 8013(j)
and 42 U.S.C. 12905). These amendments, which took effect on December
27, 2022, concern the installation of Carbon Monoxide alarms or
detectors in public housing owned or operated by a PHA, dwelling units
occupied by individuals with Housing Choice Vouchers, dwelling units
assisted with project-based vouchers or project based rental
assistance, dwelling units assisted under the 202 and 811 programs, and
dwelling units assisted under the HOPWA program. In the proposed rule,
HUD stated its intent to publish a separate proposed rule concerning
the implementation of requirements to install carbon monoxide detectors
in HUD-assisted and -insured Housing. HUD is still considering a
proposed rule which would implement carbon monoxide detectors beyond
what is now required by statute. In this rule, however, HUD has
determined to make conforming changes so that the regulations of the
programs covered by NSPIRE include the new statutory carbon monoxide
detector requirement for each program. Because these conforming rule
changes merely codify the new statutory requirements, HUD has
determined that additional notice and public comment procedure is
unnecessary.
Additionally, HUD notes that the 2021 Consolidated Appropriations
Act only adds carbon monoxide-related requirements to the HUD programs
listed above and the USDA programs authorized by sections 514 and 515
of the Housing Act of 1949. HUD programs such as HUD-insured housing
not subject to an assistance contract and the ESG, CoC, HOME, and HTF
programs are not subject to statutory requirements concerning carbon
monoxide detection. HUD has made corresponding changes at the final
rule stage in Sec. Sec. 92.251(b)(1)(viii), 93.301(b)(1)(viii),
576.403(c), 578.75(b) to clarify that these units will not be subject
to the new carbon monoxide requirements. HUD urges grantees, owners,
developers, and project sponsors in these programs to take action for
the safety of residents and reminds them that there may be additional
property standard requirements under applicable State and local laws
regarding carbon monoxide detection.
Finally, HUD notes that this final rule only implements the
statutory carbon monoxide detector requirement for programs covered
under NSPIRE. However, programs not covered by NSPIRE are still subject
to the statutory requirement where applicable. Specifically, the
statutory requirement covers all of HOPWA, but NSPIRE only applies
where HOPWA funds are used under Sec. 574.300(b)(3), (4), (5), and
(8). HUD intends to modify the HOPWA regulations to reflect the
existing statutory requirement in a future rulemaking related to HOPWA.
Other Changes to Sec. 5.703
Addition of Example Unit Components at Sec. 5.703(d)
HUD is including balconies, carbon monoxide devices, and enclosed
patio to the non-exhaustive list of components which may be included in
a unit.
Addition of ``Structural Soundness'' and ``Extreme Temperature'' Health
and Safety Concern Examples at Sec. 5.703(e)(1)
HUD has added structural soundness to the non-exhaustive list of
health and safety concerns at Sec. 5.703(e)(1) previously required
under Sec. 576.403(c)(1).
HUD has also added ``extreme temperature'' to the non-exhaustive
list of health and safety concerns at Sec. 5.703(e)(1). HUD considers
the failure to provide an adequate heat source to prevent extreme cold
a deficiency as described in the NSPIRE Standards notice. By adding
this language to the regulation and NSPIRE Standards, HUD further
implements HOTMA Section 111, which required HUD to publish model
guidelines for minimum heating requirements for public housing. As part
of the consolidation under NSPIRE, HUD is removing Sec. 982.401(e)
regarding the thermal environment and making this addition here. HUD
has added language from Sec. 982.401(e) prohibiting the indoor use of
unvented fuel-burning space heaters in Sec. 5.703(b) and (d).
Addition of ``Carbon Monoxide'' as a State and Local Requirement at
Sec. 5.703(f)(1)
At this final rule stage, HUD is adding ``carbon monoxide'' as an
example in its non-exhaustive list of examples of State or local
requirements that are not superseded by these regulations. This change
has no substantive effect.
Section 5.705 Inspection Requirements
Inspection Standards Notice Clarification at Sec. 5.705(a)(1)
In the final rule, HUD clarifies that in addition to the standards
and procedures for identifying safe, habitable housing being set out by
the Secretary and published in the Federal Register, HUD will also
provide the scoring and ranking for HUD housing by publication in the
Federal Register. HUD has also added language identifying the different
levels of deficiency which will be used in the NSPIRE Standards notice.
Correction of Typographical Error at Sec. 5.705(b)(2)
In the final rule, HUD corrects a citation in the proposed Sec.
5.705(b)(2) which cited to ``Sec. 982.352(b)(iv)'' but should have
cited to ``Sec. 982.352(b)(1)(iv).'' HUD instead cites to parts 982
and 983 generally.
Timing of Inspections at Sec. 5.705(c)(1) and (c)(2)
HUD has added language to Sec. 5.705(c)(1) clarifying that HUD may
approve extension requests for good cause as determined by HUD. In
HUD's experience, inspections occasionally need to be rescheduled due
to events outside the owner's or PHA's control or for other reasons
which would cause the extension request to be justified. HUD has also
added language making clear that HUD may extend inspection deadlines
without the PHA or owner's request, to account for situations in which
HUD decides to grant a general extension, such as in an emergency
situation.
HUD is also removing from paragraph (c)(1) the restriction that
inspections must be done in the calendar year in which they are due.
HUD does not find that this restriction is necessary or important to
ensuring timely inspections, nor does it serve another administrative
purpose.
In paragraph (c)(2), HUD proposed a default annual inspection for
Multifamily and project-based housing,
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with the potential for alternative timelines for inspection, such that
a property or project may be inspected on a timeline between two and
five years. After considering comments and reviewing inspections, HUD
believes that such an extended timeline as four or five years would, in
most cases, be too long to adequately review HUD-assisted housing. HUD
believes that the current ``3-2-1'' approach utilized in Multifamily
and Public Housing properly allocates HUD inspection resources to
ensure the regular inspection of all properties while prioritizing
those properties which require additional oversight. Properties of PHAs
that meet the definition of Small Rural under Sec. 902.101 will be
inspected every three years, as described in Sec. 902.103(b).
Addition of Citation Regarding Small PHAs at Sec. 5.705(c)
In Sec. 5.705(c)(4), HUD is adding a citation to Sec. 902.13(a)
to clarify that small PHAs shall continue to be inspected in accordance
with the relevant regulation, and in paragraph (c)(8), HUD is adding a
citation to Sec. 882.516 to clarify that Section 8 Moderate
Rehabilitation housing shall continue to be inspected under its own
regulation.
Tenant Involvement in Inspections at Sec. 5.705(f)
This final rule adds Sec. 5.705(f) stating that HUD will allow,
through notice, for tenant involvement in the inspection process of
Public Housing and Multifamily housing programs by making
recommendations regarding particular units to be inspected. Any units
inspected in addition to the standard unit sample will not be part of
the property's score, but the owner or PHA will be required to repair
any identified deficiencies. HUD has made this addition after
consideration of public comments regarding tenant involvement and the
aim to balance the need for tenant input with the procedural integrity
of the inspection process.
Section 5.707 Uniform Self-Inspection Requirement and Report
HUD is revising Sec. 5.707 to remove the electronic reporting
requirement of self-inspections, and is instead requiring that the
owner or PHA maintain records related to the self-inspection for three
years. HUD agrees with commenters who suggested a universal reporting
requirement for self-inspection results would pose an additional
administrative burden. Additionally, HUD has removed language from
Sec. 5.707 that offered an additional announcement and opportunity for
public comment in the Federal Register. This language was removed
because HUD will not use the results of self-inspections as proposed to
determine risk or the frequency of REAC inspections. The results of
self-inspections will also not affect a property's score. Because the
final version of the self-inspection requirement largely reflects
current requirements for Public Housing and Multifamily programs and
properties that score under 60, there is no need for additional
comment. The process to perform self-inspections will be in the NSPIRE
Administrative notice, which will be published without comment. For
properties scoring below 60, HUD believes that this information would
be uniquely useful as a tool to ensure all deficiencies are identified
and corrected. HUD is also adding language to allow properties the
option to perform the self-inspection in conjunction with the follow up
inspection at Sec. 5.711(c)(2). HUD has added additional language to
Sec. 5.711(c)(2) to clarify the post-inspection survey process and the
self-inspection requirement related to the inspection score.
Section 5.709 Administrative Process for Defining and Revising
Inspection Criteria
HUD is amending Sec. 5.709 at the final rule stage to make two
clarifying changes. First, HUD is distinguishing between the Standards
notice and the Scoring notice. In the proposed rule, both were
discussed as though they would be one notice. However, Standards and
Scoring represent two distinct elements of the assessment of HUD
housing, and HUD is publishing separate notices. Both notices are
subject to the same procedures.
Second, HUD is clarifying, consistent with the proposed rule's
discussion of the matter, that HUD will publish its Standards and
Scoring notices ``at least'' once every three years, to make clear that
HUD may publish its notices before it has been three years, at HUD's
discretion.
Section 5.711 Scoring, Addressing, and Appealing Findings
Change to the Name of Sec. 5.711
HUD is renaming Sec. 5.711 to more accurately reflect the purpose
of this section.
Changes to Deficiency Terminology at Sec. 5.711(c)
HUD is revising the different levels of deficiency to Life-
Threatening (LT), Severe, Moderate, and Low. This change is reflected
in the proposed NSPIRE Standards notice and HUD is also amending Sec.
5.709(a)(2)(i) for consistency with this change. As discussed further
in the NSPIRE Standards and Scoring notices, Low deficiencies are
deficiencies which are critical to habitability but do not present a
substantive health or safety risk to a resident. HUD is requiring that
Low deficiencies be repaired within sixty days unless specified
otherwise in the NSPIRE Standards.
Meaning of Correction at Sec. 5.711(c)(1)
HUD also amends Sec. 5.711(c)(1) to require that LT and Severe
items must be ``corrected'' instead of mitigated. In the context of
Sec. 5.711, ``corrected'' means the owner or PHA has resolved or
sufficiently addressed the deficiency in a manner that it no longer
poses a severe health or safety risk to residents. A correction could
include controlling or blocking access to the hazard by performing a
temporary relocation of the resident while repairs are made.\6\ HUD
recognizes that to permanently repair some deficiencies, the PHA or
owner may need additional time for a licensed professional, or supplies
that may not be available in a 24-hour timeframe. In some cases, for
lead hazard control work, exterior paint stabilization can be delayed
due to season conditions, or the resident family may need to be
relocated temporarily while the work is completed, and HUD can approve
extensions based on good cause.\7\ Additional information will be
provided in the subordinate NSPIRE Standards and Administrative
notices. For LT and Severe defects, HUD expects that permanent repairs
will be completed expeditiously, and that evidence of the repair will
be provided to HUD as described in Sec. 5.711(c)(2). HUD has also
removed the word ``contiguous'' from paragraph (c)(1) as unnecessary.
In practice, PHAs, owners and HUD all understand that the 24-hour
timeframe commences immediately upon notification and does not pause
for non-working hours, including the weekend.
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\6\ HUD notes that correction of a LT deficiency has a specific
meaning under HOTMA. Sec. 5.711 does not apply to HCV or PBV, and
therefore this definition of ``corrected'' does not apply to HCV or
PBV.
\7\ Relocation for lead hazard control work may be required
under 24 CFR 35.1345 and is subject to the requirements of the
Uniform Relocation Assistance and Real Property Acquisition Policies
Act of 1970, as amended.
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Timeline for Correction at Sec. 5.711(c)(1)
HUD also amends Sec. 5.711(c)(1) to clarify the timeline for the
correction of health or safety deficiencies. The
[[Page 30447]]
timeline for correcting LT and Severe health or safety deficiencies
remains 24 hours after the inspection. The timeline for repairing
Moderate and Low deficiencies has been revised from ``expeditiously''
to ``within 30 days,'' consistent with HUD's intent as stated in the
preamble of the Proposed Rule. HUD can authorize permanent repair
timelines that exceed 30 days if the deficiency cannot be permanently
repaired in 30 days.
The NSPIRE Standards provide HUD's expectations regarding the
timeline for repair of each type of deficiency. HUD will not change the
requirement that LT health and safety deficiencies must be corrected
within 24 hours. Under the NSPIRE Standards, for the Public Housing and
Multifamily housing programs, Severe will also require correction in 24
hours.
Post-Report Inspection at Sec. 5.711(c)(2)
HUD is removing the requirement that owners or PHAs provide
electronic evidence of correction of Moderate deficiencies as HUD
believes, after considering comments, the burden both of reporting and
processing this evidence would outweigh the benefit. Paragraph (c)(1)
continues to require evidence that Severe deficiencies have been
corrected be provided to HUD within established timeframes. HUD is also
adding a requirement that properties which score below a 60 must
complete a full self-inspection, and not the limited self-inspection
described in this regulation for identified deficiencies in units and
areas of the property not inspected by REAC. This addition is necessary
to ensure that owners and PHAs survey 100 percent of their properties
when they have poor physical performance (i.e., scores below 60) in
order to identify additional health and safety defects in the units
that were not part of the inspection sample. PHAs and owners that
conduct a full inspection after the HUD inspection can consider this
inspection to satisfy the requirements of Sec. 5.707 for that year.
Start of the 45-Day Deadline To File a Request for Technical Review at
Sec. 5.711(d)(1)
In response to a public comment, HUD is revising Sec. 5.711(d)(1)
to clarify that the 45-day deadline to file a request for a technical
review begins on the day the inspection report is provided to the owner
or PHA.
Basis for Technical Review at Sec. 5.711(d)(4)
Based on comments received, HUD revised Sec. 5.711(d)(4) for
clarity and renumbered the three types of material errors
appropriately.
HUD is also adding in paragraph (d)(4) the three qualifiers for
requesting a database adjustment previously at 24 CFR 902.24.
Commenters noted this was inadvertently removed, especially the
exclusion of adjustments for modernization work in progress. At this
final rule, HUD is combining these three qualifiers for adjustment with
the three bases for technical review. These three qualifiers will have
the same appeal and review process as the technical review process for
errors. Given these revisions, HUD is removing paragraph (c)(3) and
removing part of paragraph (e) which HUD believes is repetitive with
revised paragraphs (d) and (d)(4).
HUD also removed the term ``year built'' as an item not scored
under Sec. 5.711(d)(4)(i), since a visual lead-based paint evaluation
is now part of the NSPIRE inspection, and the results of this
evaluation will be scored.
Posting on the Availability of Materials at Sec. 5.711(h)(3)
HUD has revised this section to clarify that the owner or PHA must
post a notice to residents on the date of submission to the owner of
the inspection score for the property in which the residents reside.
The notice must advise the residents of the availability of the
inspection materials described in 24 CFR 5.711. HUD is also specifying
that the notice must be translated into other languages if necessary to
provide meaningful access for limited English proficient (LEP)
individuals, consistent with HUD's LEP guidance and Title VI.\8\
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\8\ For more information on HUD LEP and Title VI guidance, see
``Final Guidance to Federal Financial Assistance Recipients
Regarding Title VI Prohibition Against National Origin
Discrimination Affecting Limited English Proficient Persons'', 72 FR
2731 (Jan. 22, 2007).
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Departmental Enforcement Center (DEC) Evaluation at Sec. 5.711(i)
HUD is revising the introductory text of Sec. 5.711(i) to add that
HUD will also take administrative review action against properties with
two successive scores under 60. HUD also clarifies that while a score
of 30 points or less automatically leads to DEC referral, referral is
not automatic for the two successive scores under 60. Regarding the two
successive scores under 60, HUD recognizes that there may be mitigating
circumstances and HUD will take other review actions before HUD decides
whether DEC referral is necessary. As proposed, this regulation covered
both public and Multifamily housing programs, and HUD has retained this
in the final rule and clarified applicability. For public housing
properties, HUD recognizes that there are situations where the
responsible PHA's PHAS score may have already triggered other forms of
administrative review, rendering DEC review repetitive. HUD has also
made other minor, technical changes to this paragraph.
No Limitation on Existing Enforcement Authority at Sec. 5.711(j)
HUD has added the term ``grant agreement'' as an example of a
potential authorizing authority.
Sections Sec. 92.251 and 93.301 Property Standards
HUD has removed the clause, ``pursuant to 24 CFR 5.705,'' from
Sec. Sec. 92.251(b)(1)(viii), 92.251(c)(3), 92.251(f)(1)(i),
93.301(b)(1)(viii), 93.301(c)(3), and 93.301(e)(1)(i) because the
requirements in 24 CFR 5.705 through 5.713 do not apply to HOME
participating jurisdictions (PJs) under 24 CFR part 92 or HTF grantees
under 24 CFR part 93. HUD included the clause in the proposed rule in
these sections of 24 CFR part 92 and 24 CFR part 93 only to refer to
the part in Sec. 5.705 describing inspection standards and procedures
that would be published in the Federal Register. However, to avoid
further confusion, HUD is removing the clause. HUD will publish the
specific deficiencies that must be addressed by HOME PJs and HTF
grantees and explain how the requirements in 24 CFR 5.703 apply to PJs
and HTF grantees in a standards document published in the Federal
Register. This standards document for HOME and HTF will be separate
from, although similar to, the NSPIRE Standards notice and apply only
to HOME and HTF.
HUD is also making changes to these sections to clarify that
``decent, safe, sanitary, and in good repair'' means compliance with
Sec. 5.703 and deleting ``as referenced in Sec. 5.703'' because Sec.
5.703 does not use this term.
HUD is also making clarifying changes that the affirmative
requirements at Sec. 5.703 apply to single-room occupancy (``SRO'')
housing where the housing contains the room or facility referenced in
the affirmative requirements. This is necessary, for instance, where
the SRO does not contain its own restroom and therefore does not need
to meet affirmative requirements related to restrooms.
HUD is also revising Sec. Sec. 92.251(f)(1) and 93.301(e)(1) to
clarify that any property standards established by a participating
jurisdiction must ``require'' instead of ``ensure'' that the
[[Page 30448]]
owners maintain the housing as decent, safe, sanitary, and in good
repair. HUD believes that these two words, in this context, have the
same meaning, but has made the change to make the requirement clear.
Sections 92.504 and 93.404 Regarding Inspectable Areas
HUD has revised the language in Sec. 92.504(d)(1)(ii)(D) and Sec.
93.404(d)(2)(v) to describe ``inspectable areas for each building
housing HOME-assisted units.'' The regulation previously required that
for HOME projects with one-to-four HOME-assisted units, the
participating jurisdiction must inspect ``100 percent of the HOME-
assisted units'' and 100 percent of the ``inspectable items (site,
building exterior, building systems, and common areas) for each
building housing HOME-assisted units.'' However, the parenthetical
described the inspectable areas (e.g., site, building exterior,
building systems, and common areas) within a HOME project and not
``inspectable items.'' In this final rule, HUD is correcting the
language to require that when projects of one-to-four units are being
inspected by the participating jurisdiction or HTF grantee, all of the
units and 100 percent of the inspectable areas for each building must
be inspected by the PJ or HTF grantee.
Section 570.208 Criteria for National Objectives
This final rule also updates an outdated citation in Sec.
570.208(b)(1)(iv) to create a standard for determining whether
Community Development Block Grant (CDBG) funds were used to
rehabilitate a substandard residential building. Section
570.208(b)(1)(iv) describes whether an assisted activity is considered
to have met the public benefit standard for an activity to address slum
or blight on an area basis. One of the criteria for determining whether
a CDBG-assisted activity qualifies as an area benefit standard is that
the assisted activity must eliminate substandard housing, which is
housing that would also fail to meet the housing quality standards for
the Section 8 Housing Assistance Payments Program--Existing Housing (24
CFR 882.109).
On April 30, 1998, the final rule entitled ``Section 8 Certificate
and Voucher Programs Conforming Rule'' removed and reserved 24 CFR
882.109 as part of comprehensive rulemaking where HUD revised 24 CFR
part 882 to move requirements applying to the Section 8 voucher and
certificate programs into 24 CFR part 982 and 983.\9\ Therefore, this
citation is out of date. This final rule updates the citation in Sec.
570.208(b)(1)(iv) from 24 CFR 882.109 to 24 CFR 5.703. This change is
technical in nature, and HUD believes that this is an appropriate
technical correction to incorporate into this final rule.
---------------------------------------------------------------------------
\9\ 63 FR 23826 at 23854.
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Section 574.310 General Standards for Eligible Housing Activities
At the final rule stage, HUD is removing certain housing covered
under HOPWA from applicability from NSPIRE. Specifically, HUD is
removing from Sec. 574.310(b) NSPIRE's applicability to housing for
which HOPWA funds are used under permanent housing placement to pay an
eligible person's security deposit, utility hookup and processing
costs, or move in costs, except rental application and credit check
fees (Sec. 574.300(b)(7)). HUD has decided to no longer include stand-
alone permanent housing placement (Sec. 574.300(b)(7)) due to the
administrative burden it would place on HOPWA housing assistance
providers for these one-time costs. Many HOPWA grantees utilize
permanent housing placement in combination with the other permanent
housing activities that will be subject to the HUD housing standards
under the NSPIRE rule.
Section 576.403 Shelter and Housing Standards
For clarity and consistency, HUD is revising the organizational
structure of the proposed Sec. 576.403 consistent with the format of
Sec. 574.310(b)(2). HUD is also clarifying in Sec. 576.403(c)(2) that
the exemption from requiring self-inspection prior to move in for the
first thirty days does not exempt the requirement under part 35 to
inspect for lead-based paint.
Part 880--Section 8 Housing Assistance Payments Program for New
Construction
In the proposed rule, HUD proposed to amend Sec. 880.612 to
require that contract administrators inspect projects to determine
compliance with part 5, subpart G. Since the proposed rule was
published, Sec. 880.612 was modified by HUD's ``Streamlining
Management and Occupancy Reviews for Section 8 Housing Assistance
Programs'' rule.\10\ Because of this change, HUD is now choosing not to
amend Sec. 880.612. Part 880 is already made subject to part 5,
subpart G through Sec. 880.104(d), which states that ``the provisions
of 24 CFR part 5 apply to all projects [under this part.]'' Therefore,
no substantive change is made by the decision not to amend Sec.
880.612.
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\10\ 87 FR 37990 (June 27, 2022).
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Section 884.217, 886.123, 886.323 Maintenance, Operation, and
Inspections
HUD is making a technical edit to Sec. Sec. 884.217(b),
886.123(b), and 886.323(c). The previous regulation required the owner
and family to certify before move-in that the unit had been inspected
by both parties and the unit was decent, safe, and sanitary. The
proposed rule, consistent with other changes, proposed changing
``decent, safe, and sanitary'' to read ``compliant with part 5, subpart
G.'' HUD does not intend to require that a family is familiar with
HUD's housing requirements to certify compliance. Therefore, for
clarity, HUD has revised the regulation to require that only the owner
must certify compliance with part 5, subpart G. Both parties must still
certify that they have each inspected the unit. Families are still
entitled and encouraged to identify any deficiencies they believe may
exist and, where an owner fails to make repairs, report those
deficiencies to HUD.
Section 902.3 Definitions
At the final rule stage, HUD is removing the definition of
``Subarea'' from Sec. 902.3. As discussed further in HUD's proposed
Scoring notice, HUD is not using ``Subareas'' in NSPIRE. HUD is also
making a technical revision to the definition of ``Inspectable item''
to remove the reference to the ``Item Weights and Criticality Levels
document'', which no longer exists (as discussed in the proposed rule)
under NSPIRE.
Section 902.13 Frequency of PHAS Assessments
The proposed rule removed from Sec. 902.13(b)(2) language relating
to inspection frequency under PHAS and replaced it with a citation to
Sec. 5.705(c). Incidentally, this change removed language clarifying
that, for properties with a physical inspection score at or above 80--
i.e., properties scored less than annually--the most recent physical
inspection would be used in calculating the overall PHAS physical
condition indicator score for a given fiscal year.
At this final rule stage, HUD has revised Sec. 902.13(b)(2) to
clarify that HUD will use the most recent physical inspection score for
all properties, regardless of inspection frequency, in calculating the
PHAS physical condition indicator score. Section 5.705(c), which
provides the requirements for the timing of
[[Page 30449]]
inspections, does not tie inspections to a particular fiscal year.
Therefore, this revision makes clear that an inspection does not have
to occur during the PHA's assessed fiscal year to be included in that
fiscal year's PHAS score Troubled PHAs will continue to be assessed
annually as previously required by Sec. 902.13(b)(3).
Additionally, this final rule adds language to Sec. 902.13(b)(2)
regarding the transition from UPCS-based physical condition indicator
scores to NSPIRE-based scores. For simplicity, and to prevent technical
issues related to calculating scores using both the old UPCS system and
the new NSPIRE system, HUD will not provide a PHAS physical condition
indicator score that uses both UPCS scores and NSPIRE scores in its
calculation. Instead, starting July 1, 2023, PHAs will keep their most
recent physical condition indicator score until every public housing
property associated with the PHA has been inspected under NSPIRE. After
every property under a PHA has received an NSPIRE inspection, the PHA
will receive a new physical condition indicator score which will
exclusively use NSPIRE inspections in its calculation. After this
transition period, scores will be calculated using the normal method
laid out in Sec. 902.13(b)(2). This exception does not apply to small
PHAs under Sec. 902.13(a) or to small rural PHAs under part 902,
subpart H. These PHAs have a relatively small number of buildings
compared to PHAs covered by Sec. 902.13(b)(2) and inspections of these
buildings are usually more coordinated in a specific period of time.
Therefore, while this exception does not apply to these PHAs, HUD
intends to ensure that all properties under small and small rural PHAs
receive an NSPIRE inspection before calculating a PHA's new physical
condition indicator score.
Section 902.103 Public Housing Assessment of Small Rural PHAs
HUD is revising Sec. 902.103(a) to add one additional point for
physical condition and neighborhood environment to better align the
small rural PHAS regulation with the ordinary PHAS assessment. This
additional consideration ensures consistency with 42 U.S.C.
1437d(j)(1), which acknowledges the differences in the difficulty of
managing individual projects that result from their physical condition
and their neighborhood environment. HUD is also revising the
parenthetical examples in paragraphs (c)(1) and (2) to only provide one
example to avoid implying that the list of examples is exhaustive.
Section 902.107 Withholding, Denying, and Rescinding Troubled
Designation
The final rule includes Conciliation Agreements as a type of
special agreement with HUD in Sec. 902.107(a)(1) because a Voluntary
Compliance Agreement refers to agreements under Section 504, Title VI,
and the ADA, whereas Conciliation Agreement refers to agreements under
the Fair Housing Act.
Section 983.101 Housing Quality Standards
In the proposed rule, HUD proposed to replace all of Sec. 983.101
with a citation to Sec. 5.703. After further consideration, HUD has
decided, for clarity, to keep the entirety of Sec. 983.101 in place,
and to revise paragraph (a) to cite to Sec. 5.703. HUD also makes
minor conforming edits to paragraphs (b) and (c).
Section 985.205 Determination of Assessment Rating
HUD has revised the proposed Sec. 985.205(a)(1)(i) at the final
rule stage to add that a small rural PHA will be judged based on the
last two years of HCV budget authority data. HUD has made this change
because, for some PHAs, the sample size would be too small to rely on
one year only as an accurate picture of the PHA's performance. The
increased review period will improve a PHA's ability to achieve 98
percent in related indicators.
Conforming Changes
HUD makes the following conforming changes which do not impose or
change substantive requirements.
Terminology in Part 5
In the proposed rule, in certain places HUD inadvertently used the
term ``owner'' when the correct term should have been ``owner or PHA.''
There are also instances in the proposed rule where HUD used the term
``public housing'' when the correct term should have been ``HUD
housing'', which includes all the programs listed in Sec. 5.701(a).
HUD has corrected the terminology, where appropriate, in this final
rule.
Sections 884.217 and 886.123
HUD is also making minor changes to the proposed Sec. Sec.
884.217(c) and 886.123(c). HUD is removing language regarding the
sample of units to be inspected and removing language regarding the
frequency of inspections to ensure that these paragraphs are consistent
with each other, and consistent in applying part 5, subpart G.
Part 965, Subpart I--Fire Safety
This final rule removes part 965, subpart I regarding fire safety.
This subpart applied fire safety regulations to public housing. The
NSPIRE rule applies these same requirements to public housing,
rendering this subpart redundant.
Sections 982.402 and 982.618
This final rule updates part 982 to remove citations to paragraphs
in Sec. 982.401 to reflect the update to Sec. 982.401.
Part 982, Subpart M--Special Housing Types
This final rule amends 24 CFR part 982, subpart M, which lays out
alternative and additional requirements to the Housing Quality
Standards. This final rule makes no substantive changes to subpart M,
but only updates and removes citations and references to the Housing
Quality Standards consistent with the changes proposed and now made.
This is consistent with Sec. 5.703(h) of both the proposed and final
rule, which states that special housing types under part 982, subpart M
are subject to different and additional requirements.
Part 983--Project-Based Voucher (PBV) Program
This final rule amends Sec. 983.2(c)(4) to remove the citation to
``Sec. 982.401(j),'' which was removed in both the proposed and final
rule. This does not change the lead-based paint obligations which apply
to the part 983, as discussed at Sec. 983.4.
IV. Public Comments
General Support Comments
Several commenters expressed general support for the changes in the
proposed rule. A commenter stated that the rule would advance
affordable housing. Another commenter anticipated a responsive real-
life process to effect improvement in housing standards. Another
commenter stated that the proposed rule would be an avenue for managing
the workload and incentivizing properties that perform well, and also
as a way for HUD to manage its own backlog of inspections. A commenter
stated that there are many communities that do not enforce code
regulations but having all agencies on the same platform would help
local officials understand what is needed. One commenter supported the
decreased subjectivity and increased accuracy of the proposed rule to
achieve positive outcomes. Commenters also supported HUD's NSPIRE
demonstration.
[[Page 30450]]
HUD Response: HUD appreciates this input and support for the
changes in the rule. HUD agrees that having focused, objective,
accurate and up to date regulations, processes, and standards can help
achieve positive outcomes for millions of families while at the same
time improving the way HUD operates. In this final rule, HUD has
largely maintained the same framework as in the proposed rule.
Additional General Support Comments
Commenters expressed support for HUD's dedication to seeking
stakeholder feedback. One commenter supported HUD engaging with the
public to address the industry's difficulties with existing
inflexibility on technical, mechanical, and engineering issues that
have limited impact on the safety and habitability of existing
structures but absorb a disproportionate amount of time and difficulty
on sites. Another commenter stated that HUD has made clear that equity
and transparency are key goals for this rule. One commenter noted that,
while it is important that HUD lays out an expansive framework at the
Federal level, it will be important that HUD works frequently with
public authorities as they facilitate this transition to promote
efficiency while limiting administrative burden when possible. A
commenter urged HUD to expand outreach to include residents, State and
local code enforcement agencies, legal service attorneys, housing
advocates, public health advocates, and environmental justice
advocates, to make enforcement effective and efficient.
HUD Response: HUD thanks commenters for their input on this topic.
HUD continues to improve outreach efforts and obtain feedback from
stakeholders and the general public. HUD agrees that equity and
transparency are key considerations in this rule. HUD has retained the
requirement at Sec. 5.709(a)(1) to regularly revisit the requirements
through public comment, allowing all stakeholders an opportunity to be
heard. HUD also believes outreach efforts should include residents,
State and local code enforcement agencies, and other housing
stakeholders and advocates and continues to seek their feedback through
this rulemaking process. The proposed NSPIRE Standards notice was
posted for comment on June 17, 2022, for 45 days for public comment.
HUD considers these comments important in finalizing the Standards
notice. To promote feedback and encourage transparency, HUD also
published information on the NSPIRE demonstration effort on its website
and sought feedback from participants through the demonstration.
Residents of HUD-assisted housing were encouraged to comment as
members of public, but also through other available opportunities for
participation. In public housing, residents can participate in resident
advisory councils and attend regular meetings held by their Board of
Commissioners. Board members are typically appointed by elected
officials and include at least one resident member. All members of the
public, including legal service attorneys and housing and public health
advocates, can report housing standard violations or other concerns to
HUD offices. A list of contacts for HUD's local offices can be found at
https://www.hud.gov/local.
Economic Growth and Recovery Act
Question for Comment #1: Standards for Small Rural Section 8 Projects
and PHA Public Housing Projects
Commenters recommended that HUD follow Congress's intent to provide
less burdensome regulations for small PHA properties. One commenter
supported HUD's proposal to align standards for small rural PHAs.
Another commenter supported taking an expansive view and defining
``standards . . . for the acceptable condition of public housing
projects'' to mean the entire NSPIRE model. A commenter also
recommended HUD provide more technical assistance options for small
rural PHAs. One commenter suggested the same standards should apply to
all projects to ensure fair and equitable living conditions across
PHAs.
A commenter stated that Housing Quality Standards (HQS) inspections
for Section 8 properties were more consistent and objective than the
Uniform Performance Condition Standards (UPCS) inspection protocol used
for their public housing properties, and therefore small rural agencies
should be allowed to use the HQS protocol to comply with inspection
requirements. This commenter recommended that if HUD determines that
maintaining HQS inspection protocols for small rural agencies is
infeasible, then HUD should allow public housing units at small rural
agencies to be inspected similar to Section 8 properties.
HUD Response: Through this rule, HUD is adopting the statutory
requirement for specific relief for small rural PHAs but requires that
properties of these PHAs will be assessed using the NSPIRE standards
for physical conditions in both the Public Housing and HCV programs.
The changes will apply to PHAs as described in 24 CFR part 902, subpart
H and 24 CFR part 985, subpart D. HUD declines to implement the
recommendation to utilize Housing Quality Standards (HQS) for small
rural PHAs. One of HUD's objectives is to align standards across
numerous housing portfolios, and with this rule the HQS regulations
incorporate the NSPIRE standards and refer to Sec. 5.703. HUD believes
that the NSPIRE standards provide more consistent and objective
criteria with which to evaluate the safety and habitability of HUD-
assisted housing. Residents that live in units managed by small rural
PHAs should be provided the same level of safety and habitability as
residents of other 572 public or HUD-assisted housing.
As proposed and now made final, HUD will make the initial
determination of PHAs that qualify as small rural as defined in Sec.
902.101 of this title no later than 120 days after the effective date
of the final rule for Public Housing, or July 30, 2023. Additional
deregulation efforts for other small PHAs are outside the purview of
this rule but could occur through future rulemaking including updates
to the Public Housing Assessment System (PHAS). Relief under this rule
is provided in 24 CFR part 985, subpart D and a new subpart H under the
current 24 CFR part 902. Section 902.103(b) includes a three-year cycle
for overall scoring based on physical conditions for non-Troubled small
rural PHAs.
HUD agrees with the need to align standards for small rural PHAs
for Public Housing and Section 8 properties with other PHAs, and this
rule provides the framework for this alignment to the NSPIRE standards.
The NSPIRE standards were proposed for comment on June 17, 2022, and
final standards will be published before this rule's effective date.
Additional implementing information for the new standard, including the
process for PHAS rule and SEMAP assessments, will be provided through a
Departmental notice. HUD plans to provide more technical assistance for
small rural PHAs with the administrative notice.
Section 5.701 Applicability
Commenters stated that the proposed rule should be broad in scope.
Two commenters suggested expanding applicability to include tax credit
communities and Section 232 properties. Another commenter welcomed
HUD's efforts to codify uniform standards across HUD-assisted housing,
noting that establishing uniformity will help empower residents to
navigate different HUD assisted
[[Page 30451]]
housing systems over time and also improve the interface with local
code inspection agencies, who otherwise may have to navigate
conflicting standards and expectations across HUD programs.
A commenter expressed concern that the proposed rule does not take
into account the differences between insured housing and affordable
housing, pointing out that some types of HUD-insured housing, e.g.,
assisted living and nursing homes, are subject to various State-imposed
requirements and regulations. One commenter suggested that HUD should
clearly state which specific program regulations are superseded or
supplemented elsewhere, noting that part 5 may become the first stop a
PHA, owner, or owner/agent (``POA''), member of the public, or other
interested party makes to find housing quality regulations, and it may
be their last stop if they are not directed to other applicable
regulations. The commenter stated that absent this direction,
individuals will have to cross-check program regulations manually which
could lead to unnecessary confusion.
HUD Response: HUD agrees with the comments about the scope of the
rule and believes that the rule improves the consistency and uniformity
of housing standards for HUD-assisted programs given its broad
applicability to all HUD-assisted residential properties and units. In
order to ensure regulated parties know which standards apply to them,
this rule revises specific program regulations to reference the new
NSPIRE standards. The framework for evaluating physical condition
addresses safety and habitability regardless of the type of HUD-
assisted housing.
This rule applies to all types of HUD housing including health care
facilities insured under Section 232 of the National Housing Act and
Low-Income Housing Credit (LIHTC) properties receiving some form of HUD
assistance and other properties under a HUD-assisted housing contract
(e.g., annual contributions contract). HUD does not have authority to
create rules that apply to the Department of Treasury's Internal
Revenue Service LIHTC and therefore cannot apply this rule to the LIHTC
generally, but can apply this rule whenever the LIHTC property also
receives some form of HUD-assistance. HUD will engage other Federal
agencies with potentially overlapping subsidies to further evaluate the
applicability of the NSPIRE rule to these other Federal housing subsidy
types.
With respect to conflicting standards and expectations, HUD
physical condition requirements have always overlapped with State and
local physical condition standards and sometimes exceed these
standards. In other cases, State and local standards exceed HUD
standards. This rule does not change the proposed Sec. 5.703(f) which
states that for all covered programs, the NSPIRE Standards for the
condition of HUD-assisted housing do not supersede State and local
Housing codes. This rule establishes nationwide Federal minimum
requirements for HUD-assisted housing and does not attempt to unify or
preempt State and local housing standards. Because all HUD-assisted
housing must meet the NSPIRE rule requirements, residents and other
HUD-assisted housing stakeholders should have a nationwide expectation
for the safety and habitability of housing; however, it will continue
to be necessary to review all other applicable requirements including
Federal accessibility requirements and State and Local requirements.
Section 5.703 Inspection Standards
Comments Regarding Alignment and Streamlining of Standards
Commenters expressed support for the alignment of standards and
inspection processes, stating that this would have a positive impact on
properties with mixed financing or subsidy layering, eliminate the need
to subject residents to multiple, separate oversight mechanisms, and
reduce administrative and cost burden to owners and agents. Commenters
supported the proposed rule's streamlining of the number of inspection
categories and focus on the condition of individual units and stated
that this approach is more aligned with municipal laws governing health
and safety in rental housing. A commenter supported moving away from
``curb appeal'' deficiencies toward ``substantial safety
deficiencies,'' while another commenter supported the linguistic change
from ``exigent health and safety'' to ``severe health and safety''
deficiency, as reducing bias and variability in the inspections
process.
One commenter noted that federally assisted rental properties are
in varying states of disrepair with multiple deficiencies, and
suggested that irrespective of the housing program HUD might require
the same standards to be applied across the board, and according to the
housing program requirements, require different levels of risk
management measures or approaches to address the health and safety
risks posed by the identified hazards.
One commenter stated that the proposed rule lacks coherence between
HUD standards and other groups' standards. The commenter further stated
that given how housing has been contracted out and privatized, it can
be more difficult to assess program-assisted housing.
HUD Response: HUD agrees with commenters that the regulatory
consolidation, use of consistent standards across housing program, and
program alignment within this rule will allow HUD and regulated
entities to realize administrative benefits.
HUD agrees with commenters that the rule will reduce the
administrative and cost burden to owners while improving the
habitability and safety of HUD-assisted properties and units, which are
not mutually exclusive objectives. HUD evaluated many other third-party
organization standards and believes its standards are consistent with
industry best practices for residential real estate. This rule provides
a consistent means of assessing all types of HUD-assisted housing.
This rule will align all listed HUD-assisted programs under the
NSPIRE Standards that were proposed on June 17, 2022 and will be final
before the effective date of this rule. Resolution of identified
deficiencies will be mostly consistent with resolution of deficiencies
under the UPCS and HQS standards but scoring and pass/fail decisions
will be driven by the NSPIRE program requirements and applicable
statutes. With this consolidation, HUD will better focus on
habitability and the health and safety of residents.
Minimum Habitability Requirements
A commenter agreed with the idea of reinforcing the importance of
minimum habitability requirements and adding the word ``safe'' to the
existing rule and suggested that ``safe'' take on issues regarding lead
exposure and mean ``protected from the amount of exposure that will
cause harm or damage after exposure.''
HUD Response: The term ``safe'' has been, and will continue to be,
an important term for HUD inspection standards. This rule will
reinforce the priority of maintaining a safe and habitable dwelling.
HUD declines to adopt additional language around lead exposure in this
regulation, as it is covered by 24 CFR part 35.
Environmental Factors
A commenter noted that ``standard public health and safety metrics
related to morbidity and mortality'' are largely foreign to housing
providers, and whether they align well with the unique environment of
housing maintenance and management is unknown. This commenter agreed
that the built
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environment's effect on the health and safety of residents is more
important than any building damage that is strictly cosmetic in nature
but cautioned that HUD must ensure that protocols reflect that PHAs are
constrained by funding and other funding priorities.
A commenter suggested HUD require inspection of roofs, foundations,
storm water runoffs, trash receptacles, ERV systems, heat pumps, and
air ducts. This commenter further suggested HUD require screens to
prevent bugs, and humidity and environmental control to avoid
unnecessary power bills. Another commenter stated that HUD must
specifically consider hazards created by the outside environment and
their effects on subsidized properties and on the low-income tenants
who reside in these developments or are eligible to live there, and
that the comment period should either be extended, or a new comment
period opened, to specifically consider these important factors. This
commenter suggested specifically that HUD should include 24 CFR
982.401(l) in the regulations, as well as 24 CFR 982.401(h), and other
environmental hazards considerations (e.g., the proximity of the
property to large polluters and transportation infrastructure, toxins
in the soil and water, and the area's air quality).
A commenter proposed several additions to address general health
and safety concerns. The commenter suggested that HUD address toxic
mold and indoor air, largely caused by water leaks and poor ventilation
in aging housing stock, by equipping REAC inspectors with moisture
meters to detect moisture behind walls that may signal plumbing or roof
leaks that cause mold. The commenter also suggested adding and/or
revising requirements around a number of health and safety issues,
including clogged ventilation; presence of asbestos/radon; presence of
lead-based paint; presence of mice, rats, bedbugs and roaches. Finally,
the commenter recommended that HUD re-adjust or remove the Point Loss
Caps to allow for accurate deductions for deficiencies. The commenter
opined that the practice artificially inflates REAC scores, negates the
point of a ``random sample,'' and is inherently biased against the
health and safety of residents.
Commenters also focused on the issue of water-borne lead poisoning
and provided several lead-related suggestions, including that HUD
update its lead inspection requirements, by, for example, no longer
allowing visual inspections to suffice as a valid way to assess lead
risks, and by using a portable x-ray fluorescence tool, or XRF gun to
assess lead hazards. A commenter expressed concern that HUD's proposal
to make no substantive changes to the lead-based paint requirements of
its current regulations misses a critical opportunity to make long-
overdue updates to outdated lead standards.
HUD Response: HUD appreciates acknowledgement of the built
environment's effect on health and safety of residents; as such this
rule focuses on the built environment supported by HUD subsidies and/or
assistance, as described in Sec. 5.703 for outside, inside and units
and in the NSPIRE Standards notice. HUD acknowledges that capital
funding across both its Public Housing and Multifamily programs has
been limited in recent years, and this may have resulted in deferred
maintenance and modernization. However, this cannot result in units
that are unsafe for residents, and so the NSPIRE program has made life-
threatening conditions a priority for standards development and
scoring.
Comments concerning the scope of inspectable items will be
addressed through the subordinate Federal Register notice on the NSPIRE
physical condition standards, which was proposed for public comment on
June 17, 2022.
