The Arc Opposes Administration Proposal to Raise Rents in HUD Housing

Washington, DC – Yesterday, U.S. Housing and Urban Development (HUD) Secretary Ben Carson released proposed legislation that would raise rents and allow new work requirements for millions of low-income people who receive basic housing assistance from HUD. Combined, the bill’s proposals would make it harder for millions of renters – including people with disabilities – to access affordable housing in their community. The HUD bill includes a number of proposals put forward by Representative Dennis Ross (R-FL) in draft legislation and discussed yesterday by the House Committee on Financial Services.

“We’re witnessing an alarming pattern of proposals that will only make it harder for everyday Americans – including people with intellectual and developmental disabilities and their families – to pay for the basics and survive. This new bill, proposed by Housing Secretary Ben Carson, would raise rents on families and individuals who are already struggling to pay for their housing and daily expenses. For many people with disabilities surviving on extremely low incomes, higher rents could be the difference between a life in the community, and life in an institution or on the streets. Congress should reject Secretary Carson’s proposed legislation and instead continue the recent, bipartisan Congressional support that led to new investments in 2018 in affordable housing programs, including for people with disabilities,” said Peter V. Berns, CEO, The Arc.

HUD’s proposed bill would increase rents for nearly all families across many HUD affordable housing programs, including Section 8, public housing, and the Section 811 Supportive Housing for Persons with Disabilities program:

  • As highlighted by the National Low Income Housing Coalition: “Currently, most families receiving federal housing assistance pay 30% of their adjusted income as rent. Under the proposal, families, with some exceptions, would instead have to pay 35% of their gross income or 35% of the amount earned by working at least 15 hours a week for four weeks at federal minimum wage, whichever is higher. With this provision, HUD would essentially set a new mandatory minimum rent of $150—three times higher than the current minimum rent that housing providers may apply to families.”
  • Households identified as a “disabled family” or “elderly family” would also be subject to new, higher minimum rents. Their rents would be calculated as 30 percent of gross income or a minimum rent of $50 per month, whichever is higher. New “disabled family” tenants would be impacted immediately; existing “disabled family” tenants would see these higher rents phase in over 6 years. To qualify as a “disabled family” or “elderly family” for the purpose of setting the family rent, all adults in the family would have to be a person who meets the HUD definition of disability or be at least 65 years of age. Families that include non-elderly adults with and without disabilities would have to pay 35 percent of gross income or $150 per month.
  • Key income deductions currently used to calculate “adjusted income” in order to set rents would be eliminated—including deductions for medical expenses, disability-related expenses, and child care.
  • HUD would have the authority to create or authorize alternative rent policies that could lead to even higher rents for some or many tenants.

The proposed bill also would give Public Housing Authorities and project-based Section 8 housing owners the option to impose new work requirements. The details of how this would operate would be left up to HUD regulation. The bill fails to offer any new investments to ensure that people can access the supports and services they might need to find and keep a job. By reducing or cutting off basic housing assistance and making it harder for people to remain housed, work requirements will only make it harder for people to get and keep a job – including many people with disabilities and their families.

Mission Matters: Inclusion and Anti-Discrimination Should Remain in HUD’s Mission Statement

The Arc has joined over 570 organizations, led by the National Fair Housing Alliance, calling on U.S. Department of Housing and Urban Development (HUD) Secretary Dr. Ben Carson to retain references to creating “inclusive and sustainable communities free from discrimination” in the agency’s mission statement. Last week, 164 national organizations – including The Arc – and 409 state and local groups sent a letter to Secretary Carson following news accounts alleging that HUD is contemplating amending its mission statement to remove this language.

“Across the United States, people with disabilities face a crisis when it comes to inclusive, affordable, and accessible housing in the community. Discrimination continues to be a major barrier: over half of fair housing claims filed in 2017 involved discrimination on the basis of disability. Many people with disabilities also face multiple barriers to housing based on their race, gender, sexual orientation, national origin, and religion, or familial status.