In the final NSPIRE Standards notice, a screen will be considered a
component of the window, and will be cited if damaged, missing or not
functionally adequate. HUD acknowledges that some HUD-assisted housing
may be located in areas with industrial contamination, and takes very
seriously the comment concerning the risks posed to residents by the
external environment. Contamination can be addressed as a health and
safety concern under Sec. 5.703(e) of this rule. HUD will provide
additional information about the applicability of this section in the
NSPIRE Administrative notice. Lead-based paint evaluation and hazard
control is covered under 24 CFR part 35 and is outside the scope of
this rulemaking.
With respect to the dangers posed by water-borne lead, HUD
continues to work with the Office of Lead Hazard Control and Healthy
Homes and the Environmental Protection Agency (EPA) where there are
active, environmental hazards to residents, including lead in water.
More information on the review of site contamination is available at:
https://www.hudexchange.info/programs/environmental-review/site-contamination/.
With respect to other health and safety issues such as mold,
moisture and pest intrusion, this rule and the associated standards
cover these housing-related hazards. The NSPIRE Standards were proposed
on June 17, 2022, for public comment and will be finalized before this
rule takes effect. NSPIRE will continue to include visual assessments
only, but HUD will continue to consider other, specialized inspections
for environmental health issues. The use of a moisture meter to assess
moisture intrusion is one of several tools HUD has considered and,
because this pertains to inspection standards, HUD will discuss this
further in the final NSPIRE Standards notice.
HUD will elaborate more on its scoring methodology in its Scoring
notice. HUD will take these comments and all additional comments into
consideration before scoring under NSPIRE commences, including whether
the point-loss cap will be retained.
Affirmative Requirements
A commenter cautioned that several of HUD's proposed affirmative
safety requirements would exceed local building codes and create
significant costs for housing stakeholders and create unnecessary
confusion and urged HUD to base standards on existing International
Building Code or fire Life Safety Codes wherever possible. The
commenter suggested that if HUD proceeds with these affirmative safety
requirements, the agency should be mindful of these impacts and help
owners defray costs, while allowing transition times or the possibility
to ``earn'' extra points, rather than lose points, for new affirmative
safety requirements. The commenter further suggested that HUD make
efforts to mitigate inconsistencies between inspectors to the extent
possible.
HUD Response: HUD considered the costs and benefits of this rule
and considered model codes in its development, where appropriate. The
affirmative requirements in the final rule at Sec. 5.703 align with
the International Property Maintenance Code (IPMC) which is currently
adopted for use in 40 States & 1000 plus local jurisdictions as their
housing maintenance codes. Affirmative requirements are the basic
requirements for an assisted unit and property that must be met for
participation. These standards are what HUD considers the minimum
requirements for habitability, and generally will not be scored for
their presence or absence but will be designated as pass/fail. If they
are not met, they will be cited, and must be corrected if the unit is
approved for participation or continued occupancy. HUD has evaluated
the costs of the new
[[Page 30453]]
rule in its Regulatory Impact Assessment. The NSPIRE Standards notice
was published for comment on June 17, 2022; additional information
regarding affirmative requirements will also be included in the
forthcoming Scoring notice.
HUD agrees that inconsistencies between inspections and inspectors
is an important issue that should be mitigated and has revised the
requirements for eligibility and ongoing training as described in the
subordinate NSPIRE Administrative notice which will be issued soon
after this rule. This notice, and the contract used to procure REAC
inspectors will include requirements for quality assurance and control
to ensure consistency between inspectors and inspections.
The NSPIRE scoring methodology will be published in the Scoring
notice. This Scoring notice will be published for effect but will seek
public comments, including regarding scoring changes that reward
certain properties for adoption of affirmative requirements, but HUD
does not plan to award bonus points for standards that must be met and
are not optional.
Alternative Standards
A commenter noted that Federal agencies are required to use
voluntary consensus standards wherever possible in their procurement
and regulatory activities in lieu of expending public resources
developing government unique standards and encouraged HUD to leverage
private sector codes by, at minimum, accepting the IPMC across HUD's
programs as an optional, alternative compliance mechanism. The
commenter opined that allowing adherence to the IPMC to satisfy HUD's
maintenance requirements would harmonize these requirements and
standardize practices, and that inspectors would be more efficient and
effective at implementing a single maintenance standard than they would
at three or more variations. The commenter noted the IPMC exceeds HUD's
standards because HUD's standards have not been substantively updated
for decades., while the IPMC is updated every three years.
HUD Response: HUD considered the IPMC as a model but believes the
NSPIRE Standards are more appropriate for HUD programs. To apply the
IPMC, the current inspector workforce would need to learn a new set of
standards in addition to the statutory requirements that HUD must
oversee that exceed IPMC. The IPMC also does not publish standards in
areas that are safety concerns for HUD and is often a prescriptive
standard that does not consider current conditions.
Accessibility Compliance
Several commenters recommended that HUD require that common areas,
indoor mailboxes, parking lots, waste disposal areas, walkways, and
other areas should be ADA compliant for persons with disabilities.
HUD Response: Compliance with the requirements of the Americans
with Disabilities Act (ADA) is already required for services, programs,
and activities of State or local governments, as described in 28 CFR
part 35. HUD-assisted properties must also comply with Section 504, as
described in 24 CFR part 8. The Office of Fair Housing and Equal
Opportunity (FHEO) is responsible for inspection and administrative
enforcement related to compliance with accessibility standards under
both the ADA and Section 504, as well as the Fair Housing Act. Those
regulations are not proposed for modification through this rulemaking.
The NSPIRE Standards will include elements of accessibility within the
standards, but these elements are not the same as the Federal
accessibility standards as they relate to housing. Compliance with
these NSPIRE Standards does not mean the participant has complied with
the Federal accessibility standards. HUD also notes that the NSPIRE
standards include common areas under Sec. 5.703(b), Inside, and the
areas outside the property such as waste disposal areas, walkways in
Sec. 5.703(c), Outside.
Area Names and Definitions
A commenter suggested clarifying in paragraph (a) that ``outside
the building'' includes the building site. This commenter also
suggested that paragraph (b) be renamed as ``Inside common areas,''
that both mechanical rooms and utilities rooms be stricken, and that
the definition be qualified as applying only to areas that are
accessible to residents. With respect to paragraph (c), the commenter
suggested renaming it to ``Outside areas'' and that the definition be
qualified as applying only to areas that are accessible to residents.
One commenter stated that HUD must define ``functionally adequate''
and also questioned the basis of the universal habitability
requirements and design specifications.
HUD Response: HUD streamlined the number of inspection categories
(or areas as previously defined) from five to three to simplify the
inspection program and improve transparency for all stakeholders. HUD
believes that properties should be free from health and safety hazards,
including all of the areas as described in (b) Outside, (c) Inside, and
(d) Units. Section 5.703(c) includes the building site, building
exterior components, and any building systems located outside of the
building or unit. Examples of ``outside'' components on the site may
include fencing, retaining walls, grounds, lighting, mailboxes, project
signs, parking lots, detached garage or carport, driveways, play areas
and equipment, refuse disposal, roads, storm drainage, non-dwelling
buildings, and walkways. Regarding ``inside common areas,'' mechanical
rooms and utilities are included as areas to inspect, regardless of
access because they could present a safety hazard that could impact
units. For example, combustible materials near a water heater or
furnace in a utility room could cause a fire that impacts the entire
building. Regarding the definition of the term ``functionally
adequate,'' each standard in the NSPIRE Standards notice will define
what ``functionally adequate'' means for that particular standard.
Living Rooms as Bedrooms
Commenters suggested that Sec. 5.703(d)(5) should not count living
rooms as a bedroom and should be modified to include Public Housing and
Multifamily housing. A commenter stated that families with a member who
experiences a disability should not be forced to use the living areas
as a bedroom in lieu of granting the family's reasonable accommodation
request for a larger voucher.
HUD Response: Proposed Sec. 5.703(d)(5) included requirements that
for units assisted under the HCV or PBV program, the unit must have at
least one bedroom or living/sleeping room for each two persons. While
HUD appreciates comments on bedroom sizes, the regulation has been
retained with a modification to exclude gender qualifiers but retained
language around age regarding what PHAs could require for families. The
commentor's concerns, however, touch also on subsidy standards in Sec.
982.402, which are not proposed for revision. The requirements for
family size and composition are not applied to the Public Housing and
Multifamily housing programs because those programs did not previously
have strict occupancy requirements linked to the unit size. Families
that include a person with a disability may request a waiver of the
occupancy requirements to accommodate their needs as a reasonable
accommodation. The Fair Housing Act and Section 504 of the
Rehabilitation Act of 1973 each prohibit
[[Page 30454]]
discrimination against persons with disabilities, and PHAs and owners
are obligated to grant requests for reasonable accommodation when it
may be necessary to afford a person with a disability with equal
opportunity to use and enjoy housing. For more information or to file a
complaint, see www.hud.gov/fairhousing.
Superseding State and Local Code
A commenter suggested that Sec. 5.703(f)(1) should be amended to
state that HUD standards supersede local or State codes when HUD
standards exceed local or State codes.
HUD Response: HUD declines to state that HUD's standards supersede
local or State code. The NSPIRE rule establishes a standard for housing
quality across covered HUD programs, while allowing applicability of
State/local building codes that are more protective or necessary for
local conditions. Superseding State or local code only where HUD
standards exceed that code, and only for HUD housing, would be
administratively difficult and unnecessary. HUD Housing is required to
follow both Federal standards and State and local law.
Application to HCV and PBV Units
Commenters suggested that Sec. 5.703(f)(2) should be amended to
require HCV and PBV units (not just Public Housing and Multifamily
housing) to meet State and local standards that are greater than those
established by HUD in order to comply with the subpart. A commenter
asserted that the inapplicability of State and local housing code to
HCV and PBV units is in opposition of the statute and HUD's historical
practices and stated that HCV and PBV units should not pass inspection
if they do not comply with Federal, State, and local codes, asserting
that voucher families should be able to benefit from using State and
local laws to improve their housing conditions without the risk of
their losing their subsidies, and that to the extent HUD is concerned
that State and local codes are being used to target and exclude voucher
holders, HUD could clarify that local and State code violations cannot
result in the termination of the subsidy or used in a manner to
penalize the tenant household. A commenter stated that HUD must ensure
that inspection standards applicable to the HCV program do not impose
requirements that exceed typical rental market standards and
unintentionally limit housing choice or discourage landlords from
participating. The commenter stated specifically that the standard for
units to have ``a living room and a kitchen area'' should reflect the
existing definitions used in the HCV program and that the phrase
``other than very young children'' must be defined, or it must be clear
that the housing provider has the discretion to define the age.
HUD Response: HUD believes that the language under Sec.
5.705(a)(3) is sufficient to address these concerns. State and local
codes still apply to HUD assisted housing, but the requirements would
not be incorporated in the NSPIRE inspection. For the HCV and PBV
programs, PHAs have the ability to consider variations in local laws
and practices and provide appropriate flexibility to facilitate the
efficient provision of assistance. Multifamily owners, managers and
PHAs are encouraged to include State and local requirements in their
annual self-inspections. HUD agrees that the HCV and PBV program should
have certain flexibilities to ensure that the program does not
unintentionally limit housing choice or discourage landlords from
participating, while still requiring that units be healthy and safe for
residents.
With respect to definitions of ``living rooms'' and ``kitchens,''
HUD has not created new definitions for these spaces in regulatory
text, and State/local standards will continue to apply. In the
Administrative notice, HUD will include definitions that align with the
American Housing Survey. HUD appreciates the comment on defining ``very
young children.'' As discussed elsewhere, HUD removed the regulation
requiring separate bedrooms for children of the opposite sex, and
therefore the term ``very young children'' is no longer used.
Comments Regarding Smoke/Carbon Monoxide Detectors and Fire
Extinguishers
Commenters had concerns about the burden associated with providing
the various items. One commenter suggested that requirements for CO/
Smoke detectors in every sleeping room be grandfathered to requirements
at the time of construction. The commenter noted that current
regulations and code require them on each living level but, unless a
minimum threshold is crossed in rehab/modification in any unit, they
are not required in each bedroom. The commenter also opined that the
likelihood for tampering and/or removal will increase by a level times
the number required to be provided.
Another commenter opined that the proposed change of requiring fire
extinguishers in every unit is a costly and bad idea to implement, and
that it will be highly difficult to regulate extinguishers owned by
residents, and costly in dollars and points to the project. Another
commenter urged HUD to reconsider the draft standard that would require
a fire extinguisher in every unit, and to replace it with a requirement
to install extinguishers regularly at a certain measure throughout the
hallways of properties. The commenter stated that having a fire
extinguisher in the unit will increase the likelihood that a resident
will remain in the unit in the case of the fire and try to extinguish
it, instead of exiting the unit as quickly as possible.
A commenter stated that requiring a fire extinguisher inside each
rental unit would exceed local requirements and create administrative
burden. Some commenters supported requiring carbon monoxide detectors.
One commenter stated that HUD must move quickly to require the
installation of carbon monoxide detectors in HUD-assisted and HUD-
insured housing, and that, given that most local codes require the
presence of carbon monoxide detectors, there is no need for delay. A
commenter noted that HUD did not require carbon monoxide detectors to
be installed consistent with the 2018 edition of the International Fire
Code but noted that the IPMC has required carbon monoxide detectors in
each of the last two editions. A commenter asked if fire stops could be
used in place of fire extinguisher and noted success in installing fire
stops, which deploy automatically, above stoves to prevent kitchen
fires, which they found to be safer than using a fire extinguisher.
HUD Response: Regarding carbon monoxide detectors, the requirements
in the 2021 Consolidated Appropriations Act took effect on December 27,
2022. The Act requires that PHAs adopt the provisions of the 2018
edition of the International Fire Code (IFC) Standards, sections 915
and 1103 (or subsequent versions if amended) for the covered programs.
The NSPIRE Standards proposed to incorporate this requirement, but the
statute is prescriptive for public housing owned or operated by a PHA,
dwelling units occupied by individuals with Housing Choice Vouchers,
dwelling units assisted with project-based vouchers or project-based
rental assistance, dwelling units assisted under the 202 and 811
programs, and dwelling units assisted under the HOPWA program and
required that units in these covered programs have carbon monoxide
detection devices installed, effective December 27, 2022. No action
from HUD was necessary to cause this requirement to take effect, and
HUD is making these conforming changes at the final rule stage without
notice and
[[Page 30455]]
comment because they only incorporate these statutory requirements.
Regarding fire extinguishers and other fire safety requirements,
the proposed NSPIRE Standards notice published on June 17, 2022,
included a fire extinguisher requirement and HUD will discuss this
requirement, including comments received on this requirement, more in
the final Standards notice. With respect to the comment about ``fire
stops,'' HUD interprets the comment as actually relating to a
``StoveTop Firestop system.'' HUD does not intend to include such a
system as an alternative manner of compliance because these systems do
not have national standards and must be acceptable to the local
authority having jurisdiction.
Other Suggestions
A commenter supported requiring pictures of failed items and
recommended requiring pictures of items that are not fails but should
nonetheless be documented. Another commenter supported current HUD
asbestos abatement standards. Another commenter urged HUD to provide a
single document with clear and objective scorable defects and weight of
defects and required condition.
Two commenters suggested that HUD, in the final rule, refine the
characteristics of some of the identified unit components, such as
adequate heat (and cooling where appropriate) directly or indirectly in
each room, well-functioning windows and doors with functioning locks,
and an adequate number of electrical outlets and built-in lighting
fixtures.
HUD Response: HUD appreciates the comments about the need for a
clear and objective scoring methodology. NSPIRE will require
documentation of deficiencies which inspectors will upload into a new
streamlined system. Further guidance regarding documentation of
deficiencies will be published in the final Standards notice, Scoring
notice, and Administrative notice which will be published before the
effective date of this rule.
The proposed rule did not propose new standards for asbestos in
federally assisted housing and HUD is choosing not to do so now.
Property owners, managers and PHAs are advised to continue to monitor
any known or suspected asbestos containing materials (ACM) and ensure
that they are not damaged or friable. If ACM will be disturbed during
renovation activities, follow all applicable OSHA and EPA laws.
Comments Regarding Water Safety (Questions for Comment #1 and #2)
HUD asked several questions about water safety. HUD received
comments on all of these questions, which are combined and discussed
below. The first group of questions was directed at definitional
issues, i.e., how should ``safe and potable water'' be defined and
whether ``safe'' should mean that a public water system is in
compliance with the Safe Drinking Water Act?
A number of commenters pointed out that PHAs are not in a position
to monitor water safety, which is the responsibility of local water
suppliers and local government agencies. Commenters also noted that
there is an important distinction, unaddressed in the proposed rule,
between properties served by public water systems and those served by
well water systems. Some commenters stated that HUD had no business
attempting to define ``safe and potable water,'' with a few
recommending specifically that ``safe'' be removed. These commenters
stated that this determination is the province of other State and
Federal entities, most notably the EPA, and that HUD lacks the
requisite expertise with respect to determinations of water safety.
Many commenters did suggest definitions for ``safe and potable
water.'' Some commenters suggested keeping the definitions very basic:
``Running water with temperatures of hot and cold running thru the
pipes''; ``water that is safe to drink and for food preparation'';
potable water is water that is ``safe to drink.'' One commenter
suggested that HUD should define safe water as having ``reasonable
certainty that no harm will result,'' and that ``there is a reasonable
certainty in the minds of competent scientists that the substance is
not harmful under the conditions of its intended use.'' This commenter,
with respect to ``potable water,'' suggested that potable means more
than just safe, and that water can be used for drinking, cooking,
bathing, and other household needs, and therefore must meet the
required (chemical, biological and physical) quality standards at the
point of supply to the users, and be of an acceptable color, odor and
taste for each personal and domestic use. One commenter stated that
``if water is coming from a public source, it is safe to assume the
water is fit to drink.'' A commenter believed that HUD should establish
a national definition, not driven by local standards or politics. Many
commenters stated that it is appropriate for HUD to rely on EPA
determinations under the Safe Drinking Water Act (``SDWA''). At least
two commenters, however, while supporting a general reliance on EPA's
SDWA determinations, pointed out that those determinations are not
acceptable in the presence of lead service lines.
HUD also asked several questions related to detection and
enforcement of safe water standards, including how should HUD monitor
whether water is safe; what elements should be reviewed during a
physical inspection to determine water safety; and whether inspectors
should verify that a municipal water supply authority is in compliance
with EPA's Safe Drinking Water Act?
A number of commenters expressed an opinion that HUD should not be
involved in ``monitoring'' water safety; rather, HUD should defer to
the agencies that currently monitor the water supply under State and
Federal law. One commenter noted that should HUD choose to enter this
area, participation should be limited to confirmation that the property
is served by a municipal water system through a water bill or that any
private well system is monitored and tested regularly. Another
commenter stated that adding a new safe water monitoring layer to
something that is already regulated and monitored on a State and
Federal level seems a bit redundant and unnecessary. Another commenter
offered that if HUD is concerned about water quality, then HUD, either
internally or through the EPA, should be able to perform regular,
routine inquiries about public water systems around the country to
ensure that those systems are in compliance with the Safe Drinking
Water Act.
Similar to monitoring, a number of commenters expressed an opinion
that HUD should not be involved in conducting inspections related to
water safety; or, in the alternative, that HUD conduct only the most
cursory inspection with respect to water safety. One commenter opined
that no elements should be reviewed during the physical inspection to
determine water safety; that a PHA has met its responsibility if there
is hot and cold running water. Another commenter suggested that HUD's
inspection be limited to a visual observation of water for
contamination or discoloration. Other commenters suggested that no
elements should be included by HUD in requirements for physical
inspections other than a visual inspection for poorly maintained pipes
and valves and confirmation that water flow is present and can maintain
at least 120 degrees.
One commenter suggested that as one element of inspection, HUD
should seek to determine that owners are not delinquent in their water
and sewer
[[Page 30456]]
accounts for individual properties, in order to ensure that properties
are not at risk for service disconnection. Several commenters suggested
that HUD could review local Water Quality Reports that are compliant
with the U.S. EPA's National Primary Drinking Water Regulation for
Consumer Confidence Reports, and/or other reports provided by
municipalities/water supply authorities.
Two commenters opined that inspectors trained in water sampling
techniques could take the water samples directly and send them to a
certify laboratory for analysis. One commenter stated that HUD should
monitor drinking water safety by testing housing facility
infrastructure for contamination, not just public water systems.
Another commenter stated that HUD, either internally or through the
EPA, should be able to perform regular, routine inquiries about public
water systems around the country to ensure that those systems are in
compliance with the Safe Drinking Water Act. If not, the Federal
Government should work with the local jurisdiction managing the public
water system to ensure those systems are upgraded and safe. The
commenter noted that HUD can also inform PHAs in those areas that there
may be water contamination so that they may inform their residents and
provide those residents options for safe drinking water if the local or
State government has yet to do so.
One commenter recommended that HUD must conduct its own monitoring
of water safety in order to ensure that housing it supports provides
safe and potable water to its residents. The commenter suggested
periodic monitoring of every unit for lead; PFAS and other unregulated
yet harmful contaminants; Legionella; and, objectionable smell, taste,
color, or clarity, and that monitoring and sampling should be done in
accordance with the best science to achieve accurate results. The
commenter also stated that HUD must immediately notify residents of
unsafe or unpotable water, what is being done to rectify the condition,
and when the condition has been resolved.
With respect to whether HUD inspectors should verify that a
municipal water supply authority is in compliance with EPA's Safe
Drinking Water Act, the majority of commenters replied in the negative
with several noting that building owners have zero recourse if the
water provider is not in compliance with the Safe Drinking Water Act.
One commenter expressed that if HUD seeks to verify the availability of
safe and potable water for residents, the Department should communicate
with local water system administrators rather than with property owners
and agents. One commenter stated that SDWA is designed to measure a
water system's compliance with Federal standards, which the commenter
finds lacking in several respects. This commenter stated that Federal
lead standards, EPA enforceable limits, and maximum SDWA contaminant
levels are out of date and do not reflect latest scientific evidence,
with the result that some dangerous contaminants can be present in
water within homes even though the water provided by the water system
is free of the bacteria.
Some commenters supported the notion that HUD should verify SDWA
compliance; one commenter strongly supported this idea. This commenter
stated that HUD should create a uniform standard of water safety
monitoring at HUD facilities nationwide. Another commenter opined that
water safety should be determined using the guidelines of the EPA's
Safe Drinking Water Act and that an inspector needs to ensure that the
local municipal water supply authority is in compliance.
Those commenters who did suggest physical inspection criteria
offered a number of recommendations. Multiple commenters suggested
primary reliance on official reports from other governmental entities;
one of these suggested that where there is no public water supply HUD's
inspection should rely on appearance, odor and/or taste. Another
commenter suggested that a basic turbidity test from randomly selected
units at the property might give some immediate feedback for an
inspection report about whether a plumbing issue might be impacting the
potable drinking water, and that an inspector could also take a quick
pH test at the same source. This same commenter suggested that
privately sourced water could be sent to a laboratory for testing.
A commenter suggested that any Point of Use or Point of Entry
treatment device should be identified and inspected to ensure it is
properly installed and maintained, and that hot water tanks be
inspected and drained, as appropriate. This commenter recommended
inspection criteria for well water systems, including well inspection;
proximity to and quality of any onsite or neighboring septic system;
total coliform/microbial testing; lead and copper testing, and chemical
testing for all known potential chemical contaminants in the aquifer.
HUD Response: HUD appreciates comments on how water is monitored,
and the shared responsibility for ensuring drinking water safety. HUD
notes that drinking water requirements are not new to HUD standards.
Requirements already exist within the HQS and UPCS regulations, with
additional details in the HQS inspection guidance; the NSPIRE
regulations consolidate and clarify the requirement. At this final rule
stage, HUD is including a requirement that the unit provide safe
drinking water, regardless of the source (well vs. municipal water
supply). Additional information about this requirement is provided in
the NSPIRE Standards notice proposed for comment on June 17, 2022.
When there is public health risk related to drinking water from a
public source, the public water system is required under US
Environmental Protection Agency (EPA) regulations \11\ to notify its
customers. Notice typically includes local media alerts, postings on
public water system websites and alerts in water bills. Given this, HUD
expects that PHAs, residents and landlords participating in the Section
8 programs will have a minimal burden to monitor public water safety.
If a local public water system notifies a landlord or PHA that the
public water is contaminated and recommends action, landlords
participating in the Section 8 program are already expected to ensure
that the action is taken. This same expectation applies to PHAs
operating public housing. This rule standardizes both regulations to a
single requirement and adopts the existing approved acceptability
criteria for drinking water for all applicable programs.
---------------------------------------------------------------------------
\11\ 40 CFR part 141, subpart I.
---------------------------------------------------------------------------
HUD adopted the term ``safe'' to align its regulations with the
term used under the Safe Drinking Water Act, as well as to support the
broad HUD-wide goal to provide safe, habitable housing for residents.
Water for drinking, bathing and other activities must be available to
residents. After consideration of public comments, HUD has decided to
continue to defer to EPA's determinations for allowable levels of
drinking water contaminants, and what is considered safe. HUD expects
that landlords, PHAs, and residents will be advised by a public water
system, State or local health departments, or the EPA when the public
water is unsafe and can rely on this determination without further
testing. These alerts will be distributed through local media alerts,
the public water system website or within water bills. PHAs and owners
should be aware of local water safety alerts and take action to either
implement recommendations or provided an alternate source of safe
[[Page 30457]]
water, such as bottled water. Often, the impacted jurisdiction will
provide bottled water for free. For more information about requirements
for public notification, see https://www.epa.gov/dwreginfo/lead-and-copper-rule. Regarding the suggestion of a visual inspection for
contamination or discoloration, this observation would not indicate if
the water had high levels of lead. Additional details about the water
inspection process will be provided in the NSPIRE Standards notice.
The NSPIRE rule, and the REAC physical inspection, does not require
detailed reviews of documentation, and there is no current HUD
regulatory requirement that PHAs and property owners maintain
documentation of water and sewer payments or local water quality
reports. This would be a substantial new administrative burden not
contemplated in the proposed rule. Additionally, since this information
is not federally standardized, it would add a significant time burden
to the inspection. HUD has consulted with the EPA on whether it could
monitor reporting in the Safe Drinking Water Information System
(SDWIS), but the information reported is delayed, and may not indicate
whether there is a current exposure risk. For example, when lead is
identified through routine system monitoring, the public water supply
can take actions to alter water chemistry to reduce leaching. In HUD's
administrative notice, HUD intends only to include a requirement that
PHAs and landlords be aware of local drinking water alerts that are
already required under EPA regulations and to take action to implement
an acceptability criteria variation (e.g., point of use water
filtration) when necessary. These alerts are issued when actions taken
by the public water system are not sufficient and there may be a risk
of exposure. HUD also continues to evaluate means of using publicly
available data to keep residents safe.
HUD declines to include a requirement under NSPIRE for inspection
of water treatment devices, point of use filters, well systems, or
water testing. Section 5.703(d)(1) requires that the unit include an
adequate source of safe water and does not specify or establish
different contaminant standards for whether the source is municipal or
well. As discussed above in the preamble, HUD has removed the term
``potable'' and has clarified that safe drinking water must be provided
in the kitchen.
Question for Comment #3: Site and Neighborhood Standards
HUD asked whether the site and neighborhood standards as found in
24 CFR 982.401(l), should be included in the regulation or only in the
inspection standards. HUD also asked whether all of the explicit
standards should be included or if there are certain site and
neighborhood standards that HUD should consider changing. HUD received
the following comments in response.
Site & Neighborhood Standards Generally
Several commenters stated that PHAs should be held responsible for
environmental conditions within their control and that the standards
remain relevant because it may sometimes be necessary to invoke site
and neighborhood standards when conditions are genuinely unsafe,
especially for children. A commenter stated that site and neighborhood
standards have historically been important to ensure a balanced
distribution of public housing projects within a locality.
A commenter suggested that a regulation for a site & neighborhood
inspection is unnecessary because most of the facilities already follow
the HUD and Tax Credit guidelines to not build in areas of industry,
railroad tracks or traffic congestion; another noted that it would not
make sense to include these standards in the regulation when the vast
majority of inspection standards will not be in the regulation. Another
commenter pointed to the difficulty inspectors would have enforcing
local site and neighborhood standards.
Commenters cautioned that these standards could be prejudicial
against older housing and transit-oriented properties and suggested
that historical buildings should be exempted from the testing standard
to preserve the rarity and quality of materials and finishes in these
buildings.
Commenters expressed concerns that site and neighborhood standards
can be subjective and very hard to judge, unless an area clearly
represents a serious health hazard or safety concern. Thus, commenters
urged HUD to provide explicit standards and to clarify how it
determines whether there is a danger because it is important for HUD to
provide specific and measurable guidance so that PHAs are able to
incorporate any changes into existing processes. A commenter urged HUD
to write the regulations to specify that properties must be
``reasonably free'' of ``serious adverse environmental conditions'';
another suggested HUD add ``landslide'' and ``hill slide'' to the term
``mudslide'' and cited to examples of HUD-assisted properties being
vacated due to hill slide events in both public housing and project-
based housing.
With respect to the Section 8 program, where there is no scoring
system similar to the PHAS system, a commenter suggested HUD clarify
whether these items require failure of an HQS inspection.
One commenter opined that the site and neighborhood standards
should be included in the inspection standards and the regulation,
because there are no qualifications for inspectors and leaving
enforcement to individuals who can only rely on instructions provided
by their locality would defeat the implementation of establishing a
uniform standard. This commenter also opposed giving these inspectors
discretion, which the commenter said would effectively render them
legislators.
HUD Response: HUD appreciates the comments related to the
importance of site and neighborhood standards to the NSPIRE rule. HUD
believes that expanding the existing HQS site and neighborhood
standards from Sec. 982.401(l) to apply to additional programs would
negatively impact existing properties for circumstances beyond their
control and threaten already scarce affordable housing resources. With
this final rule, the original text of Sec. 982.401 is removed and the
regulation refers to Sec. 5.703. Site is included as the example
``building site'' at Sec. 5.703(c). Neighborhood conditions are not
directly included in Sec. 5.703(c). The listed elements of the outside
must be functionally adequate, operable, and free of health and safety
hazards. The final subordinate NSPIRE Standards notice, to be published
before this rule is effective, will provide more details on areas and
components inspected. HUD will continue to update and publish guidance
on other environmental hazards that are not fully addressed by NSPIRE,
such as radon, lead-based paint, carbon monoxide, and other
environmental health hazards. The NSPIRE inspection is not intended to
serve as the only way HUD assesses compliance with all environmental
health laws and related requirements. Compliance is verified through
other oversight processes performed by different HUD staff. For
example, radon is considered as part of certain environmental reviews
conducted under 24 CFR parts 50 and 58. Because the revised Sec.
982.401 will refer to the new Sec. 5.703, the term ``mudslide'' is no
[[Page 30458]]
longer in regulation, and there is no need to add ``landslide'' or
``hill slide'' as examples in regulatory text. Finally, NSPIRE
inspections will include the elements identified as ``outside,''
including the site as provided in the NSPIRE Standards notice. But the
NSPIRE inspection will not include environmental sampling. The focus of
NSPIRE is more toward residents' units, where residents spend the most
time.
Inspectors using the NSPIRE standards will be trained in the
standards and have experience in performing housing inspections. The
final NSPIRE Standards notice will provide guidance on what to
evaluate, and the NSPIRE Scoring notice will provide factors for
scoring. A software tool will be available to inspectors and PHAs to
help ensure assessments are consistent and accurate. Property owners
and managers will continue to have a process to appeal physical
inspection scores to HUD, and REAC will continue to have a quality
assurance team to monitor inspection scoring and trends. The process
for appeals is provided in this final rule at Sec. 5.711(c), (d) and
(e) and the Administrative Procedures notice.
Environmental Conditions
Many commenters stated that the property or PHA should not be held
accountable for adverse environmental conditions outside of its
control, such as flooding, poor drainage, sewage hazards, mudslides,
air pollution, smoke or dust, excessive noise of vehicular traffic, and
issues with adjacent lots or buildings. A commenter noted that property
owners' ability to address these issues may be restricted by local
laws. Another noted that fire hazards, garbage and infestations can be
the result of tenant behaviors within their units, common areas or the
site grounds.
Commenters pointed out that if properties are penalized for these
issues, the voucher program may have fewer units available for families
as landlords are increasingly frustrated with the inspection process.
One commenter stated the neighborhood standards may also preclude
provision of assistance to existing homeowners in substandard housing
conditions that reside in rural communities where drainage, streets,
sidewalks and other neighborhood improvements are not found or also
require improvement.
Commenters suggested that the site and neighborhood standards
should be considered for properties only at the time of development,
prior to final endorsement, or prior to entering into a rental subsidy
contract.
HUD Response: HUD appreciates the comments regarding site and
neighborhood standards and environmental conditions that may be outside
the control of the property owner or PHA. In addition to HUD's
responses above, NPSIRE inspections and scoring are more focused on the
units, versus other inside and outside areas. This is because the unit
is where residents spend most of their time, and the safety and
habitability of the unit is critical. Additional details on inspectable
areas and deficiencies were proposed for comment in the subordinate
NSPIRE Standards notice and will be finalized before the rule is
effective.
Questions for Comment #4-11 on HOME and HTF
HUD asked a number of related questions pertaining to minimum
housing condition standards, minimum deficiencies, and other
appropriate standards across HOME and HTF, including HOME Tenant-based
rental assistance (TBRA) properties, in a variety of contexts (e.g.,
rehabilitation, rental, home ownership and affordability period) to
solicit feedback on appropriate standards to ensure that HOME-assisted
and HTF-assisted housing remains decent, safe, sanitary and in good
repair.
Comments Regarding HOME and HTF Standards Generally
Across the different scenarios presented, several commenters
expressed a need for a uniform, consistent set of standards, not only
for HOME and HTF, but across all federally assisted housing programs.
One commenter stated that minimum standards should not be asymmetrical
depending on program or resident type, but broad sweeping to fit all
sorts of housing units. The same commenter recommended that inspectors
for HOME and HTF programs be provided clear definitions to limit
firsthand interpretations of the guidance as well as appropriate
supplemental training on future guidance.
HUD Response: HUD appreciates and agrees with the comment with
respect to consistency and has aligned standards with only minor
exceptions. The NSPIRE rule aligns HOME and HTF standards with other
HUD-assisted housing programs subject to NSPIRE. There will be some
differences by project type in certain cases (e.g., rental project,
homebuyer acquisition, or units occupied by tenants receiving HOME
TBRA). While the NSPIRE rule aligns standards for HUD-assisted housing
programs where these programs share common attributes (e.g., within the
dwelling unit), HUD agrees with comments pointing out that the minimum
deficiencies that must be corrected in a HOME- or HTF-assisted project
should vary in certain cases. This is because NSPIRE includes standards
for areas or components of a Multifamily building that do not exist in
a single unit assisted with HOME TBRA or HOME or HTF-assisted single-
family housing of one to four units. In addition, HOME and HTF may be
used to assist a homebuyer to acquire housing, which is a fundamentally
different type of housing project compared to the HUD rental programs
for which NSPIRE is designed. HUD is concerned that unduly onerous
property standards may severely limit the choice of unit for an
individual or family receiving assistance for homebuyer acquisition. It
is HUD's intent to impose property standards that ensure both HOME- or
HTF-assisted homebuyer acquisition projects are decent, safe, sanitary
and in good repair but also sustainable so that the homebuyers are not
subject to the financial burden of a system replacement or major
repairs soon after acquisition.
Consequently, HUD has determined that it is necessary to impose
HOME and HTF minimum property standards consistent with NSPIRE's focus
on safety and habitability, but which vary based on project type to
balance the need for both quality and availability of housing. As
requested by commenters, HUD will provide additional guidance and
training to ensure that all PJs and HTF grantees understand the
property standards requirements. HUD's Office of Community Planning and
Development (``CPD Office'') will issue an NSPIRE notice describing the
applicability of the NSPIRE Standards for HOME and HTF.
Comments Regarding Minimum Housing Condition Standards for HOME and HTF
Housing
Some commenters discussed the suitability of the current HQS as an
appropriate standard to ensure that the housing remains decent, safe,
sanitary and in good repair. One commenter believed that HQS in and of
itself could apply across the programs covered by the proposed rule.
Another commenter stated that HQS, in combination with the current
HomeFirst inspection form, would establish a robust minimum housing
condition standard.
One commenter recommended adoption of International Residential
Code (IRC) for single family new construction projects and
rehabilitation projects. With respect to rehabilitation, the commenter
further recommended
[[Page 30459]]
inclusion of minimum health and safety standards in addition to IRC, as
not all health and safety concerns are addressed by IRC rehabilitation
requirements.
With respect to HOME TBRA specifically, the commenter urged HUD to
consider that many participants elect to reside in single-family
housing that may not meet the requirements set forth for HOME rental
properties and expressed an opinion that existing Housing Quality
Standards are well suited to both homebuyer, acquisition only, and HOME
TBRA projects.
A commenter recommended that HUD include Sec. 982.401(l) and (h)
and other environmental hazard considerations.
HUD Response: HUD understands that some commenters prefer HQS as a
standard for ensuring that HOME- and HTF-assisted housing is decent,
safe, sanitary and in good repair upon completion and throughout the
period of affordability for rental housing. HUD believes that the
transition to NSPIRE will retain what commenters appreciate about HQS
while accomplishing NSPIRE's goal of aligning standards across HUD
programs.
For the HOME and HTF programs, CPD will issue a notice to implement
the NSPIRE Standards and identify deficiencies related to the NSPIRE
Standards for these specific programs. In CPD's experience with HQS as
a minimum property and inspection standard for HOME TBRA units and
certain HOME and HTF rental projects, HOME- and HTF-assisted housing
have different statutory requirements than other NSPIRE programs and
therefore, other factors that must be considered in implementing
revised property standards. This rule revises the HQS regulations at
Sec. 982.401 to point to Sec. 5.703. Due to this, HUD will implement
requirements for HOME- and HTF-assisted projects that limit the
applicability of the NSPIRE Standards to accommodate program-specific
requirements.
HOME and HTF programs are formula block grants that allow for local
decision-making by the State and local governments that administer
these programs. Therefore, HOME and HTF cannot impose property standard
requirements that ignore State and local codes. This requirement for
compliance with State and local codes is also statutory under the HOME
program. Consequently, it is not possible for the NSPIRE Standards to
replace State and local codes in HOME and HTF-assisted projects. In the
absence of applicable State or local codes, HOME and HTF program
regulations apply the IRC or International Building Code (IBC) of the
International Code Council to new construction projects, as applicable
to the type of housing, and the International Existing Building Code
(IEBC) of the International Code Council to rehabilitation projects, as
applicable.
References in HOME to Sec. 982.401(l) and (h) and other
environmental hazard considerations are now covered by Sec. 5.703(c)
and have been updated. HUD agrees that elements of Sec. 982.401(l) and
(h) and other environmental hazards are important and will be addressed
in the supplemental CPD NSPIRE notice that will apply to HOME and HTF.
Comments Comparing NSPIRE Standards to HOME and HTF Housing and Minimum
Deficiencies
One commenter, in comparing the NSPIRE Standards to minimum
deficiencies that must be corrected in HOME- and HTF-assisted
rehabilitation projects at Sec. Sec. 92.251(b) and 93.301(b) or which
must be corrected prior to HOME- and HTF-assisted homebuyer acquisition
of standard housing, opined that the HomeFirst inspection form meets or
exceeds the NSPIRE standards for minimum deficiencies that must be
corrected since it incorporates State and local standards of housing
safety and maintenance. Another commenter stated that there should not
be a minimum or maximum of deficiencies that must be corrected during
an onsite inspection; rather, there should be a system in place by
which as many hazards are identified in a home, evaluated, and
prioritized based on their severity for potential health and safety
outcomes affecting the occupants. Once there is a prioritized list, the
owner would address those hazards in the order of outcome severity. The
same commenter specifically noted that addressing lead hazards should
be part of that high standard for housing assisted with HOME or HTF,
and that lead hazards assessed should include lead-based paint, lead in
the drinking water with point of use testing, and soil contamination.
With respect to whether HUD should establish different minimum
deficiencies that must be corrected in HOME- or HTF-assisted rental
housing and homebuyer or owner-occupied housing rehabilitation projects
at Sec. Sec. 92.251(b) and 93.301(b), a commenter stated that instead
of having minimum deficiencies that must be corrected, the property
owner/manager should address the hazards based on the severity (i.e.,
extreme, severe, serious, or moderate) of potential health and safety
outcomes affecting the occupants.
HUD Response: Under the HOME and HTF regulations, an owner of a
rental property must immediately correct health and safety
deficiencies. In addition, the lead-based paint requirements at 24 CFR
part 35 continue to apply to HOME and HTF-assisted rehabilitation
projects and during the period of affordability for rental projects;
these regulations are not proposed for revision and this final rule
includes cross-references to the applicable sections of part 35,
including subparts B, J, K, M, and R. HUD disagrees that the programs
should not set minimum deficiencies that must be corrected following an
onsite inspection of rental housing during the period of affordability.
If HOME or HTF funds are invested in a rental development project, HUD
must ensure that the project remains decent, safe, sanitary and in good
repair throughout the period of affordability. This is a statutory
requirement for HOME. Furthermore, the HOME and HTF programs require
that PJs and HTF grantees underwrite a rehabilitation or new
construction rental project to ensure that funding is available to make
necessary repairs throughout the period of affordability. Therefore, it
is reasonable to expect HOME and HTF projects to support necessary
repairs to maintain the housing at a standard that meets HOME and HTF
minimum requirements and the PJ or HTF grantee's ongoing property
standards.
HUD does not agree that the HQS, in combination with the current
HomeFirst inspection form, would meet the new standards established
with the NSPIRE final rule.
Comments Regarding Minimum Deficiencies for Small HOME and HTF
Rehabilitation Projects
With respect to whether HUD should establish different minimum
deficiencies that must be corrected in large and small HOME- or HTF-
assisted rehabilitation projects at Sec. 92.251(b) and Sec.
93.301(b), commenters replied in the negative, and generally repeated
the feeling that standards should be uniform across programs and
occupancy categories. With respect to how HUD should define a large
housing project, one commenter suggested that the appropriate threshold
is 40 or more units.
HUD Response: HUD agrees with commenters and will not establish
different minimum deficiencies for large and small HOME- and HTF-
assisted rehabilitation projects in this final rule.
[[Page 30460]]
Comments Regarding Minimum Deficiencies That Must Be Corrected for HOME
or HTF Housing
With respect to whether HUD should establish different minimum
deficiencies that must be corrected for HOME or HTF-assisted
rehabilitation and homebuyer or owner-occupied acquisition of standard
housing projects at Sec. 92.251(c)(3) and Sec. 93.301(c)(3), one
commenter opined that no updates to the minimum deficiency standards
are recommended at this time.
Another commenter responded in the affirmative, noting that the
current requirement for single-family housing to meet the requirements
of UPCS includes inspecting for non-applicable items, and exceeds the
standard for other federally assisted or insured mortgage programs. The
commenter recommended that units for acquisition be subject only to
homebuyer inspections as required by FHA financing, and not subject to
a separate standard.
HUD Response: Updates to the required minimum deficiencies that
must be corrected in a HOME- or HTF-assisted rehabilitation or
homebuyer acquisition project are necessary because the current
regulation references UPCS, which will no longer exist when this rule
becomes effective. HUD agrees with the commenter that minimum
deficiencies to be corrected should vary based on project type in
certain cases because not all the standards of NSPIRE, which was
developed for ongoing inspections of Multifamily rental developments,
will apply to single-family housing.