“The Arc has been alarmed by recent news reports that HUD may be considering removing anti-discrimination language from its mission statement. We hope this is not the case. Removing this language would send the wrong message. We call on Secretary Carson to keep inclusion and freedom from discrimination front and center in all of HUD’s work, and to retain this important anti-discrimination language in HUD’s mission statement,” said Marty Ford, Senior Executive Officer, Public Policy, The Arc.

The Arc on Bipartisan, Two Year Budget Deal

The Arc is pleased that Congress was able to negotiate a bipartisan budget deal last week.  The deal provides welcome temporary relief for the non-defense discretionary part of the budget that funds a range of programs – such as education, housing, and employment – that help make community living possible for people with intellectual and developmental disabilities.  Further, by raising the debt ceiling though March of 2019, it provides a measure of stability that will allow Congress time to continue to develop appropriations legislation to keep the federal government operating.  However, despite these and many other beneficial provisions, The Arc remains concerned about future efforts to make program cuts in order to deal with the increased spending authorized in the deal and reduced revenue from the tax law enacted in December.

The Arc Responds to New Report Exposing Abuse and Neglect of Individuals With Disabilities in Group Homes

Washington, DC – At the request of Congress, the U.S. Department of Health and Human Services Office of Inspector General investigated states’ monitoring and reporting of injuries and other critical incidents of people with disabilities living in group homes. Following the investigation, a report was issued that cited numerous incidents of abuse of people with intellectual and developmental disabilities in group homes. The report found that up to 99% of these critical incidents were not reported to the appropriate law enforcement or state agencies as required. Below is The Arc’s response to the report:

“We are grateful to the Department of Health and Human Services, Office of Inspector General for its report that draws attention to critical incident reporting in group homes and provides states the tools to address the health and safety of individuals with intellectual and developmental disabilities (I/DD) in their communities. Abuse, neglect, and injuries to people with disabilities must be taken seriously, reported to the appropriate law enforcement or state agencies, and prosecuted as appropriate for crimes committed. System failures must be addressed to ensure improvements.

“The OIG report is certainly cause for alarm and signals the need for rededication and reinvestment to ensure that everyone has the freedom to live safe from harm in their communities. It is important to highlight and appropriately address such jarring results, however, we are concerned that some see this as a call for returning to the time when people with I/DD were placed in institutions and hidden away from the community. This report only focuses on group homes, not on the whole service system including institutions, the narrowness of the report must be taken into consideration and the report must not be used to eliminate options for community living.

“Throughout The Arc’s history we have fought for community inclusion for individuals with disabilities. Everyone deserves the right to choose where and with whom they live and it has been proven that people with disabilities thrive when living, working, and enjoying life in the community with their peers. We remain steadfast in our commitment to ensure that the services people with disabilities rely on for inclusion remain intact because community supports are critical. When people live in their communities they are visible and their neighbors and friends look out for them and know when something is wrong. We must make no mistake, it is life in the community that really is safest,” said Peter Berns, CEO of The Arc.

The Arc advocates for and serves people wit­­h intellectual and developmental disabilities (I/DD), including Down syndrome, autism, Fetal Alcohol Spectrum Disorders, cerebral palsy and other diagnoses. The Arc has a network of over 650 chapters across the country promoting and protecting the human rights of people with I/DD and actively supporting their full inclusion and participation in the community throughout their lifetimes and without regard to diagnosis.

Civil Rights, Housing, and Community Development Organizations Call on HUD to Maintain a Critical Fair Housing Tool and Not to Roll Back the Promise of the Fair Housing Act

Washington, DC – 76 national civil rights, faith-based, affordable housing and other organizations have voiced their strong opposition to HUD’s sudden and short-sighted decision to effectively suspend the Affirmatively Furthering Fair Housing (AFFH) regulation.

Nearly 50 years ago, Congress adopted the Fair Housing Act, landmark legislation necessary to end discrimination in housing and eliminate the barriers created by segregation.  The AFFH regulation —designed with considerable public input and piloted extensively — was adopted in 2015 and was a critical and long overdue step in carrying out Congress’ intent. It provided jurisdictions with a roadmap and tools for compliance and included measures for accountability.  Without warning, HUD has decided effectively to suspend the regulation, leaving local jurisdictions confused, giving local residents less voice in important decisions about their communities, and reinstating an approach to fair housing that the Government Accountability Office found to be ineffective and poorly administered.