Comments Regarding Minimum HOME TBRA Written Property Standards
With respect to whether HUD should establish minimum written
property standards requirements for housing occupied by tenants
receiving HOME TBRA at Sec. 92.251(f) that exceed or are different
than minimum requirements for the ongoing condition of HOME-assisted
rental housing, one commenter noted that tenants of HOME TBRA often
reside in single-family housing rather than in multifamily rental
developments and that the use of a standard that is heavily focused on
large rental developments, such as UPCS, would include items that are
not present in single-family housing, and may neglect to fully inspect
for hazards that are generally only present in single-family housing.
With respect to whether HUD, in the alternative, should apply the
NSPIRE standards (not to include the inspection procedures,
administrative processes for scoring and ranking, or the enforcement
requirements of NSPIRE) to housing occupied by tenants assisted with
HOME TBRA at Sec. 92.251(f), one commenter stated that this was a
reasonable approach. The commenter stated that HUD can apply NSPIRE
standards but allow local jurisdictions to establish stronger local
standards which would apply in that jurisdiction. The NSPIRE standard
should be a minimum, but if there are higher quality standards that
local jurisdictions establish, those should be allowable as well.
Another commenter replied in the negative, stating that HUD should
treat this situation consistent with the proposed rule for HCV and PBV,
and not another standard.
In response to whether another national housing quality or
condition standard exists that HUD should apply to housing occupied by
tenants assisted with HOME TBRA, one commenter recommended the use of
the same standard for HOME TBRA as for the Section 8 HCV program, even
if this standard is different than the standard for HOME rental
projects. The commenter reasoned that HOME TBRA closely mirrors the
Section 8 HCV program, and both programs are often administered by the
same agencies, allowing them to utilize one common standard that is
most applicable to the project type.
HUD Response: HUD agrees with commenters who requested consistency.
The NSPIRE rule establishes standards that will cover all listed
programs, with exceptions only where there are differing statutory or
programmatic requirements. For example, the regulation at Sec.
92.251(b)(1)(viii) continues to exclude HOME-assisted projects and
units from using the scoring, item weights, criticality, and other
requirements contained in Sec. Sec. 5.705-5.713. Additionally, HOME
PJs must create their own ongoing property standards for HOME rental
housing or housing occupied by tenants receiving HOME TBRA, which must
comply with State and local code requirements and ordinances. Where
there are no applicable State or local code requirements and
ordinances, the HOME PJ will be required to inspect the property so
that the property does not contain the specific deficiencies prescribed
by HUD based on the applicable standards in 5.703 and published in the
Federal Register. By doing this, HUD is establishing c HOME PJs require
owners maintain the housing as decent, safe, and sanitary housing in
good repair.
Question for Comment #12: Special Housing
HUD asked whether the application of unique standards to certain
specific special types of housing (i.e., single room occupancy housing;
congregate housing; shared housing; and manufactured homes) in the HCV,
PBV, and Moderate Rehabilitation Programs should be expanded to apply
to CoC, ESG, and HOPWA programs as well.
Two commenters expressed general agreement with the expansion of
the unique standards; however, one of these commenters limited
endorsement of the application of the unique standards to CoC PBRA. One
commenter stated that the unique standards should be expanded to apply
to CoC, ESG, and HOPWA programs. The commenter opined that if a
recipient of CoC, ESG, or HOPWA funding determines that using a special
type of housing is the best course of action for a specific household,
then they should be able to use that type of housing and not be
penalized through poor inspection scores based off of standards that do
not make sense for the unit. The commenter also noted that applying the
unique standards to CoC, ESG, and HOPWA will help standardize
inspection protocols across HUD programs.
One commenter stated that the unique standards should apply to CoC,
ESG, and HOPWA programs in order to fulfill HUD's intent to align
inspection requirements for all housing assistance programs to decrease
the complexity and uncertainty associated with participating in HUD's
programs that may deter some owners from future involvement, as well as
to decrease regulatory burden. The commenter further suggested that HUD
consider other housing types recently implemented by municipalities to
address their housing crises such as the approval of Accessory Dwelling
Units.
One commenter stated that the NSPIRE protocol should consider
universally accepted norms associated with healthcare, assisted living
and memory care occupancies, and that these should include specific
allowances for egress issues associated with normal elopement risk
reduction inherent to these facilities. The commenter further stated
that the health care facility concept of ``RACE'' (Rescue, Alarm,
Contain and Extinguish) should be accepted by NSPIRE as a standard
method of fire and life safety within healthcare and senior facilities,
greatly reducing the necessity of window egress exits.
One commenter stated that the unique housing standards in part 982
should
[[Page 30461]]
not be applied to ESG since the minimum standards for permanent housing
in Sec. 576.403 provide more flexibility for the program participant
and consistency for the administrator. The commenter also recommended
that the proposed addition of Sec. 576.403(d) should be revised to
state, ``for the first 30 days in which a program participant receives
homelessness prevention assistance, the recipient or subrecipient may
provide services under Sec. 576.105(b) and Sec. 576.106 to help the
program participant remain in their unit without inspecting the unit or
determining whether it meets the requirement in this section.'' The
commenter reasoned that the payment of rental arrears or rental
assistance under Sec. 576.106 are often necessary to prevent eviction,
and that requiring the habitability inspection within 30 days of
assistance while also providing rental arrears or assistance would
decrease the disruptive process of eviction. The commenter recommend
further that HUD provide guidance about what resolution is required of
a grantee if the unit that was assisted in the 30-day period does not
meet the standard but should not require repayment of assistance
provided during that term.
HUD Response: HUD appreciates the comments related to special
housing types and the needs of participants in tenant-based rental
assistance, as well as the feedback about consistent standards across
housing programs, including expanding unique standards to certain types
of housing within CoC, ESG and HOPWA programs. The NSPIRE Standards
will apply to these programs, with some limitations that will be
described in the CPD NSPIRE notices. For the HCV and PBV programs,
Section 982.605 continues to allow for alternate requirements for
sanitary facilities, food preparation, and space and security if there
is no applicable local code standard for SRO housing. Housing that
meets the affirmative habitability standards in Sec. 5.703(d) can be
eligible for HUD assistance, including Accessory Dwelling Units. With
alignment of housing standards, the Department will better focus on
habitability and the health and safety of residents.
With respect to universally accepted norms associated with health
care, HUD evaluated many of these norms including RACE. Facilities that
need to keep doors or windows locked for resident safety (e.g., memory
care facilities) or to comply with other legal requirements, such as
Federal civil rights laws, will be allowed to request a technical
correction and score adjustment after the inspection. More information
will be in the Administrative Procedures notice. In addition, Sec.
5.703(d) of this rule requires smoke detectors consistent with the
requirements in NFPA 72, and more information will be provided in the
NSPIRE Standards notice.
HUD will issue additional guidance on Sec. 576.403(f) as pertains
to payment of rental arrears or rental assistance and preventing
evictions.
Question for Comment #13: Affirmative Requirements
HUD asked for input with respect to the inclusion of certain
affirmative requirements at the final rule stage by adding deficiencies
for the lack of a presence of certain specific features in HUD-assisted
units. Specifically, HUD asked for input related to electrical outlets
and switches; GFCIs and AFCIs; HVAC (permanently installed heating
source); guardrails; and lighting.
General Comments
Two commenters noted their general agreement with all of HUD's
suggestions, without providing any specific comments. Many commenters
sounded a common theme that HUD should weigh very carefully any attempt
to introduce affirmative requirements across the entire portfolio of
HUD-assisted housing, in light of all of the relevant considerations to
the differences in such housing. One common theme was centered on the
difference between older and newer housing. For example, one commenter
noted that most new construction units have more than enough electrical
outlets in each bedroom and living room. However, older cities, such as
New York City, have aging housing stock which might not support
multiple new outlets without upgrading to a new wiring system. Another
commenter opined that properties built in the 1940s should not be held
to the same standards as those more recently built, and that even those
that may have undergone some modernization since initially built were
modernized to the codes and standards of the time during which they
were modernized. The commenter pointed out that to hold older
properties to the same standards of recent buildings would be a
financial burden and that the PHA has neither the funds nor the staff
to stay in compliance and would discourage private property owners from
participating in HUD programs.
Another common theme related to suggestions for HUD restraint
centered around the existence of various housing codes, which
commenters argued obviated the need for HUD to impose additional
requirements. For example, one commenter pointed out that HUD's
proposed requirements would not be in alignment with local code and
would set higher expectations than local code, which could have far-
reaching implications on the development and maintenance of properties
and lead to much higher costs. Another commenter opined that in some
cases the proposed changes represent very significant upgrades or
overhauls and urged HUD to either defer to local building codes, or to
slowly phase in the affirmative safety requirements, as well as to
consider approving additional project or capital funds to cover the
costs of these upgrades. Two commenters noted that to the extent that
existing properties are subject to new standards, HUD must refrain from
penalizing (unintentionally or otherwise) PHAs, owners, and operators
that may not have funds for upgrades, particularly when those
properties are in compliance with local/State codes which reflect local
needs and conditions. Commenters suggested that the electrical
requirements should match the code at the time the building was built,
and that requiring electrical upgrades to existing building would be a
financial hardship on building owners unless the building is being
renovated. A commenter expressed that HUD should align the proposed
requirements to the UCC and PHA's local codes.
With respect to the proposed addition of new standards, generally,
one commenter noted that some owners with older properties may decide
not to participate if HUD requires significant upgrades to their units
that they are not required to perform if they rent to someone in the
private market. Another commenter noted that funding to maintain and
improve properties is in limited supply, and that properties that are
compliant under current standards should be considered compliant under
the new standards, and that any new standards should apply only to new
construction and properties that undergo renovation. One commenter
agreed that all potential deficiencies that HUD is considering appear
to be reasonable for safety considerations, but noted that to the
extent that existing properties are subject to new standards, PHAs,
owners and operators should have an ample notice period to bring their
units into compliance. Another commenter opined that the proposed
requirements could create new costs for PHAs and limit the supply of
housing available to voucher holders. As such, HUD should assess the
total cost to PHAs to comply. One commenter, while agreeing that the
proposed features may be necessary, cautioned that the cost to produce
the features must be heavily
[[Page 30462]]
weighed in view of additional affordable units lost versus created or
preserved, and that dollars invested in these features will ultimately
reduce the available subsidies for those applicants waiting to be
housed, further straining American's scarce affordable housing stock.
HUD Response: HUD appreciates the comments about differences in
housing stock related to age and location and reaffirms that the NSPIRE
Standards will balance the need for housing with the mission to ensure
that the housing is decent, safe, sanitary and in good repair, as well
as the challenge of having consistent housing standards across programs
with very different levels of Federal investment and assistance. HUD
recognizes, and agrees with the commenters, that if inspection
standards and process for tenant-based programs are onerous and delay
lease up, private landlords may decline to accept a voucher and lease
to other renters.
HUD also recognizes the challenge of meeting State or local housing
codes for properties that will be covered by the NSPIRE Standards. Most
importantly, the forthcoming NSPIRE Standards will apply nationally and
provide standards for areas where there are no codes or safety
requirements. In other areas, the State or local requirements may be
more or less stringent. Often, State or local requirements account for
special conditions in that jurisdiction such as local climate
variation. Where a State or local requirement is more stringent that
NSPIRE, the property must meet that requirement as well as the NSPIRE
Standards.
With respect to comments regarding timelines to correct identified
deficiencies, and the ability of property owners or PHAs to fund
required renovations, the available time frame for response will vary
depending on the deficiency, the program, and the process. In this
final rule, HUD has revised ``severe health and safety'' to LT. HUD
also developed a secondary category for other severe, but not LT
deficiencies. Where a LT deficiency as described in Sec. 5.711(c) is
identified, the owner or PHA must correct it in 24 hours. For the HCV
program, response times for LT deficiencies must be corrected in
accordance with the HOTMA statute. HUD will discuss this matter further
in the final NSPIRE standards. Other deficiencies can be resolved as
described in existing program regulations. Those regulations are not
included in this rulemaking for revision. HUD recognizes that standards
should include reasonable expectations for repair, and the need for
work to be completed quickly and affordably. These expectations will be
described in the Administrative Procedures notice which will be
published before this final rule takes effect.
Comments Regarding the Electrical Outlet and Switch Requirement
Two commenters referred expressly to the presence of extension
cords. One of them, in agreeing with the proposed requirement,
explained that inadequate number of outlets within all habitable rooms
leads the occupant to rely on the usage of power-strips and extension
cords, and that these power strips and extension cords are often
overloaded with plugs from multiple appliances, a condition that could
lead to overheating and potential electrical fires. The commenter
further noted that the presence of such cords is also the cause of
trips and falls hazards which significantly affect elderly occupants.
The other stated that the proposed requirement should not be addressed
as an issue unless there are extension cords that could cause a trip
hazard.
Several commenters raised the issues of the age of the property in
question. One commenter stated that meeting this requirement may be
challenging in older units that do not have either two electrical units
or an electrical unit and a permanent light in all habitable rooms, as
older buildings may have to undergo substantial electrical work on the
unit, adding significant cost and burden to meeting the standard.
Another commenter stated that many older units include bedrooms where
there is only one outlet and no overhead lighting. One commenter
specifically noted that the age of the building should be considered
when determining the distance of the outlet to the sink. One commenter
felt that establishing minimum standards to be maintained by properties
that have already been constructed and under contract as affordable
housing for decades exceeds the reach of an inspection which is
supposed to ensure the property is being adequately maintained as safe,
decent, and sanitary, and crosses into the realm of specifying how that
property should have been constructed instead of confirming the
adequacy of its maintenance.
Two commenters specifically expressed concerns with respect to
historic properties. One noted that, because insured buildings are so
diverse in age and design, to add this requirement would be a hardship
on owners especially in older historic occupancies; the other opined
that historic buildings should be exempted from this proposed
requirement in order to preserve the high quality of fixtures and
materials.
One commenter expressed that the rationale in the rule (safety,
usability, and illumination) demonstrates why a one-size-fits-all
approach is inappropriate and opined that HUD should attempt to create
standards around safety, usability, and illumination or demonstrate,
with data, why the proposed requirements are necessary before adding
the proposed deficiency. One commenter, while expressing general
support for the proposed requirement, noted that wiring a second outlet
can represent a significant undertaking, and therefore urged HUD to
incorporate a mechanism for providing relief for housing under existing
rental assistance contracts which may not have been built/renovated to
this standard, providing a grace period until improvements can be made.
HUD Response: HUD appreciates feedback about the question of adding
a deficiency for an inadequate number of outlets. HUD took these
comments into consideration in drafting the proposed Standards notice
and will address this matter more fully in the final NSPIRE Standards
notice.
Comments Regarding the GFCI & AFCI Requirement
As with ``electrical outlet and switch,'' many of the comments on
GFCI and AFCI centered on issues of existing codes and/or
implementation with respect to older properties. One commenter noted
that while new and rehabilitated properties are in compliance with this
standard, older properties that have not been upgraded may not be able
to comply. Specifically, a commenter noted that bathrooms in older
properties tend to be smaller and built before the era of ground fault
indicators, but it is likely that GFCIs were installed at a later date
during an electrical modernization, and that to now require that an
outlet be located more than 6 feet from a shower or sink or be upgraded
with a GFCI is not only unreasonable but unfeasible as well.
Another commenter repeated its position that imposition of this
proposed requirement crosses into the realm of specifying how that
property should have been constructed instead of confirming the
adequacy of its maintenance. Commenters stated that GFCI outlet
requirement should be grandfathered, i.e., required where minimum
rehabilitation thresholds for modification have been surpassed and
that, if required in older Section 8 HCV units, owner participation may
be discouraged due to prohibitive costs to
[[Page 30463]]
modify. One commenter stated that it does not believe that owners of
older construction (pre-1975) housing units with proper operating
outlets need to be forced to upgrade to GFCI and AFCI outlets in order
for the unit to pass inspection and that, if HUD decides to move
forward with this requirement, additional capital resources should be
made available to convert to this protection. The commenter further
urged that all NSPIRE inspectors should be equipped with the proper
equipment to test the GFCI and AFCI outlets and not be reliant on a
visual inspection.
With respect to AFCI in particular, two commenters noted that AFCI
protection is a newer concept and would be burdensome and costly to
install in older buildings. Another commenter, while supporting the
GFCI proposal, distinguished AFCI as a higher standard that represents
a significant undertaking because it requires the removal and
replacement of circuit breakers. The commenter encouraged HUD to defer
to local building code requirements rather than imposing a blanket AFCI
requirement, and that, if the AFCI requirement is imposed, HUD should
incorporate a mechanism for providing relief for housing under existing
rental assistance contracts which may not have been built/renovated to
this standard, providing a grace period until improvements can be made.
Several commenters provided comments with respect to the GFCI
location standard (i.e., within 6 feet of sinks, tubs, showers; or
exterior, garage, or unfinished basement areas). Two commenters stated
that while it is reasonable to expect GFCI protection when an outlet is
within 6 feet of water or on the exterior of the building, it does not
believe it is necessary to require GFCI protection in garages and
unfinished basement areas.
With respect to refrigerators, a commenter questioned the need for
GFCI protection as they are often located within 6 feet of a sink but
are on their own dedicated circuit which does not have a GFCI
installed. The commenter felt that such a requirement would be
confusing.
HUD Response: HUD agrees that ARC Fault Circuit Interrupter (AFCI)
should not be required in existing buildings. The ARC Fault Circuit
Interrupter (AFCI) standard under consideration does not require the
installation of AFCI breakers where they are not present. The standard
requires the test button, when present, to function properly when
pressed.
With respect to the physical placement of Ground Fault Circuit
Interrupter (GFCI) protected outlets or breakers, HUD continues to
believe that Ground Fault Circuit Interrupter (GFCI) protected outlets
or breakers should be a requirement near water sources as specified in
the current Electrical--Outlet and Switch standard \12\ HUD agrees that
major appliances do not need to be plugged into a GFCI outlet. HUD will
address this matter further in the final NSPIRE Standards notice. The
requirement for GFCI outlets was added to the affirmative requirements
in Sec. 5.703(b), (c) and (d).
---------------------------------------------------------------------------
\12\ Electrical Safety Foundation International (ESFI), ``Ground
Fault Circuit Interrupters: Preventing Electrocution Since 1973''
https://www.esfi.org/ground-fault-circuit-interrupters-preventing-electrocution-since-1971/ (Last accessed May 2, 2022).
---------------------------------------------------------------------------
Comments Regarding HVAC (Permanently Installed Heating Source)
Several commenters expressed general approval of including a
requirement for a permanently installed heating source and suggested
there should be a deficiency for lack of proper heating. One commenter
opined that because not having heat could be a life-threatening
situation, not having a working and reliable heating system should be a
deficiency; another pointed out that use of a portable heater (with HUD
approval) is generally approved only in rural areas with warm climates,
and that HUD should include a requirement for a permanently installed
heat source. Another agreed that all units should have a heating source
but suggested that HUD define this to include a properly installed and
vented wood stove as a permanent heating source. One commenter urged
consideration for existing properties which do not meet this standard
and are not going through a substantial rehabilitation and suggested
that it might be appropriate to exclude existing developments from the
proposed requirement.
Other commenters differed. Two commenters stated that the
requirement would greatly burden older and historic homes that do not
have permanent heat sources installed, and that it would be more
reasonable to require heating to be UL rated for use as a heating
device so long as it is in safe, operable condition. One commenter
pointed out that many areas do not require the use of HVAC systems to
maintain a living space at a safe temperature, and that forcing
tropical properties to install heating equipment and polar communities
to install air conditioning is wasteful and unnecessarily complicates
property maintenance. The commenter suggested that establishing that a
target temperature range be attainable would be a more cost-effective
manner of protecting stakeholder interests.
One commenter stated that the heating source requirement is
addressed under flammable materials and that the proposed requirement
would be redundant and should be eliminated.
HUD Response: HUD agrees with the comments regarding the importance
of properly functioning heating systems. Adequate heat is essential for
the health and comfort of residents. The NSPIRE HVAC standard will
include a deficiency for a minimum temperature requirement during the
winter to prevent the potential negative health and safety effects of
cold temperatures, including hypothermia, which can be fatal. HUD has
replaced language originally in Sec. 982.401(e) regarding the
``thermal environment'' with a requirement in Sec. 5.703(e)(1) that
the unit not be subject to ``extreme temperatures'' and will finalize
provisions to meet the requirement in the NSPIRE standards.
HUD appreciates feedback particularly regarding tropical climates
and will take it into consideration for future standards iterations.
Additional consideration may be given to areas with extreme cold
weather that falls within the 3rd standard deviation of winter
temperatures. This will be revisited in subordinate Standards notices.
HUD agrees that presence of air conditioning units should not currently
be a requirement. The proposed NSPIRE HVAC standard does not include a
requirement for air conditioning, just that installed AC units provide
cool air, which is specified as lower than room temperature. NSPIRE
does not have a deficiency for a maximum temperature requirement during
the summer that is analogous to the minimum temperature winter
requirement for heat. Where State or local jurisdictions have such
requirements, covered programs must follow the more stringent
requirement.
HUD does not agree with commenters that suggested that portable
space heaters or fireplaces should be allowable as sources of heat.
Portable space heaters, electric and fuel burning, have been associated
with property fires and carbon monoxide poisoning. Fires and carbon
monoxide poisoning resulting from space heater usage have caused
serious injuries and deaths. Space heaters have also caused substantial
property damage to properties throughout the United States sometimes
leading to the complete loss of housing. Residents without adequate
heating have occasionally used gas and electric ovens to provide heat,
which have resulted in property fires and
[[Page 30464]]
carbon monoxide poisonings as well. Requiring a properly functioning
permanent heating source as an affirmative requirement in Sec.
5.703(c) removes the health and safety risks associated with portable
space heaters.
HUD also does not agree that a fireplace should be considered as a
permanent heating source. Permanent heating sources are typically
specified as being self-fueled. They are permanently affixed within the
unit or building, safely connected to the unit or building electrical
system, thermostatically controlled by the unit or building and
appropriate for the size of the unit. The energy source for a permanent
heating system can be electric, gas or oil. A fireplace does not meet
the self-fueled criteria. Fireplaces also do not evenly distribute
heated air throughout a property as effectively as permanently
installed heating sources and are one of the leading causes of heating
system caused fires in properties.
HUD notes that there have been instances of properties experiencing
a heating emergency if a boiler or furnaces fail. In these situations,
a temporary, back up heating source may be necessary.
Comments Regarding the Guardrail Requirement
While some commenters supported the proposed requirement, several
noted the need for additional details. Two commenters stated that the
requirement needs to have a minimum horizontal distance associated with
it within which the 30-inch vertical drop exists; one recommended that
HUD better explain the proposed requirement depending on site
conditions such as hills, slopes, etc.; otherwise, the requirement
could adversely affect the scoring while posing no threats to the
residents or general public. One commenter noted that because a 30''
drop over a 2'' run is dramatically different from a 30'' drop over a
20'' run, a better definition of conditions requiring a railing would
be helpful. The same commenter felt that the standard for handrails on
an exterior ramp are excessively vague and in need of clarification
about what constitutes a ramp versus an inclined sidewalk. One
commenter requested additional details for the design of the railing,
such as height, material, presence of balusters/spindles, etc.
One commenter stated that guardrails should be installed in elderly
or disabled facilities only, and not in family facilities. One
commenter suggested that HUD collect data to evaluate the costs
associated with the proposed guardrail requirement, as it could impose
significant financial burdens on certain properties, and HUD should
perform a comprehensive assessment of the potential impacts of this
proposal before implementation. The commenter indicated support for a
guardrail adjacent to a ``walking surface,'' but not to an area of
raised grass (e.g., single family home with a front yard where there is
a low retaining wall by the sidewalk).
HUD Response: HUD appreciates the commenters' feedback. Guardrails
were added as an affirmative requirement in Sec. 5.703, so they apply
to all housing covered by that section. In addition, all HUD-assisted
housing must comply with accessibility requirements, where applicable,
including Section 504, the Americans with Disabilities Act, and the
Fair Housing Act. The Section 504 accessibility standards, which are
the Uniform Federal Accessibility Standards or the 2010 ADA Standards
for Accessible Design as specified in the Deeming Notice (79 FR 29,671,
May 23, 2014), have certain technical requirements for guardrails
(referred to as handrails under the Federal accessibility standards)
for ramps. In general, trip and fall related injuries occur with high
frequency across multiple age groups throughout the country. These
injuries result in emergency room visits, life altering impacts and
sometimes death. Installing guardrails in higher risk walking locations
will decrease the risk for residents throughout the HUD portfolio. The
deficiency criteria for guardrails are closely aligned with housing
codes throughout the country. The deficiency criteria reflect
observable conditions documented during extensive field testing and
demonstration inspections. HUD is not including specifications for
balusters or spacing for vertical railing within the guardrail due to
variations in building code requirements over time across the HUD
property portfolio.
Comments Regarding the Interior Lighting Requirement
Several commenters were in general agreement with the proposed
requirement. Two commenters expressed general agreement with the
proposed requirement but opined that special considerations should be
allowed for historic buildings or other special circumstances related
to older buildings. One commenter agreed with the proposed requirement
and added that similar consideration should be given to adequate
illumination on interior stairs and to some extent on exterior
entrances/stairs. The commenter further opined that a standard should
be provided with respect to what constitutes proper lighting (e.g.,
lumens). One commenter stated that the rule should explicitly require a
light fixture in the bathroom.
One commenter stated that there are already HUD guidelines for
lights installed in bathrooms and kitchens, and that they are also
included in building codes. One commenter urged that if HUD moves
forward with this requirement, consideration be given to existing
properties which do not meet this standard and are not going through a
substantial rehabilitation.
HUD Response: HUD appreciates the comments regarding the safety and
well-being of residents and quality of the HUD-assisted housing stock.
Without artificial illumination, residents may not have a means of
illumination at night when natural light is not available. Lighting is
critical for safe egress during a potentially life-threatening
emergency, allows people to see unsanitary and unsafe conditions, and
thus leads to a healthier and safer living environment. Proper lighting
also removes usability barriers allowing people to fully utilize the
features of the built environment. HUD will take this feedback into
consideration as it drafts the final Standards notice, which will be
subject to further public comment.
With respect to historic properties, HUD's position is that a light
source in the kitchen and bathrooms is the minimum standard for health
and safety and has added this as an affirmative requirement in Sec.
5.703. In the rare case that a historic property designation would not
permit a permanent light fixture in the kitchen and bathroom, the PHA
or owner may apply to HUD for a waiver of this affirmative requirement.
If the unit is occupied, HUD will suspend the correction timeframe
until the waiver is reviewed.
Question for Comment #14: Risk-Based Annual Inspection Requirement
Expansion
HUD solicited comment on the proposed risk-based annual inspection
requirement expansion from 2 to 5 years and received comments both for
and against the proposal.
Several commenters supported the proposal, noting that most
properties are compliant with inspection standards and therefore do not
need such frequent inspection. Another noted generally that the
proposed 2-5-year inspection cycle would be reasonable and welcome.
Several commenters focused on the relief the proposal would provide to
high performers and low risk properties. Two commenters noted that the
proposal's flexibility will allow PHAs to shift inspection capacity and
resources
[[Page 30465]]
to properties, units and households with the greatest need, with one
adding that the inspection process is very costly for PHAs and the
expansion of the requirement from 2 to 5 years would be consistent with
the ever-decreasing funding.
Commenters specifically noted the appropriateness of the proposal
in connection with self-inspections. Two commenters, in indicating
strong support for the proposal, opined that paired with the annual
self-inspection requirement, a risk-based inspection schedule would
provide adequate oversight over the portfolio. Another commenter stated
since HUD is adding an annual self-inspection requirement for its
insured multifamily properties, project-based assisted properties, and
public housing portfolio, this change is appropriate, and that
expanding the time between risk-based physical inspections will reward
high-performing properties, alleviate administrative burdens associated
with inspections, minimize disruptions to residents and allow HUD to
focus its resources on lower scoring properties that may require more
oversight. One commenter, while supporting the proposal, urged HUD to
leverage self-inspection reporting to require onsite inspector presence
less often and recommended that HUD should maintain portfolio data
through self-inspections that can continue to insulate against
criticism of the condition of the portfolio.
Conversely, multiple commenters were opposed to the proposed risk-
based annual inspection requirement expansion from 2 to 5 years,
believing that such a change is not reflective of HUD's desire to
improve oversight over assisted properties. These commenters generally
felt that five years is too long between inspections and suggested a
maximum interval of three years. Commenters stated that 5 years, and
even 2 years, is a long time and a property may fundamentally change
within that time, citing potential adverse occurrences within a five-
year timeframe, including high turnover in the industry leading to
change in management or ownership, natural disasters, unexpected
capital needs or discovery of environmental hazards, mold caused by
water line ruptures, fire hazards, heating/cooling systems breakdowns,
pest infestations, and hazards resulting from extreme weather events.
A commenter stated that stretching REAC inspections out over a five
year, rather than three-year maximum period, would be an extremely
risky move, not warranted by any evidence that owners are suddenly more
compliant with health and safety codes than they have been in the past.
Another commenter noted that Public Housing and Multifamily housing
properties are already in extremely poor condition, another agreed and
stated that even one property with poor living conditions is one too
many and urged HUD to catchup on its backlog of inspections and focus
resources on the lowest performing properties. Another commenter noted
that while inspections on a more frequent basis are arguably costly for
housing providers, it is localities that often bear the brunt of the
cost burden when a property is not adequately maintained--both through
inspection costs and the cost to the community if residents lose their
housing or are forced to relocate due to dangerous conditions.
With respect to self-inspections, a commenter pointed out that
self-inspections necessitated by the COVID pandemic were not
appropriately diligent and that many units failed subsequent
inspections, in some cases requiring relocation of tenants, and
suggested that all units should have annual inspections for the first
five years under this system in order to properly enforce the
requirements.
A commenter suggested that for the Multifamily Section 8 or PBRA
programs, the Contract Administrators could be a second source to
``inspect'' or follow-up on the units/property during years that an
official REAC inspection is not performed and to verify POA self-
inspections and work order system efficacy, and that the combination of
POA self-inspections (annually), Contract Administration MOR
inspection/follow-up, and REAC Inspections would ensure the physical
health of the property and safe, habitable unit dwellings for the
residents, all within a 3-4 year cycle.
A commenter noted specifically that the proposed rule also allows
for changes in the inspection protocol to happen three years after
implementation of previous changes to the inspection protocol, and that
coupling five-year inspections with changes in the inspection protocol
may result in a property being inspected under different protocols,
calling into question the reliability of the assessment of the
property's physical health.
Several commenters provided mixed support for the proposal. One
commenter noted that in addition to providing a strong positive
incentive for POA performance, the prospect of less-frequent unit
inspections is likely to be attractive for many residents, for whom the
unit inspection can feel invasive and traumatic but also noted that the
criteria for determination of inspection frequency, including the
proposed risk assessment, will be crucial to ensuring this system both
protects residents and provides incentives for strong performance and
strongly urged HUD to work closely with stakeholders to develop these
criteria, including publication of draft criteria for comment in the
Federal Register. This commenter suggested that such criteria include
not only the recent performance of the subject property, but also the
POA's track record of performance at other HUD-assisted properties as
well as the timespan since the property's construction or most recent
renovation.
One commenter expressed that increasing the number of years in
between inspections should be looked at in the context of the annual
self-inspection and how burdensome that process will be as well as the
triggers for reinspection, and that the proposed rule is not clear
around the reinspection procedures, and suggested that HUD should make
clear that only an owner or manager of HUD housing may request a
reinspection and HUD may determine whether it is advisable and should
specify the grounds on which HUD will make this determination. Another
commenter expressed general support for the proposal, suggesting that
if the property is in good shape and has passed all previous health and
safety inspections the time for the next inspection should be pushed to
5 years, while cautioning that inspection intervals should always be
based on the condition of the property and how well the inspections are
conducted.
Some commenters suggested specific metrics related to proposal. One
commenter suggested that a property achieving a score in the 90s could
be inspected every 5 years, in the 80s every 4 years, in the 70s every
3 years, and in the 60s or below every 2 years. Another commenter
suggested every 5 years for a score of 96-100; every 4 years for a
score of 90-95, every 3 years for a score of 80-89, every 2 years for a
score of 70-79 and annually for a score below 70. Two commenters
suggested that 5-year inspection cycles should be reserved only for the
highest-performing properties (90-100), with the inspection frequency
increasing as the score drops by every 10 points. The commenters
further suggested that HUD maintain the ability to override this
schedule if needed, e.g., in the case of significant tenant-input to
HUD that seems to indicate a poor building quality.
A commenter noted that the risk of a major problem increases in
older properties and suggested that an option may be to require regular
inspection
[[Page 30466]]
every 1-2 years for older properties, and 2-3 years for newer
constructions and that, intermingled throughout each period, it might
be convenient to have less invasive, virtual home assessments which
have the right sensitivity to capture health and safety hazards caused
by major sudden events in the home.
One commenter distinguished between Public Housing and HCV,
recommending that for the former inspection should occur every other
year on a pass/fail basis, and for the latter that the interval between
inspections be no more than three years, and then only for landlords
with a good history of maintaining their units.
One commenter expressed that it would be best to implement an
inspection schedule based on a risk-based method. Another commenter
suggested that HUD should reform REAC's scoring system, improve tenant
participation and otherwise adopt lessons learned from NSPIRE to secure
housing improvements first, before considering the relaxation of
inspection protocols.
One commenter opined that HUD should give PHAs the discretion to
define higher and lower risk categories, i.e., a PHA should have the
ability to place in the high-risk category those property owners who
consistently take multiple attempts to pass inspections and/or have a
high number of abatements while those who consistently pass on the
first attempt can be placed in a low-risk category.
Three commenters expressed general support for the proposal but
noted the need for additional details on how it would be put into
practice. One commenter noted that under the current scheme properties
that score 90 or over are scheduled for their next inspection on the
3rd anniversary, while those scoring 80-89 are inspected on the 2nd
anniversary, and those scoring 79 or less annually. The commenter
questioned how HUD is proposing to spread the scores over a 1-5 year
period. Another commenter opined that HUD needs to provide additional
information about how they would evaluate whether PHAs qualify for a 2-
to 5-year inspection cycle, and that it would oppose an extended
inspection cycle based on requirements that include submitting all
self-inspection results and related work orders to HUD, which would
likely negate any resource savings achieved through an extended
inspection cycle. Another commenter expressed that determining the
criteria that HUD will use to decide whether a PHA qualifies for a
longer inspection time period or not must be clear and attainable, and
that if the criteria for a longer inspection time period is too
stringent then the incentive PHAs have for expanded inspection periods
would be decreased.
HUD Response: HUD appreciates the comments on the timeline for
inspections, and has gained valuable insight into this issue as a
result of the ongoing COVID-19 pandemic. REAC UPCS inspections resumed
in June of 2021 and the almost two-year break in third-party
inspections proved to be too long for some properties with performance
issues. Five years is a very long period of time to go without visiting
a property and presents a risk to the tenants and the Department--even
a high-quality property could degrade in that time. Therefore, HUD
supports maintaining the current risk-based inspection requirements
ranging from 1 to 3 years (3-2-1).
For small rural PHAs the statute requires a three-year inspection
cycle unless the PHA is Troubled. For PHAs that will continue to be
assessed under PHAS and for multi-family properties, the inspection
frequency would be either a 3-, 2-, or 1-year cycle based on the
anniversary of the last inspection. HUD will continue to evaluate
efforts to provide administrative relief to high performing properties,
including the circumstances under which self-inspections may be
accepted, through subordinate notices and additional public comment.
With respect to the suggestion that the entire portfolio of Public
Housing and Multifamily assisted housing be inspected annually for the
first five years under NSPIRE, HUD does not consider it feasible to do
so with current resources. Because HUD is declining to adopt an
extended timeline of two to five years for physical inspections, there
is no need to provide information about how properties will be
assessed, the process for implementation, and what information will be
considered to allow less frequent inspections of up to five years. HUD
notes that small rural PHAs that are not troubled under 902.105 will be
inspected every three years.
HUD appreciates the feedback regarding self-inspections as it
relates to risk-based annual inspections. HUD's risk-based approach
seeks to balance administrative burden on owners and management and HUD
will continue to review the appropriateness of self-inspection
processes for its public housing and project-based portfolios in
context with inspection timing. For the requirement for self-inspection
reporting at Sec. 5.705, HUD has limited the collection of these
reports to those properties that receive a score of less than 60. This
aligns with the current process for Multifamily Housing programs. HUD
will continue to rely on the results of independent, HUD-funded
inspectors for scoring and to determine inspection frequency.
Question for Comment #15: Tenant Involvement
HUD solicited comments on how tenants could be involved in
identifying poor performing properties.
Commenters asked HUD to provide more context around these ideas and
how HUD would use these ideas so that the industry can respond in a
more productive way. Some commenters opposed resident involvement in
the inspection process, noting that tenant reviews, like consumer
reviews, could be biased and unreliable and that disgruntled tenants
may unduly influence inspection results, analogizing to
disproportionate numbers of 1- or 5-star reviews for restaurants and
products online. Commenters stated that tenant involvement would
complicate the tenant-landlord relationship. For example, a tenant may
give an unearned good review to gain favor with a landlord, or urge
residents to participate in a survey prior to inspection could obligate
property staff to please residents to get a positive review.
Several commenters opined that tenant involvement in the inspection
process is simply not needed, noting that inspectors are the best, most
reliable source for inspecting and reporting on the property, that
residents have always had the ability to notify HUD when their work
orders or repairs are not completed in a timely manner, that owners are
already required to inform residents of their rights to notify HUD of
any such concerns, and that tenants are already adequately protected by
local landlord tenant laws, by the REAC process generally and by the
residents' relationship with the HUD Account Executive. As an
alternative to an added review program, commenters urged that HUD make
sure that the reporting systems work well to inform the appropriate HUD
staff of conditions and to ensure that these resources are fully
staffed and communicated to residents through multiple channels.
Another alternative offered was that HUD explore ways to facilitate and
clarify this complaint/enforcement process through the NSPIRE
demonstration and intervene to enforce its physical standards and
compel owner/agents (OAs) to resolve identified issues.
Several commenters focused on the appropriate weight that should be
assigned to tenant input, suggesting that resident reviews should not
be given so
[[Page 30467]]
much weight as to disrupt the value of the random selection of units
under the current scheme; that creating a separate inspection agenda
that does not contribute to the final inspection result would create
confusion; and that the results of tenant surveys should not increase
or alter sample size, or affect the frequency of inspections.
Commenters cautioned that an inspection not based on a statistical
random sample is not a legitimate representation of the property's
physical condition. A commenter noted that residents would only want
units inspected that they feel illustrate deficiencies, another noted
that pre-identifying units to be inspected would allow prior targeting
of those units either by OAs or residents to influence scoring.
Two commenters urged HUD not to turn the REAC inspection into a
complaint-based inspection scheme and suggested investigation of tenant
complaints should remain outside the purview of the REAC inspector.
HUD received a large number of comments with respect to the use of
tenant surveys, with several commenters suggesting that a proper survey
to all tenants could yield higher-than-average concerns about specific
deficiencies which HUD could treat as a factor among others in
determining inspection frequency or intensity.
Commenters advocating the use of surveys sounded several common
themes: that HUD or its contract administrators administer the tenant
survey to ensure confidence in the survey's independence; that tenant-
based questions should not be subjective and should include clear
definitions for a rating system with significant training and
administrative system to avoid subjectivity; that surveys solicit
specific information so responses would be less subjective; that
surveys include random, anonymous questionnaires to residents; and that
the survey be accessible to persons with disabilities and include a
paper option.
Some commenters suggested a single, targeted question or short
series of questions asked by inspectors to some residents during
inspection, while another suggested an annual mailing to residents with
a request to rate specific performance issues. A commenter suggested a
simple, accessible tenant inspection form uploaded in a similar manner
to owner self-inspection and on the same frequency/timeline. A
commenter supported REAC's initial protocols (dropped in early 2000s),
which required a Tenant Survey, by mail, of a sample of REAC-inspected
properties; however, another commenter opined that this resident
questionnaire was not representative of the property.
Commenters recommended tenant surveys include questions about
health and safety generally, water leaks, mold, insects such as
bedbugs, rodents, lead-based paint, smoke detectors, carbon monoxide
detectors, and other environmental hazards, management performance and
treatment of tenants, the right to organize, and the existence of a
working stove. A commenter suggested anonymized survey data be provided
to properties to permit responses with respect to identified issues.
Commenters suggested that tenant survey data (together with REAC
scores) could be used by HUD to evaluate the accuracy of self-
inspections. A commenter suggested that survey information that
identifies a life-threatening condition(s) should trigger an
inspection.
Commenters also suggested that tenants be allowed to recommend
their unit for inspection. Commenters recommended adding five units to
REAC's random selection if requested by a tenant organization. A
commenter suggested that residents should be allowed to recommend homes
for inspection as they are best positioned to direct HUD to conditions
on the property, another opined that allowing tenants to designate
substandard units for inspection will help offset the ``point loss
cap'' bias built into the REAC system. A commenter suggested that an
additional procedure to account for extra units inspected per resident
request could be developed; one commenter suggested a resident council
could work to ensure adding a more representative group of individuals'
units to the inspection sample. A commenter supported the inclusion of
units/issues subject to such enforcement action within the sample for
the next REAC/NSPIRE inspection, to ensure ongoing compliance.
HUD Response: HUD appreciates the comments related to tenant
involvement in the NSPIRE inspection process. HUD regularly hears from
groups representing tenants about how residents can be more engaged in
the inspection process and sought comment through the proposed rule as
a way of advancing this conversation and agrees that HUD should
consider working through resident councils and tenant organizations,
for example. HUD's process will be addressed further in a subordinate
notice specifically on tenant engagement.
HUD does not intend for resident feedback to supersede trained
inspectors, nor does it intend to use resident ratings to score
properties. HUD's intent in proposing a rating of 1 (poor) through 5
(excellent) was to provide a mechanism for residents to identify
additional units for inspection; however, HUD does not intend for these
units to comprise part of the property score. HUD can direct owners and
PHAs to repair identified deficiencies even if those deficiencies are
not scored, because the requirement for housing to be maintained in
accordance with 5.703 always applies. Based on public comment and other
analysis, HUD will further evaluate scaled 1 to 5 responses as
suggested in the question and other means of collecting tenant
feedback. This aligns with comments about eliminating as much
subjectivity as possible. HUD will also continue to explore tenant
participation in an accessible manner to align feedback with potential
deficiencies. The NSPIRE Scoring notice will provide more information
about the sample that will be considered for the score. HUD agrees that
professional inspectors are the most reliable source for assessing
property conditions but believes tenant involvement in NSPIRE and
feedback about the condition of properties is also very meaningful and
should be taken seriously. HUD will continue to evaluate how the NSPIRE
inspection process design best results in independent assessments of
property condition while balancing a desire for more tenant feedback
about property condition. HUD does not consider these two objectives
mutually exclusive.
HUD takes into account the potential administrative burden on both
the owners and the residents and plans to add additional units to the
NSPIRE inspection if they are requested by the residents. Additional
details will be provided in the Administrative Notice. With respect to
tenant-selected units in the sample biasing an inspector, HUD will
consider ways to protect anonymity of personally identifying factors,
such as unit address and number. HUD will also consider the suggestion
that an inspection be triggered or when a survey identifies the
existence of a life-threatening condition.
HUD agrees with the comments regarding existing channels for
tenants to report property conditions and engage with OAs and HUD
Account Executives. HUD will look at ways to strengthen the existing
operational protocols while exploring ways to expand tenant engagement
in the NSPIRE process. Residents can also contact the State HUD field
office.