“HUD’s effective suspension of the rule does nothing to help local governments fulfill their fair housing responsibilities to create equitable, healthy communities and provide access to housing without discrimination,” says Angela Glover Blackwell, CEO for PolicyLink.  “It is the wrong move, particularly at a time when housing needs are so severe and housing and community development resources are so scarce.  And by taking this step, HUD is abrogating its duty to carry out the mission Congress assigned it 50 years ago.”

“Americans strongly believe that a zip code should not determine a child’s future, and that everyone – regardless of their race or national origin, the language they speak, or whether they have children or have a disability – should have access to the opportunities they need to succeed,” said Shanna L. Smith, president and CEO for the National Fair Housing Alliance.  “But we are falling short of achieving that goal.  Actions taken over many years by HUD, other government agencies and the private sector have left us more segregated than we were 100 years ago.  That has led to concentrated poverty and weaker communities and undermines our prosperity.  We need HUD to enforce this important rule, not suspend it.”

“The administration’s abrupt decision to effectively suspend this critical regulation is misguided,” says Diane Yentel, president and CEO of the National Low Income Housing Coalition.  “The federal government, states and local communities have been required by law since 1968 to work to undo the segregated communities that federal housing policy created in the first place.  Suspending the tools that help communities meet that obligation, without any input from key stakeholders, is a step in the wrong direction.”

“The obligation of local governments to ‘affirmatively further fair housing’ is essential to fulfill the promises of the Fair Housing Act, particularly this year, the 50th Anniversary of this key civil rights law,” said Sherrilyn Ifill, President and Director-Counsel of the NAACP Legal Defense and Educational Fund, Inc. “HUD’s proposed suspension would roll back one of the law’s most critical tools to correct structural inequality and racial segregation and represents yet another attack by this Administration on communities of color across the country.”

“HUD’s decision to suspend a critical rule that has helped promote fair housing across the country is firm demonstration of Secretary Ben Carson’s hostility to fair enforcement and implementation of the Fair Housing Act,” said Kristen Clarke, president and executive director of the Lawyers’ Committee for Civil Rights Under Law.  “We will not stand by idly as HUD works to roll back the important gains that have been made to promote fair housing opportunities across the country.”

HUD’s announcement today is a serious loss for fair housing and puts the promise of making every neighborhood a community of opportunity further out of reach.  We call on HUD to reverse its decision, withdraw this notice, and move ahead with implementation and enforcement of this important fair housing rule.  And we call on Congress to provide policy and budgetary oversight of HUD to ensure it is delivering on the promise of fair and equitable housing.

For media inquiries, contact:

Jessica Brady, Lawyers’ Committee for Civil Rights Under Law, (202) 662-8600 x 8317, press@lawyerscommittee.org

Phoebe Plagens, NAACP Legal Defense and Educational Fund, Inc., 212.965.2235, pplagens@naacpldf.org

Jesse Meisenhelter, National Community Reinvestment Coalition, jmeisenhelter@ncrc.org, 202-464-2737

Debby Goldberg, National Fair Housing Alliance, Dgoldberg@nationafairhousing.org, 202-898-1661 or Jessica Aiwuyor, National Fair Housing Alliance, Jaiwuyor@nationalfairhousing.org, 202-898-1661

Renee Willis, National Housing Law Project, Media@nlihc.org, 202-662-1530

Lisa Marlow, National Low Income Housing Coalition, Lmarlow@nlihc.org, 202-662-1530

Milly Hawk Daniel, PolicyLink, Milly@policylink.org, 917-658-6468

 

This statement is issued on behalf of:

Action Center on Race and the Economy Institute

American Civil Liberties Union

Association of Programs for Rural Independent Living

Autism Society of America

Autistic Self Advocacy Network

California Reinvestment Coalition

CarsonWatch

Center for Popular Democracy

Center for Responsible Lending

Center for Social Innovation

Center for the Study of Social Policy

Center on Budget and Policy Priorities

Coalition on Human Needs

Consortium for Citizens With Disabilities Housing Task Force

Consumer Action

Consumer Federation of America

Disability Rights Education and Defense Fund (DREDF)

Enterprise Community Parnters

Equal Justice Society

First Focus

FORGE, Inc.