HUD appreciates the feedback suggesting strengthening existing
procedures before adding tenant participation into the unit selection
[[Page 30468]]
process. HUD agrees that more robust communication about REAC processes
and final scores could improve overall conditions of HUD-assisted
properties. HUD also agrees with the sentiment of improving REAC
through NSPIRE--and the demonstration program--to compel OAs to resolve
identified issues. HUD believes that NSPIRE's focus on health and
safety of the residents will lead to better living conditions and
outcomes. NSPIRE procedures for inspections, scoring, and collection of
resident-nominated units will be in the NSPIRE Administrative notice.
With respect to comments about tenant-selected units influencing
the overall inspection outcome and potential to turn into an
alternative complaint process, HUD does not intend for tenant feedback
to HUD to supersede existing work order and tenant complaint processes.
HUD sees tenant involvement in the inspection process as an additional
means to improve the overall quality of HUD-assisted housing by
bringing the resident's voice to the table. HUD sees this as useful
where random sampling falls short--e.g., it's possible that a random
sample could completely miss units with infestation, and where pests
are active only at night. Tenant involvement also provides an
opportunity for HUD to ensure that known deficiencies raised by tenants
are corrected. HUD will take into consideration the suggestions to
engage Tenant Organizations, resident councils and other means to allow
residents to select certain units to be included in the inspection
sample, but these units will not impact the overall score, unless they
were already randomly selected as part of the REAC inspection sample.
HUD considered the suggestion that tenants to designate certain units
for the inspection could help offset the ``point loss cap'' for system-
based scoring and ensure accurate deductions for deficiencies, but
determined that resident-selected units would not be scored unless
randomly selected as part of the inspection performed by HUD.
Additionally, as provided in the proposed Scoring notice, 88 FR 18268
(Mar. 28, 2023), HUD is proposing to eliminate point-loss caps allowed
under UPCS.
Other Suggestions
HUD received a number of additional comments regarding tenant
involvement that relate to current REAC processes. Commenters
recommended tenants be notified about REAC matters and results and
given the opportunity to comment and that HUD remove the current 60-day
limitation on the availability to tenants of REAC Reports, scores, and
related correspondence. Commenters also suggested REAC inspectors
should access local code reports in localities if available online, as
well as summary work order reports that many management companies
maintain to provide a REAC inspector with a quick overview of how many
repairs were reported, how long it took to complete them, and tenant
satisfaction. Commenters requested HUD require a meeting between a REAC
inspector and any legitimate tenant organization before starting an
inspection and allow a representative of any legitimate tenant
organization to accompany an inspector if a tenant organization
requests, but not into an individual unit unless invited by a tenant.
Commenters also suggested that tenants should have the opportunity to
trigger a REAC inspection when at least 25 percent of the residents, or
the local government, request one.
Other comments related to tenant involvement include a suggestion
that HUD develop a separate and distinct program, with allocated
funding and resources, to engage residents in evaluating their housing
experience and the quality of their housing; that HUD require owners
and agents to make tenants aware of reporting options, for example by
requiring the phone number(s) to be posted or distributed with lease
documents; and that HUD support tenants' right to organize and support
building tenant association capacity by making $10 million annually in
Section 514 funding to local nonprofit tenant assistance organizations.
In connection with the last suggestion, commenters noted that Congress
has made available funding through Section 514 of MAHRAA to provide for
tenant organizing and capacity building, and HUD currently has
available funding for this purpose.
A commenter suggested that HUD resident feedback measures adopted
for Multifamily and Public Housing could, in principle, be extended to
any HUD-supported apartment complex, including RAD converted
properties, Mod Rehab and PBVs.
HUD Response: HUD appreciates feedback regarding communication with
residents regarding the REAC inspection results, including the
opportunity to comment and suggested participation of tenant
organizations. HUD regularly publishes its REAC physical inspection
scores on its website and will continue to do so. Tenants also have the
opportunity to review the REAC inspection report after the score is
finalized. The owner must make the physical inspection report and all
related documents available to residents during regular business hours
upon reasonable request for review and copying. Related documents
include the owner's survey plan, plan of correction, certification, and
related correspondence. HUD will take this feedback into consideration
as it seeks to improve communication with HUD-assisted residents.
The comment suggesting a separately funded tenant evaluation
program in parallel with the REAC NSPIRE inspection process is outside
the scope of this rulemaking.
With respect to the suggestion that management provide HUD and REAC
inspectors with summary work order reports for evaluation, HUD and/or
its Performance Based Contract Administrators currently review work
order processes as a component of their management reviews. HUD will
take into consideration the suggestion to include evaluation of local
code violations.
Regarding the comment suggesting that HUD require owners to inform
residents about their rights and responsibilities, specifically in
regard to complaints and physical conditions, HUD programs already
require Owner/Agents to inform residents of the procedures for raising
complaints and the various appeals available if the landlord,
management agent, or Housing Authority is unresponsive. HUD will
nonetheless take this feedback into consideration as it looks at ways
to reinforce tenant education.
HUD appreciates comments on tenants' right to organize and supports
building tenant association capacity but has not proposed changes in
this rulemaking. Additional information about resident opportunities to
provide HUD feedback will be provided in the NSPIRE Administrative
notice and in a subsequent notice once HUD considers public and
stakeholder burden. Comments about expanding resident feedback to other
HUD-assisted programs, such as RAD conversions, Mod Rehab and PBVs,
were shared with the program offices. At this time, HUD is not planning
to require a resident feedback requirement in properties not inspected
by REAC, as that would be new requirement and burden on PHAs and other
owners that was not proposed. HUD will also take into consideration
comments suggesting that appropriate triggers for an inspection should
include when 25 percent of tenants request one.
[[Page 30469]]
Section 5.705 Inspection Requirements
Comments Regarding Sec. 5.705(a), Procedures
A commenter suggested HUD extend the exception for Section 8
housing in proposed Sec. 5.705(a)(3) to public housing, and that PHAs
should be able to use variant inspection standards based on local
building codes; otherwise, a PHA's inspection score may be adversely
impacted even though the condition comports with local codes and has
been determined to be safe.
HUD Response: HUD appreciates this feedback. With NSPIRE, HUD
intends to further align the inspection standards for the Public
Housing and Multifamily portfolios, while acknowledging the Housing
Choice Voucher and Project-Based Voucher programs have some unique
qualities that are taken into consideration with variant inspection
standards in Sec. 5.705(a)(3), as these are privately owned
properties. HUD does not support expanding those to public housing
because public housing does not have these unique qualities and under
the U.S. Housing Act must meet HUD-defined standards for decent, safe,
sanitary and in good repair. HUD recognizes that there may be
situations in which a property comports with local codes, but still
does not meet the standard for public housing. In those instances, HUD
believes that the public housing must meet the higher NSPIRE standards.
Comments Regarding Sec. 5.705(b), Entity Conducting Inspections
A commenter stated that in Sec. 5.705(b)(2), the reference to the
voucher regulation should be corrected to reference Sec.
982.352(b)(1)(iv).
HUD Response: HUD thanks the commenter and has made this correction
in this final rule.
Comments Regarding Sec. 5.705(c), Timing of Inspections
A commenter suggested revising paragraph (c)(6) regarding Section
232 facilities to require a case-by-case analysis, remove a
``complaint'' as a basis of information received, and take into
consideration whether the physical integrity of the project is at risk.
Another commenter objected to changing the timing of inspection
from being linked to the previous inspection date to being linked with
the property's anniversary date. This commenter recommended amending
paragraph (c) such that, during the transition from the current timing
protocol to the proposed timing protocol, HUD requires the inspection
to take place on the earliest of either the previous inspection date or
the property's anniversary date, rather than delaying the inspection.
HUD Response: While HUD appreciates the commenters' concern about
the quality of assisted living, board and care, and intermediate care
facilities, HUD does not agree with these suggested revisions to Sec.
5.705(c)(6). This final rule tracks with current policy and allows
flexibility where needed for special circumstances, such as complaints
about assisted living and care facilities. HUD has the authority to
inspect properties where there are concerns about the safety of
residents or project preservation.
With respect to the suggestion regarding inspection timing, HUD
believes that the commenter misunderstood the meaning of
``anniversary'' in the proposed rule. This was meant to still be linked
to the previous inspection date, not to any other date. With the
exception of small PHAs as described in Sec. 902.13(a), public housing
properties will no longer be scored based on the fiscal year end for
the portfolio and previous PHAS score, and properties will be assessed
based on the anniversary and score of the previous inspection.
Comments Regarding Sec. 5.705(d), Inspection Costs
Two commenters, while supporting a reinspection fee to increase
accountability, urged HUD to clarify that it is not establishing a new
reinspection protocol, only the ability for a fee to be imposed if the
work that was reported complete is not in fact complete. The commenters
further urged HUD to establish and maintain caps or benchmarks on
reinspection fees to encourage reasonableness and standardization and
to clarify whether the fee is authorized for Video Remote Inspections
or only for onsite inspections.
Another commenter suggested limiting the reinspection payment to an
amount no more than $500, and also allowing such payment to be passed
on to the household residing in the unit when the tenant has caused the
damage at issue. A commenter noted that paragraph (d) does not provide
for the imposition of such a reinspection fee on PHAs and suggested
that the language should be amended to include PHAs.
HUD Response: HUD appreciates the commenters' recommendations
regarding reinspection fees but is not making these changes in this
final rule. A fee cap could be problematic if this requirement is in
place indefinitely and does not allow for inflation. Additionally,
landlords and PHAs can collect fees for tenant-caused damages in
accordance with their lease and policies and existing regulations.
Adjusting a fee at the time it is assessed would create an additional
burden. However, HUD took these comments into consideration in the
subordinate notice for Administrative Procedures, which will specify
the circumstances and details for re-inspections. For units in the HCV
and PBV programs, HOTMA Section 101(a)(3) allows for the PHA to
consider tenant-caused damage as a factor for HQS enforcement.
Comments Regarding Sec. 5.705(e), Access to Property for Inspection
Commenters stated that giving a PHA a physical condition score of
zero if the inspector is unable to access even one unit is unreasonably
punitive, is a higher standard than the standard placed on other POAs
and could lead to penalization for actions of residents beyond the
PHA's control, such as where a tenant prevents an inspection or is ill.
Another commenter suggested that HUD should not require access to an
apartment where there is a sufficient number of similar apartments that
the inspector can visit as alternates, as it is unreasonable to require
all households to either stay home all day or have an adult present
throughout the inspection, and that, in the alternative, inspectors
should select a higher sample and larger number of alternate apartments
or visit any additional units to reach the sample size required before
providing a physical condition score of zero for the project. Another
commenter suggested amending paragraph (e) to require reasonable
advance notice of an inspection to the property owner.
A commenter noted that the opening paragraph of Sec. 5.705(e)
refers to HUD inspections of ``HUD housing,'' yet paragraph (e)(2)
provides important details applicable only to public housing. The
commenter suggested that paragraph (e)(2) should be revised to apply to
all HUD housing.
HUD Response: HUD thanks the commenters for feedback concerning
access to the property, advance notice and conformity of language
concerning HUD housing. Because these matters are related to scoring
methodology, HUD will further specify its scoring methodology including
how access to the property impacts the methodology by which HUD scores
or assesses property condition through the forthcoming NSPIRE Scoring
notice. HUD continues to believe, however, that property access is a
fundamental component of independent assessment. HUD will similarly
address the notice of inspections requirements for its NSPIRE
[[Page 30470]]
inspections under the forthcoming subordinate Administrative Procedures
notice, but believes its recent, existing notice period (ranging from
14-28 days) is reasonable. HUD declines the suggestion to include
language in Sec. 5.705(e) requiring reasonable advance notice of an
inspection to the owner in regulation and will continue to provide
advance notice of inspections to allow PHAs and owners may comply with
lease agreements that require reasonable notice for residents. In this
final rule HUD has, where appropriate, revised ``public housing'' where
it meant to state ``HUD housing'' in the proposed rule.
Section 5.707 Uniform Self-Inspection Requirement and Report
Question for Comment #16 and Question for Comment 17 Regarding Self-
Inspection
HUD solicited comment on how the clarification to self-inspect all
HUD housing units in certain programs would impact operations.
Comments Supporting Requiring Self-Inspection
Many commenters supported annual self-inspections, noting that this
requirement is a generally accepted best practice and it is good for
HUD to make it a formal requirement. A commenter supported extending
this requirement to any programs that do not currently require them;
another noted that expanding the scope of the inspection across all the
three inspectable areas will promote increased confidence in the self-
inspection process, on the whole. Commenters noted that the self-
inspection process has the potential advantage of decreasing the
financial cost to HUD or the PHA of conducting a physical inspection.
A commenter stated that the time cost to the property was worth it
because self-inspections allow staff to catch maintenance issues that
might otherwise go unnoticed or unreported by the tenant. This
commenter noted that if the maintenance problem is severe or persistent
it could negatively impact the health of the tenant or cause long-term
physical maintenance issues for the building.
Another commenter noted that a random unit selection like that used
in a housing inspection cannot capture all maintenance issues, so it is
important that the managing agent sees each unit firsthand annually.
HUD Response: With respect to the self-inspection requirement, HUD
notes that an annual self-inspection was already required for the
Public Housing program at 42 U.S.C. 1437d(f)(3), and the requirement in
the proposed rule was intended to mitigate gaps in inspections with the
2-5-year REAC inspection time frame, to ensure that unit conditions do
not deteriorate in between inspections. HUD has retained the regulation
that added this requirement to properties participating in Multifamily
Housing programs. HUD considered the burdens associated with submission
of self-inspection results of all properties and decided not to
implement the proposed regular submission of self-inspection results
for all properties. The full process for conducting self-inspections
according to the NSPIRE standards will be detailed in the NSPIRE
Administrative notice.
Comments Regarding Third Party Self-Inspections
A commenter cautioned against allowing a third party to complete
self-inspections because allowing properties to shop for a friendly
inspection company defeats the purpose of this potentially eye-opening
tool. Conversely, another commenter suggested HUD require that annual
inspections be conducted by a neutral third party, which often
motivates PHAs and owners to finally address long overdue maintenance.
HUD Response: HUD appreciates these observations concerning the
pros and cons of third-party self-inspections and will take this
feedback into consideration as it further refines and details the
NSPIRE self-inspection requirements in subordinate implementing
notices. HUD will design quality assurance processes to achieve a high
degree of confidence in the quality and objectivity of all types of
inspections conducted under NSPIRE.
Comments Regarding Implementation and Enforcement of a Self-Inspection
Requirement
Commenters had several questions about how HUD would implement a
self-inspection requirement. Commenters suggested HUD provide a user-
friendly and intuitive public software tool to perform the inspections
at the property level. A commenter suggested including a mechanism for
triggering a direct electronic report to HUD where an inspection
revealed serious deficiencies. Another commenter asked what computer
hardware would be required to perform the inspection and advised
against requiring expensive hardware.
A commenter asked how property staff would be able to know all the
rules that REAC NSPIRE inspectors are required to know, which the
commenter stated may require training and technical knowledge.
A commenter suggested self-inspection should be waived on years
that an NSPIRE inspection is due to occur. A commenter asked how the
requirements of a self-inspection approach align with a potential risk-
based model.
Commenters urged HUD to provide details regarding the submission
methods and self-inspection criteria that will be expected of owners
and agents and urged HUD to carefully consider the feasibility of the
new reporting requirements. A commenter cautioned that the process will
not be efficient if owners aren't providing HUD with sufficient
information in a usable format. A commenter noted that owners currently
inspect different components of the unit during self-inspections, and
flexibilities for COVID-19 have further adjusted self-inspection
techniques. A commenter urged HUD to be transparent about what the
submitted data/information will be used for and how it will be handled
by the agency. A commenter urged the self-inspection protocol be as
simple and intuitive as possible. A commenter recommended safe harbor
guidelines around unit inspections, since issues such as tenants not
allowing access often arise.
A commenter urged HUD to weigh the benefits of a standardized
approach, which would supply data to the agency and allow HUD to
compare ``apples to apples'' in terms of the state of the portfolio,
vs. the ease of submission or completion of this requirement. This
commenter urged HUD to maintain the lowest lift possible for owners to
complete the self-inspection and reporting requirements.
A commenter urged HUD to make clear that the self-inspections can
take place at any point throughout the year instead of all at once.
Commenters suggested HUD could seek to rely on local code
enforcement history for a property, which is frequently complaint
driven. A commenter suggested HUD should also accept complaints by
local legal aid offices, public health officers, or other entities who
have observed poor housing conditions or potential violations of State
or local code violations. This commenter supported the NSPIRE
demonstration's requirement that local code violations must be reported
to HUD by participants and suggested HUD expand it to other complaints
received.
A commenter urged HUD to utilize systems already in place for
submitting information to HUD (e.g., the annual recertification
process) or conducting
[[Page 30471]]
oversight (for example file reviews) instead of creating new systems
for properties to submit self-inspection results to HUD. This commenter
noted that if communities could simply document in the file that they
have inspected 100 percent of units at any point throughout the year,
or if they could submit a certification to that effect during the
annual recertification process, it would eliminate the need to create
new processes and systems.
A commenter asked what ramifications a property would face for
failing to complete an inspection to REAC's expectations and how REAC
would know if a 100 percent inspection is valid and reliable
statistically.
A commenter asked how HUD will use information gathered from the
self-inspections and what penalties housing providers could face as a
result of the information obtained.
Another commenter suggested HUD make clear that any submitted
results of self-inspections do not have any bearing on a property's
official property inspection score. A commenter urged that the REAC
inspection should be the central evidence for that claim.
A commenter suggested a self-inspection requirement must be coupled
with an auditing process to verify the veracity of self-inspection
reports. A commenter asked whether HUD has sufficient staff to review
annual submissions from all covered properties. A commenter suggested
HUD or PHAs verify self-inspection results when available, potentially
every other year, but noted the administrative cost of doing so.
Comments Regarding Self-Inspection in Particular Programs
Commenters urged HUD to consider the differences between inspection
requirements for the Public Housing program and the HCV, PBV, Mod
Rehab, and CPD programs. A commenter stated that HCV landlords,
especially small landlords, would be unable to absorb the cost of
additional self-inspection.
A commenter suggested that the HCV, PBV, Mod Rehab, and CPD
programs, which currently do not require self-inspection, should
benefit from a reduction in risk-based annual inspections, similar to
the 2-5-year inspection time period proposed for the Public Housing
program. Other commenters stated that because these projects have
annual or biennial unit inspections, they should not also have self-
inspection requirements. A commenter stated it appeared that 232 health
care facilities would have NSPIRE inspections waived and asked if they
would still be required to perform the annual 100 percent inspections.
A commenter asked who HUD believes would be responsible for self-
inspections of voucher holder units. Commenters noted that since CoC-
funded rental assistance projects have annual unit inspections, an
additional self-inspection is onerous on the subrecipient as well as
the PHA that would have to track and monitor subrecipients' compliance
to this new requirement and recommended HUD not extend the self-
inspection requirement to CPD programs.
A commenter advised against requiring self-inspections in the HOME
program, which has a significantly different regulatory framework than
the covered programs.
HUD Response: HUD notes that the requirement for a self-inspection
was already a statutory requirement for public housing under 42 U.S.C.
1437d(f)(3) and was proposed to be extended to other programs under
NSPIRE, except for owners participating in the HCV, PBV, and Moderate
Rehabilitation Programs under proposed Sec. 5.707. The final
regulations include edits to clarify HUD's expectations for electronic
submission only for properties scoring under 60 and retains the
language that provides for additional notice with public comment before
implementation. Generally, results of self-inspections will be used by
HUD to monitor resolution of deficiencies and ongoing compliance with
the NSPIRE Standards in failing properties, or those that score under
60 points. Requiring them broadly for all properties will help PHAs and
Multifamily Housing owners ensure properties are regularly monitored
and maintained. Reducing reporting burden for these inspections serves
to align the Public Housing program with existing procedures in
Multifamily Housing Programs.
HUD appreciates comments regarding the use of technology to
facilitate self-inspection and swift transfer of information between
the property and HUD. The Department is in the process of developing
technology solutions and will take this feedback into consideration.
Regarding concerns about the cost of hardware, HUD is developing a
technology solution based off of the Salesforce platform. Inspection
results will be uploaded via a phone, tablet, or computer--no
specialized equipment will be necessary for the inspection, except a
moisture meter as proposed in the NSPIRE Standards notice, if
finalized. HUD also appreciates concerns regarding methods for
uploading/transferring inspection data to HUD, inspectable areas, how
data will be used, timing, and user experience of inspection reporting
systems. HUD's REAC is developing new technology to help facilitate
easy transfer of the inspection results without any specialized
hardware.
HUD agrees that adding this burden to small landlords participating
in tenant-based programs may discourage landlords from accepting
residents participating in the programs. PBV and moderate
rehabilitation units are already subject to frequent inspections by the
PHA, including PHA inspections resulting from tenant complaints.
Additionally, the HCV, PBV, and Moderate Rehabilitation inspections are
not numerically scored. Section 5.707 exempts owners participating in
the HCV, PBV, and Moderate Rehabilitation Programs from self-inspection
requirements. HUD declines to include Healthcare Programs, CPD-funded
programs and Office of Multifamily properties that do not have an
assistance contract at this time. The requirement to perform and upload
an NSPIRE inspection would be a new burden for these programs.
When HUD implements the self-inspection requirements, training
opportunities will be provided along with the implementing notice.
Self-inspections performed to comply with Sec. 5.707 shall be done in
accordance with the NSPIRE Standards.
With respect to the comment about waiving self-inspections on the
same year as the NSPIRE inspection of record, HUD has not allowed this
flexibility under the NSPIRE rule because it would conflict with the
statutory requirements for public housing under 42 U.S.C. 1437d(f)(3).
Revisions to Sec. 5.711(c)(2) allow PHAs and owners to fulfill this
requirement in conjunction with the follow-up already required under
that regulation.
With regard to the comments regarding local code violations or
input from local organizations, HUD continues to seek ways to
facilitate information sharing with local authorities. HUD-assisted
housing will continue to be subject to local code requirements as
covered in the regulations, but local code violations will not be
included in the NSPIRE Standards or scoring at this time.
Comments Regarding How To Involve Residents in Self-Inspection
Commenters urged HUD to require the self-inspection be reported to
residents and provided at no cost and also to add a provision providing
a formal mechanism for residents to raise challenges to the HUD Field
Office that must be investigated and addressed by
[[Page 30472]]
Field Office staff, requiring owners to cure any material deficiencies.
A commenter suggested that the tenant and the landlord walk the
unit together and sign certifying the results, which would allow PHAs
to have a reward program for tenants and landlords with good track
record of completing the universal inspection certification (UIC).
Another commenter urged HUD to make clear that self-inspections do not
need to have a tenant signature attesting to the inspection, because
many inspections occur while the residents is outside the unit.
A commenter urged HUD to implement the system allowing tenants to
provide a ``1-5'' rating of their units, applied to categories
including ``HVAC,'' ``water,'' and ``electrical,'' and recommended HUD
aggregate these ratings for multi-unit properties to identify common
issues at a single location. This commenter further recommended
allowing feedback to be submitted both electronically and via regular
mail to ensure involvement of all age demographics and avoid
technological barriers.
A commenter requested HUD require PHAs and Owners provide at least
48 hours advance notice of inspections and notice of the completion of
the inspection to residents and any present tenant organization, with
information about the inspection that is accessible to the family.
A commenter recommended that during COVID the resident can do a
self-evaluation inspection distributed by the management/owner with
work orders being generated for completion, noting that it would cost
less money to know that repairs are done immediately and not allowed to
cause further damage.
HUD Response: HUD appreciates the suggestions related to tenant
involvement in self-inspections but declines to implement them at this
time. The self-inspection process will be spelled out in the NSPIRE
Administrative notice, and HUD will provide an opportunity for tenant
feedback in other areas of NSPIRE. There are formal procedures in place
for residents to submit complaints regarding their property or unit and
residents of HUD-assisted housing may call their local HUD office when
they are unsure of how to navigate this process, as it varies by
program. Public housing and HCV program residents can also bring
concerns to their Board of Commissioners and attend board meetings. PHA
Boards of Commissioners usually include at least one resident member.
HUD also has field office coverage for every State and territory, see
www.hud.gov/local.
Comments Opposing the Self-Inspection Standard and Suggesting
Alternatives
Commenters stated that a self-inspection requirement is
unnecessary, stating that most owners already do self-inspections and
take good care of their property, rendering a requirement unnecessary
and burdensome for owners and managers as they familiarize themselves
with yet another protocol of inspection and reporting, especially if
the owner chooses to hire a third party; that there is no convincing
rationale for why REAC needs this level of information or how they plan
to use it; and that HUD's assumption that a universal self-inspection
requirement would increase the quality of HUD-assisted housing is false
because, were it true, there would be substantial differences in
inspections scoring between Public Housing where self-inspections are
required and other programs that do not require self-inspections. One
commenter urged against new requirements being merely a ``signal'' and
suggested new requirements must lead to improved outcomes which are
predicted by data, particularly when there is no direct statutory basis
for the requirement.
Other commenters opposed the self-inspection requirement as too
costly, noting the increase in administrative burdens on staff and the
PHA itself. Commenters expressed concerns that a self-inspection
requirement would cause capacity constraints to private landlords that
rent to voucher holders, threaten the ability to recruit and retain
landlords, and prevent these landlords from urgently addressing move in
inspection issues A commenter opposed the requirement on the grounds
that an annual self-inspection requirement might also be overly
intrusive to tenants who are able to successfully care for their units,
especially since many tenants in tax-credit properties also undergo
inspections as part of tax-credit compliance.
Other commenters expressed an inability to assess the magnitude of
the proposed requirement without understanding the parameters of the
self-inspection or self-reporting requirements.
Commenters also stated that the proposed requirement would go
beyond the Housing Act, which requires that PHAs ``shall make an annual
inspection of each Public Housing project to determine whether units in
the project are maintained in accordance with'' housing quality
standards and noted the statute does not require that PHAs inspect each
unit annually. A commenter noted that in a HUD Public Housing
Management E-newsletter in January 2012, HUD recognized that Congress
did not intend that every unit be inspected every year, and noted that
using another method, such as inspecting a representative sample of
units or inspecting historically problematic units more frequently
allows PHAs to ``free up resources, especially those necessary to
provide unit maintenance.''
As an alternative, a commenter suggested HUD work with Congress to
remove the annual self-inspection requirement to be replaced by the
risk-based inspection protocol as established by HUD to further
deregulate and devolve control of public housing units to their owners.
Finally, commenters expressed concern that a self-inspection may
not be effective if the inspector is not qualified to conduct a proper
inspection and therefore will likely miss or misreport important
issues. A commenter additionally expressed concern that housing
providers might falsely self-certify compliance with lead-based paint
certification and the remediation of defects.
HUD received the following comments in response to HUD's request
for alternatives to the self-inspection protocol.
Two commenters stated that the current annual self-inspection is
adequate. Another suggested HUD require PHAs to inspect each public
housing unit once every two years, rather than annually.
A commenter suggested HUD allow a documented entry for a
maintenance purpose, during which a smaller scale inspection for safety
hazards is conducted, to count as a self-inspection.
A commenter recommended implementing a Quality Control program that
would provide Healthy Homes Assessment capacity to PHAs to ensure
uniformity/consistency in the way the PHAs identify, evaluate,
prioritize, and manage the hazards found in the home and provide random
QC-checks to inspected homes using a combination of on-site and virtual
home assessments.
Commenters suggested making the self-inspection protocol less
burdensome. One recommended creating a self-inspection protocol that is
the least burdensome possible, including no more than three categories,
less than 5 sub-categories, and either paper or electronic submissions;
another suggested HUD allow properties to simply document the
inspections and work orders in the file instead of requiring the actual
submission of an electronic report until requested by
[[Page 30473]]
HUD or monitored in an MOR. A commenter expressed concern over the
submission of a self-inspection report, or a requirement that all a
property's work order receipts for a rolling year be provided, as
overly burdensome to property owners, and questioned what role the
information will play in the REAC inspection or scoring.
Commenters suggested that HUD limit the reporting requirement so
that properties will only report on the Health and Safety Risks
identified and corrected at property within a given year. These
commenters noted a narrower scope will ensure that the NSPIRE
requirements are practicable while providing HUD with data on each
property's most critical maintenance activities.
A commenter suggested that owners should not be allowed to self-
certify that they have addressed severe health and safety citations on
the grounds that HUD should not trust the certification.
Commenters suggested giving autonomy or options to residents to
minimize the inconvenience or trauma of unit inspections, such as
requiring 48 hours notice to residents before self-inspection, as well
as allowing residents to opt in to doing a self-inspection, potentially
with photo or video documentation. A commenter suggested allowing a
resident to opt into less frequent inspections where historically the
unit has been in very good condition. A commenter urged HUD to require
that the annual inspections be no more than annual.
HUD Response: HUD appreciates the thoughtful feedback regarding
self-inspections, and that property owners, managers and PHAs
understand their obligation to provide decent, safe, sanitary housing
in good repair at all times. HUD agrees that regular inspections should
be occurring in well-managed properties, and that annual self-
inspections should result in improved conditions and outcomes.
The United States Housing Act of 1937 requires that all PHAs ``make
an annual inspection of each Public Housing project to determine
whether units in the project are maintained in accordance with the
requirements.'' \13\ The requirement to perform an annual self-
inspection in public housing did not change with the NSPIRE rule;
however, in this rule, HUD has added a requirement for self-inspections
for housing participating in Multifamily Housing programs, and a new
regulatory requirement to electronically transmit the results of self-
inspections for all properties that score less than 60. Collecting
self-inspections of every unit is consistent with current Multifamily
Housing policy.\14\ HUD disagrees that self-inspections are overly
burdensome and unnecessary and reminds PHAs and owners that they should
not rely solely on HUD's inspections to manage their properties. If
self-inspections are occurring as part of routine operations, or for
compliance with the Housing Act, a new regulation clarifying this
requirement is not a new burden.
---------------------------------------------------------------------------
\13\ 42 U.S.C. 1437d(f).
\14\ See Housing Notices H 2015-02 and H 2018-08.
---------------------------------------------------------------------------
HUD clarifies that self-inspections submitted to HUD should include
all units. Inspecting every unit during a self-inspection (vs.
sampling) was discussed in the preamble to the ``Uniform Physical
Condition Standards (UPCS) and Physical Inspection Requirements for
Certain HUD Housing'' rule published on September 1, 1998.\15\ While
this final rule requires self-inspections for all properties on an
annual basis, only properties scoring below 60 will be required to
transmit a report with the results of the inspection to HUD. Self-
inspections submitted to HUD must also adhere to the NSPIRE standards.
The process for performing a self-inspection and transmitting it to HUD
will discussed in detail in a subordinate notice.
---------------------------------------------------------------------------
\15\ 63 FR 46566.
---------------------------------------------------------------------------
HUD is aware of the obligation on owners to certify to lead-based
paint compliance through other processes and its limitation. These
requirements are not included or changed in the NSPIRE rule. HUD agrees
that results of self-inspection will not be used as part of calculating
the physical inspection score, and instead will be part of the follow
up HUD performs on properties that are failing, i.e., score below 60.
This requirement creates an incentive for PHAs and owners to ensure
their properties are maintained and in good repair. If HUD program
offices or the DEC are following up on results, they may request
additional documentation, such as work orders, but the regulation at
Sec. 5.707 does not require that. For self-inspections, HUD continues
to allow the use of remote video inspections as described in PIH Notice
2020-31, which could be done in coordination with the resident. PHAs
and owners should continue to follow lease agreements for notice to
residents before an inspection occurs.
HUD understands that residents are interested in the results of
NSPIRE inspections and self-inspections, but because inspections
contain detailed information down to the unit level, they may contain
sensitive information. For example, residents with pest infestations
may not want that information made public along with their unit number.
Information from REAC-performed inspections will be available to
residents as described in Sec. 5.711(h).
HUD acknowledges the suggestion to include Mod Rehab, PBVs and
other CPD-funded programs in the self-inspection requirement but
declines to include such a requirement at this time. First, these
properties are not scored as Multifamily Housing and Public Housing
programs. Secondly, for the PBV and Mod Rehab programs, these owners
work directly with PHAs and do not submit reports to HUD. Moreover,
under CPD-funded programs such as HOME and HTF, grantees already have
the flexibility to require self-inspection as part of their ongoing
property standards. To minimize the burden of inspections, HUD has
allowed flexibility to PHAs and owners to combine the self-inspection
requirement in the years HUD performs an inspection with the follow up
inspection in Sec. 5.711(c)(2). With respect to ``Healthy Homes
Assessments'' and their use to identify, evaluate, prioritize, and
manage the hazards found in the home, REAC collaborates with HUD's
Office of Lead Hazard Control and Healthy Homes to help ensure
inspections include hazards that can cause death, illness, and injury
in residents, and intends to include many elements of a health and
safety assessment in the NSPIRE Standards notice. HUD will require that
self-inspections use the NSPIRE Standards so that results are
consistent and can be compared to inspections performed by REAC. For
quality assurance, HUD will provide information on the qualifications
and training recommended for persons performing self-inspections.
Additional details about the self-inspection process will be discussed
in detail in the Administrative notice. This process will also allow
PHAs and owners additional time to establish or modify a self-
inspection program.
Section 5.709 Administrative Process for Defining and Revising
Inspection Criteria
Comments Regarding Updating Revisions to Inspection Procedures Every 3
Years
Commenters supported revisions of standards every three years to
allow HUD to respond to the changing needs of an evolving housing
portfolio. One commenter opposed any new changes to inspection
standards and requirements
[[Page 30474]]
that are made outside of the Federal Register.
Some commenters cautioned that HUD should avoid upending inspection
standards every three years. One commenter, while supporting the
transparency behind continual updates to standards on a 3-year cycle,
noted concerns with respect to the impact on building systems and
suggested that HUD should be mindful of costs and impacts on housing
owners, managers, and tenants caused by significant updates and
changes. Commenters suggested HUD adopt advisory scores and transition
times for major changes to standards, and support properties as they
make significant new upgrades, including when new standards are first
implemented, and that stakeholders be given ample time to comment and
understand the guidelines. A commenter recommended 30 days' notice
prior to new procedures becoming effective.
HUD Response: HUD believes that a periodic scheduled review of the
Standards and Scoring Model will allow for iterative improvements to
the NSPIRE inspection process, adapting to changing technologies and
circumstances in our portfolio. The routine triennial revision process
will allow for a public comment period of no less than 30 days in the
Federal Register. HUD will take feedback related to advisory scores and
transition times for major changes into consideration. Scoring under
PHAS may have a transition period to be announced at a later date.
Additional guidance will be in subordinate notices which will be
published in the Federal Register and available for public comment.
Comments Regarding Emergency Revisions to the NSPIRE Standards
Some commenters opposed the proposed changes to Sec. 5.709(a)(2),
which would allow HUD to publish a notice implementing changes to the
inspection standards without public comment in an emergency, defined as
``a significant health hazard, a new safety concern due to changing
construction technology, or another event as defined by the
Secretary.'' One commenter stated that HUD did not provide an example
of what changes would constitute an emergency under this definition,
and urged HUD to provide a comment period for all significant changes
made to the standards so that various stakeholders have an opportunity
to weigh in. Another commenter suggested that no type of severe health
or safety deficiencies, new safety concerns, or other events would
necessitate the Secretary to publish a final notice without 30 days of
public comment in the case of an emergency that permanently changes
inspection standards and scoring methodology. This commenter suggested
that the regulation should be amended to make it clear that any
regulations published without notice and comment will be implemented on
an emergency basis, time-limited, and subject to notice and comment
prior to final implementation. Another commenter suggested that if HUD
decides to proceed with emergency provisions without such a comment
period, there must be a grace-period of at least 30 days for
inspections that occur immediately following the release of the
emergency revision, and that such deficiencies should not negatively
impact a property's score for the first inspection which such emergency
revisions are included. A commenter expressed preference for a 30-day
public comment period on all published notices but understood health
and safety emergencies require swift action.
Commenters also noted that Sec. 5.709(a)(2) concerning emergency
revisions refers only to public housing and suggested that the
provision in the final rule should include all HUD housing.
HUD Response: HUD thanks commenters for their suggestions about the
process to announce and implement emergency provisions without public
comment. HUD believes that there are types of LT and Severe concerns
that would require an emergency notice, and as written in the final
rule the provision is available for ``HUD housing'', or programs
covered by this rule. When a significant health or safety hazard
exists, allowing 30 days for public comment before taking corrective
action may cause severe injury or loss of life. HUD intends to weigh
the exigency of the situation in advance of decisions and limit
provisions to a reasonable timeframe, or to the duration of the
declared emergency. HUD may also consider notices that are final upon
issuance but still include an option for comment.
Question for Comment #18: Definitions for Kitchens and Sanitary
Facilities
HUD sought input on whether and how it should define kitchens and
sanitary facilities. HUD received the following responses.
Comments Regarding Whether To Define Kitchens and Sanitary Facilities
Many commenters supported definitions for both kitchens and
sanitary facilities, stating that definitions would ensure everyone is
inspecting and providing the same standard across the board and that
doing so would help eliminate ambiguity during inspections.
Other comments opposed defining these facilities, suggesting they
are already adequately represented by local building codes and any
effort to standardize these definitions nationally could result in a
discrepancy between HUD's definitions and State or local approaches. A
commenter cautioned that defining these rooms could limit the number of
units available to voucher holders and may risk owner participation in
the HCV program if units do not meet HUD's proposed specifications.
Other commenters had suggestions for both standards. Commenters
suggested that HUD defer to local code or go no further than local
code. One commenter stated that a definition should be defined by the
number of fixtures, another stated that definitions should apply only
to new construction or properties that are renovated, and only if the
definitions match current building code. A commenter recommended that
if HUD decides to amend or change these definitions, HUD do so in a
uniform manner across programs; another suggested that the definitions
used in the HCV program are reasonable and should be used as a guide
for the purposes of NSPIRE.
A commenter suggested that the definitions be broad enough to
account for different types and eras of housing, such as variations in
SROs, micro-studios, and older housing. This commenter noted the NSPIRE
standards currently require kitchen ventilation or a range hood that
filters air to the exterior, a building design that is uncommon in
older homes and apartment buildings and which could be costly for some
owners to upgrade.
Comments Regarding How To Define Kitchen and Sanitary Facilities and
Their Related Components
Commenters supported defining a kitchen and its related components.
Commenters recommended that a kitchen be defined as having an
approved cooking appliance (such as a stove or oven with overhead vent
fan, range, or heating plate), a sink (with hot and cold running
water), a refrigeration unit, and a garbage disposal, sufficient light
and ventilation, and a minimum clear working space of 30 inches. A
commenter cautioned that HUD should keep in mind the size of the units.
A commenter recommended using the IPMC.
[[Page 30475]]
A commenter cautioned that HUD should not define ``functional
adequacy'' to allow stoves and refrigerators when they have outlived
their ``useful life'' because residents should not be saddled with
outmoded, unsightly, antiquated appliances that send a message that HUD
tenants are ``second class citizens'' or that that HUD tenants do not
deserve the best.
A commenter recommended HUD provide some flexibility to ensure that
units, like SROs for example, that do not have cook tops or other
components typically associated with kitchens are not penalized if the
unit does not come equipped with those components. A commenter urged
HUD not to regulate by equipment type.
Commenters supported defining a sanitary facility and its related
components, noting that the quality of these facilities in closely tied
to the ability of residents to be safe and healthy in their homes, and
HUD should clearly identify its expectations for these critical
facilities. A commenter stated that because bathrooms are more standard
than kitchens, it is appropriate to define a bathroom in the standards.
Commenters suggested HUD require a toilet, sink, and bathtub or
shower in sanitary, safe working condition. A commenter noted that this
would be consistent with the IPMC. A commenter noted that the bathroom
should have hot and cold running water.
Some commenters recommended a ventilation requirement to avoid
mold. Another comment noted that many building codes across the country
do not require bathroom ventilation, and as such ventilation should not
be considered a component required for functional adequacy unless it is
required by local codes.
A commenter suggested standards should reflect appropriate
standards for compact and micro units. A commenter suggested that a
bathtub be replaced with only a way of washing that is not necessarily
a shower or bathtub depending on the size of the unit. Another
commenter suggested a sanitary facility should also provide privacy to
those using the facility.
A commenter opposed adding a definition for sanitary facility and
stated that the inspectors are trained professionals and based on
general HUD guidance should be able to assess each component/fixture
normally tested during the NSPIRE inspection.
HUD Response: HUD appreciates the diverse comments received on
kitchens and sanitary facilities and agrees that there are variations
in different types and eras of housing, and that some level of
definition is needed. HUD will include definitions that align with the
American Housing Survey in the Administrative notice. Further, all HUD-
assisted units should meet a minimum standard for habitability, but
this definition could allow for some flexibility. HUD also reviewed how
kitchens and sanitary facilities are defined in the American Housing
Survey. As provided in the final regulation at Sec. 5.703(d) as an
affirmative habitability requirement, kitchens must have a sink with
hot and cold water, a cooking appliance, a refrigerator, food
preparation area and a food storage area. Sanitary facilities must have
a sink with hot and cold water, a bathtub or shower, interior flushable
toilet and be usable in private. For the HCV and PBV programs, the
regulations for Special Housing Types at part 982 subpart M will
continue to apply.
Outside of the minimum affirmative habitability requirements, the
NSPIRE standards will also account for health and safety concerns
related to kitchens and bathrooms, such as minimum ventilation and
mold. Additional information on the individual components, their
definition and functionality will be in the NSPIRE Standards notice,
within the relevant standard (e.g., Bathtub and Shower Standard,
Kitchen Countertop Standard).
Section 5.711 Scoring, Ranking Criteria, and Appeals
Comments Regarding Sec. 5.711(a), Applicability
A commenter recommended HUD include a cross-reference to the
Section Eight Management Assessment Program regulations in Sec.
5.711(a).
HUD Response: HUD notes that this cross-reference already existed
in HUD's proposed rule. HUD is keeping this cross-reference at the
final rule stage.
Comments Regarding Sec. 5.711(c)(1), Inspection Requirements
A commenter objected to expanding what qualifies as an exigent
health and safety deficiency in need of a 24-hour work order as
unnecessary.
A commenter urged HUD to provide a formal mechanism for residents
to raise challenges to the certification and supporting evidence to the
HUD Field Office that must be investigated and addressed.
Commenters noted that the proposed rule's preamble stated that
severe health or safety deficiencies would have to be addressed within
24 hours, while other deficiencies would need to be corrected within 30
days, but the text of paragraph (c)(1) only discusses severe health or
safety deficiencies that must be ``mitigated'' within 24 hours and
paragraph (c)(2) merely directs an owner to correct non-life-
threatening severe health and safety deficiencies ``expeditiously''--
not within 30 days. Commenters urged HUD to clearly require an owner to
correct non-life-threatening severe health and safety deficiencies
within 30 days. A commenter noted that establishing clear timelines for
redressing deficiencies is paramount to health and safety of citizens,
and noted that deficiencies may be regionally contextual, such as the
failure of HVAC in a warm climate in summertime.
Commenters objected to the term ``mitigated'' as it does not mean
to eliminate or abate and recommended HUD use ``corrected or resolved
or sufficiently abated.''
A commenter recommended that HUD should state the party responsible
for the physical inspection will provide the owner and PHA with the
entire physical inspection report (electronically through the internet
or by mail), which provides the physical inspection results and other
information relevant to inspections, including all deficiencies,
similar to the language currently in Sec. 200.857(c)(1).
HUD Response: HUD is designing its NSPIRE standards with the goal
of prioritizing the health and safety of residents. In this final rule,
the term ``Severe Health and Safety'' is revised to LT to better align
NSPIRE to the terminology and correction time frames in HOTMA. As
described in the NSPIRE Standards notice, LT deficiencies are those
that, if evident in the home or on the property, present a high risk of
death or severe illness or injury to a resident. For the HCV and PBV
programs, HOTMA also defines the response times for LT deficiencies to
be corrected within 24 hours, and for all other deficiencies to 30
days. Because different deficiencies will have different ways to
resolve the deficiency, the expectation for what can be completed in
these time frames will be adjusted, while still allowing for some local
flexibility and discretion. For a LT deficiency in the context of
Multifamily and Public Housing, ``corrected'' means that the PHA or
owner has either completed all repairs, or at least controlled or
blocked access to the hazard in a manner that it no longer poses a
severe health or safety risk to residents of the property. HUD
recognizes that to permanently repair some deficiencies, the PHA or
owner may need additional time for a licensed professional or
specialized supplies that may not be available in a 24-hour
[[Page 30476]]
timeframe. Guidance for correction timeframes and evidence that
correction is complete is in the Administrative notice. Repairs will
vary by the component and level of deficiency, and some mitigations
will be approved on a case-by-case basis to meet the statutory and
regulatory timeframes. For example, if a PHA has to procure specialized
or certified trades professionals, it may take 30 days just to prepare
a request for proposals and get approval from the Board of
Commissioners.
HUD does not agree that all non-life-threatening deficiencies can
be completely resolved in 30 days or less and wants to retain the
flexibility already available. Some deficiencies may be property-wide,
require special expertise, and/or the services may not be readily
available to fully address the deficiency. HUD also appreciates that
some deficiencies may be exacerbated by local conditions, especially
local climates, and this should be considered to ensure the health and
safety of residents. For LT deficiencies, HUD has used the term
``corrected'' to align with HOTMA. If the PHA or owner at least
prevents or blocks potential harm to residents in 24 hours, more
extensive repairs can be done over a longer time frame, with approval
from HUD and as described in the NSPIRE Administrative notice. HUD can
also allow temporary relocation of residents as a method to prevent
harm to residents while repairs are completed. In some cases, temporary
relocation of residents is required.\16\ Under Sec. 5.711(c)(1), the
deficiency must be corrected, and owners and PHAs cannot simply block
access in perpetuity. With respect to comments about providing the
owner with a copy of the inspection report, HUD is developing
technology solutions to provide quick, seamless transmittal of results
to owners and agents.
---------------------------------------------------------------------------
\16\ See, e.g., Sec. 35.1345(a)(2).
---------------------------------------------------------------------------
Comments Regarding Sec. 5.711(c)(2), Post-Report Inspection
A commenter stated that submitting all work orders related to an
NSPIRE inspection would be an unnecessary administrative burden and
noted HUD did not provide a rationale for requiring this data or plan
for how HUD would use it. This commenter questioned whether HUD has the
capacity to review and respond to such a data flood effectively and
consistently and asked if HUD is going to require PHAs/POAs to use a
specific type of maintenance work order reporting platform.
A commenter suggested Sec. 5.711(c)(2) should be modified to
remove the extra post-inspection 100 percent self-inspection, noting
that this is now a second 100 percent self-inspection and a REAC
inspection in one year, and that three inspections in one year is
burdensome to owners and managers.
HUD Response: At the final rule stage, HUD has changed the
reporting requirement to only apply to LT and Severe deficiencies, and
offered flexibility to combine the self-inspection under Sec. 5.707
with the post-report inspection described in Sec. 5.711(c)(2).
Comments Regarding Sec. 5.711(c)(4), Technical Review of Inspection
Results
Commenters noted in Sec. 5.711(c)(4) the language references
``four sources of error'' but there appear to be only three sources.
Commenters supported making the ``fourth source of error'' the
currently entitled ``database adjustment'' and suggested it should be
moved to this section.
A commenter recommended HUD indicate that the basis for a technical
review is a material error associated with the physical inspection
score, and that building data errors, unit count errors, and non-
existent deficiency errors are types of material errors.
A commenter suggested that paragraph (c)(4)(ii) be amended such
that HUD's system of records do not actually need to be updated, but
the owner only needs to notify HUD and request that HUD's system of
records is updated, to account for situations in which it is not the
owner's fault that the system is not updated.
HUD Response: HUD agrees that the numbering of this part of the
proposed rule was incorrect. HUD has corrected this numbering. HUD is
also amending the final rule to restore the language for database
adjustments in Sec. Sec. 902.24 and 200.857.
Comments Regarding Sec. 5.711(d), Technical Reviews
A commenter supported the extension of technical review submission
from the current 30 days to 45 days and the ability for electronic
submissions. Another commenter opposed the change because the increased
time period to submit a request for a technical review would unduly
delay the remediation of deficiencies at properties, particularly in
light of HUD not including a time period for which a PHA or owner must
complete its survey of the property and remediation of any non-life
threatening severe health and safety defects. This commenter also asked
HUD to define what day will be considered the ``day of release'' of the
physical inspection report.
HUD Response: In this final rule, HUD has retained 45 days in Sec.
5.711(d) for technical reviews. The technical review process should not
delay the process to remediate deficiencies. LT conditions will still
require correction in 24 hours. With regard to ``day of release,'' HUD
has revised this term to be ``the day the inspection report is provided
to the owner or PHA.''
Comments Regarding Sec. 5.711(d)(2), Request for Technical Review
A commenter noted that currently REAC can issue a new physical
condition score or keep the same physical condition score and asked why
HUD needed to change this option. This commenter stated that in order
to fully comment on this HUD should provide the parameters pursuant to
which REAC will make these determinations and urged that REAC should
only undertake a new inspection if the owner requests it. Another
commenter urged HUD to accept for review any property's technical
review regardless of the number of points at stake for any individual
property.
HUD Response: HUD appreciates the feedback and will discuss this
matter in the subordinate Administrative Procedures notice.
Comments Regarding Sec. 5.711(d)(3), Burden of Proof That Error or
Adverse Conditions Occurred
A commenter agreed that the burden of proof should rest with the
PHA/POA, but noted HUD has the obligation to carefully consider the
evidence presented, to research and carefully examine the protocol,
guidance and precedent, and to provide a response that lists what was
considered and the reasoning for the decision so that the response
serves as a teaching tool, providing insight about the deficiency in
question, not just to those who requested the technical review, but to
others as well.
A commenter suggested all technical reviews and decisions need to
be available and accessible to the public to provide residents the
ability to know more about the final result of the inspection, serve as
a teaching tool for PHAs/POAs who can see if there is any precedent for
a deficiency they are attempting to appeal, and ensure a more
consistent application of the protocol by inspectors who will be able
to see if they are citing deficiencies that are non-existent. This
commenter noted that REAC has rejected documentation and arguments that
they previously accepted without any explanation as to the change in
standards.
A commenter recommended HUD should revise ``owner'' to read ``owner
or PHA'' in Sec. 5.711(d)(3) for clarity.
[[Page 30477]]
HUD Response: Details regarding burden of proof are included in the
Administrative Procedures notice which will be published before this
final rule is effective. HUD regularly used ``owner'' for either the
PHA or Multifamily owner entity but has revised the regulations that
apply to both PHAs and owners to indicate applicability more clearly.
Comments Regarding Sec. 5.711(d)(5), Significant Improvement
A commenter asked how ``significant improvement'' is to be
interpreted and noted that for any one property, even a 1-5 point
improvement in a score might not move that property's ranking from one
level (such as standard) to another (high performer), but can
collectively within a portfolio improve the PHA's overall PHAS score.
HUD Response: HUD agrees that moving a ranking level up (e.g.,
substandard vs. standard) is significant. The term ``significant
improvement'' was included to ensure that PHA, owner and government
resources are used efficiently. Additional details about the technical
review are in the Administrative Procedures notice.
Comments Regarding Sec. 5.711(d)(6) Reinspection
A commenter believed that HUD should bear the expense from
reinspection where HUD determines that the reinspection is required,
and suggested that if there is a threat to the inspecting party of
bearing the cost if the new inspection score results in a significant
improvement, then that inspection will not be impartial. This commenter
also noted that if a PHA/POA has the threat of bearing the cost if no
significant improvement occurs, that will have the effect of
discouraging them from requesting the technical review even if they
strongly believe there was an error.
A commenter cautioned that an inspector could fail a site to get
additional money from reinspection, and also that tenant-induced damage
or a tenant's refusal to allow access could lead to a fail that
management does not deserve.
Commenters asked for clarification on what HUD considers a
reasonable inspection fee. A commenter opposed HUD determining whether
a reinspection is appropriate and suggested that the inspection occur
only upon request from an owner or manager, and that HUD should make
the inspection within 30 days of the owner's request.
HUD Response: HUD appreciates the comments on issues surrounding
reinspection and cost, but has decided not to change this language at
the final rule stage. If a new inspection is undertaken by the
inspecting party and the new inspection score results in a significant
improvement in the property's overall score, the entity responsible for
the inspection shall bear the expense of the new inspection. If no
significant improvement occurs, then the owner or PHA responsible for
the property must bear the expense of the new inspection. Owners and
PHAs can collect reasonable fees for tenant damages through lease
enforcement.
Comment Regarding Sec. 5.711(d)(7), Deficiencies
A commenter suggested Sec. 5.711(d)(7) is punitive and the triple
point deduction should be removed as it would bar earnest owners and
managers from appealing or requesting reinspection.
HUD Response: HUD appreciates the commenter's feedback and accepts
this recommendation. The regulations include other enforcement
mechanisms to ensure that deficiencies are corrected.
Comments Regarding Sec. 5.711(e) Independent HUD Review
A commenter also suggested that ``modernization work in progress,''
which is a common ground for appeal for aged properties undergoing
moderate substantial rehabilitations, should be grounds for independent
HUD review. A commenter noted the language in the proposed text mirrors
24 CFR 200.857(e)(1), but the proposed language does not include
``owners'' and recommended HUD include ``owners'' in the proposed
language along with PHAs to ensure clarity. A commenter also urged HUD
to include the process and timing for requesting a score adjustment in
the final rule for clarity.
HUD Response: Modernization work in progress was previously
included in Sec. 902.24(c) and was not included in the proposed rule.
HUD has added this language at the final rule stage. The final rule
keeps the proposed rule's requirement that a score adjustment request
be made no later than the 45th calendar day following the release of
the inspection report. Because the basis for the technical correction
may be complicated, HUD has not provided a limit on the time it may
take to review these requests. HUD intends to provide additional
information on this issue in guidance.
Comment Regarding Sec. 5.711(f) Responsibility of Final Score and
Publication of Scores
A commenter stated there should be no reinspection mandated by HUD
outside of the 2-5-year range or as required by statute and only the
owner should be able to request reinspection. This commenter also
suggested HUD should have clear guidelines around when and how it will
grant a reinspection to requesting parties and noted that the new
inspection score should be considered the final score only if the owner
requested it.
HUD Response: HUD appreciates the feedback but disagrees with the
commenter's perspective. Reinspection can be a necessary tool for HUD
to review score disputes and to conduct oversight at properties and
ensure compliance with the regulatory agreement at the property. While
having some guidelines around how reinspections will be conducted is
appropriate, HUD needs to have the flexibility to make dynamic
decisions to reinspect in response to emergency situations. Once a
reinspection occurs the resulting score will become a score of record
and will be made available to the owner.
Comments Regarding Sec. 5.711(g) Issuance of Final Score and
Publication of Score
A commenter stated it is unclear whether posting of the final score
will be publicly available and suggested HUD must maintain
confidentiality in terms of providing access to reports or ownership
information and this should be clarified. Another commenter requested
HUD correct Sec. 5.711(g)'s two references to paragraph (c), stating
that both of these references should be references to paragraph (e).
HUD Response: The final rule keeps the proposed rule's language at
Sec. 5.711(g) that HUD will make final scores public on HUD's internet
site or other appropriate means. Section 5.711(h) also provide a
process for owners, managers or PHAs to notify residents of inspections
and make the results available. HUD regularly publishes its REAC
inspection scores on the HUD website for both Public Housing and
Multifamily properties: www.huduser.gov/portal/datasets/pis.html. HUD
program areas also maintain websites with certain data. The Office of
Multifamily Housing regularly publishes REAC inspection scores here:
www.hud.gov/program_offices/housing/mfh/rems/remsinspecscores/remsphysinspscores.
[[Page 30478]]
Under Sec. 5.711(h)(2), tenants may request to view inspection
reports after the 45-day appeals process is complete. Section 5.711(h)
is based on and replacing the old Multifamily Housing requirement which
was previously included in 24 CFR 200.857(g). HUD has corrected the
citation to paragraph (c) to paragraph (e) and thanks this commenter
for identifying this incorrect citation.
Comments Regarding Paragraph (h)(1), Notification to Residents
Commenters suggested HUD require 7-days notice to residents before
an inspection, with a minimum notice of 48 hours, or at least the time
period proscribed by State and local law. A commenter noted that the
current 24 hours is not enough time for residents to prepare their
units or make appropriate arrangements.
Commenters suggested owners be required to explain to residents the
details about the inspection such as why it is happening, residents
must be informed of their right to be present during an inspection, to
identify problems to the inspector, to meet with the inspector prior to
its start, and to designate a tenant representative to accompany the
inspector on their rounds. Commenters recommended HUD prescribe
specific, plain language for owners to utilize regarding REAC
inspections, as it does for Section 8 Opt Out Notices, to mitigate this
problem.
A commenter suggested that HUD clarify that notification to
residents must be done in accordance with the resident lease.
HUD Response: HUD appreciates the feedback but declines to expand
the language in this provision to include a 48-hour to 7-day
notification window for unit/property inspection. Notification
requirements are already included in leases and will vary by owner and
program. In the Public Housing program, for example, the model lease
requires at least 48-hours notice. HUD therefore declines to revise
this requirement in this rulemaking.
With respect to additional tenant guidance regarding the inspection
process, this final rule does require owners and PHAs to post in the
management office and on common bulletin boards availability of the
final inspection report for review along with supporting documents and
correspondence as specified in Sec. 5.711(h)(2). HUD continues to seek
avenues to expand tenant participation in the NSPIRE inspection process
which will be addressed in subordinate notices via the Federal Register
and available for public comment.
HUD supports the suggestion to include language that notification
should also be in accordance with the resident lease, as this is
consistent with current practices.
Comments Regarding Paragraph (h)(2), Availability of Documents for
Review
Commenters recommended that these documents should be provided at
no additional cost. A commenter recommended HUD specify that documents
available for review, including but not limited to the REAC inspection
Report and related correspondence and the results of any re-inspection
and appeals, should be available for residents to copy during normal
business hours upon request.
Commenters recommended owners and agents should be required to
retain these documents for inspection or review by tenants or the
tenant association for five years, not just the current 60-day
limitation. A commenter stated this would echo the five-year retention
and availability provision of the statute creating the Comprehensive
Housing Affordability Strategy (CHAS), one of the statutory
underpinnings of the Consolidated Plan. Another commenter recommended
removing the time limit requirement entirely.
HUD Response: As stated in Sec. 5.711(h)(2)(i) of this rule,
tenants of HUD housing have a right to review and copy the final
inspection report and related documents upon reasonable request during
regular business hours. There is no cost associated with reviewing the
documents. The rule language specifies related documents include the
owner's survey plan, plan of correction, certification, related
correspondence, appeals, reinspection, etc.
HUD declines to mandate a longer document tenant-review period.
Program record retention periods are determined in accordance with
agency document retention policies and applicable Federal law. Because
property conditions can change over time, inspections that are four or
five years old may not still be current. Members of the public
interested in older property inspection information from REAC can
submit a Freedom of Information Act (FOIA) request to HUD.
Comments Regarding Paragraph (h)(3)
A commenter asked for more details regarding the required date on
which the notice must be posted and the duration of the posting.
Commenters recommended HUD add that the materials provided by the
owner for resident inspection should include the owner's certification
that severe health and safety deficiencies have been abated within
three days and the owners' materials should also be provided to any
legitimate tenant association, as defined by HUD at 24 CFR part 245,
subpart B.
Commenters also recommended HUD require that the notices in Sec.
5.711(h)(3) should encourage residents to comment directly to the HUD
Field Office with the name of the responsible Field Office staff and
their direct phone number and email address, and Field Office staff
must acknowledge receipt of comments from residents with seven days of
receipt and respond substantively within 14 days.
HUD Response: HUD agrees and added a requirement that owners and
PHAs post this notice within three days of the inspection. HUD also
appreciates the feedback that the rule should require owner
certification that severe health and safety deficiencies have been
corrected. This final rule keeps language from the proposed rule that
states that certification must be made available for tenant review and
copying, which would include severe health and safety certification.
HUD believes the final rule language addresses the commenters' concerns
by keeping language from the proposed rule that requires that the
owner's posts include the name, work address and telephone number of
the HUD Account Executive and tenants are encouraged to contact HUD
with any concerns or noted discrepancies.
Comments Regarding Sec. 5.711(i) Administrative Review of Properties
Commenters recommended residents should receive notice and DEC
should be obligated to consult residents when evaluating the property.
Commenters recommend that HUD add that owners must post the notice
regarding submission of the property for DEC evaluation and enforcement
to tenants explaining what a below 30 score means, why the property has
been referred, and what that implies. A commenter suggested the
explanation must state that transfer of the file does not mean the
subsidy will be terminated but is a process to address concerns and
bring the property into compliance. A commenter suggested tenants and
their representatives should be encouraged to submit their own comments
to DEC, if they choose. A commenter noted it has often been the efforts
of residents and advocates that have resulted in the preservation of
assisted properties and improved housing conditions for families.
A commenter recommended HUD amend paragraph (i) to clarify that
documents, reports and correspondence
[[Page 30479]]
between the owner and DEC shall be made available to residents and
their representatives, with the aim of including their input in DEC's
analysis, recommendations and remedial action, before final decisions
are made, consistent with Housing Notice 2018-8.
Commenters supported paragraph (i)(2) but stated that DEC's
analysis ``may'' include input from tenants, along with HUD, elected
officials and others and requested should be changed to ``shall'', and
that any subsequent site visit by DEC to the property include a meeting
with residents and/or the legitimate tenants association, if any.
A commenter recommended HUD clarify that ownership and management
need 2-week advance written notice of DEC evaluation site visits.
A commenter noted that the proposed rule did not incorporate
important language about DEC's compliance and enforcement from 24 CFR
200.857(h)(2) and (i) and urged HUD to include it, especially regarding
supporting and relevant information and documentation, and the
development of a compliance plan.
A commenter suggested HUD should make information regarding
enforcement actions taken by HUD publicly available and noted proactive
residents and local advocates are essential to the type of efficiency
HUD says it is seeking, such that HUD must publicly provide property-
level information regarding conditions, mortgage maturity dates,
housing assistance payment contract expiration dates, and HUD's actions
to enforce its programmatic requirements.
HUD Response: Referrals to the DEC will be automatic for Public
Housing and Multifamily Housing properties that score 30 or below.
Properties receiving two successive scores of less than 60 may also be
referred. Additional information about this process will be in the
Administrative notice including a requirement that the PHA, owner or
agent must provide a copy of notification of referral to the Department
Enforcement Center to residents and certify it has done so by
reasonable means such as leaving a notice under each door, posting in a
mail room and on each floor, which is consistent with past practice
outlined in Housing Notice 2018-08. HUD is not planning any additional
notice or communication to residents or the public about referrals to
the DEC, or information about the investigation and follow up, but the
public has the right to submit a Freedom of Information Act Request. If
a DEC review includes unit inspections, residents will receive
notification in accordance with their lease. HUD declines to include a
two-week notification requirement to owners and PHAs in regulation for
site visits. HUD acknowledges the role tenants and advocates play in
identifying conditions in housing and advocating for repair and
preservation of existing affordable housing but declines to require
that all administrative reviews include tenant input by adding
``shall.'' HUD believes that the addition of tenant participation into
the REAC inspection process via the NSPIRE final rule gives residents a
substantive feedback apparatus and that additional tenant participation
during a DEC referral should be at the discretion of the DEC after
consultation with program offices. Additional administrative procedures
will be provided in a subordinate notice. This notice will include
guidance on supporting and relevant information and documentation and
the development of a compliance plan.
Other Comments Regarding Sec. 5.711
A commenter suggested HUD remove ``significant'' from ``significant
improvement'' in paragraphs (c)(3) and (d)(2), and other instances.
This commenter stated there is no intent to waste the Department's time
with appeals and to make an appeal takes time and resources from the
owner or manager appellant, such that this is a sufficient bar to
frivolous appeals. This commenter noted that under the current scoring
system, it is not simple to ascertain whether different appeals will
result in improvements to the score and going from a 29 score to a
score of 32 may not be ``significant'' in terms of scoring, but is
significant enough to withdraw a trigger for DEC referral. This
commenter noted that increasing your score from a 59 to a 61, while not
being a ``significant'' improvement in score, does take an owner or
manager from ``failing'' to ``passing.''
A commenter recommended generally that tenants, legitimate tenant
associations, and their representatives be given Notice, Comment and
Appeal rights parallel to owners and agents, at each step of the REAC
process and requested that HUD recognize this explicitly at each step,
and allow tenants to post comments and photos electronically and/or in
writing, in response to each stage, from initial inspection report; a
final report after technical appeals; and an owners certification that
severe health and safety citations have been addressed.
A commenter recommended HUD set a stationary scoring threshold to
be used to refer properties to the Departmental Enforcement Center
(DEC) and retain HUD's ability to send properties scoring higher than
the stationary threshold to DEC so that HUD sets clear expectations for
the owner, residents, and advocates regarding what will trigger HUD's
enforcement action. This commenter noted HUD's current enforcement
practices for specific properties are often inaccessible or unknown to
residents and advocates. This commenter stated that the stationary
scoring threshold should not be lower than 30 and suggested HUD also
consider if properties scoring at the specified threshold generally
have numerous life-threatening severe health and safety deficiencies,
have difficulty correcting the defects within the HUD given timeframe,
have difficulty substantially raising their score in the subsequent
inspection, and have numerous State or local code violations.
HUD Response: HUD appreciates the feedback but declines to
implement the suggested revisions with respect to use of the term
``significant'' in paragraphs (c)(3) and (d)(2). This language was
added to discourage owners and PHAs from requesting technical reviews
that will likely not result in substantial change to the score. In
drafting this regulation, HUD considered current Federal resources and
the administrative burden that technical reviews require and
establishes a basis for HUD to decline a request.
With regard to expanding tenant participation in the appeals
process, HUD will continue to explore the appropriate ways in which to
engage tenants in the NSPIRE inspection process outside of what is
already included in Sec. 5.711(i)(2). Adding a required tenant element
to this process would be administratively challenging for HUD, the DEC,
PHAs and owners and could delay case resolution. Consultation with
residents will remain as an option under the regulations. Tenant
participation outside of administrative referrals will be outlined in
future subordinate notices published in the Federal Register.
The scoring threshold for DEC referrals will be 30 and under, and
properties that score under 60 in two successive inspections. The
language in Sec. 5.711(i)(1) and (3) has been revised to reflect that
this process will include both Multifamily housing programs and Public
Housing and the relevant HUD program offices. The addition of
properties with scores of less than 60 in two successive inspections
matches the current process outlined in Housing Notices H 2015-02 and
2018-08. HUD notes that an administrative referral to the DEC is not
the only way HUD's program offices follow up on physical deficiencies.
Staff in HUD's program
[[Page 30480]]
offices, field offices and the Performance-based Contract
Administrators (PBCAs) also do this oversight and follow-up. HUD will
take this feedback into consideration as it details administrative
procedures in subordinate notices.
Question for Comment #19: How To Approach Tenant-Induced Damage
HUD solicited comment on how to fairly approach tenant-induced
damage and received the following responses.
Comments Regarding Problems Caused by Tenant-Induced Damage
Commenters noted that tenant-induced damages can be expensive and
often go unreimbursed. A commenter stated that HUD has long been aware
of the problem of tenant-induced damage and should have acted long ago.
Commenters noted HUD's intended update to inspectable areas would
increase the weight of in-unit scoring, which has the potential to
significantly increase the impact of tenant-induced damage on the
scoring.
Commenters stated that the biggest problem with tenant-induced
damage isn't the cost of repair but being penalized by HUD for the
damage. A commenter noted that most repairs can be easily handled in
due course, another noted that tenant-induced damage can be inside and
outside the unit.
Commenters noted that properties are often not aware of tenant-
induced damage and that scoring physical deficiencies caused by tenants
forces owners to invade residents' privacy to check for tenant-induced
damage.
A commenter identified the following as types of tenant-induced
damage: (i) deficiencies for blocked egress where a tenant has moved
furniture in front of doors and windows, even after owner or its agent
has requested that the item be moved and verified that it was moved;
(ii) resident installed fans and air conditioning units; (iii) improper
storage of items in the oven by residents; and (iv) condition of tenant
owned appliances over which the owner has no control.
A commenter stated that owners and managers often use ``tenant
induced damage'' as an excuse to avoid responsibility for ordinary wear
and tear, or other damage not induced by the tenant to pass along
charges to tenants, and to harass tenants. This commenter noted that
owners and agents blame tenants for mold in their units, when the mold
is due to the presence of moisture caused by water leaks and poor
ventilation. This commenter stated that owners and managers seek to
foist on residents charges through questionable ``House Rules'' for
items which should be part of the ordinary maintenance of the property
such as lightbulb or lock/key replacement. This commenter recommended
HUD investigate this matter further and carefully construct future
rules on this matter with consultation from tenant leaders and legal
service agencies.
Support for HUD's Current Method of Handling Tenant-Induced Damage
Commenters stated that HUD should not treat tenant-induced damage
differently because tenant-induced damage is still damage and an
indicator of a problem that needs to be addressed by property
management.
Commenters stated that sufficient protections are already in place,
noting that: tenant-induced damages are already addressed by current
regulatory provisions under family obligations which covers
disincentives and program termination; the owner already has the right
to pursue damages against the tenant; many housing authorities already
include tenant damage charges in their ACOP and in their standard
leases; properties can collect security deposits, and properties can
have systems in place to deal with extraordinary damage caused by
tenants.
HUD Response: HUD understands the commenters' concerns about the
potential impact of tenant-induced damage on costs, scoring, and the
burden of additional owner/management inspections. The Department also
appreciates the comments and concerns about normal wear and tear and
ownership responsibilities of maintaining units. PHAs and landlords can
use policies and lease enforcement to prevent and collect fees for
tenant damages. With the addition of affirmative habitability
requirements in Sec. 5.703(d) there is a clear expectation that the
landlord is responsible for certain elements of the unit. If there are
tenant-owned items cited in the inspection, the PHA or owner can
request a technical review.
For units in the HCV and PBV programs, HOTMA provides that if a PHA
determines that any damage (other than any damage resulting from
ordinary use) was caused by the tenant, the agency may waive the
applicability of the housing quality standards, except as it applies to
the tenant. As HUD progresses with notices around Scoring and
Standards, the Department will continue to seek to strike a balance to
hold all parties accountable to their responsibilities outlined in
their respective contractual documents and HUD guidance in caring for
and maintaining units.
HUD generally agrees with the sentiment that damage, regardless of
the source, must be addressed and that excessive tenant-induced damage
may also indicate problems with property management and enforcement of
lease provisions and house rules. Lease agreements and security
deposits are essential vehicles for managing these issues.
Comments Regarding Incentives
Several commenters stated that landlords should use existing tools
to handle tenant-induced damage. Commenters suggested that property
owners should hold residents accountable for severe damage to units by
issuing lease violations, going through mediation, charging for the
damages, terminating the tenancy, and evicting tenants. Commenters
recommended that properties use minimum monthly repayment agreements.
Commenters suggested that providing a list of potential charges at
move-in might help discourage a tenant from damaging the unit beyond
normal wear and tear; one commenter suggested properties serve a 3-day
notice to quit in situations where the amount of damage is equal to a
year of rent.
Commenters recommended several incentives to tenants for
maintaining their units, including: a gift card for the best kept unit
administered by the management/owner, yearly community awards,
privileges, recognition ceremonies for the apartment/unit/block/
building kept in best conditions, rent incentives, a small saving
account with deposits for taking care of units, or a new microwave.
Other commenters noted that the incentive to maintain the unit should
be the opportunity to live in the unit, and most do maintain their
units. A commenter suggested that owners and PHAs can establish
incentive programs if they want to.
A commenter noted that non-MTW PHAs do not have funding flexibility
to provide creative incentives outside of current regulatory provisions
and funding levels; another noted a disincentive requiring residents to
pay additional charges due to damage and neglect would not work because
residents would not be able to afford to pay.
HUD Response: HUD agrees that owners and agents must abide by their
rights and responsibilities which includes enforcing lease provisions
and house rules and PHA policies alongside of their responsibilities to
maintain the physical condition of the property. PHAs and owners can
ensure that
[[Page 30481]]
residents are aware of policies, understand their responsibilities, and
collect reasonable fees for damages. PHAs and owners can also stay
abreast of property conditions with regular inspections and the annual
self-inspection process included in NSPIRE. HUD also agrees that
additional punitive financial charges above what is allowed in the
lease provisions and security deposit administration would likely not
be an effective means to discourage tenant-induced damage.
Comments Regarding How Inspections Should Take Into Account Tenant-
Induced Damage
Commenters stated that tenant-induced damage should not be scored
against an owner or PHA. One commenter stated, in the alternative, that
tenant-induced damage should result in the minimum point deduction;
another suggested that tenant-induced damage should count only if the
PHA failed to address it. Commenters suggested adding an appeal option
to allow demonstrating that damage is repeatedly caused by tenants and
repaired by the owner. A commenter suggested that if the owner can show
the tenant caused the damage, the owner should not be sanctioned or see
score reductions through the NSPIRE process.
Commenters suggested that HUD should use an advisory approach which
allows properties to remove deficiencies for superficial damage that is
likely to have occurred in the days immediately preceding the
inspections, or if the damage was not reported to the property by the
tenant, if the owner submits work orders showing the repairs within a
certain number of days following the inspection. A commenter suggested
that inspectors negate any point deductions where the housing authority
can provide documentation to substantiate resident noncompliance as is
often required when these lease infractions are taken before local
courts.
A commenter suggested that HUD allow a property to negate points if
they can identify a significant number of such deficiencies
attributable to an individual unit that are not present in other units
in the sample and are otherwise unreflective of the property condition.
A commenter suggested an inspector should be given latitude to assign
blame for damage to a resident and not the property management. Another
commenter suggested that a property could gain points back based on
especially pristine condition of a property.
HUD Response: HUD appreciates the feedback but disagrees with the
comments suggesting that tenant-induced damage not be scored as part of
an inspection. HUD believes this approach would be overly subjective as
it is not always clear what damage may be tenant-induced versus normal
wear and tear. Additionally, inspectors would not be able to account
for poor property management or other potential factors. Scoring should
reflect the overall condition of the property regardless of the source
of the damage, and inspectors will not be able to fully assess and
determine responsibility for damages while onsite. With respect to the
comment regarding pristine properties, HUD believes NSPIRE will result
in scores that accurately reflect the health and safety of a property.
If a property is pristine, it will be reflected in the inspection
score.
Other Suggested Changes
Commenters recommended that HUD support lessor rights under the
lease. Other commenters recommended that the HUD lease be modified to
include language such that the lease is more enforceable regarding
property damage.
Commenters made several additional specific recommendations with
respect to tenant-induced damage, including: that HUD clearly define
``tenant-induced damage,'' provide guidance on what timeline is
appropriate for tenant-induced damage, and provide guidance on what
legal recourse is available to the owner; that HUD make distinctions
between tenant-induced damage and wear-and-tear and provide clear
examples; and that tenants receive training on how to maintain their
home and how the condition of their home impacts their health and
safety.
Commenters recommended HUD allow the collection of a security
deposit or increased security deposit that can cover damages, with one
commenter noting that many programs currently have a limit on what can
be collected. A commenter requested that HUD permit payment of surety
bonds in programs where payment of security deposits is an eligible
program expense which would result in a cost-savings to the tenant and
the program, and would protect the asset to a greater degree for less
cost than a traditional security deposit.
A commenter suggested that tenant-induced costs should be
reportable similar to debts owed to PHAs. Commenters suggested that
tenant-induced damage could be a sign that the tenant needs additional
resources from HUD such as resident service coordinator assistance, or
help with behavioral or other problems.
Commenters suggested that PHAs should have the discretion to
disallow transfers both within the program and between programs (from
Public Housing to HCV for example) if the tenant has caused damage. A
commenter suggested HUD explore reduced utility reimbursements, or
ineligibility to receive utility reimbursements, for tenants who cause
damage.
A commenter recommended that HUD require notice and opportunity to
respond, with copies to HUD, to tenants who are assessed charges or
fees for alleged ``tenant-induced'' damage. A commenter suggested HUD
conduct listening sessions with both tenant and owner stakeholders on
this topic to determine the best path forward.
HUD Response: Regarding comments on lessors and the lease, HUD
supports a balanced approach where all parties to the lease agreements
understand their rights and responsibilities. HUD appreciates the
feedback on providing further clarification and guidance on tenant-
induced damage. Regarding HUD's ability to provide guidance on legal
recourse, State and local jurisdictions administer landlord-tenant laws
and eviction processes vary by jurisdiction.
Regarding resident training or service coordinators, HUD encourages
Multifamily owners and agents to speak with their Account Executive
about service coordinator funding opportunities and eligibility. HUD
also encourages owners and agents to explore local social service
providers who may help assisted residents with housekeeping skills. Any
participation with social services must be voluntary, and providers
must comply with nondiscrimination laws.
With respect to suggestions related to security deposits, surety
bonds, debt reporting, and punitive responses to tenant-based damage,
HUD believes these program issues are beyond the scope of this rule.
Insufficient Information
A commenter stated that due to the weight HUD will place on unit
condition, there is insufficient information about how HUD will address
tenant-created issues.
HUD Response: REAC inspectors will not consider whether tenants
caused the damages that lead to the deficiency, because they will not
be able to fully assess and determine responsibility for damages while
onsite. For the HCV and PBV programs, however, the PHA may provide more
flexibility to owners as provided in a future HOTMA rulemaking. HUD
will publish a Scoring notice before this final rule becomes effective.
[[Page 30482]]
Question for Comment #20: Scoring Threshold for Referring Properties to
the DEC
HUD sought input on the scoring threshold to use for referring a
property to the Departmental Enforcement Center. HUD received the
following responses.
Factors To Consider
Commenters recommended HUD periodically review its referral system,
and a commenter recommended this review be in consultation with tenants
and other stakeholders. A commenter recommended HUD develop a threshold
that includes automatic referral to the DEC when certain significant
issues are discovered, such as: structural concerns, severe roof
conditions, foundation failure, significant water intrusion, or severe
exterior dilapidation or deterioration. Another commenter recommended
that HUD consider building code violations, abatements and emergency
fail items.
A commenter recommended that HUD elaborate that the DEC may include
input from residents in its analysis of the property, noting that
tenants have not been able to consult with the DEC recently and that
FOIA requests to the DEC for a copy of REAC report and scores have
denied on the grounds that the referral is a ``judicial proceeding.''
This commenter noted that this type of consultation is important to
ensure that HUD pursues the proper remedies and pursues termination or
abatement only as a last resort option, by seeking input from residents
as to the most appropriate remedy.
HUD Response: HUD will take the input regarding its referral system
and factors that it should evaluate in its administrative referrals to
the DEC into consideration. The basis for referrals under NSPIRE will
be the property score. More information on the scoring process will be
provided in the NSPIRE Scoring notice. Section 5.711(i) covers
administrative enforcement of the NSPIRE Standards and regulations,
which may include elements of structural concerns, severe roof
conditions, foundation failure. Other building code violations that are
not in the NSPIRE Standards would not be enforced by HUD unless
specified in HUD program regulations (e.g. 24 CFR part 92 for HOME and
24 CFR part 93 for HTF). HUD will consider better information sharing
with State and local code enforcement agencies. Regarding sharing of
information under review by the DEC, many areas of enforcement are
exempted under FOIA. HUD will provide other avenues for resident input
and notification through its field offices. Where there are direct
impacts to residents--such as a need for temporary or permanent
relocation, there are other resident notification processes in other
HUD regulations. That process is not part of the NSPIRE rulemaking.
Point Based Referrals
Commenters recommended that HUD keep the DEC threshold as stable as
possible and maintain the 30-point automatic referral and the 31-59
optional referral, paired with the additional requirements of owners
below the 60-point threshold.
A commenter urged HUD to adopt the recommendations put forth by the
Government Accountability Office in their 2019 report titled ``Real
Estate Assessment Center: HUD Should Improve Physical Inspection
Process and Oversight of Inspectors'' (GAO-19-254) to strengthen its
oversight mechanisms and ensure adequate quality of life in HUD-
assisted communities. The 2019 report calls attention to the
discrepancy between the 2017 and 2018 Consolidated Appropriations Acts
(which stipulate that HUD must provide a notice to owners of properties
that score 60 or below on the REAC physical inspection), and current
and long-standing HUD practice (which is to send notices at scores 59
and below). The report also discusses the sampling margin of error, in
particular instances in which the longer range of the margin could
encompass scores of 59 or below, and yet because the score itself is
above 60, no administrative consequence results. The report states that
``If REAC were to resume reporting on sampling errors and develop a
process to address properties that fall below certain cutoff scores
when the sampling error is taken into account, it would have the
information it needs to identify properties that may require more
frequent inspections or enforcement actions''.
HUD Response: HUD evaluated the GAO Report as part of its efforts
to identify mechanisms to improve its inspection program under NSPIRE.
HUD will take this input into consideration as part of the
Administrative Procedures notice. This notice will include information
about its sampling methodology. For administrative referrals, HUD
clarifies in this final rule that these referrals will be essentially
consistent for both Public Housing and Multifamily housing programs.
Suggested Standards for Referring Properties to the DEC
Commenters suggested that a property should be referred to the DEC
only when there is blatant disregard for the property condition and/or
the significant presence of health and safety issues. Commenters noted
that an inspection can have as little as 5-6 specific deficiencies,
some of which could be fixed in seconds or are unknown to property
staff and fail the UPCS inspection. Another commenter noted that some
repairs may be expensive but not relevant to maintaining a safe living
environment. A commenter noted that an agency may not be aware of all
tenant-induced damage on their property.
Several commenters stated that HUD should refer a property to the
DEC only where there are multiple low scores or repeat failures on the
same issue. Commenters expressed that due to the wide variance in how
HUD inspectors evaluate properties, a single score, that could be an
outlier, should not trigger corrective action.
Commenters suggested DEC referrals should be reserved for serious
cases of malfeasance or misappropriations of funds that rise to
potential violations of the law. A commenter noted that DEC does not
have the resources to be utilized as an additional entity providing
oversight to the physical condition of assisted properties and
inspection scoring should be considered as one element in determining
if referral to the enforcement center is warranted; another stated that
HUD should consider the history and condition of other properties in an
owner's portfolio before referral.
Commenters suggested that, if a property is about to undergo a
renovation (or is in the midst of a renovation) which will address the
factors leading to a score which might otherwise lead to its referral
to DEC, HUD should factor the renovation scope into its decision as to
whether to refer.
A commenter suggested lenience for older properties regarding
certain areas that are not avoidable and are not necessarily health and
safety issues.
HUD Response: Properties that score under 60 under the NSPIRE
Standards will have health and safety hazards that merit follow up, and
in some cases, administrative review by the DEC or HUD. The method for
scoring properties under NSPIRE will be discussed further in the NSPIRE
Scoring notice. HUD's process regarding administrative or DEC referrals
will be for properties that score 30 or less or have two successive
scores of under 60, as described in Housing
[[Page 30483]]
notices 2015-02 and 2018-08. The DEC can also investigate cases under
the False Claims Act, including situations when a PHA or owner
certifies that deficiencies have been corrected when they have not.
Additional information on administrative referrals will be provided in
the NSPIRE Administrative notice.
Regarding scores that did not consider renovations, owners or PHAs
can request a technical review of the inspection to determine if the
inspection considered these factors. If these conditions would raise a
score over 30 or 60, HUD would consider that significant. For tenant-
induced damages, REAC inspectors will not attempt to determine this at
the site, and owners and PHAs already have options under their lease
and policies to discourage damage and collect fees.
Timeline for Repair of Severe Health and Safety Defects
A commenter suggested that the requirement of severe health or
safety defects being repaired within 24 hours should be conditional on
what the deficiency is, and that replacing a smoke detector battery on
5-10 units is reasonable to perform in 24 hours, but, in cases where
some disagreement exists as to whether a fix is required due to the
potential for an appeal or local code allowances, an alternative to
this requirement should be in place. This commenter also suggested
that, for issues found outside of normal resident access areas,
especially in cases requiring the use of qualified professionals
outside of the property for proper repair, there should be alternative
requirements for repair timelines.
This commenter stated that the requirement of all non-life-
threatening defects to be repaired within 30 days is burdensome because
certain capital improvements may require time to analyze, budget, and
obtain bids for and complete. This commenter noted that areas affected
by natural disasters frequently have labor shortages that need to be
considered, and non-catastrophic repairs of roofing, siding, trip
hazards or repairs associated with concrete or asphalt repairs may be
delayed or made impossible by seasonal weather delays.
HUD Response: HUD appreciates this feedback about the timeline of
correcting severe health and safety defects, now referred to as LT to
align the NSPIRE rule with HOTMA statute. Under HOTMA Section 101(a)(3)
life threatening conditions must be corrected within 24 hours after
such notice has been provided, and non-life-threatening conditions
within 30 days after such notice has been provided or such longer
period as the PHA may establish. Because NSPIRE is aligning
requirements across its programs, these timeframes will also apply to
Public Housing and Multifamily housing programs, except that Severe
deficiencies for Public Housing and Multifamily housing will require 24
hour repairs, HUD will provide additional flexibility for Public
Housing and Multifamily housing programs on what is considered an
acceptable correction within the timeframes for other programs covered
by this rulemaking. HUD understands that in 24 hours, PHAs and owners
may only be able to prevent exposure to a hazard and that some
permanent repairs may take longer, and also that that some repairs may
require specialized services that will need to be procured, or
professionals that may not be immediately available. These
determinations will be made case-by-case, with the understanding that
HUD can allow flexibility on what is acceptable given the time frame,
provided the immediate hazard is corrected. PHAs and owners should
avoid relying on ``quick fixes'' and plan for effective or permanent
repair (e.g., at least 20 years) where possible, so that hazards do not
re-develop. More detail about correcting deficiencies will be published
in the subordinate NSPIRE Administrative notice.
Not Enough Information To Respond
Commenters responded that this question cannot be adequately
commented upon until the scoring model is released because it is known
that it will be different from the model currently in existence, and
therefore using the current model to assess findings under an unknown
model is incomplete and unreliable.
HUD Response: HUD appreciates this feedback. The NSPIRE Scoring
notice will be final before this regulation is effective. More detail
about correcting deficiencies will be published in subordinate notices.
Section 5.713 Second- and Third-Party Rights
Commenters opposed the proposed exclusion of third-party
beneficiary rights to tenants and others regarding enforcement of HUD
contracts with owners or PHAs. A commenter noted that when HUD or
owners fail to enforce standards, tenants should have the opportunity
to pursue remedies in court. This commenter also noted that some HUD
Multifamily programs, such as Mark Down to Market, already include
tenant third-party rights and HUD has not been overburdened with
frivolous claims.
Another commenter suggested there is no need to include this
language in 24 CFR part 5 because the ability to assert second- or
third-party beneficiary status is already prohibited because many, if
not all, of the regulatory agreements and subsidy contracts already
include a clause disclaiming third-party beneficiary status to
residents. This commenter suggested removing second- and third-party
beneficiary status in part 5, and other changes in Part A of this
notice, are just a continuation of HUD's ``old'' business approach and
stated that HUD's clients are the families assisted through these
programs and statutory and regulatory law has consistently included the
identification of poor physical conditions and maintenance concerns as
an area in which active resident participation is critical. This
commenter stated that HUD continues to hamper residents' ability to be
a partner to HUD and housing providers by making HUD's enforcement
actions opaque to residents, and by limiting residents' rights that
they normally should have as direct beneficiaries of the contracts
between HUD and its housing providers. This commenter noted the slow
pace in which HUD often holds PHAs and owners accountable for gross and
flagrant violations of housing condition standards, and that HUD should
not be concerned about getting sued for failure to act because HUD is
already being sued.
HUD Response: HUD declines to make revisions to Sec. 5.713 in this
final rule. This regulation acknowledges that covered programs have
different mechanisms for addressing second- and third-party beneficiary
status, as it can be covered in the Annual Contributions Contract
(ACC), Housing Assistance Payments (HAP) agreement subsidy contracts,
and regulatory agreements. The NSPIRE rule is not intended to override
existing program requirements. Tenant participation and feedback is
already included in many areas of these regulations.
Addition of Part 902, Subpart H and Part 985, Subpart D Regarding Small
Rural PHAs
Question for Comment #21: Threshold for Troubled PHAs Under the Small
Rural Assessment
HUD sought comment on the proper threshold for troubled PHAs under
the small rural assessment. A commenter recommended that HUD assure
that if a reduced score would result in action by
[[Page 30484]]
HUD that would affect a resident's occupancy, the action should not be
taken until HUD has provided an alternative housing option to the
tenant. Another commenter suggested that adding a second property below
70 percent creates a more accurate picture of whether an agency is
troubled or not as it shows a pattern of struggling developments.
Multiple commenters responded that without details of the scoring
protocol, commenters could not provide informed input as to the
threshold for designation a troubled agency regardless of size.
HUD Response: HUD acknowledges the impact reduced assessment scores
may have on a resident and the need for alternative housing. Residents
of HUD-assisted housing are protected by the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970, as
amended (42 U.S.C. 4601 et seq.) (URA) and other HUD requirements. A
failing inspection or PHAS score would not displace residents, as PHAs
are provided time to correct the deficiency. When a public housing
property is approved for demolition or disposition under Section 18 of
the 1937 Act (42 U.S.C. 1437p), residents must be offered comparable
housing or provided a tenant protection voucher. As provided in the
final rule at Sec. 902.103, small rural PHAs shall be assessed and
scored based only on the physical condition of their public housing
properties, which will include all projects. Additional information
about the scoring protocol will be provided in the Scoring notice.
Question for Comment #22: Indicators To Determine if the PHA is Failing
To Fulfill Its Responsibilities, Small Rural PHA Assessment
HUD requested comment on the four indicators proposed to determine
if the PHA is failing to fulfill its responsibilities for unit
inspections under the HCV program and the method by which HUD is
proposing to determine if the PHA has passed or failed the indicator.
Two commenters supported the proposed indicators. A commenter
stated that a score of 70 or better to prevent being designated as
troubled seemed lofty and suggested using the current level. This
commenter expressed that the HQS system for Section 8 HCV has worked
well since inception and any additional requirements added to those in
place for owners will likely discourage participation.
A commenter responded that the threshold HUD proposed to determine
if the PHA has passed or failed the indicator is overly stringent
because provisions in HOTMA allow agencies to move families into
Section 8 units before a unit inspection occurs if there was an
inspection before like LIHTC or one that is as stringent as HQS and
requiring 98 percent of all units to be inspected before a tenant moves
into the unit defeats this flexibility. This commenter also expressed
concern about the provision requiring 98 percent of units to be
inspected every 3 years because if HUD provides the HCV program the
flexibility to have risk-based assessments every 2 to 5 years, then
this acts as a disincentive for agencies to benefit from 5-year
inspection time periods. This commenter recommended either reducing the
98 percent threshold for those provisions or including a caveat for
units with non-HQS inspections before move-in to count toward the
threshold and changing language to note that 98 percent of units are
inspected in the time period they should be inspected, as specified by
HUD criteria.
A commenter proposed the following Indicators: (1) Failing to
recognize hazards with potentially extreme or severe outcomes; (2)
Failing to evaluate and prioritize the hazards; (3) Failing to
recommend adequate housing measures to address hazards; (4) Failing to
develop a comprehensive, integrated, and prescriptive scope of work
that can be effectively used by subcontractors installing the measures.
A commenter responded that it is difficult to comment on the
indicators without knowing how deficiencies will be rated or scored.
HUD Response: HUD appreciates comments on the Small Rural PHA
Assessment program for SEMAP indicators and PHAS scoring. The NSPIRE
standards, as proposed, will include the list of ``life threatening''
conditions, which were proposed as severe health and safety
deficiencies so that the NSPIRE regulations are consistent with HOTMA.
With this final rule, the NSPIRE standards are the applicable housing
quality standards for the HCV and PBV programs, and these define the
deficiencies. HCV and PBV housing inspections will still be on a pass/
fail rating system and not scored. The Standards notice affirmed the
elective allowance under HOTMA to have residents move into units with
only non-life-threatening conditions is retained, and the proposed time
frame of risk-based inspections every 2 to 5 years does not apply to
the HCV and PBV programs. Section 5.705(c)(4) and (5) reference
existing regulations for the timing of inspections. Section
985.203(c)(2) accounts for the PHA initial inspection option for non-
life threatening deficiencies or alternative inspections. Alternative
inspections will be accepted by HUD if they meet the NSPIRE standards
for health and safety.
HUD acknowledges the comment about a score of 70 or better to
prevent being designated as Troubled for public housing, which is
referencing the score of 60 or less used as the Troubled standard for
other PHAs. HUD declines to revise Sec. 902.105(a) to 60 at this time.
Small Rural PHAs will be assessed for physical conditions only and will
no longer be scored under the financial, management and Capital Fund
indicators of 24 CFR part 902. Removing this administrative burden of
managing performance of other indicators will offer Small Rural PHAs
more time to focus on improving the physical conditions of their
properties. A score of 70 or better should be easily attainable for all
HCV programs. For SEMAP, the indicators in part 985 are provided as
pass/fail. HUD retained the language that a PHA that failed any of the
four indicators under Sec. 985.201 will be designated as troubled, as
these indicators measure compliance with the program regulations, are
required activities, and rarely missed. The final rule also retains
indicator levels at 98 percent to be consistent with the SEMAP ratings
for PHAs that are not small rural. Achieving 98 percent for these
indicators is the norm for PHAs regardless of size. To provide more
flexibility, under Sec. 985.205(a)(i), HUD will consider budget
authority utilization based on the most recent two calendar years prior
to the assessment.
HUD generally appreciates the proposal to revise the indicators to
be more focused on hazards, but did not include these revisions for
small rural PHAs to remain consistent with the SEMAP regulations for
other PHAs, which are not proposed for revision with this rule. HUD
will consider these comments for future revisions to the SEMAP
regulations for all PHAs.
With respect to the suggestion to create an integrated scope of
work (SOW) that could be used by subcontractors, HUD does not prescribe
the methods by which the PHA resolves issues identified during the
inspection. It is the PHA's responsibility to repair the deficiencies
by either using its maintenance staff, external vendors or contracts,
or other means. Any identified life-threatening deficiencies are
required to be mitigated within 24 hours. Regarding how deficiencies
will be rated or scored, the NSPIRE Standards notice will provide the
standards and the pass/fail rating already in place for HCV and PBV
[[Page 30485]]
programs. Individual HCV and PBV properties will not be scored under
NSPIRE, per Sec. 5.711(a).
Question for Comment #23: Criteria To Determine if the PHA is a High
Performer or a Standard Performer, Small Rural PHA Assessment Under
SEMAP
HUD asked for comment on the criteria for determining if a PHA is a
high performer or a standard performer. Commenters supported the
current scoring system. A commenter supported recognizing the
challenging environment in which small rural HAs operate HCV programs
by predominantly focusing the ratings on the functions under the
control of the PHA.
Commenters noted that there is a small margin for error for small
PHAs, which have up to 550 combined Public Housing and HCV units, and
suggested that the scoring percentage should be widened, with two
commenters suggesting moving from 98 percent to 90 percent, and one of
these commenters suggesting this move for small HCV programs (250 or
fewer units). A commenter noted that small agencies may have difficulty
achieving high performer status if it is predominately based on funding
utilization and pointed out that voucher program utilization can
fluctuate because of housing availability and fair market rent (FMR)
fluctuations, and that this can be especially true in rural areas where
there is often a lack of decent, affordable rental housing available. A
commenter noted this is unfair and contrary to Congress' deregulatory
goals. A commenter urged HUD that Housing availability and FMR
fluctuations, which are outside of the control of PHAs, should not be
held against an agency. This commenter also noted that special-purpose
vouchers, like HUD-VASH can also be challenging to meet utilization
thresholds--especially in rural areas and recommended excluding
special-purpose vouchers for the utilization rate requirement. Another
commenter suggested there should be more differentiation on point
scoring between the High Performer status and Troubled status.
Commenters also advised that without understanding the property
inspection scoring protocol, it is hard to evaluate the Public Housing
Assessment System.
HUD Response: For small rural agencies, Public Housing, HCV and PBV
properties will be inspected using the NSPIRE Standards. The proposed
indicators for Small Rural SEMAP are retained in the final rule to
remain consistent with the SEMAP program for other PHAs. However, Small
Rural PHAs will undergo a SEMAP assessment only every three years as
provided in Sec. 985.207, and indicators will be evaluated only on a
pass/fail basis. Individual properties will not be scored under NSPIRE.
Other Small Rural Comments
A commenter expressed concern that updating the small rural PHA
list every three years may add undue uncertainty to PHAs that qualify
as small rural as there is a chance their status may change depending
on factors outside of their control such as population growth or
changes to regulations at the CFPB. This commenter recommended that HUD
allow for agencies determined to be small rural to be grandfathered
into the small rural definition, unless there is significant and
substantial change to the agency, to provide additional consistency to
small rural agencies so that they do not have to worry about their
inspection protocol potentially changing every three years.
Alternatively, this commenter suggested at least allowing an agency to
be grandfathered in for one additional 3-year period after falling
outside of the definition of ``small rural'' to ensure the agency would
have ample time update their inspection process and prepare for the new
inspection protocol.
HUD Response: HUD appreciates the commenter's concern regarding the
definition of small rural PHAs and the timeframe for updates to the
list of every three years. HUD does not expect that the list will
change from year to year given the relatively stable indicators
provided in statute and Sec. 902.101, but HUD did not have discretion
on this definition as it is statutory. All PHAs will be provided time
before the final rule is effective, and small rural PHAs will have an
additional 120 days after the rule is effective for HUD to designate
small rural status per Sec. 902.101(b).
Insufficient Information To Provide Meaningful Opportunity To Comment
Several commenters stated that they were unable to provide
meaningful comments on the proposed rule because information had not
been released. Commenters stated that they lacked key information
about: NSPIRE Standards; NSPIRE scoring methodologies; Criteria to
qualify for longer risk-assessment inspection periods; Electronic data
collection of self-inspections; List of deficiencies including severe
health and safety deficiencies and which of those deficiencies are
life-threating and which are not; Deficiencies and methodologies to use
for scoring and ranking HUD housing; Factors for HCV unit pass/fail;
Specific minimum project and unit deficiencies for multiple programs,
including HOME and homeownership; Minimum property standards
deficiencies; Submission of PHA certifications for small rural PHAs;
Calculation for determining excess HAP reserve for small rural PHAs;
the criteria required for PHAs to qualify for a longer inspection
cycle; and flexible protocols to accommodate the unique circumstances
of each program and housing type.
A commenter urged HUD to provide detail about whether REAC will
begin to provide the necessary information regarding deferred
maintenance as required by investors who provide liquidity to the
market.
A commenter noted that they are unable to consider HUD's HOTMA
rulemaking and the NSPIRE rulemaking for lack of information about the
new NSPIRE inspection model.
A commenter noted that they lacked key information about the status
of electronic submission, the result of reducing inspectable areas, how
the new deficiencies improved inspector objectivity, and how inspection
results compare to past inspections.
Because of the lack of information available, commenters requested
extension. Commenters suggested HUD extend the demonstration period
until scoring methodologies can be incorporated into the Standards
notice so reviewers can weigh all factors before commenting. Commenters
suggested that the demonstration has not been able to provide as much
information due to the COVID-19 pandemic.
HUD Response: HUD appreciates this feedback. The NSPIRE Standards
were proposed on June 17, 2022, and the NSPIRE Scoring notice was
proposed on March 28, 2023, for public comment. HUD will consider
additional comment before making these requirements final, and NSPIRE
inspections will not begin until after HUD publishes final NSPIRE
Standards and Scoring notices. HUD does not have details regarding
deferred maintenance as required by investors who provide liquidity to
the market, as that is outside the scope of this rulemaking.
Information about the status of electronic submission will be provided
in a notice to implement the new self-inspection requirements in Sec.
5.707. Information on inspectable areas and deficiencies will be in the
NSPIRE Standards notice. Information on improved inspector objectivity
is discussed above in this preamble. Information on how NSPIRE
inspection results compare to past inspections performed under UPCS is
not yet available. Additional notices and rules
[[Page 30486]]
under HOTMA since the NSPIRE proposed rule and notices were published.
HUD will consider comments on Standards and Scoring before they are
final and effective for HUD housing.
Environmental Justice Issues
Two commenters asked, pursuant to the January 20, 2021, Regulatory
Freeze Pending Review memorandum from Ronald A. Klain, Assistant to
President Biden and White House Chief of Staff, (``Klain memo'') which
was published in the Federal Register on January 28, 2021,\17\ for an
extension until such time as there can be further consideration of
environmental justice issues and the impact of the outdoor environment
on the residents who live in HUD-assisted housing. These commenters
noted that statutes and implementing regulations have largely failed to
address the common environmental risks present in the outdoor
environment surrounding HUD-assisted housing, unless an environmental
review has been triggered under the National Environmental Policy Act.
42 U.S.C. 4321 et. seq. (1969). This commenter noted that on February
21, 2021, HUD's Office of Inspector General (HUD OIG) issued a report,
Contaminated Sites Pose Potential Health Risks to Residents at HUD
funded properties, in which HUD OIG found that HUD's current approach
to identifying and addressing contaminated sites has resulted in
federally-assisted housing residents experiencing prolonged exposure to
toxic contamination, including dangerously high level of lead and
proximity to Superfund sites that continue to present significant risks
to human health. This commenter noted that the proposed rule was silent
on the issue of inspecting the outdoor environment at HUD-assisted
sites, including inspecting adjacent soil or the proximity of the
housing to Superfund sites.
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\17\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/regulatory-freeze-pending-review/ (86 FR 7424).
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HUD Response: HUD notes that the NSPIRE final rule is one
rulemaking and one component of HUD's broader approach to addressing
environmental justice, which involves other offices within HUD as well
as coordination with other Federal agencies such as EPA. HUD does not
view this proposed rule as requiring regulatory freeze. The regulations
at Sec. 5.703(c) include the building site, and Sec. 5.703(e) affirms
that the outside must be free of health and safety concerns. Additional
information is in the NSPIRE Standards notice published on June 17,
2022, for public comment. HUD's regulations at 24 CFR parts 50 and 58
include a process for considering site contamination and are not within
the scope of this rulemaking. Additional information about HUD's
efforts with EPA on HUD-assisted sites and Superfund sites will be made
public as part of that effort, and not within the context of the NSPIRE
rulemaking. HUD will take the commenters' feedback into consideration
and encourages additional public comment on subsequent NSPIRE
Subordinate Notices and other HUD rulemaking or policymaking concerning
environmental justice.
Other Comments
Resident Rights
Several commenters expressed that inspection information should be
made available for comment to residents and their representatives. Such
information noted by commenters included severe health and safety
citations, notice before inspections, notice regarding submission of
the property for DEC evaluation and inspection, certification and
supporting evidence of repairs within 3 days of when a severe health
and safety risk has been corrected, and notification of inspection.
Commenters requested that the information provided include a named
HUD contact official with their contact information, include tenant
organizations, be accessible, be posted in the owners' management
office and bulletin boards in common areas, at no cost to residents, be
in plain language, provide information about what is happening and why.
HUD Response: REAC inspection data is available online at
www.huduser.gov/portal/datasets/pis.html, and NSPIRE inspection data
will also be online once inspections commence. Residents will be
provided notice before inspections in accordance with their leases, and
PHAs and owners will make inspection information available per Sec.
5.711(h). All information collected by HUD is available through FOIA,
and residents can contact their local HUD office (see https://www.hud.gov/local) to seek more information or for complaints.
Information related to enforcement referrals and actions is usually
confidential until the matter is closed and exempted from FOIA. Because
of the many ways residents are kept informed of the NSPIRE process, HUD
does not agree that resident rights must be included the NSPIRE
regulations.
HUD has sought public comment on tenant participation in the NSPIRE
inspection process and will continue to explore ways to engage
residents. Initially, this will include inspecting additional units
recommended by residents or resident groups. Additional details
regarding resident engagement in forthcoming subordinate notices
published in the Federal Register and available for public comment.
Requests Due to the Coronavirus Pandemic
A commenter urged HUD to waive the shortened physical inspection
notification timeframe (14 days) for assisted housing properties, as
announced on February 22, 2019, through PIH Notice 2019-02 and return
to the 30-to-60-day timeframe to ensure the maximum safety of
residents, management staff, and inspectors.
A commenter noted that during the COVID-19 pandemic, personnel have
had to meet difficult standards at risk to their own personal health,
and some residents have been hesitant to allow facility personnel into
their dwelling units for fear of infection, and therefore owners and
managers have fallen behind on unit repairs that will take several
months to catch up with. This commenter cautioned that NSPIRE's scoring
methodology more heavily scrutinizes and penalizes in-unit
deficiencies, which owners and managers need time to catch up on. This
commenter therefore called for HUD to suspend REAC inspections in
elderly facilities, specifically those inspections under the new NSPIRE
standard, for a minimum of one year. This commenter also noted that
many of the reports of poor assisted housing focused on certain pockets
of the US, and many focused on the property portfolios of specific
owners/management agents. This commenter urged HUD not to punish other
regions and properties.
Commenters urged HUD to learn from the pandemic and expand
electronic communication and remote listening sessions to gather
stakeholder feedback video remote inspections to HUD Multifamily
properties, utilize properties' existing software mechanisms to check
work orders and proof of annual self-inspections, and examine how
ventilation and other health retrofits are incorporated into physical
condition standards for HUD-assisted housing.
HUD Response: Adjustment of inspection notification timeframes due
to COVID-19 is an issue outside of this final rule. HUD can adjust
certain requirements when there is a national emergency in effect.
Inspection administration protocol will be outlined in subordinate
notices that will be published in the Federal Register and available
for public comment.
[[Page 30487]]
On June 1, 2021, the Secretary announced that REAC inspections
would resume after a 15-month pause due to the COVID pandemic. While
the NSPIRE Demonstration is underway, HUD continues to use UPCS to
conduct inspections of record. Inspections under the NSPIRE Standards
will not phase in until the Standards and Scoring notices are final,
and the rule is effective. HUD takes the health and safety of residents
and property staff very seriously and has strict protocols in place.
In response to the pandemic and in preparation for future concerns,
HUD issued a notice on Remote Video Inspections, PIH Notice 2020-31.
HUD is also developing new technology solutions to facilitate
convenient transfer of information including inspection findings,
photographic evidence and certification of completion of repairs.
Regarding time for PHAs, owners and agents to inspect and update units
after the pandemic, HUD resumed REAC inspections on June 1, 2021, and
has not observed a significant reduction in scores. The timeline
discussed earlier in this preamble, will give PHAs, owners, and agents
additional time to prepare for the transition. PHAs are reminded that
the requirement for self-inspections was in place before the NSPIRE
regulation, and owners may commence self-inspections at any time.
HUD has considered the comments about retrofits for health and
well-being in light of the pandemic and resident health and safety were
a key consideration in developing the NSPIRE Standards.
Additional Suggestions
A commenter urged HUD to build robust oversight systems and
consider accountability and feasibility. This commenter urged HUD to
consider cost and time impacts of newly required technical/building
upgrades; the breadth and scope of inspections, paired with the
staffing capacity at HUD and at HUD-assisted communities; and the
impact of inspections on residents' lives and private living spaces.
A commenter asked HUD to consider integrating or coordinating
revisions with the Management and Occupancy Review (MOR) process so
that these two monitoring tools are complementary.
A commenter suggested that PHAs and owners/agents should be
incentivized or rewarded for maintaining a higher level of on-going
maintenance of the property/units, as determined by REAC scoring and
ranking of covered units.
One commenter noted that consistent with the notion of fairness to
parties not responsible for adverse conditions, third party management
companies should be rated based on the performance of their duties in
the context of the resources provided, and that management companies
with no identity-of-interest relationship to the owner should be able
to note their performance in the context of resources made available to
them by the ownership. The commenter further suggested while decent,
safe and sanitary housing must be provided, administrative conclusions,
sanctions and ``flags'' should be sensitive to the owner's performance
based on the possible available funding and recapitalization
alternatives where all funds were efficiently spent on operations.
A commenter cautioned that HUD should avoid setting new
requirements for the sake of alignment where it lacks statutory
authority.
A commenter applauded the alignment of inspections in projects with
multiple HUD funding and/or subsidy sources and recommended the same
alignment of inspections in circumstances involving funding sources
outside of HUD, e.g., State or Federal historic preservation funds.
HUD Response: HUD appreciates the additional suggestions on its
oversight systems, and accountability and feasibility. The NSPIRE rule
did not propose revisions to the Management and Occupancy Review (MOR)
process, but HUD appreciates comments to streamline oversight
processes. PHAs and owners/managers that have higher assessment scores
will be rewarded with reduced inspection frequency under NSPIRE. High
performing PHAs may receive additional funds under the Public Housing
Capital Fund program. The comments on fairness to parties not
responsible for adverse conditions and third-party management companies
are noted but are outside the scope of the regulations. The NSPIRE
Standards will include information on the deficiencies, and the NSPIRE
Scoring notice will cover how properties will be scored, regardless of
management type. With respect to the comments about statutory
authority, HUD has ensured that this rulemaking is consistent with its
authority as provided by Congress and the relevant statutes.
HOME/HTF
A commenter suggested that, because the Housing Trust Fund
regulations were modeled on the HOME regulations, Sec. Sec.
93.301(c)(3) and 93.301(e)(1)(i) should be modified to provide cross-
references back to the regulations at Sec. 5.703 that would, under the
proposed rule, govern HOME, as well as a specific reference to NSPIRE.
HUD Response: HUD appreciates the comment and has made changes as
appropriate in the final rule.
Inspector Issues
Comments Regarding Inspector Qualifications
Several commenters noted problems with inconsistent or subjective
inspections that could not be effectively appealed. Commenters
cautioned against punishing agencies due to growing pains associated
with a new program. A commenter suggested dedicating substantial time
and effort to training inspectors in NSPIRE before implementing the new
inspection protocol; another recommended HUD itself train inspectors. A
commenter recommended requiring inspector certification with
availability of voluntary training with a link and phone number.
Several commenters suggested HUD require a level of training or
qualification for inspectors. A commenter recommended at least basic
standards such as the current Inspector Qualifications for REAC UPCS
Inspector Certification Training candidates.\18\
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\18\ See: UPCS Inspection Certification Training, Page 2, (1) B.
https://www.hud.gov/sites/dfiles/PIH/documents/UPCSInspectorCertificationTraining.pdf).
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A commenter noted that since 1970, State licensure of home
inspectors has expanded and 36 States regulate home inspectors,
requiring education, field training, and a number of supervised
inspections.
A commenter recommended inspectors have two years of experience in
the last four years as a full-time combination inspector or similar
government-certified position, or two years of full-time experience as
a licensed Home Inspector, or in States without licensing, two years
within the last four years of full-time experience and documentation of
passage of the National Home Inspector Examination. This commenter
recommended inspectors be required to have completed a minimum of 250
physical commercial real estate or residential inspections as sole
inspector. The commenter recommended FEMA inspections, termite
inspections, appraisals, and site visits not be included. This
commenter also recommended HUD require providing 25 inspections
completed on an excel spreadsheet, inspectors be required to possess
general computer skills, and inspectors be required to possess a high
school education or equivalent.
[[Page 30488]]
A commenter cautioned that inspectors not familiar with the
property and local codes may not follow the HUD inspection standards
and noted that the owner/agent may pay for pre-inspection by a third
party.
A commenter stated that inspectors are corrupt and in league with
property management teams, thereby ignoring clear maintenance issues,
and that landlords ignore tenant complaints and seek to constructively
evict complaining tenants.
HUD Response: HUD appreciates the comments regarding inspector
qualifications, experience, and training. Inspections performed by REAC
will continue to include contract-based inspectors for the Public
Housing and Multifamily housing programs. In addition to revising the
inspections standards and scoring, REAC will revise the contract model
to include performance expectations and metrics and require that
awarded firms have an internal quality assurance and training program.
These requirements will supplement the technical assistance and
oversight performed by HUD's Quality Assurance (QA) division. These
enhancements will help ensure that inspectors are experienced at hire
and will become proficient through training so they can consistently
assess and score properties against the NSPIRE standards. Knowledge of
local code requirements of the building are not necessary if the
inspector is adhering to the NSPIRE standards, but this information
could be assessed as part of self-inspections. REAC's goal is to ensure
that contract inspectors will have experience in home inspections but
will become proficient in the NSPIRE Standards through training and
hands-on field work. Licensed and/or certified home inspectors will
qualify for hire and complete training on the NSPIRE standards before
performing inspections of records. HUD agrees that the model followed
by State-licensed home inspectors is valuable and will consider that
for the new contract requirements. The recommendations for minimum
hours and inspections completed is also very helpful and a model REAC
will consider in the contract design. Lastly, with the new system
supporting inspection data and scoring, HUD QA staff will be better
able to see and act on scoring anomalies, and perform enhanced
monitoring.
HUD's expectations for inspector training and qualifications will
be detailed in the Administrative notice issued with this rule so that
PHAs and external firms can mirror their own programs on the REAC
model. The NSPIRE Standards and system will be available in electronic
format for public use before the requirements are effective.
With respect to the comment about perceived bias of housing
inspectors, HUD's oversight of the physical inspection process and
resolution should help curb anomalies and abuse. Residents can continue
to report concerns to HUD offices at hud.gov/local. Residents of HUD-
assisted properties are protected from retaliation by their lease and
HUD regulations. Program terminations must be for cause, and residents
in many programs have grievance rights available to review terminations
in advance of eviction.
HUD is aware that properties may employ outside inspectors to
review their property before a REAC inspection. This practice could be
used to help satisfy the requirements of the self-inspection, where
required, if the inspection follows the NSPIRE standards. While the
NSPIRE regulations do not require a review for local codes, combining
this with a regular inspection could reduce administrative burden on
PHAs and owners.
Comments Regarding an Inspector Shortage
A commenter advised that its pool of inspectors certified to
conduct a REAC inspection is so minimal that it is impossible for all
lenders to complete their REAC inspection responsibilities within the
current prescribed timeframes. This commenter therefore opposed the
current rule that an inspection must be conducted within three months
before the Ideal Future Date (IFD) and three months after the IFD.
A commenter recommended adopting a version of the GSEs' current
certification standards and processes to not further shrink the pool of
FHA inspectors and create further timing and cost issues.
A commenter recommended allowing servicing mortgagees (SMs) or
their inspection contractors to set up a parallel program of inspector
training including the ability to recruit candidates, submit them to
HUD for approval and then facilitate their training until they are
certified. This commenter noted that, since REAC is moving away from
training inspectors, SMs need the ability to train inspectors to use to
perform NSPIRE (and UPCS) inspections, and if REAC requires an
associated Quality Control program developed like what it requires for
HUD Contracted companies, SMs should be allowed to do so. This
commenter suggested SMs can develop their QC program in a parallel
fashion to assure inspector and inspection validity and reliability,
and whatever privileges that are given to HUD Contractors working in
the Public/Multi-Family side to recruit and train inspectors should be
extended to the SM community.
A commenter noted that because of the alignment between programs,
more new inspections may fall under HUD's consolidated inspection
protocol than were covered previously and cautioned that HUD should be
clear about how it will handle the additional inspections and who will
be conducting them. Another commenter urged HUD to consider the impacts
of additional inspections under REAC's umbrella, and to be clear about
workload adjustments and capacities, noting that more new inspections
may fall under HUD's consolidated inspection protocol than were covered
previously.
HUD Response: HUD appreciates the comments with respect to
inspector shortages, inspector management and administration. HUD's
requirement that all REAC inspectors be certified through the current
process helped contribute to the inspector shortage. HUD also agrees
that a regulatory requirement that inspections be completed within
three months before the anniversary (or Ideal Future Date (IFD)) and
three months after the IFD in the same calendar year is restrictive and
removed ``calendar'' from the regulation and added language to reflect
the current process of allowing extensions for good cause.
Additionally, HUD may need more time to meet this schedule in the first
year of NSPIRE implementation, and so the final rule allows for up to
six months in the initial year of NSPIRE implementation. With respect
to comments about servicing mortgagees establishing training programs,
at this time HUD is not planning to review or recognize other
organizations' training programs. HUD's NSPIRE Standards, scoring and
system will be publicly available, and HUD will also make its own
training programs available. This will also help PHAs establish and
manage their own inspector programs for the HCV and PBV programs. HUD
has provided more details on inspector administration and oversight in
the NSPIRE Administrative notice.
With respect to additional inspections and who will be conducting
them, the NSPIRE rule aligns the different HUD assistance programs but
does not change the organization responsible for performing the
inspection. For example, PHAs will continue to inspect HCV and PBV
units, and PJs will continue their normal inspection processes.
[[Page 30489]]
V. Findings and Certifications
Regulatory Review--Executive Orders 12866 and 13563
Pursuant to 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.
HUD believes that this rule, by consolidating physical condition
inspection standards into a streamlined format and utilizing improved
technology and methods will aid all parties--PHAs, property owners,
agents, and inspectors--in complying with HUD's physical condition
standards creating a smaller burden while maintaining or increasing the
effectiveness of HUD's physical condition requirements. The rule has
been determined to be a ``significant regulatory action,'' as defined
in section 3(f) of the Order, but not economically significant under
section 3(f)(1) of the Order. The docket file is available for public
inspection online at www.regulations.gov.
HUD prepared a Regulatory Impact Analysis (RIA) that addresses the
costs and benefits of the final rule. HUD's RIA is part of the docket
file for this rule at http://www.regulations.gov. HUD strongly
encourages the public to view the docket file at www.regulations.gov.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (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.
There are 2,297 small PHAs all of which will be affected; however, the
economic impact will not be significant.
The economic impact will not be significant because the rule does
not change the substantive requirement that HUD program participants
are required to maintain the physical condition of HUD housing. The
rule also, in most cases, maintains the same level of review for
compliance in the form of physical inspections. Regulatory relief would
also be provided to small rural PHAs, which would only be subject to
triennial inspections under PHAS and SEMAP. Accordingly, the
undersigned certifies that the rule will not have a significant
economic impact on a substantial number of small entities.
Environmental Impact
A Finding of No Significant Impact (FONSI) with respect to the
environment has been made in accordance with HUD regulations at 24 CFR
part 50, which implement section 102(2)(C) of the National
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is
available through the Federal eRulemaking Portal at http://www.regulations.gov. The FONSI is also available for public inspection
between the hours of 8 a.m. and 5 p.m. weekdays in the Regulations
Division, Office of General Counsel, Room 10276, Department of Housing
and Urban Development, 451 Seventh Street SW, Washington, DC 20410-
0500.
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either: (i) imposes substantial direct compliance costs on State and
local governments and is not required by statute, or (ii) preempts
State law, unless the agency meets the consultation and funding
requirements of section 6 of the Executive Order. This rule merely
revises existing Federal standards in a way which would not increase or
decrease compliance costs on State or local governments and therefore
does not have federalism implications and does not impose substantial
direct compliance costs on State and local governments or preempt State
law within the meaning of the Executive Order.
Unfunded Mandates Reform Act
Title II of 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 rule does not
impose any Federal mandates on any State, local, or Tribal governments,
or on the private sector, within the meaning of the UMRA.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3501-3520), an agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information, unless the
collection displays a currently valid Office of Management and Budget
(OMB) control number. Generally, the information collection
requirements contained in this rule have already been approved by OMB
under the Paperwork Reduction Act and assigned OMB control numbers, but
these final regulations include additional requirements not previously
considered. Given that, HUD will consolidate existing information
collections into a new collection for the NSPIRE final rule prior to
the effective date of the new requirements. The information collection
requirements when approved will be assigned an OMB approval number and
the public will be notified of this number.
Related collections that will be incorporated include 2502-0369
(Uniform Physical Standards and Physical Inspection Requirements),
2577-0241 (Exigent Health and Safety Deficiency Correction
Certification), 2577-0257 (Public Housing Assessment System (PHAS)
Appeals, Technical Reviews and Database Adjustments), 2577-0289
(National Standards for the Physical Inspection of Real Estate
(NSPIRE)), 2577-0169 (HCV Program and Tribal HUD-VASH), 2577-0289. HUD
estimates that the burden under 2502-0369 (Uniform Physical Standards
and Physical Inspection Requirements) will be approximately the same as
described in the proposed rule. The inspection time burden will
slightly increase from the proposed rule's estimate because inspection
sample may also include up to five units recommended by residents,
which was not considered during the proposed rule. The Self-inspection
burden will be substantially less than in the proposed rule, however,
as HUD will only collect results for properties that score 60 and
below, instead of all properties.
Additionally, in the proposed rule, HUD requested comment on how
HUD could utilize tenant feedback to better achieve its goals of
identifying poor performing properties. In the PRA package associated
with this final rule, HUD is including an additional information
collection for resident feedback. HUD will request that the property
representative identify the resident council or tenant organization for
the property. HUD will communicate with that resident group to ask
about housing conditions and ask the group to
[[Page 30490]]
identify additional units for HUD to inspect. HUD expects that it will
add up to five resident-nominated units regularly scheduled
inspections. HUD anticipates the burden of this additional collection
will be minimal at about five minutes for the property representative
per property and about thirty minutes for each resident group that
chooses to respond.
The collection requirements will be amended to reflect the altered
burden contained in this final rule.
List of Subjects
24 CFR Part 5
Administrative practice and procedure, Aged, Claims, Crime,
Government contracts, Grant programs--housing and community
development, Individuals with disabilities, Intergovernmental
relations, Loan programs--housing and community development, Low and
moderate income housing, Mortgage insurance, Penalties, Pets, Public
housing, Rent subsidies, Reporting and recordkeeping requirements,
Social security, Unemployment compensation, and Wages.
24 CFR Part 92
Administrative practice and procedure, Low and moderate income
housing, Manufactured homes, Rent subsidies, and Reporting and
recordkeeping requirements.
24 CFR Part 93
Administrative practice and procedure, Grant programs--housing and
community development, Low and moderate income housing, Manufactured
homes, Rent subsidies, and Reporting and recordkeeping requirements.
24 CFR Part 200
Administrative practice and procedure, Claims, Equal employment
opportunity, Fair housing, Housing standards, Lead poisoning, Loan
programs--housing and community development, Mortgage insurance,
Organization and functions (Government agencies), Penalties, Reporting
and recordkeeping requirements, Social security, Unemployment
compensation, and Wages.
24 CFR Part 570
Administrative practice and procedure, American Samoa, Community
development block grants, Grant programs--education, Grant programs--
housing and community development, Guam, Indians, Loan programs--
housing and community development, Low and moderate income housing,
Northern Mariana Islands, Pacific Islands Trust Territory, Puerto Rico,
Reporting and recordkeeping requirements, Student aid, Virgin Islands.
24 CFR Part 574
Community facilities, Grant programs--housing and community
development, Grant programs--social programs, HIV/AIDS, Low and
moderate income housing, and Reporting and recordkeeping requirements.
24 CFR Part 576
Community facilities, Grant programs--housing and community
development, Grant programs--social programs, Homeless, and Reporting
and recordkeeping requirements.
24 CFR Part 578
Community development, Community facilities, Grant programs--
housing and community development, Grant programs--social programs,
Homeless, and Reporting and recordkeeping requirements.
24 CFR Part 882
Grant programs--housing and community development, Homeless, Lead
poisoning, Manufactured homes, Rent subsidies, and Reporting and
recordkeeping requirements.
24 CFR Part 884
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements, and Rural areas.
24 CFR Part 886
Grant programs--housing and community development, Lead poisoning,
Rent subsidies, and Reporting and recordkeeping requirements.
24 CFR Part 902
Administrative practice and procedure, Public housing, and
Reporting and recordkeeping requirements.
24 CFR Part 965
Government procurement, Grant programs--housing and community
development, Lead poisoning, Loan programs--housing and community
development, Public housing, Reporting and recordkeeping requirements,
Utilities.
24 CFR Part 982
Grant programs--housing and community development, Grant programs--
Indians, Indians, Public housing, Rent subsidies, and Reporting and
recordkeeping requirements.
24 CFR Part 983
Grant programs--housing and community development, Low and moderate
income housing, Rent subsidies, and Reporting and recordkeeping
requirements.
24 CFR Part 985
Grant programs--housing and community development, Public housing,
Rent subsidies, and Reporting and recordkeeping requirements.
For the reasons discussed in the preamble, HUD amends 24 CFR parts
5, 92, 93, 200, 570, 574, 576, 578, 882, 884, 886, 902, 965, 982, 983,
and 985 as follows:
PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS
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1. The authority for part 5 continues to read as follows:
Authority: 12 U.S.C. 1701x; 42 U.S.C. 1437a, 1437c, 1437d,
1437f, 1437n, 3535(d); Sec. 327, Pub. L. 109-115, 119 Stat. 2936;
Sec. 607, Pub. L. 109-162, 119 Stat. 3051 (42 U.S.C. 14043e et
seq.); E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; and E.O.
13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273.
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2. Effective July 1, 2023, revise subpart G to read as follows:
Subpart G--Physical Inspection of Real Estate
Sec.
5.701 Applicability.
5.703 National standards for the condition of HUD housing.
5.705 Inspection requirements.
5.707 Uniform self-inspection requirement.
5.709 Administrative process for defining and revising inspection
criteria.
5.711 Scoring, addressing, and appealing Findings.
5.713 Second- and third-party rights.
Subpart G--Physical Inspection of Real Estate
Sec. 5.701 Applicability.
(a) Scope. This subpart applies the national standards for the
physical inspection of real estate standards to the following HUD
programs:
(1) All Public Housing programs (programs for housing assisted
under the U.S. Housing Act of 1937 other than section 8 of the Act);
(2) The Housing Choice Voucher program under section 8(o) of the
U.S. Housing Act of 1937, part 982 of this title and the Project-Based
Voucher program under section 8(o)(13) of the Act and the regulations
at 24 CFR part 983 (referred to in this part as the HCV
[[Page 30491]]
and PBV programs, or HCV and PBV housing);
(3) All project-based Section 8 programs;
(4) Section 202 Supportive Housing for the Elderly (Capital
Advances);
(5) Section 811 Supportive Housing for Persons with Disabilities
(Capital Advances);
(6) Section 202 direct loan program for projects for the elderly
and persons with disabilities as it existed before October 1, 1991
(including 202/8 projects and 202/162 projects); and
(7) Housing with mortgages insured or held by HUD, or housing that
is receiving assistance from HUD, under the following authorities:
(i) Section 207 of the National Housing Act (NHA) (12 U.S.C. 1701
et seq.) (Rental Housing Insurance);
(ii) Section 213 of the NHA (Cooperative Housing Insurance);
(iii) Section 220 of the NHA (Rehabilitation and Neighborhood
Conservation Housing Insurance);
(iv) Section 221(d)(3) of the NHA (Market Interest Rate (MIR)
program);
(v) Section 221(d)(3) and (5) of the NHA (Below Market Interest
Rate (BMIR) program);
(vi) Section 221(d)(4) of the NHA (Housing for Moderate Income and
Displaced Families);
(vii) Section 231 of the NHA (Housing for Elderly Persons);
(viii) Section 232 of the NHA (Mortgage Insurance for Nursing
Homes, Intermediate Care Facilities, Assisted Living Facilities, Board
and Care Homes);
(ix) Section 234(d) of the NHA (Rental) (Mortgage Insurance for
Condominiums);
(x) Section 236 of the NHA (Rental and Cooperative Housing for
Lower Income Families);
(xi) Section 241 of the NHA (Supplemental Loans for Multifamily
Projects). (Where, however, the primary mortgage of a Section 241
property is insured or assisted by HUD under a program covered in this
part, the coverage by two HUD programs does not trigger two
inspections); and
(xii) Section 542(c) of the Housing and Community Development Act
of 1992 (12 U.S.C. 1707 note) (Housing Finance Agency Risk Sharing
program).
(b) Conflicts. The regulations in this subpart may be supplemented
by the specific regulations for the HUD-assisted programs listed in
paragraph (a) of this section. The program-specific regulations may
address the frequency of inspections, who performs the inspections and
whether alternative inspections are available given the statutory and
regulatory framework for the program. When there is a conflict between
the regulations of this subpart and the program-specific regulations,
the program-specific regulations govern.
(c) HUD housing. For purposes of this subpart, the term ``HUD
housing'' means the types of housing listed in paragraph (a) of this
section.
Sec. 5.703 National standards for the condition of HUD housing.
(a) General. To ensure that all residents live in safe, habitable
dwellings, the items and components located inside the building,
outside the building, and within the units of HUD housing must be
functionally adequate, operable, and free of health and safety hazards.
The standards under this section apply to all HUD housing. HUD housing
under the HCV, PBV, and Moderate Rehabilitation programs shall be
subject to these standards only for:
(1) The subsidized unit itself; and
(2) Items and components within the primary and secondary means of
egress from a unit's entry door(s) to the public way, those common
features related to the residential use of the building (e.g., the
laundry room, community room, mail room), and the systems equipment
that directly services the subsidized unit.
(b) Inside. Inside of HUD housing (or ``inside areas'') refers to
the common areas and building systems that can be generally found
within the building interior and are not inside a unit. Examples of
``inside'' common areas may include, basements, interior or attached
garages, enclosed carports, restrooms, closets, utility rooms,
mechanical rooms, community rooms, day care rooms, halls, corridors,
stairs, shared kitchens, laundry rooms, offices, enclosed porches,
enclosed patios, enclosed balconies, and trash collection areas.
Examples of building systems include those components that provide
domestic water such as pipes, electricity, elevators, emergency power,
fire protection, HVAC, and sanitary services. The inside area must meet
the following affirmative requirements:
(1) The inside area must include at least one battery-operated or
hard-wired smoke detector, in proper working condition, on each level
of the property. The Secretary may establish additional standards
through Federal Register notification;
(2) Except for housing subject to this subpart only through Sec.
5.701(a)(6) or (7), or housing otherwise exempt from this requirement
as provided elsewhere in this title, the inside area must meet or
exceed the carbon monoxide detection standards set by the Secretary
through Federal Register notification;
(3) For the inside area, any outlet installed within 6 feet of a
water source must be ground-fault circuit interrupter (GFCI) protected;
(4) The inside area must have a guardrail when there is an elevated
walking surface with a drop off of 30 inches or greater measured
vertically;
(5) The inside area must have permanently mounted light fixtures in
any kitchens and each bathroom; and
(6) The inside area may not contain unvented space heaters that
burn gas, oil, or kerosene.
(c) Outside. Outside of HUD housing (or ``outside areas'') refers
to the building site, building exterior components, and any building
systems located outside of the building or unit. Examples of
``outside'' components may include fencing, retaining walls, grounds,
lighting, mailboxes, project signs, parking lots, detached garage or
carport, driveways, play areas and equipment, refuse disposal, roads,
storm drainage, non-dwelling buildings, and walkways. Components found
on the exterior of the building are also considered outside areas, and
examples may include doors, attached porches, attached patios,
balconies, car ports, fire escapes, foundations, lighting, roofs,
walls, and windows. The outside area must meet the following
affirmative requirements:
(1) For the outside area, outlets within 6 feet of a water source
must be GFCI protected; and
(2) The outside area must have a guardrail when there is an
elevated walking surface with a drop off of 30 inches or greater
measured vertically.
(d) Units. A unit (or ``dwelling unit'') of HUD housing refers to
the interior components of an individual unit. Examples of components
included in the interior of a unit may include the balcony, bathroom,
call-for-aid (if applicable), carbon monoxide devices, ceiling, doors,
electrical systems, enclosed patio, floors, HVAC (where individual
units are provided), kitchen, lighting, outlets, smoke detectors,
stairs, switches, walls, water heater, and windows. The unit must also
meet the following affirmative requirements:
(1) The unit must have hot and cold running water in both the
bathroom and kitchen, including an adequate source of safe drinking
water in the bathroom and kitchen;
(2) The unit must include its own bathroom or sanitary facility
that is in proper operating condition and usable in privacy. It must
contain a sink, a bathtub or shower, and an interior flushable toilet;
(3) (i) The unit must include at least one battery-operated or
hard-wired
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smoke detector, in proper working condition, in the following
locations:
(A) On each level of the unit;
(B) Inside each bedroom;
(C) Within 21 feet of any door to a bedroom measured along a path
of travel; and
(D) Where a smoke detector installed outside a bedroom is separated
from an adjacent living area by a door, a smoke detector must also be
installed on the living area side of the door.
(ii) If the unit is occupied by any hearing-impaired person, the
smoke detectors must have an alarm system designed for hearing-impaired
persons;
(iii) The Secretary may establish additional standards through
Federal Register notification;
(iv) Following the specifications of National Fire Protection
Association Standard (NFPA) 72 satisfies the requirements of this
paragraph (d)(3);
(4) The unit must have a living room and a kitchen area with a
sink, cooking appliance, refrigerator, food preparation area, and food
storage area;
(5) For units assisted under the HCV or PBV program, the unit must
have at least one bedroom or living/sleeping room for each two persons;
(6) Except for units subject to this subpart only through Sec.
5.701(a)(6) or (7), or housing otherwise exempt from this requirement
as provided elsewhere in this title, the unit must meet or exceed the
carbon monoxide detection standards set by HUD through Federal Register
notification;
(7) The unit must have two working outlets or one working outlet
and a permanent light within all habitable rooms;
(8) Outlets within 6 feet of a water source must be GFCI protected:
(9) For climate zones designated by the Secretary through notice,
the unit must have a permanently installed heating source. No units may
contain unvented space heaters that burn gas, oil, or kerosene;
(10) The unit must have a guardrail when there is an elevated
walking surface with a drop off of 30 inches or greater measured
vertically; and
(11) The unit must have a permanently mounted light fixture in the
kitchen and each bathroom.
(e) Health and safety concerns--(1) General. The inside, outside
and unit must be free of health and safety hazards that pose a danger
to residents. Types of health and safety concerns include, but are not
limited to carbon monoxide, electrical hazards, extreme temperature,
flammable materials or other fire hazards, garbage and debris, handrail
hazards, infestation, lead-based paint, mold, and structural soundness.
(2) Lead-based paint. HUD housing must comply with all requirements
related to the evaluation and control of lead-based paint hazards and
have available proper documentation of such (see 24 CFR part 35). The
Lead-based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846), the
Residential Lead-based Paint Hazard Reduction Act of 1992 (42 U.S.C.
4851-4856), and the applicable regulations at 24 CFR part 35 apply.
(f) Compliance with State and local codes. (1) The standards for
the condition of HUD housing in this section do not supersede State and
local housing codes (such as fire, mechanical, plumbing, carbon
monoxide, property maintenance, or residential code requirements).
(2) All HUD housing other than units assisted under the HCV and PBV
programs must comply with State or local housing codes in order to
comply with this subpart.
(3) State and local code compliance is not part of the
determination of whether a unit passes the standards for the condition
of HUD housing under this section for the HCV and PBV programs (except
in accordance with Sec. 5.705(a)(3)).
(g) Use of an alternative inspection or additional standard for HCV
and PBV programs. A PHA is not subject to the standards set by this
section when the PHA is relying on an alternative inspection in
accordance with 24 CFR 982.406. PHAs may also elect to establish
additional requirements for quality, architecture, or design of PBV
housing, and any such additional requirements must be specified in the
Agreement to enter into a HAP Contract or HAP Contract as provided in
24 CFR part 983.
(h) Special housing types in the HCV, PBV and Moderate
Rehabilitation programs. Part 982, subpart M, of this title identifies
special housing types which require standards unique to special types
of housing. Unless modified by program-specific regulations, NSPIRE
Standards will apply for these special housing types.
Sec. 5.705 Inspection requirements.
(a) Procedures--(1) General. Any entity responsible for conducting
an inspection of HUD housing to determine compliance with this subpart,
must inspect and score such HUD housing in accordance with the
standards and procedures for identifying safe, habitable housing set
out by the Secretary and published in the Federal Register as described
in Sec. 5.711. The entity conducting the inspection shall identify
each deficiency as ``Life Threatening'', ``Severe,'' ``Moderate'', or
``Low.''
(2) Inspection scope. The inspection requirement for HUD housing
generally requires the inside, outside and unit to be inspected, in
accordance with Sec. 5.703. The inspection requirement for the tenant-
based HCV program and the unit inspection for the PBV and Moderate
Rehabilitation programs only applies to units occupied or to be
occupied by HCV, PBV, and Moderate Rehabilitation participants, and
common areas and exterior areas which either service or are associated
with such units.
(3) HCV and PBV variant inspection standards. (i) HUD may approve
inspection criteria variations for the following purposes:
(A) Variations which apply standards in local housing codes or
other codes adopted by the PHA; or
(B) Variations because of local climatic or geographic conditions.
(ii) Acceptability criteria variations may only be approved by HUD
pursuant to paragraph (a)(3)(i) of this section if such variations
either:
(A) Meet or exceed the performance requirements; or
(B) Significantly expand affordable housing opportunities for
families assisted under the program.
(iii) HUD will not approve any inspection criteria variation if HUD
believes that such variation is likely to adversely affect the health
or safety of participant families, or severely restrict housing choice.
(iv) Approved variations must be added to the Administrative Plan
as described in 24 CFR 982.54(d)(21).
(b) Entity conducting inspections. HUD housing must be inspected by
the appropriate entity as described in paragraph (b)(1) of this
section, except as described in paragraph (b)(2) of this section.
(1) General. The owner, lender, contract administrator, or HUD is
the entity responsible for performing inspections of HUD housing as
provided in this title, or a regulatory agreement or contract. For
properties with more than one HUD-insured loan, only the first mortgage
lender is required to conduct the inspection. The second mortgage
lender will be provided a copy of the physical inspection report by the
first mortgage lender.
(2) Exception. Under the HCV and PBV programs, the Public Housing
Agency is responsible for inspecting HUD housing under those programs,
unless another entity is assigned the inspection by the program
regulations governing the housing, regulatory agreements or contracts.
A PHA-owned
[[Page 30493]]
unit receiving assistance under section 8(o) of the 1937 act must be
inspected by an independent entity as specified in 24 CFR parts 982 and
983. Under the Moderate Rehabilitation program, the PHA is responsible
for inspecting the HUD housing unless the PHA is managing units on
which it is also administering the HAP Contract in accordance with 24
CFR 882.412, in which case HUD is responsible for the inspections in
accordance with 24 CFR 882.516(d).
(c) Timing of inspections--(1) Generally. A property must be
inspected before the property is approved for participation in any of
the HUD housing programs under this part unless there is a program
specific exception to this requirement. An entity responsible for
conducting an inspection of HUD housing to determine compliance with
this subpart must inspect such housing annually unless specified
otherwise below. An inspection shall be conducted no earlier than 3
months before and no later than 3 months after the date marking the
anniversary of the previous inspection, except that inspections due on
or before July 1, 2024, shall be conducted no earlier than 6 months
before and no later than 6 months after the date marking the
anniversary of the previous inspection. HUD may approve requests by an
owner or PHA for extensions of the deadline for an inspection for good
cause as determined by HUD and HUD may extend inspection deadlines
without owner request, as deemed necessary by the Secretary.
(2) Extended inspection cycle. HUD housing, except as specified
below, shall be scored and ranked in accordance with the methodology
provided through Federal Register notification.
(i) Standard 1 performing property. If a property receives a score
of 90 points or higher on its physical condition inspection, the
property will be designated a standard 1 performing property.
Properties designated as standard 1 performing properties will be
required to undergo a physical inspection once every three (3) years.
(ii) Standard 2 performing property. If a property receives a score
of 80 points or higher but less than 90 on its physical condition
inspection, the property will be designated a standard 2 performing
property. Properties designated as standard 2 performing properties
will be required to undergo a physical inspection once every two (2)
years.
(iii) Standard 3 performing property. If a property receives a
score of less than 80 points, the property will be designated a
standard 3 performing property. Properties designated as standard 3
performing properties will continue to undergo an annual physical
inspection as currently required under covered HUD programs.
(3) Triennial cycle for small rural PHAs. Small rural PHAs as
defined in 24 CFR 902.101 shall be assessed in accordance with part
902, subpart H of this title.
(4) Triennial cycle for small PHAs. Small PHAs as defined in 24 CFR
902.13(a) shall be assessed in accordance with 24 CFR 902.13(a).
(5) Housing choice vouchers. PHAs must inspect units subject to
part 982 of this title in accordance with the frequency described in 24
CFR 982.405.
(6) Project based vouchers. PHAs must inspect units subject to 24
CFR part 983 in accordance with the frequency described in 24 CFR
983.103.
(7) FHA insured mortgages section 232 facilities. HUD may exempt
assisted-living facilities, board and care facilities, and intermediate
care facilities from physical inspections under this part if HUD
determines that the State or local government has a reliable and
adequate inspection system in place, with the results of the inspection
being readily and timely available to HUD. For any other section 232
facilities, the inspection will be conducted only when and if HUD
determines, on the basis of information received, such as through a
complaint, site inspection, or referral by a State agency, on a case-
by-case basis, that inspection of a particular facility is needed to
assure protection of the residents or the adequate preservation of the
project.
(8) Section 8 Moderate Rehabilitation program. PHAs must inspect
units subject to the Moderate Rehabilitation program under 24 CFR part
882 in accordance with the frequency described in 24 CFR 882.516.
(d) Inspection costs. The cost of an inspection shall be the
responsibility of the entity responsible for the inspection as
identified in paragraph (a) of this section, except that a reasonable
fee may be required of the owner of a property for a reinspection if an
owner notifies the entity responsible for the inspection that a repair
has been made or the allotted time for repairs has elapsed and a
reinspection reveals that any deficiency cited in the previous
inspection that the owner is responsible for repairing was not
corrected. No fee may be passed along to the household residing in the
unit or units.
(e) Access to property for inspection. Nothing in this subpart
shall restrict the right of HUD, or an entity contracted by HUD, to
inspect a property. All owners and PHAs are required to provide HUD or
its representative with full and free access to all HUD-assisted
properties. All owners and PHAs are required to provide HUD or its
representative with access to all units and appurtenances in order to
permit physical inspections, monitoring reviews, and quality assurance
reviews under this part. Access to the units shall be provided whether
or not the resident is home or has installed additional locks for which
the owner or PHA did not obtain keys. In the event that an owner or PHA
fails to provide access as required by HUD or its representative, the
owner or PHA shall be given a physical condition score of zero for the
project or projects involved. A score of zero for an owner or PHA shall
be used to calculate the physical condition indicator score and the
overall assessment score for that owner or PHA.
(f) Tenant involvement in inspections. HUD will establish, through
notice, a procedure for tenants to recommend to HUD particular units
which HUD may choose to inspect either during or separate from its
standard inspection. HUD will evaluate the condition of these units and
issue a report on findings, but they will not be included in the
official score unless they were randomly selected independent of the
tenant's recommendation. The owner or PHA is required to correct any
deficiency HUD identifies within the timeframes HUD has established for
the identified deficiency.
Sec. 5.707 Uniform self-inspection requirement and report.
All PHAs and owners of HUD housing subject to an assistance
contract, other than owners participating in the HCV, PBV, and Moderate
Rehabilitation programs, are required to annually self-inspect their
properties, including all units, to ensure the units are maintained in
accordance with the standards in Sec. 5.703. The owner or PHA must
maintain the results of such self-inspections for three years and must
provide the results to HUD upon request. This self-inspection is
independent of other HUD inspections discussed in Sec. 5.705. The
owner or PHA may choose to conduct this inspection after a HUD
inspection to satisfy this requirement and the post-report survey
requirement at Sec. 5.711(c)(2) simultaneously.
Sec. 5.709 Administrative process for defining and revising
inspection criteria.
(a) Inspection standards and scoring methodology. The Secretary
will publish in the Federal Register, following notice and the
opportunity to
[[Page 30494]]
comment, a standards notification with a list of deficiencies and the
relative severity of these deficiencies to use for inspecting HUD
housing. This Federal Register document will also include the factors
for determining if an HCV, PBV, or Moderate Rehabilitation unit passes
or fails the inspection. The Secretary will also publish in the Federal
Register, following notice and opportunity to comment, a scoring
notification containing the methodologies to use for scoring and
ranking HUD housing. After considering the public comments received on
these Federal Register documents, the Secretary will publish documents
announcing the new inspections standards and scoring methodologies, and
the date on which these notifications become effective.
(1) Revisions. The Secretary will issue a notification in the
Federal Register published for at least 30 days of public comment
making any revisions to the inspection and scoring procedures HUD deems
necessary, at least once every three years, or three years after the
most recent revision, whichever is later.
(2) Emergency revisions. The Secretary may publish a notification
without 30 days of public comment in the case of an emergency to
protect Federal financial resources or the health or safety of
residents of HUD housing, after HUD makes a documented determination
that such action is warranted due to:
(i) A Life-Threatening deficiency or Severe deficiency and other
significant risks to safety as outlined in Sec. 5.703;
(ii) A new safety concern due to changing construction technology;
or
(iii) Other events as determined by the Secretary.
(b) [Reserved]
Sec. 5.711 Scoring, ranking criteria, and appeals.
(a) Applicability. Administrative process for scoring and ranking
the physical condition of HUD housing properties under this section
does not apply to the HCV, PBV or Moderate Rehabilitation programs.
PHAs administering HCV and PBV programs will be assessed under the
Section 8 Management Assessment Program (``SEMAP'') or the small rural
PHA assessment in accordance with 24 CFR part 985, and PHAs
administering the Moderate Rehabilitation programs are subject to HUD
review in accordance with 24 CFR 882.517.
(b) Scoring and ranking of HUD housing--(1) General. HUD's Real
Estate Assessment Center (REAC), or the appropriate entity either as
described in Sec. 5.705(b), or as identified in the regulator
agreement or contract for the property as described in Sec.
5.705(b)(1), will score and rank the physical condition of HUD housing
properties in accordance with the procedures set out by the Secretary
in Sec. 5.709.
(2) Public housing programs. PHAs operating public housing will be
scored and ranked under the Public Housing Assessment System (``PHAS'')
outlined in part 902 of this title.
(c) Inspection report requirements. (1) Life-Threatening
deficiencies and Severe deficiencies. Upon completion of an inspection,
or at the end of each day on a multiple-day inspection, REAC, or the
appropriate party as described in Sec. 5.705(b), will provide the
owner or PHA or owner's representative, a notice of any items
classified as Life-Threatening or Severe deficiencies. All Life-
Threatening items must be corrected within 24 hours of receipt of
notice of these items, unless HUD approves a variation. All Severe
items must be corrected within 24 hours of receipt of notice, unless
indicated otherwise within the individual inspection standards
published in the Federal Register with notice and the opportunity for
comment, or HUD approves a variation. The owner or PHA or owner's
representative must electronically certify and provide supporting
evidence within 2 business days after the deadline to correct the Life-
Threatening and Severe items that the items have been resolved or
sufficiently corrected such that they no longer pose a severe health or
safety risk to residents of the property, or that the hazard is blocked
until permanent repairs can be completed. If permanent repair will take
longer than the allowable time in the relevant standard for the
deficiency, the owner or PHA must provide HUD a timeframe for
completing permanent repairs for HUD approval.
(2) Post-report inspection. The owner or PHA must carefully review
the inspection report and is responsible for conducting its own survey
of the total property. Moderate deficiencies must be corrected within
thirty days and Low deficiencies must be corrected within sixty days,
unless indicated otherwise within the individual inspection standards
published in the Federal Register with notice and the opportunity for
comment or within such other reasonable time prescribed by a HUD notice
to the owner or PHA. For properties that scored at or above 60, the
survey may be limited to inspecting for deficiencies based on the
inspecting entity's inspection findings. For properties that scored
below 60, the owner or PHA must conduct a survey of the entire project,
including all units, inside areas, and outside areas, for any
deficiency, and must electronically submit a copy of the results of the
survey to HUD.
(d) Technical review of inspection results--(1) Timing. A request
for a technical review of inspection results must be submitted
electronically and must be received by the inspecting entity no later
than the 45th calendar day following the day the inspection report is
provided to the owner or PHA.
(2) Request for technical review. The request must be accompanied
by the owner's or PHA's relevant evidence that an objectively
verifiable and material error occurred or adverse conditions beyond the
owner or PHA's control occurred, which if corrected will result in a
significant improvement in the overall score of the property. A
technical review of the inspection results will not be conducted based
on conditions that were corrected subsequent to the inspection. Upon
receipt of this request from the owner or PHA, the REAC will review the
inspection and the evidence. If the REAC review determines that an
objectively verifiable and material error (or errors) or adverse
condition(s) beyond the owner's or PHA's control has been documented
and that it is likely to result in a significant improvement in the
property's overall score, the REAC will take one or a combination of
the following actions:
(i) Undertake a new inspection;
(ii) Correct the original inspection; or
(iii) Issue a new physical condition score.
(3) Burden of proof that error or adverse conditions occurred rests
with owner or PHA. The burden of proof rests with the owner or PHA to
demonstrate that an objectively verifiable and material error (or
errors) or adverse conditions occurred in the REAC's inspection through
submission of evidence, which if corrected will result in a significant
improvement in the property's overall score. The REAC will apply a
rebuttable presumption that the inspection was conducted accurately. To
support its request for a technical review of the physical inspection
results, the owner or PHA may submit photographic evidence, written
material from an objective source with subject matter expertise that
pertains to the item being reviewed such as a local fire marshal,
building code official, registered architect, or professional engineer,
or other similar evidence.
(4) Basis for technical review. An objectively verifiable material
error must be present, or an adjustment to the score must be necessary,
to allow for a
[[Page 30495]]
technical review of inspection results. The basis for a technical
review must not be due to the fault of the owner or PHA and must
exhibit specific characteristics and meet specific thresholds. The
applicable types of material errors and bases for adjustment are as
follows.
(i) Building data error. A building data error occurs if the
inspector inspected the wrong building or a building that was not owned
by the property, including common or site areas that were not a part of
the property. Incorrect data due to the failure of an owner or PHA to
ensure HUD's systems of records are updated cannot form the basis of a
review. Incorrect building data that does not affect the score, such as
the address and building name would not be considered material.
(ii) Unit count error. A unit count error occurs if the total
number of units considered in scoring is incorrect due to the fault of
HUD. Since scoring uses total units, REAC will examine instances where
the participant can provide evidence that the total units used was
incorrect and that the results were not representative of the condition
of the property.
(iii) A non-existent deficiency error. A non-existent deficiency
error occurs if the inspection records an observed deficiency that does
not satisfy or does not meet a reasonable interpretation of the
definition of that deficiency as defined by inspection procedures.
(iv) Adjustments for factors not reflected or inappropriately
reflected in physical condition score. HUD may determine it is
appropriate to review the results of a property's physical inspection
if facts and circumstances affecting the owner's or PHA's property are
not reflected in the inspection or are reflected inappropriately in the
inspection. The circumstances addressed in this may include
inconsistencies between local code requirements and the HUD physical
inspection protocol; conditions that are permitted by local variance or
license or which are preexisting physical features that do not conform
to, or are inconsistent with, HUD's physical condition protocol; or the
project or PHA having been scored for elements (e.g., roads, sidewalks,
mail boxes, resident-owned appliances, etc.) that it does not own and
is not responsible for maintaining.
(v) Adjustments for adverse conditions beyond the control of the
owner or PHA. HUD may determine that certain deficiencies that
adversely and significantly affect the physical condition score of the
project were caused by circumstances beyond the control of the owner or
PHA. The correction of these conditions, however, remains the
responsibility of the owner or PHA. The circumstances addressed by this
paragraph may include, but are not limited to, damage caused by third
parties (such as a private entity or public entity undertaking work
near a Public Housing project that results in damage to the project) or
natural disasters.
(vi) Adjustments for modernization work in progress. HUD may
determine that occupied dwelling units or other areas of a property,
which are subject to physical inspection, and which are undergoing
modernization work, require an adjustment to the physical condition
score. An occupied dwelling unit or other areas of an owner's or PHA's
property undergoing modernization are subject to physical inspection;
the unit(s) and other areas of the property are not exempt from
physical inspection. All elements of the unit or of the other areas of
the owner or PHA's project that are subject to inspection and are not
undergoing modernization at the time of the inspection (even if
modernization is planned) will be subject to HUD's physical inspection
protocol without adjustment. For those elements of the unit or of the
property that are undergoing modernization, deficiencies will be noted
in accordance with HUD's physical inspection protocol, but the owner or
PHA may request adjustment of the physical condition score as a result
of current modernization or rehab work in progress.
(5) Significant improvement. Significant improvement in the
project's overall score refers to an increase in a score for the owner
or PHA such that the new score crosses an administratively significant
threshold.
(6) Reinspection. If HUD determines that a reinspection is
appropriate, it will arrange for a complete reinspection of the
project(s) in question, not just the deficiencies previously
identified. The reinspection will constitute the final inspection for
the project, and HUD will issue a new inspection report (the final
inspection report).
(e) Independent HUD review. Under certain circumstances, HUD may
find it appropriate absent an owner or PHA request for technical review
to review the results of an inspection which are anomalous or have an
incorrect result due to facts and circumstances affecting the inspected
property which are not reflected in the inspection or reflected
inappropriately in the inspection.
(f) Responsibility for the cost of a new inspection. If a new
inspection is undertaken by the inspecting party and the new inspection
score results in a significant improvement in the property's overall
score, then the entity responsible for the inspection shall bear the
expense of the new inspection. If no significant improvement occurs,
then the owner or PHA responsible for the property must bear the
expense of the new inspection. The inspection cost of a new inspection,
if paid by the owner or PHA, is not an eligible project operating
expense. The new inspection score will be considered the final score.
(g) Issuance of final score and publication of score. (1) The score
of the property is the final score if the owner or PHA files no request
for technical review, as provided in paragraph (d) of this section, or
for other adjustment of the physical condition score, as provided in
paragraph (e) of this section. If the owner or PHA files a request for
technical review or score adjustments in accordance with paragraphs
(d), or there is a HUD review under paragraph (e) of this section, the
final inspection score is the score issued by HUD after any adjustments
are determined necessary and made by HUD at the conclusion of these
processes.
(2) HUD will make public the final scores of the properties of the
owners and PHAs through posting on HUD's internet site, or other
appropriate means.
(h) Responsibility to notify residents of inspection; and
availability of documents to residents--(1) Notification to residents.
An owner or PHA must notify its residents of any planned inspections of
their units or the housing development generally.
(2) Availability of documents for review. (i) Once a final score
has been issued the owner or PHA must make the physical inspection
report and all related documents available to residents during regular
business hours upon reasonable request for review and copying. Related
documents include the owner's or PHA's survey plan, plan of correction,
certification, and related correspondence.
(ii) Once the owner's final inspection score is issued and
published, the owner or PHA must make any additional information, such
as the results of any reinspection or appeal requests, available for
review and copying by its residents upon reasonable request during
regular business hours.
(iii) The owner or PHA must maintain the documents related to the
inspection of the property, as described in paragraphs (h)(2)(i) and
(ii) of this section, for review by residents for a
[[Page 30496]]
period of 60 days from the date HUD provides the inspection score for
the property in which the residents reside.
(3) Posting on the availability of materials. The owner or PHA must
post a notice to the residents in the owner's or PHA's management
office and on any bulletin boards in all common areas on the date of
submission to the owner of the inspection score for the property in
which the resident resides that advises residents of the availability
of the materials described in this section. The notice must be
translated into other languages if necessary to provide meaningful
access for limited English proficient (LEP) individuals. The notice
should include, where applicable, the name, address, and telephone
number of the HUD field office contact.
(4) Residents are encouraged to comment on this information
provided by the owner or PHA and submit any comments directly to the
applicable HUD field office or responsible entity. Should residents
discover the owner or PHA provided HUD with a false certification
during the review, they are encouraged to notify the applicable HUD
field office where appropriate inquiry and action will be taken.
(i) Administrative review of properties. The file of a property
that receives a score of 30 points or less, or two successive scores
under 60, on its inspection will be subject to additional
administrative review. Properties that receive two successive scores
under 60 may be referred to HUD's Departmental Enforcement Center (DEC)
for evaluation. Properties that receive a score of 30 points or less
shall be automatically referred to the DEC for evaluation.
(1) Notification to owner of submission of property file to the
DEC. Upon referral to the DEC, the Department will provide for
notification to the PHA or owner that the file on the owner's property
is being submitted to the DEC for evaluation. The notification will be
provided at the time the REAC issues the inspection report to the owner
or at such other time as a referral occurs.
(2) Evaluation of the property. During the DEC's evaluation period,
the DEC will perform an analysis of the property, which may include
input from tenants, HUD officials, elected officials, maintenance staff
and others as may be appropriate. Although program offices will assist
with the evaluation, the DEC will have primary responsibility for the
conclusion of the evaluation of the property after taking into
consideration the input of interested parties as described in this
paragraph. The DEC's evaluation may include a site visit to the PHA's
or owner's property.
(3) Continuing responsibilities of HUD program offices and
mortgagee. During the period of DEC evaluation, HUD's program offices
continue to be responsible for routine business, oversight, and
monitoring. In addition, during this period of evaluation, the
mortgagee, as applicable, shall continue to carry out its duties and
responsibilities with respect to the mortgage.
(4) Enforcement action. Except as otherwise provided by statute,
if, based on the DEC's evaluation and in consultation with HUD program
offices, the DEC determines that enforcement actions are appropriate,
it may take those actions for which the DEC has delegated authority
and/or make recommendations to HUD program office with respect to
resolving identified physical deficiencies and owner or PHA
noncompliance.
(j) No limitation on existing enforcement authority. The
administrative process provided in this section does not prohibit HUD
from taking whatever action may be necessary (notwithstanding the
commencement of this process), as authorized under existing statutes,
regulations, contracts, grant agreements or other documents, to protect
HUD's interests in HUD housing properties and to protect the residents
of these properties.
Sec. 5.713 Second- and third-party rights.
Nothing in this subpart is intended to create any right of the
family residing in HUD Housing or any party, other than HUD or a PHA,
to require enforcement of the standards required by this subpart or to
assert any claim against HUD or the PHA for damages, injunction, or
other relief for alleged failure to enforce the standards.
PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM
0
3. The authority for part 92 continues to read as follows:
Authority: 42 U.S.C. 3535(d), 12 U.S.C. 1701x and 4568.
Sec. 92.2 [Amended]
0
4. Effective October 1, 2023, amend Sec. 92.2 by removing the
definition of ``Uniform Physical Condition Standards (UPCS)''.
0
5. Effective October 1, 2023, amend Sec. 92.209 by revising paragraph
(i) to read as follows:
Sec. 92.209 Tenant-based rental assistance: Eligible costs and
requirements.
* * * * *
(i) Housing standards. Housing occupied by a family receiving
tenant-based rental assistance under this section must meet the
participating jurisdiction's property standards under Sec. 92.251. The
participating jurisdiction must inspect the housing initially and re-
inspect it annually.
* * * * *
0
6. Effective October 1, 2023, amend Sec. 92.251 by:
0
a. Revising paragraphs (b)(1)(viii) and (c)(3);
0
b. Removing and reserving paragraph (d); and
0
c. Revising the paragraph (f) heading and paragraphs (f)(1)
introductory text and (f)(1)(i).
The revisions read as follows:
Sec. 92.251 Property standards.
* * * * *
(b) * * *
(1) * * *
(viii) HUD housing standards. The standards of the participating
jurisdiction must be such that, upon completion, the HOME-assisted
project and units will be decent, safe, sanitary, and in good repair.
This means that the HOME-assisted project and units will meet the
standards in 24 CFR 5.703, except that the carbon monoxide detection
requirements at 24 CFR 5.703(b)(2) and (d)(6) shall not apply. For all
HOME-assisted projects and units, the requirements at 24 CFR 5.705
through 5.713 do not apply. At minimum, the participating
jurisdiction's rehabilitation standards must require correction of the
specific deficiencies published in the Federal Register for HOME-
assisted projects and units. For SRO housing, 24 CFR 5.703(d) shall
only apply to the extent that the SRO unit contains the room or
facility referenced in 24 CFR 5.703(d).
* * * * *
(c) * * *
(3) Existing housing that is acquired for homeownership (e.g.,
downpayment assistance) must be decent, safe, sanitary, and in good
repair. The participating jurisdiction must establish standards to
determine that the housing is decent, safe, sanitary, and in good
repair. At minimum, the standards must provide that the housing meets
all applicable State and local housing quality standards and code
requirements and the housing does not contain the specific deficiencies
established by HUD based on the applicable standards in 24 CFR 5.703
and published in the Federal Register
[[Page 30497]]
for HOME assisted projects and units. The participating jurisdiction
must inspect the housing and document this compliance based upon an
inspection that is conducted no earlier than 90 days before the
commitment of HOME assistance. If the housing does not meet these
standards, the housing must be rehabilitated to meet the standards of
this paragraph (c)(3) or it cannot be acquired with HOME funds.
* * * * *
(f) Ongoing property condition standards: Rental housing and
housing occupied by tenants receiving HOME tenant-based rental
assistance--(1) Ongoing property standards. The participating
jurisdiction must establish property standards for rental housing
(including manufactured housing) that apply throughout the
affordability period and for housing occupied by tenants receiving HOME
tenant-based rental assistance. The standards must require that owners
maintain the housing as decent, safe, sanitary, and in good repair. The
participating jurisdiction's description of its property standards must
be in sufficient detail to establish the basis for a uniform inspection
of HOME rental projects and housing occupied by tenants receiving HOME
tenant-based rental assistance. The participating jurisdiction's
ongoing property standards must address each of the following:
(i) Compliance with State and local codes, ordinances, and
requirements. The participating jurisdiction's standards must require
the housing to meet all applicable State and local code requirements
and ordinances. In the absence of existing applicable State or local
code requirements and ordinances, at a minimum, the participating
jurisdiction's ongoing property standards must provide that the
property does not contain the specific deficiencies established by HUD
based on the applicable standards in 24 CFR 5.703 and published in the
Federal Register for rental housing (including manufactured housing)
and housing occupied by tenants receiving HOME tenant-based rental
assistance. The requirements in 24 CFR 5.705 through 5.713 do not apply
to the participating jurisdiction's ongoing property standards.
* * * * *
0
7. Effective October 1, 2023, amend Sec. 92.504 by revising paragraphs
(d)(1)(ii)(D) and (d)(1)(iii) to read as follows:
Sec. 92.504 Participating jurisdiction responsibilities; written
agreements; on-site inspections.
* * * * *
(d) * * *
(1) * * *
(ii) * * *
(D) Inspections must be based on a statistically valid sample of
units appropriate for the size of the HOME-assisted project, as set
forth by HUD through a document published in the Federal Register. For
projects with one-to-four HOME-assisted units, a participating
jurisdiction must inspect all of the HOME-assisted units and all
inspectable areas for each building with HOME-assisted units.
(iii) Annual inspections. Tenant-based rental assistance (TBRA).
All housing occupied by tenants receiving HOME tenant-based rental
assistance must meet the property standards of Sec. 92.251. The
participating jurisdiction must perform annual on-site inspections of
rental housing occupied by tenants receiving HOME-assisted TBRA to
determine compliance with these standards.
* * * * *
PART 93--HOUSING TRUST FUND
0
8. The authority for part 93 continues to read as follows:
Authority: 42 U.S.C. 3535(d), 12 U.S.C. 4568.
0
9. Effective October 1, 2023, amend Sec. 93.301 by revising paragraphs
(b)(1)(viii), (c)(3), (e)(1) introductory text, and (e)(1)(i) to read
as follows:
Sec. 93.301 Property standards.
* * * * *
(b) * * *
(1) * * *
(viii) Housing standards. The standards of the grantee must be such
that, upon completion, the HTF-assisted project and units will be
decent, safe, sanitary, and in good repair. This means that the HTF-
assisted project and units will meet the standards in 24 CFR 5.703,
except that the carbon monoxide detection requirement at 24 CFR
5.703(b)(2) and (d)(6) shall not apply. For all HTF-assisted projects
and units, the requirements at 24 CFR 5.705 through 5.713 do not apply.
At minimum, the grantee's rehabilitation standards must require
correction of the specific deficiencies published in the Federal
Register for HTF-assisted projects and units. For SRO housing, the
requirements at 24 CFR 5.703(d) shall only apply to the extent that the
SRO unit contains the room or facility referenced in 24 CFR 5.703(d).
* * * * *
(c) * * *
(3) Existing housing that is acquired for homeownership (e.g., down
payment assistance) must be decent, safe, sanitary, and in good repair.
The grantee must establish standards to determine that the housing is
decent, safe, sanitary, and in good repair. At minimum, the standards
must provide that the housing meets all applicable State and local
standards and code requirements, and the housing does not contain the
specific deficiencies established by HUD based on the applicable
standards in 24 CFR 5.703 and published in the Federal Register for
HTF-assisted projects and units. The grantee must inspect the housing
and document compliance based upon an inspection that is conducted no
earlier than 90 calendar days before the date of commitment of HTF
assistance. If the housing does not meet these standards, the housing
must be rehabilitated to meet the standards of this paragraph or it
cannot be assisted with HTF funds.
* * * * *
(e) * * *
(1) Ongoing property standards. The grantee must establish property
standards for rental housing (including manufactured housing) that
apply throughout the affordability period. The standards must require
that owners maintain the housing as decent, safe, sanitary and in good
repair. The grantee's description of its property standards must be in
sufficient detail to establish the basis for a uniform inspection of
HTF rental projects. The grantee's ongoing property standards must
address each of the following:
(i) Minimum Property Standards. At a minimum, the grantee's ongoing
property standards must provide that the property does not contain the
specific deficiencies established by HUD based on the applicable
standards in 24 CFR 5.703 and published in the Federal Register for
rental housing (including manufactured housing). The requirements in 24
CFR 5.705 through 5.713 do not apply to the grantee's ongoing property
standards.
* * * * *
0
10. Effective October 1, 2023, amend Sec. 93.404 by revising paragraph
(d)(2)(v) to read as follows:
Sec. 93.404 Grantee responsibilities; written agreements; onsite
inspections; financial oversight.
* * * * *
(d) * * *
(2) * * *
(v) Inspections must be based on a statistically valid sample of
units appropriate for the size of the HTF-
[[Page 30498]]
assisted project, as set forth by HUD through notification published in
the Federal Register. For projects with one to four HTF-assisted units,
the HTF grantee must inspect all of the HTF-assisted units and all
inspectable areas for each building housing HTF-assisted units.
* * * * *
PART 200--INTRODUCTION TO FHA PROGRAMS
0
11. The authority for part 200 continues to read as follows:
Authority: 12 U.S.C. 1702-1715z-21; 42 U.S.C. 3535(d).
0
12. Effective October 1, 2023, revise Sec. 200.850 to read as follows:
Sec. 200.850 Physical condition standards and physical inspection
requirements.
The requirements in 24 CFR part 5, subpart G, are applicable to the
multifamily properties assisted or insured that are listed in 24 CFR
5.701.
Sec. Sec. 200.853, 200.855, and 200.857 [Removed and Reserved]
0
13. Effective October 1, 2023, remove and reserve Sec. Sec. 200.853,
200.855, and 200.857.
PART 570--COMMUNITY DEVELOPMENT BLOCK GRANTS
0
14. The authority citation for part 570 continues to read as follows:
Authority: 12 U.S.C. 1701x, 1701x-1; 42 U.S.C. 3535(d) and 5301-
5320.
0
15. Effective October 1, 2023, amend Sec. 570.208 by revising
paragraph (b)(1)(iv) to read as follows:
Sec. 570.208 Criteria for national objectives.
* * * * *
(b) * * *
(1) * * *
(iv) The assisted activity addresses one or more of the conditions
which contributed to the deterioration of the area. Rehabilitation of
residential buildings carried out in an area meeting the above
requirements will be considered to address the area's deterioration
only where each building rehabilitated is considered substandard under
local definition before rehabilitation, and all deficiencies making a
building substandard have been eliminated. At a minimum, the local
definition for this purpose must be such that buildings that it would
render substandard would also fail to meet the standards for the
condition of HUD housing at 24 CFR 5.703.
* * * * *
PART 574--HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS, SUBPART D--
USES OF GRANT FUNDS
0
16. The authority for part 574 continues to read as follows:
Authority: 12 U.S.C. 1701x, 1701x-1; 42 U.S.C. 3535(d) and 5301-
5320.
0
17. Effective October 1, 2023, amend Sec. 574.310 by revising
paragraphs (b) introductory text and (b)(2) and adding paragraph (b)(3)
to read as follows:
Sec. 574.310 General standards for eligible housing activities.
* * * * *
(b) * * *. The following standards apply for all housing for which
HOPWA funds are used under Sec. 574.300(b)(3), (4), (5), and (8).
* * * * *
(2) HUD housing standards. Except for such variations as are
proposed by the grantee and approved by HUD, the housing must meet the
standards for HUD housing in 24 CFR 5.703, except that:
(i) As applied to HOPWA, ``HUD housing'' in 24 CFR 5.703 means the
units eligible persons occupy or will occupy, systems equipment that
directly services those units, items and components within the primary
and secondary means of egress from those units' doors to the public
way, and common features related to the residential use of the building
(e.g., the laundry room, community room, mail room).
(ii) Housing that continues to meet the HOPWA housing quality
standards that applied when the eligible person(s) moved into that
housing shall not be required to meet new or different standards under
24 CFR 5.703.
(3) The requirements of 24 CFR 5.705 through 5.713 do not apply.
* * * * *
PART 576--EMERGENCY SOLUTIONS GRANTS PROGRAM
0
18. The authority for 24 CFR part 576 continues to read as follows:
Authority: 12 U.S.C. 1701x, 1701x-1; 42 U.S.C. 11371 et seq., 42
U.S.C. 3535(d).
Subpart E--Program Requirements
0
19. Effective October 1, 2023, amend Sec. 576.403 by revising
paragraph (c) to read as follows:
Sec. 576.403 Shelter and housing standards.
* * * * *
(c) Minimum standards for permanent housing. When ESG funds are
used for permanent housing under 24 CFR 576.105 or 576.106, the minimum
standards in 24 CFR 5.703 apply, except that:
(1) Definition of HUD housing. For the purposes of ESG, ``HUD
housing'' in 24 CFR 5.703 means the program participant's unit, systems
equipment that directly services those units, items and components
within the primary and secondary means of egress from those units'
doors to the public way, and common features related to the program
participant's use of the building (e.g., the laundry room, community
room, mail room).
(2) Housing inspections. For the first 30 days in which a program
participant receives homelessness prevention assistance, the recipient
or subrecipient may provide services under 24 CFR 576.105(b) to help
the program participant remain in their unit without inspecting the
unit to determine whether it meets the minimum standards identified in
this paragraph (c), except that the recipient or subrecipient must
still comply with the requirements under 24 CFR part 35. Before
otherwise using ESG funds under 24 CFR 576.105 or 576.106 to help a
program participant remain in or move into specific housing, however,
the recipient or subrecipient must inspect that housing to confirm that
it meets the requirements in this section. In addition, recipient or
subrecipient must inspect the housing at least once every 12 months
during the period of assistance to confirm the housing continues to
meet the minimum standards in this paragraph (c).
(3) Correction of deficiencies. If an inspection reveals one or
more deficiencies that prevent the housing from meeting the
requirements in this section, ESG funds must not be used under 24 CFR
576.105 or 576.106 with respect to that housing unless the owner
corrects the deficiencies within 30 days from the date of the initial
inspection and the recipient or subrecipient verifies that all
deficiencies have been corrected.
(4) Rental arrears. Housing for which rental arrears are paid is
only subject to the requirements in this section, if a program
participant is seeking to stay in that housing.
(5) Additional standards. The recipient may also add standards that
exceed these minimum standards.
(6) Other exemptions from 24 CFR part 5, subpart G. The
requirements in 24 CFR 5.703(b)(2) and (d)(6) and 5.705 through 5.713
do not apply.
[[Page 30499]]
PART 578--CONTINUUM OF CARE PROGRAM
0
20. The authority for 24 CFR part 578 continues to read as follows:
Authority: 12 U.S.C. 1701x, 1701x-1; 42 U.S.C. 11381 et seq., 42
U.S.C. 3535(d).
0
21. Effective October 1, 2023, amend Sec. 578.75 by revising paragraph
(b) to read as follows:
Sec. 578.75 General operations.
* * * * *
(b) Housing standards. Housing leased with Continuum of Care
program funds, or for which rental assistance payments are made with
Continuum of Care program funds, must meet the applicable standards
under 24 CFR 5.703, except that the carbon monoxide detection
requirement at 24 CFR 5.703(b)(2) and (d)(6) shall not apply. For
housing that is occupied by program participants receiving tenant-based
rental assistance, 24 CFR part 35, subparts A, B, M, and R apply. For
housing rehabilitated with funds under this part, the lead-based paint
requirements in 24 CFR part 35, subparts A, B, J, and R apply. For
housing that receives project-based or sponsor-based rental assistance,
24 CFR part 35, subparts A, B, H, and R apply. For residential property
for which funds under this part are used for acquisition, leasing,
services, or operating costs, 24 CFR part 35, subparts A, B, K, and R
apply. Additionally, for tenant-based rental assistance, for leasing of
individual units, and for sponsor based rental assistance where not all
units in a structure are or will be assisted, the standards apply only
to the unit itself, and to the means of ingress and egress from the
unit to the public way and to the building's common areas.
(1) Before any assistance will be provided on behalf of a program
participant, the recipient, or subrecipient, must physically inspect
each unit to assure that the unit meets 24 CFR 5.703. Assistance will
not be provided for units that fail to meet 24 CFR 5.703, unless the
owner corrects any deficiencies within 30 days from the date of the
initial inspection and the recipient or subrecipient verifies that all
deficiencies have been corrected.
(2) Recipients or subrecipients must inspect all units at least
annually during the grant period to ensure that the units continue to
meet 24 CFR 5.703.
(3) The requirements in 24 CFR 5.705 through 5.713 do not apply.
* * * * *
PART 882--SECTION 8 MODERATE REHABILITATION PROGRAMS
0
22. The authority for part 882 continues to read as follows:
Authority: 42 U.S.C. 1437f and 3535(d).
Sec. 882.404 [Amended]
0
23. Effective October 1, 2023, amend Sec. 882.404 by removing
paragraph (d).
0
24. Effective October 1, 2023, amend Sec. 882.516 by revising the
section heading and paragraphs (b), (c), and (e) to read as follows:
Sec. 882.516 Maintenance, operation, and inspections.
* * * * *
(b) Periodic inspection. In addition to the inspections required
prior to execution of the Contract, the PHA must inspect or cause to be
inspected the contract units in accordance with the physical inspection
requirements under 24 CFR part 5, subpart G, at least annually, and at
such other times as may be necessary to assure that the Owner is
meeting the obligations to maintain the units so they are compliant
with 24 CFR part 5, subpart G, and to provide the agreed upon utilities
and other services. The PHA must take into account complaints and any
other information coming to its attention in scheduling inspections.
(c) Units with health and safety hazards. If the PHA notifies the
Owner that the unit(s) under Contract are not being maintained in
compliance with the standards under 24 CFR part 5, subpart G, and the
Owner fails to take corrective action (including corrective action with
respect to the Family where the condition of the unit is the fault of
the Family) within the time prescribed in the notice, the PHA may
exercise any of its rights or remedies under the Contract, including
abatement of housing assistance payments (even if the Family continues
in occupancy) or termination of the Contract on the affected unit(s)
and assistance to the Family in accordance with Sec. 882.514(e).
* * * * *
(e) Periodic reviews. Periodic PHA audits must be conducted as
required by HUD, in accordance with 2 CFR part 200, subpart F.
PART 884--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW
CONSTRUCTION SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING
PROJECTS
0
25. The authority for part 884 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
0
26. Effective October 1, 2023, revise Sec. 884.217 to read as follows:
Sec. 884.217 Maintenance, operation, and inspections.
(a) Maintenance and operation. The Owner shall maintain and operate
the project consistent with 24 CFR part 5, subpart G, and shall provide
all the services, maintenance, and utilities which the Owner agrees to
provide under the Contract, subject to abatement of housing assistance
payments or other applicable remedies if the Owner fails to meet these
obligations.
(b) Inspection prior to occupancy. Prior to occupancy of any unit
by a Family, the Owner and the Family shall inspect the unit. On forms
prescribed by HUD, the Owner and Family shall certify, that they have
inspected the unit and the owner shall certify that the unit is
compliant with 24 CFR part 5, subpart G, and the criteria provided in
the prescribed forms. Copies of these reports shall be kept on file by
the Owner for at least 3 years, and may be required to be
electronically submitted to HUD.
(c) Periodic inspections. HUD (or the PHA, as appropriate) will
inspect or cause to be inspected the contract units and related
facilities in accordance with the physical inspection requirements in
24 CFR part 5, subpart G, and at such other times (including prior to
initial occupancy and renting of any unit) as HUD (or the PHA) may
determine to be necessary to assure that the Owner is meeting the
obligation to maintain the units in accordance with 24 CFR part 5,
subpart G, and to provide the agreed upon utilities and other services.
(d) Units with health and safety hazards. If HUD (or the PHA, as
appropriate) notifies the Owner that the Owner has failed to maintain a
unit that in accordance with 24 CFR part 5, subpart G, and the Owner
fails to take corrective action within the time prescribed by notice,
HUD (or the PHA) may exercise any of its rights or remedies under the
Contract, including abatement of housing assistance payments, even if
the Family continues to occupy the unit. If, however, the Family wishes
to be rehoused in another unit with Section 8 assistance and HUD (or
the PHA) does not have other Section 8 funds for such purposes, HUD (or
the PHA) may use the abated housing assistance payments for the purpose
of rehousing the Family in another unit. Where this is done, the Owner
shall be notified that the Owner will be entitled to resumption of
housing assistance payments for the vacated unit if:
[[Page 30500]]
(1) The unit is restored to in accordance with 24 CFR part 5,
subpart G;
(2) The Family is willing to and does move back to the restored
dwelling unit; and
(3) A deduction is made for the expenses incurred by the Family for
both moves.
PART 886--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--SPECIAL
ALLOCATIONS
0
27. The authority for part 886 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
Sec. 886.113 [Amended]
0
28. Effective October 1, 2023, amend Sec. 886.113 by removing and
reserving paragraphs (b) and (i).
0
29. Effective October 1, 2023, revise Sec. 886.123 to read as follows:
Sec. 886.123 Maintenance, operation, and inspections.
(a) Maintenance and operation. The Owner shall maintain and operate
the project so as to provide housing that is compliant with 24 CFR part
5, subpart G, and the Owner shall provide all the services,
maintenance, and utilities which the Owner agrees to provide under the
Contract, subject to abatement of housing assistance payments or other
applicable remedies if the Owner fails to meet these obligations.
(b) Inspection prior to occupancy. Prior to occupancy of any unit
by a Family, the Owner and the Family shall inspect the unit. On forms
prescribed by HUD, the Owner and Family shall certify that they have
inspected the unit, and the owner shall certify that the unit is
compliant with 24 CFR part 5, subpart G, and with the criteria provided
in the prescribed forms. Copies of these reports shall be kept on file
by the Owner for at least three years.
(c) Periodic inspections. HUD will inspect or cause to be inspected
the contract units in accordance with the requirements in 24 CFR part
5, subpart G, and at such other times as may be necessary to assure
that the owner is meeting contractual obligations.
(d) Units not free of health and safety hazards. If HUD notifies
the Owner that the Owner has failed to maintain a unit that is
compliant with the requirements in 24 CFR part 5, subpart G, and the
Owner fails to take corrective action within the time prescribed by
notice, HUD may exercise any of its rights or remedies under the
Contract, including abatement of housing assistance payments, even if
the Family continues to occupy the unit.
Sec. 886.307 [Amended].
0
30. Effective October 1, 2023, amend Sec. 886.307 by removing and
reserving paragraphs (b), (i), and (m).
0
31. Effective October 1, 2023, revise Sec. 886.323 to read as follows:
Sec. 886.323 Maintenance, operation, and inspections.
(a) Maintain housing free of health and safety hazards. The Owner
shall maintain and operate the project so as to be compliant with 24
CFR part 5, subpart G, and the Owner shall provide all the services,
maintenance, and utilities which the Owner agrees to provide under the
contract and the lease. Failure to do so shall be considered a material
default under the contract and Regulatory Agreement, if any.
(b) HUD inspection. Prior to execution of the contract, HUD shall
inspect (or cause to be inspected) each proposed contract unit and
related facilities to ensure that they comply with the requirements at
24 CFR part 5, subpart G.
(c) Owner and family inspection. Prior to occupancy of any vacant
unit by a Family, the Owner and the Family shall inspect the unit. The
Owner shall certify that they have inspected the unit, and the owner
shall certify that the unit is compliant with 24 CFR part 5, subpart G.
Copies of these reports shall be kept on file by the owner for at least
3 years.
(d) Periodic inspections. HUD will inspect the project (or cause it
to be inspected) in accordance with the requirements in 24 CFR part 5,
subpart G, and at such other times as HUD may determine to be necessary
to assure that the owner is meeting the Owner's obligation to maintain
the units and the related facilities in accordance with 24 CFR part 5,
subpart G, and to provide the agreed-upon utilities and other services.
(e) Failure to maintain housing. If HUD notifies the Owner that he/
she has failed to maintain a unit that is compliant with 24 CFR part 5,
subpart G, and the Owner fails to take corrective action within the
time prescribed in the notice, HUD may exercise any of its rights or
remedies under the Contract, or Regulatory Agreement, if any, including
abatement of housing assistance payments (even if the Family continues
to occupy the unit) and rescission of the sale. If the Family wishes to
be rehoused in another unit, HUD shall provide assistance in finding
such a unit for the Family.
PART 902--PUBLIC HOUSING ASSESSMENT SYSTEM
0
32. Effective July 1, 2023, the authority for part 902 is revised to
read as follows:
Authority: 42 U.S.C. 1437d(j), 42 U.S.C. 3535(d), 1437z-10.
0
33. Effective July 1, 2023, amend Sec. 902.3 by:
0
a. Removing the definition of ``Criticality'';
0
b. Revising the definitions of ``Dictionary of Deficiency
Definitions'', ``Inspectable areas (or area)'', and ``Inspectable
item''; and
0
c. Removing the definitions of ``Item Weights and Criticality Levels
document'', ``Normalized weights'', ``Score'', ``Severity'',
``Statistically valid sample'' and ``Subarea''.
The revisions read as follows:
Sec. 902.3 Definitions.
* * * * *
Dictionary of Deficiency Definitions means the documents published
in the Federal Register that contain the inspection standards and
scoring values pursuant to 24 CFR part 5, subpart G.
* * * * *
Inspectable areas (or area) mean any of the three major components
of public housing that are inspected, which are: inside, outside, and
unit.
Inspectable item means the individual parts, such as walls,
kitchens, bathrooms, and other things, to be inspected in an
inspectable area.
* * * * *
0
34. Effective July 1, 2023, amend Sec. 902.13 by revising paragraph
(b)(2) to read as follows:
Sec. 902.13 Frequency of PHAS assessments.
* * * * *
(b) * * *
(2) The physical condition score for each project will determine
the frequency of inspections of each project in accordance with the
inspection cycle laid out in 24 CFR 5.705(c). The PHAS physical
condition indicator score for an assessment period shall be calculated
by taking the unit-weighted average of the most recent physical
condition score for each project, except that, starting July 1, 2023,
no new physical condition indicator will be issued for a PHA until
every project under the PHA has been inspected on or after July 1,
2023.
* * * * *
Sec. 902.20 [Removed and Reserved]
0
35. Effective July 1, 2023, remove and reserve Sec. 902.20.
0
36. Effective July 1, 2023, revise Sec. 902.21 to read as follows:
[[Page 30501]]
Sec. 902.21 Physical condition standards for public housing.
Public housing must be maintained in a manner that meets the
physical condition standards set forth in 24 CFR part 5, subpart G.
0
37. Effective July 1, 2023, revise Sec. 902.22 to read as follows:
Sec. 902.22 Inspection of PHA projects.
The PHA's score for the physical condition indicator is based on an
independent inspection of a PHA's project(s) provided by HUD and using
the requirements and timelines laid out in 24 CFR part 5, subpart G, to
ensure projects meet acceptable basic housing conditions. Mixed-finance
projects will be subject to the physical condition inspections.
Sec. 902.24 [Removed and Reserved]
0
38. Effective July 1, 2023, remove and reserve Sec. 902.24.
Sec. 902.26 [Removed and Reserved]
0
39. Effective July 1, 2023, remove and reserve Sec. Sec. 902.24,
902.26, and 902.68.
Sec. 902.68 [Removed and Reserved]
0
40. Effective July 1, 2023, remove and reserve Sec. Sec. 902.24,
902.26, and 902.68.
0
41. Effective July 1, 2023, add subpart H to read as follows:
Subpart H--Assessment of Small Rural Public Housing Agencies
Sec.
902.101 Definitions of small rural PHAs.
902.103 Public housing assessment of small rural PHAs
902.105 Troubled small rural PHAs
902.107 Withholding, denying, and rescinding troubled designation.
902.109 Right to petition and appeal troubled designation.
902.111 Sanctions for troubled small rural PHAs.
902.113 Incentives for small rural PHAs high-performers.
Subpart H--Assessment of Small Rural Public Housing Agencies
Sec. 902.101 Definition of small rural PHAs.
(a) Definition. A PHA is a small rural PHA if it administers 550 or
fewer combined public housing units and vouchers under section 8(o),
and either:
(1) Has a primary administrative building as determined with a
physical address in a rural area as described in 12 CFR
1026.35(b)(2)(iv)(A); or
(2) More than 50 percent of its combined public housing units and
voucher units under section 8(o) are in rural areas as described in 12
CFR 1026.35(b)(2)(iv)(A).
(b) Determination. (1) HUD will make the initial determination of
PHAs that qualify as small rural as defined in this section no later
than October 30, 2023.
(2) HUD will determine if a PHA qualifies as a small rural PHA
under paragraph (a) of this section every 3 years.
(c) Appeals. A PHA may challenge HUD's determination concerning
whether the PHA qualifies as small rural PHA by presenting an
objectively verifiable material error which resulted in the incorrect
determination, or by presenting information showing that the status of
the PHA has changed to justify a redetermination.
Sec. 902.103 Public housing assessment of small rural PHAs.
(a) Small rural public housing assessment. The public housing
program of small rural PHAs as defined in Sec. 902.101 shall be
assessed and scored based only on the physical condition of their
public housing properties in accordance with 24 CFR part 5, subpart G,
except that properties that meet the definition specified in Sec.
902.44(b) of physical condition and neighborhood environment shall
receive one additional point for physical condition and neighborhood
environment. Such agencies shall not be subject to PHAS except as noted
below.
(b) Triennial assessment. Public housing programs operated by small
rural PHAs will be assessed no more than once every three years, except
that a small rural PHA shall be subject to annual inspection if it is
designated by the Secretary as troubled as defined in Sec. 902.105.
(c) Initial public housing assessment. (1) For PHAs subject to
small PHA deregulation, the first assessment and inspections will be
determined based on the PHA's next scheduled PHAS assessment (e.g., a
higher performing PHA would receive the first inspection 3 years after
the most recent PHAS assessment).
(2) For PHAs not subject to small PHA deregulation, the first
inspection is based on the PHA's overall weighted project physical
condition indicator score (e.g., a PHA with a physical condition
indicator score of 90 or greater would receive the first inspection
three years after most recent PHAS assessment).
Sec. 902.105 Troubled small rural PHAs.
(a) Definition of troubled small rural PHA. A small rural PHA will
be determined to be troubled under the public housing program if the
weighted average score of all property inspections is below 70 percent
of the total available points, or if a small rural PHA has a weighted
average score of between 70 and 80 percent of the total available
points and has at least one property that receives fewer than 70
percent of the total available points.
(b) Referral to the local field office. Upon a PHA's designation as
a troubled performer HUD must notify the PHA and shall refer the
troubled performer PHA to the PHA's field office, or other designated
office(s) at HUD, for remedial action, oversight, and monitoring. The
actions to be taken by HUD and the PHA will include statutorily
required actions, and such other actions as may be determined
appropriate by HUD.
(c) Corrective Action Agreement (CAA). Within 30 days of
notification of a PHA's designation as a troubled performer, HUD will
initiate activities to negotiate and develop a CAA. A CAA is required
for a troubled performer. The final CAA is a binding contractual
agreement between HUD and a PHA. The scope of the CAA may vary
depending upon the extent of the problems present in the PHA. The term
of the CAA will not exceed one year and is subject to renewal at the
discretion of HUD if HUD determines that the circumstances requiring
the CAA still exist at the expiration of the term of the CAA based on
the annual assessment frequency as included in Sec. 902.103. It shall
include, but not be limited to:
(1) Baseline data, which should be data without adjustments or
weighting but may be the PHA's score identified as a deficiency;
(2) Performance targets for such periods specified by HUD (e.g.,
annual, semiannual, quarterly, monthly), which may be the attainment of
a higher score or the description of a goal to be achieved; however,
safety, health, and environmental performance targets and deadlines
otherwise specified by regulation, including the lead safety
regulations at 24 CFR part 35, are not superseded by the CAA
performance targets;
(3) Strategies to be used by the PHA in achieving the performance
targets within the time period of the CAA, including the identification
of the party responsible for the completion of each task and for
reporting progress;
(4) Technical assistance to the PHA provided or facilitated by HUD;
(5) The PHA's commitment to take all actions within its control to
achieve the targets;
(6) The consequences of failing to meet the targets; and
(7) A description of the involvement of local public and private
entities, including PHA resident leaders, in carrying out the agreement
and rectifying the PHA's problems. A PHA
[[Page 30502]]
shall have primary responsibility for obtaining active local public and
private entity participation, including the involvement of public
housing resident leaders, in assisting PHA improvement efforts. Local
public and private entity participation should be premised upon the
participant's knowledge of the PHA, ability to contribute technical
expertise with regard to the PHA's specific problem areas, and
authority to make preliminary commitments of support, financial or
otherwise.
(d) PHA review of the CAA. The PHA will have 10 days to review the
CAA. During this 10-day period, the PHA shall resolve any claimed
discrepancies in the CAA with HUD and discuss any recommended changes
and target dates for improvement to be incorporated in the final CAA.
Unless the time period is extended by HUD, the CAA is to be executed 30
days following issuance of the draft CAA.
(e) Maximum recovery period. Upon the expiration of the one-year
period that started on the date on which the PHA receives initial
notice of a troubled performer designation, the PHA shall improve its
performance in order to no longer be considered troubled under the
assessment.
(f) Parties to the CAA. A CAA shall be executed by:
(1) The PHA Board Chairperson (supported by a Board resolution), or
a receiver (pursuant to a court-ordered receivership agreement, if
applicable) or other AME acting in lieu of the PHA Board;
(2) The PHA Executive Director, or a designated receiver (pursuant
to a court-ordered receivership agreement, if applicable), or other
AME-designated Chief Executive Officer; and
(3) The field office.
(g) Involvement of resident leadership in the CAA. HUD encourages
the inclusion of the resident leadership in the execution of the CAA.
(h) Failure to execute CAA or make substantial improvement under
CAA. If a troubled performer PHA fails or refuses to execute an CAA
within the period provided in paragraph (d) of this section, or a
troubled performer PHA operating under an executed CAA does not achieve
a passing physical inspection score, as provided in paragraph (e) of
this section, the field office shall refer the PHA to the Assistant
Secretary to determine such remedial actions, consistent with the
provisions of the ACC and other HUD regulations, including, but not
limited to, remedies available for substantial default.
(i) Continuation of services to residents. To the extent feasible,
while a PHA is in a troubled performer status, all services to
residents will continue uninterrupted.
Sec. 902.107 Withholding, denying, and rescinding troubled
designation.
(a) Withholding designation. In exceptional circumstances, even
though a PHA has satisfied the requirements for high performer or non-
troubled designations, HUD may conduct any review as it may determine
necessary, and may deny or rescind incentives or high performer
designation or non-troubled performer designation, in the case of a PHA
that:
(1) Is operating under a special agreement with HUD (e.g., a civil
rights Conciliation or Voluntary Compliance Agreement);
(2) Is involved in litigation that bears directly upon the physical
performance of a PHA;
(3) Is operating under a court order;
(4) Demonstrates substantial evidence of fraud or misconduct,
including evidence that the PHA's certifications, submitted in
accordance with this part, are not supported by the facts, as evidenced
by such sources as a HUD review, routine reports, an Office of
Inspector General investigation/audit, an independent auditor's audit,
or an investigation by any appropriate legal authority; or
(5) Demonstrates substantial noncompliance in one or more areas of
a PHA's required compliance with applicable laws and regulations,
including areas not assessed under the small rural assessment. Areas of
substantial noncompliance include, but are not limited to,
noncompliance with civil rights, nondiscrimination and fair housing
laws and regulations, or the ACC. Substantial noncompliance casts doubt
on the capacity of a PHA to preserve and protect its public housing
projects and operate them consistent with Federal laws and regulations.
(b) High performer and standard designations. If a high performer
designation is denied or rescinded, the PHA shall be designated either
a non-troubled performer, or troubled performer, depending on the
nature and seriousness of the matter or matters constituting the basis
for HUD's action. If a non-troubled performer designation is denied or
rescinded, the PHA shall be designated as a troubled performer.
(c) Effect on score. The denial or rescission of a designation of
high performer or non-troubled performer shall not affect the PHA's
numerical small rural assessment score, except where the denial or
rescission is under paragraph (a)(4) of this section.
Sec. 902.109 Right to petition and appeal troubled designation.
(a) Appeal of troubled performer designation and petition for
removal of troubled performer designation. A PHA may take any of the
following actions:
(1) Appeal its troubled performer designation;
(2) Petition for removal of troubled performer designation; and
(3) Appeal any refusal of a petition to remove troubled performer
designation.
(b) Appeal of small rural Assessment score. (1) If a PHA believes
that an objectively verifiable and material error(s) exists in its
small rural assessment score, which, if corrected, will result in a
significant change in the PHA's score and its designation, the PHA may
appeal its score in accordance with the procedures of paragraphs (c)
through (e) of this section. A significant change in a score is a
change that would cause the PHA's score to increase, resulting in a
higher designation for the PHA (i.e., from troubled performer to non-
troubled performer, or from non-troubled to high performer).
(2) A PHA may not appeal its score or designation based on the
subsequent correction of deficiencies identified as a result of a
project's physical inspection.
(c) Appeal and petition procedures. (1) To appeal a troubled
performer designation or petition for the removal of a troubled
performer designation, a PHA must submit a request in writing to the
Deputy Assistant Secretary of the Real Estate Assessment Center, which
must be received by HUD no later than 30 days following the issuance of
the score to the PHA.
(2) To appeal the denial of a petition to remove a troubled
performer designation, a PHA must submit a written request to the
Deputy Assistant Secretary of the Real Estate Assessment Center, which
must be received by HUD no later than 30 days after HUD's decision to
refuse to remove the PHA's troubled performer designation.
(3) An appeal of a troubled performer designation or an appeal of
the denial of a petition for removal of a troubled performer
designation must include the PHA's supporting documentation and reasons
for the appeal or petition. An appeal of an assessment score must be
accompanied by the PHA's evidence that a material error occurred. An
appeal or petition submitted to HUD without supporting documentation
will not be considered and will be returned to the PHA.
(d) Denial, withholding, or rescission. A PHA that disagrees with
the basis for denial, withholding, or rescission of its designation
under Sec. 902.66 may make a written request for reinstatement within
[[Page 30503]]
30 days of notification by HUD of the denial or rescission of the
designation to the Assistant Secretary, and the request shall include
reasons for the reinstatement.
(e) Consideration of petitions and appeals. (1) Consideration of a
petition or the appeal of a final overall assessment score, of a
troubled performer designation, or of a petition to remove troubled
performer designation. Upon receipt of such an appeal or a petition
from a PHA, HUD will evaluate the appeal and its merits for purposes of
determining whether a reassessment of the PHA is warranted. HUD will
review the PHA's file and the evidence submitted by the PHA to
determine whether an error occurred.
(2) Consideration of an appeal of refusal to remove a troubled
performer designation. Upon receipt of an appeal of refusal to remove a
troubled performer designation, HUD will evaluate the appeal and its
merits for the purposes of determining whether a reassessment of the
PHA is warranted. The HUD staff initially evaluating an appeal of
refusal to remove a troubled performer designation will not be the same
HUD staff who evaluated the PHA's petition to remove the troubled
performer designation. The Assistant Secretary will render the final
determination of such an appeal.
(f) Notice and finality of decisions. (1) If HUD determines that
one or more objectively verifiable and material error has occurred, HUD
will undertake a new inspection of the project, adjust the PHA's score,
or perform another reexamination of information, as appropriate in
light of the nature of the error that occurred. A new score will be
issued and an appropriate performance designation made by HUD. HUD's
decision on appeal of an assessment score, issuance of a troubled
performer designation, or refusal to remove a troubled performer
designation will be final agency action. No reconsideration will be
given by HUD of such decisions.
(2) HUD will issue a written decision on all appeals and petitions
made under this section.
Sec. 902.111 Sanctions for troubled small rural PHAs.
The sanctions for small rural PHAs with troubled public housing
programs that remain troubled as required by Sec. 902.108 will be the
same as those sanctions for PHAs assessed under PHAS as described in
Sec. 902.83.
Sec. 902.113 Incentives for small rural PHAs high-performers.
(a) High performer. PHAs with a weighted average score for all
inspections of at least 90 percent of all available points will be
considered high performers and will be eligible for benefits as
described in Sec. 902.113(b) and Sec. 905.400(l) of this chapter.
(b) Incentives. High performer small rural PHAs under the public
housing program will be eligible for the same incentives as high
performer PHAs under PHAS as described in Sec. 902.71.
PART 965--PHA-OWNED OR LEASED PROJECTS--GENERAL PROVISIONS
0
42. The authority for part 965 continues to read as follows:
Authority: 42 U.S.C. 1437, 1437a, 1437d, 1437g, and 3535(d).
Subpart H is also issued under 42 U.S.C. 4821-4846.
Subpart I--[Removed and Reserved]
0
43. Effective July 1, 2023, remove and reserve subpart I, consisting of
Sec. Sec. 965.800 and 965.805.
PART 982--SECTION 8 TENANT-BASED ASSISTANCE: HOUSING CHOICE VOUCHER
PROGRAM
0
44. The authority for part 982 continues to read as follows:
Authority: 42 U.S.C. 1437f and 3535(d).
Subpart A--General Information
0
45. Effective October 1, 2023, amend Sec. 982.4 in paragraph (b) by
revising the definition of ``Housing quality standards (HQS)'' to read
as follows:
Sec. 982.4 Definitions.
* * * * *
(b) * * *
Housing quality standards (HQS). The minimum quality standards
developed by HUD in accordance with 24 CFR 5.703 for the HCV program or
the HUD approved alternative standard for the PHA under 24 CFR
5.703(g).
* * * * *
Subpart H--Where Family Can Live and Move
0
46. Effective October 1, 2023, amend Sec. 982.352 by revising
paragraph (b)(1)(iv)(A)(3) to read as follows:
Sec. 982.352 Eligible housing.
* * * * *
(b) * * *
(1) * * *
(iv) * * *
(A) * * *
(3) To inspect the unit for compliance with the HQS in accordance
with Sec. Sec. 982.305(a) and 982.405. The independent entity shall
communicate the results of each such inspection to the family and the
PHA.
* * * * *
Subpart I--Dwelling Unit: Housing Quality Standards, Subsidy
Standards, Inspection and Maintenance
0
47. Effective October 1, 2023, revise Sec. 982.401 to read as follows:
Sec. 982.401 Housing quality standards.
As defined in Sec. 982.4, housing quality standards (HQS) refers
to the minimum quality standards developed by HUD in accordance with 24
CFR 5.703 for housing assisted under the HCV program or a HUD approved
alternative standard for the PHA under 24 CFR 5.703(g).
Sec. 982.402 [Amended]
0
48. Effective October 1, 2023, amend Sec. 982.402 in paragraph (b)(2)
by removing ``Sec. 982.401(d)'' and adding in its place ``Sec.
982.401''.
0
49. Effective October 1, 2023, amend Sec. 982.405 by revising
paragraph (a) to read as follows:
Sec. 982.405 PHA initial and periodic unit inspection.
(a)(1) General requirements. The PHA must inspect the unit leased
to a family prior to the initial term of the lease, at least biennially
during assisted occupancy, and at other times as needed, to determine
if the unit meets the HQS. (See Sec. 982.305(b)(2) concerning timing
of initial inspection by the PHA.)
(2) Small rural PHAs. Instead of biennially, a small rural PHA as
defined in Sec. 902.101 of this chapter must inspect a unit during
occupancy at least once every three years.
* * * * *
Subpart M--Special Housing Types
0
50. Effective October 1, 2023, amend Sec. 982.605 by revising
paragraph (a) to read as follows:
Sec. 982.605 SRO: Housing quality standards.
(a) HQS standards for SRO. As defined in Sec. 982.4, housing
quality standards (HQS) refers to the minimum quality standards
developed by HUD in accordance with 24 CFR 5.703 for housing assisted
under the HCV program or a HUD approved alternative standard for the
PHA under 24 CFR 5.703(g). However, the standards in this section apply
in place of standards related to sanitary facilities, food preparation
and refuse disposal, and space and security. Since the SRO units will
not house children, the standards at 24 CFR part 35, subparts A, B, H,
and
[[Page 30504]]
R, applying to the PBC program, concerning lead-based paint, do not
apply to SRO housing.
* * * * *
0
51. Effective October 1, 2023, amend Sec. 982.609 by revising
paragraph (a) to read as follows:
Sec. 982.609 Congregate housing: Housing quality standards.
(a) HQS standards for congregate housing. As defined in Sec.
982.4, housing quality standards (HQS) refers to the minimum quality
standards developed by HUD in accordance with 24 CFR 5.703 for housing
assisted under the HCV program or a HUD approved alternative standard
for the PHA under 24 CFR 5.703(g). However, the standards in this
section apply in place of standards related to food preparation and
refuse disposal. Congregate housing is not subject to the requirement
that the dwelling unit must have a kitchen area.
* * * * *
0
52. Effective October 1, 2023, amend Sec. 982.614 by revising
paragraphs (a) and (b)(1) to read as follows:
Sec. 982.614 Group home: Housing quality standards.
(a) Compliance with HQS. The PHA may not give approval to reside in
a group home unless the unit, including the portion of the unit
available for use by the assisted person under the lease, meets the
housing quality standards. As defined in Sec. 982.4, housing quality
standards (HQS) refers to the minimum quality standards developed by
HUD in accordance with 24 CFR 5.703 for housing assisted under the HCV
program or a HUD approved alternative standard for the PHA under 24 CFR
5.703(g).
(b) * * *
(1) The standards in this section apply in place of standards in 24
CFR 5.703 that relate to sanitary facilities, food preparation and
refuse disposal, space and security, structure and materials, and site
and neighborhood.
* * * * *
0
53. Effective October 1, 2023, amend Sec. 982.618 by revising
paragraphs (b) and (c) to read as follows:
Sec. 982.618 Shared housing: Housing quality standards.
* * * * *
(b) Applicable HQS standards. As defined in Sec. 982.4, housing
quality standards (HQS) refers to the minimum quality standards
developed by HUD in accordance with 24 CFR 5.703 for housing assisted
under the HCV program or a HUD approved alternative standard for the
PHA under 24 CFR 5.703(g). However, the HQS standards in this section
apply in place of standards related to space and security in 24 CFR
5.703.
(c) Facilities available for family. The facilities available for
the use of an assisted family in shared housing under the family's
lease must include (whether in the family's private space or in the
common space) a living room, sanitary facilities in accordance with the
standards set in 24 CFR 5.703, and food preparation and refuse disposal
facilities in accordance with 24 CFR 5.703.
* * * * *
0
54. Effective October 1, 2023, amend Sec. 982.621 by revising the
introductory text to read as follows:
Sec. 982.621 Manufactured home: Housing quality standards.
As defined in Sec. 982.4, housing quality standards (HQS) refers
to the minimum quality standards developed by HUD in accordance with 24
CFR 5.703 for housing assisted under the HCV program or a HUD approved
alternative standard for the PHA under 24 CFR 5.703(g). A manufactured
home also must meet the following requirements:
* * * * *
0
55. Effective October 1, 2023, amend Sec. 982.628 by revising
paragraph (a)(4) to read as follows:
Sec. 982.628 Homeownership option: Eligible units.
(a) * * *
(4) The unit satisfies the HQS (see 24 CFR 5.703 and Sec.
982.631).
* * * * *
PART 983--PROJECT-BASED VOUCHER (PBV) PROGRAM
0
56. The authority for part 983 continues to read as follows:
Authority: 42 U.S.C. 1437f and 3535(d).
Sec. 983.2 [Amended]
0
57. Effective October 1, 2023, amend Sec. 983.2 in paragraph (c)(4) by
removing ``Sec. 982.401(j)'' and adding in its place ``Sec.
982.401''.
0
58. Effective October 1, 2023, amend Sec. 983.3 in paragraph (b) by
revising the definition of ``Housing quality standards (HQS)'' to read
as follows:
Sec. 983.3 PBV definitions.
* * * * *
(b) * * *
Housing quality standards (HQS). The minimum quality standards
developed by HUD in accordance with 24 CFR 5.703 for the PBV program or
the HUD approved alternative standard for the PHA under 24 CFR
5.703(g).
* * * * *
0
59. Effective October 1, 2023, amend Sec. 983.10 by revising paragraph
(b)(2)(ii) to read as follows:
Sec. 983.10 Project-based certificate (PBC) program.
* * * * *
(b) * * *
(2) * * *
(ii) Lead-based paint requirements. The Lead-based Paint Poisoning
Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-based Paint
Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing
regulations at 24 CFR part 35, subparts A, B, H, and R of this title,
apply to the PBC program.
* * * * *
0
60. Effective October 1, 2023, amend Sec. 983.101 by revising
paragraphs (a) through (c) to read as follows:
Sec. 983.101 Housing quality standards.
(a) HQS applicability. As defined in Sec. 983.3, housing quality
standards (HQS) refers to the minimum quality standards developed by
HUD in accordance with 24 CFR 5.703 of this title for housing assisted
under the PBV program or a HUD approved alternative standard for the
PHA under 24 CFR 5.703(g).
(b) Requirements for special housing types. For special housing
types assisted under the PBV program, HQS applies to the PBV program
except as specified in 24 CFR part 982, subpart M. Provisions contained
within 24 CFR part 982 that are inapplicable to the PBV program
pursuant to Sec. 983.2 are also inapplicable to special housing types
under the PBV program.
(c) Lead-based paint requirements. The Lead-based Paint Poisoning
Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-based Paint
Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing
regulations at 24 CFR part 35, subparts A, B, H, and R, apply to the
PBV program.
* * * * *
0
61. Effective October 1, 2023, amend Sec. 983.103 by revising the
paragraph (d) heading and adding paragraph (d)(4) to read as follows:
Sec. 983.103 Inspecting units.
* * * * *
(d) Periodic inspections. * * *
(4) Instead of at least biennially, a small rural PHA as defined in
Sec. 902.101 of this chapter must inspect the random sample of units
in accordance with paragraph (d)(1) of this section at least once every
three years.
* * * * *
[[Page 30505]]
PART 985--SECTION 8 MANAGEMENT ASSESSMENT PROGRAM (SEMAP) AND SMALL
RURAL PHA ASSESSMENTS
0
62. Effective October 1, 2023, the authority citation for part 985 is
revised to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 1437z-10, and 3535(d).
0
63. Effective October 1, 2023, revise the heading of part 985 to read
as set forth above.
0
64. Effective October 1, 2023, amend Sec. 985.1 by revising paragraph
(b) and adding paragraph (c) to read as follows:
Sec. 985.1 Purpose and applicability.
* * * * *
(b) Applicability. This rule applies to PHA administration of the
tenant-based Section 8 rental program (part 982 of this chapter), the
project-based voucher program (part 983 of this chapter) to the extent
that PBV family and unit data are reported and measured under the
stated HUD verification method, and enrollment levels and contributions
to escrow accounts for Section 8 participants under the family self-
sufficiency program (FSS) (part 984 of this chapter).
(c) Small rural PHA assessments. Subpart D of this part covers the
HCV and PBV assessment for a small rural PHA as defined in Sec.
902.101 of this chapter. Section 985.3 and subparts B and C of this
part do not apply to small rural PHAs.
0
65. Effective October 1, 2023, add subpart D to read as follows:
Subpart D--Small Rural PHA Assessment
Sec.
985.201 Applicability.
985.203 Assessment indicators and HUD verification methods.
985.205 Determination of assessment rating.
985.207 Frequency of assessments.
985.209 Troubled small rural PHAs.
985.211 Small rural PHAs assessment records.
Subpart D--Small Rural PHA Assessment
Sec. 985.201 Applicability.
(a) This subpart applies to small rural PHAs as defined in Sec.
902.101 of this chapter.
(b) Small rural PHAs shall be assessed and rated on the indicators
and methodology of this subpart and shall not be subject to the SEMAP
requirements.
Sec. 985.203 Assessment indicators and HUD verification methods.
(a) This section describes the performance indicators used to
assess a PHA's designation as troubled resulting from the small rural
PHA assessment. HUD will use the verification method identified for
each indicator. The four indicators are determined on a pass or fail
basis.
(b)(1) Inspection standards. This indicator shows whether the PHA
applied the correct inspection standards to HCV and PBV unit
inspections.
(2) HUD verification method. The PHA's assessment certification and
on-site HUD review when applicable.
(3) Rating. The PHA passes the indicator if it applied the correct
inspection standards for all unit HCV and PBV unit inspections
conducted during the assessment period. If the PHA applied the
incorrect inspection standards for any HCV or PBV unit inspection
during the assessment period, the PHA fails the indicator.
(c)(1) Initial unit inspections. This indicator determines if the
PHA conducted the initial HQS inspections within the required time
period.
(2) HUD verification method. HUD systems show percent of newly
leased units where the beginning date of the assistance contract is
before the date the unit passed the initial unit inspection or, if the
PHA employed the PHA initial inspection option for non-life-threatening
deficiencies or alternative inspections, the timing requirements for
the applicable PHA initial inspection option.
(3) Rating. The PHA passes the indicator if at least 98 percent of
units placed under HAP contract during the assessment period passed the
initial PHA HQS inspection within the required time period. If fewer
than 98 percent of units placed under HAP contract during the
assessment period passed the HQS inspection within the required time
periods, the PHA fails the indicator.
(d)(1) Frequency of HQS inspections. This indicator shows, for
units that have been under HAP contract for at least three years,
whether the PHA re-inspected tenant-based units under HAP contract and
the required sample of PBV units at least once during the three-year
period from the last PHA inspection.
(2) HUD verification method. HUD systems show the percentage of
units that have been under HAP contract for at least three years that
have been re-inspected within the required three-year period from the
last inspection.
(3) Rating. The PHA passes the indicator if at least 98 percent of
the units that have been under HAP contract for at least three years
have been re-inspected within the required three-year period from the
last inspection. The PHA fails the indicator if fewer than 98 percent
of these units have been re-inspected within the required three-year
period.
(e)(1) Unit condition enforcement. This indicator shows whether,
following the inspection of a unit under contract where the unit fails
to meet the required standards, any cited life-threatening and non-
life-threatening deficiencies are corrected within the required cure
period in accordance with Sec. Sec. 982.404 and 983.103 of this
chapter. In addition, if HQS deficiencies are not corrected timely, the
indicator shows whether the PHA stops (abates) housing assistance
payments beginning no later than the first of the month following the
specified correction period or terminates the HAP contract or, for
family-caused defects, takes prompt and vigorous action to enforce the
family obligations. (Sec. 982.404 of this chapter)
(2) HUD verification method. The PHA certification and on-site HUD
review (if performed), and HUD system data.
(3) Rating. In order to pass the indicator, the applicable
verification method, which may include sampling, determines that the
PHA took corrective action within the required timeframes for at least
98 percent of inspections with identified life-threatening or other HQS
deficiencies.
(f)(1) PHA submission of certifications. The PHA must submit its
certifications for the applicable indicators within the designated
timeframe required by HUD, and in the form and manner as required by
HUD. HUD will issue instructions on the submission of PHA
certifications by Federal Register notification, which will be subject
to public comment.
(2) Failure to submit. Failure of the PHA to submit any
certification in accordance with this paragraph will result in the PHA
failing the indicator and being designated as troubled under the small
rural PHA assessment.
Sec. 985.205 Determination of assessment rating.
(a) High performer designation. (1) A PHA is designated a high
performer under the small rural PHA assessment if the PHA has passed
all four indicators identified in Sec. 985.203 and the PHA:
(i) Has utilized at least 98 percent of its HCV budget authority in
the two most recent calendar years, or the percent of HCV units leased
by renters or occupied by homeowners in the two most recent calendar
years was at least 98 percent;
(ii) Did not end that calendar year with excess HAP reserves; and
[[Page 30506]]
(iii) Did not end that calendar year in a funding shortfall or
receive shortfall prevention funding from HUD.
(2) HUD shall publish the calculation for determining excess HAP
reserves in the Federal Register, and such calculation shall provide
for public comment before becoming effective.
(b) Standard performer designation. A PHA that passed all four
indicators but did not meet the funding utilization criteria for a high
performer designation in paragraph (a) is designated as a standard
performer.
(c) Troubled PHA designation. A PHA that failed any of the four
indicators under Sec. 985.201 is designated as a troubled PHA under
the small rural PHA assessment.
Sec. 985.207 Frequency of assessments.
(a) Frequency of small rural PHA assessments--(1) Initial
assessment. The initial small rural PHA assessment will be effective
when the PHA's next SEMAP assessment would have been applied. For PHAs
that qualify for SEMAP biennial review as a small PHA (less than 250
assisted units), the transition to the small rural PHA assessment will
occur when the PHA's next biennial SEMAP assessment is required.
(2) Triennial assessments. HUD shall assess small rural PHAs no
more than once every three years, except that a troubled small rural
PHA shall be subject to an annual assessment in accordance with Sec.
985.209.
(b) [Reserved]
Sec. 985.209 Troubled small rural PHAs.
(a) Appeals--(1) HUD action. HUD must review, consider, and provide
a final written determination to a small rural PHA that appeals its
designation as a troubled PHA.
(2) Deciding HUD official. The HUD decision on the PHA appeal shall
be made by a HUD official who has not been involved in and is not
subordinate to any person who has been involved in the original
determination to designate the PHA as a troubled PHA under the small
rural PHA assessment.
(b) Corrective action agreement. No later than 60 days after the
date on which the PHA is designated a troubled PHA, the PHA and HUD
will enter into a corrective action agreement (CAA) under which the PHA
shall take actions to correct the deficiencies upon which the troubled
PHA designation is based. The PHA must comply with HUD requirements for
the submission of the CAA, including but not limited to the date by
which the CAA must be submitted to HUD. The CAA must:
(1) Have a term of one year, and shall be renewable at the option
of HUD;
(2) Specify goals to be achieved;
(3) Identify obstacles to goal achievement and ways to eliminate or
avoid them;
(4) Identify resources that will be used or sought to achieve
goals;
(5) Provide, where feasible, for technical assistance to assist the
PHA in curing its deficiencies;
(6) Identify a PHA staff person with lead responsibility for
completing each goal;
(7) Identify key tasks to reach each goal;
(8) Specify time frames for achievement of each goal, including
intermediate time frames to complete each key task;
(9) Provide for regular evaluation of progress toward improvement;
(10) Provide for the reconsideration of the PHA's designation as a
troubled PHA no less than annually, and provide for the termination of
the CAA when HUD determines the PHA is no longer troubled;
(11) Provide that in the event of substantial noncompliance by the
PHA under the CAA, HUD may (i) contract with another PHA or a private
entity to administer the HCV program; and (ii) withhold funds otherwise
distributable to the troubled PHA;
(12) Be signed by the PHA board of commissioners chairperson and by
the PHA executive director. If the PHA is a unit of local government or
a State, the CAA must be signed by the Section 8 program director and
by the chief executive officer of the unit of government or his or her
designee.
(c) Monitoring. The PHA and HUD must monitor the PHA's
implementation of its CAA to ensure performance targets are met.
(d) Annual small rural assessment. A troubled PHA shall be subject
to the small rural assessment on an annual basis.
(e) Use of administrative fee reserve prohibited. Any PHA
designated as troubled may not use any part of the administrative fee
reserve for other housing purposes (see Sec. 982.155(b) of this
chapter).
(f) Upgrading poor performance rating. HUD shall change a PHA's
overall performance rating from troubled to standard or high performer
if HUD determines that a change in the rating is warranted because of
improved PHA performance and a standard or high designation on a
subsequent small rural PHA assessment.
(g) Default under the Annual Contributions Contract (ACC). HUD may
determine that a PHA's failure to correct identified deficiencies
resulting from its small rural PHA assessment or to execute and
implement a CAA as required by HUD constitutes a default under the ACC.
Sec. 985.211 Small rural PHA assessment records.
HUD shall maintain small rural PHA assessment files, including
designations, notifications, appeals, corrective action agreements, and
related correspondence for at least 3 years.
Adrianne Todman,
Deputy Secretary.
[FR Doc. 2023-09693 Filed 5-9-23; 8:45 am]
BILLING CODE 4210-67-P