GLMA: Health Professionals Advancing LGBT Equality

Grounded Solutions Network

Housing Assistance Council

Impact Fund

Japanese American Citizens League

Lambda Legal

LatinoJustice PRLDEF

Lawyers’ Committee for Civil Rights Under Law

Local Initiatives Support Corporation (LISC)

Local Progress

LOCUS: Responsible Real Estate Developers and Investors

Low Income Investment Fund

NAACP Legal Defense and Educational Fund, Inc.

National Alliance of Community Economic Development Associations

National Alliance on Mental Illness

National Asian Pacific American Women’s Forum (NAPAWF)

National Association for Latino Community Asset Builders

National Association of Councils on Developmental Disabilities

National Association of Human Rights Workers

National Center for Lesbian Rights

National Center for Transgender Equality

National Coalition for Asian Pacific American Community Development (CAPACD)

National Community Reinvestment Coalition

National Consumer Law Center (on behalf of its low-income clients)

National Council of Churches

National Disabilty Rights Network

National Education Association

National Equality Action Team (NEAT)

National Fair Housing Alliance

National Health Care for the Homeless Council

National Housing Law Project

National Housing Trust

National Juvenile Justice Network

National Law Center on Homelessness & Poverty

National LGBTQ Task Force

National Low Income Housing Coalition

National Network to End Domestic Violence

National Urban League

Paralyzed Veterans of America

PFLAG National

PolicyLink

Poor Peoples Economic Human Rights Campaign

Poverty & Race Research Action Council

Pride at Work

Prosperity Now

Public Advocates Inc.

Public Citizen

Smart Growth America

Technical Assistance Collaborative

The Arc of the United States

The Leadership Conference on Civil and Human Rights

Transgender Law Center

Treatment Communities of America

UnidosUS (formerly National Council of La Raza)

United Way Worldwide

Owning a Home with a Special Needs Trust

By Amy R. Tripp, Esq., Special Needs Alliance

To say that adequate housing options for persons with disabilities is a challenge is an understatement. As a result, in the process of future planning, housing is almost always one of the most important topics. Some people with disabilities would like to continue living in the family home, with appropriate supports, after Mom and Dad are gone, and parents often agree that would best serve their son or daughter’s interest. Other parents anticipate leaving funds that would allow their son or daughter to own appropriate alternate housing. In both cases, it must be determined if it makes sense for the house to be owned by a special needs trust (SNT) that is likely at the center of their plan. And as noted below, individuals and families must also weigh the benefits of home ownership versus renting to determine the best fit.

The short answer is that, in many cases, is does make sense for an SNT to own a home, but there are numerous considerations and caveats that come into play. This is an overview of the rules and issues that can arise when an SNT owns a home.

It is important first to identify what type of trust would own the home. We should distinguish between “first party” and “third party” trusts. A first party SNT is funded with the individual beneficiary’s assets and, after the death of the beneficiary, requires reimbursement to the state for Medicaid services. A third party SNT, which is funded with someone else’s assets, such as an inheritance from a parent or proceeds from a life insurance policy, is more flexible and does not require reimbursement to the state.

Options for Titling Homes

A threshold consideration in deciding whether a residence is better owned by an SNT or the individual is whether that person has legal capacity to hold title on their own and what decision-making supports the person might need. Minors simply cannot hold title and would require a guardian (in some states, a conservator) be appointed. Many adults may also need support to manage home ownership. If an adult is under guardianship or conservatorship, the guardian or conservator would likely have legal authority to manage the property. Many other adults with I/DD would benefit from using decision-making supporters to help them meet the obligations of home ownership.

For an adult with I/DD, home ownership can be empowering, as it is for all of us. The responsibilities of home ownership, as well as the status of a property owner, can have very positive impact. Families should take care to ensure that appropriate decision-making supports are in place.

If direct ownership isn’t practical, leaving a family home to a third party SNT, or buying one with trust assets, protects the property from creditors and leaves financial and maintenance issues in the hands of a trustee.

While a residence purchased by a first party SNT gains these advantages during the beneficiary’s lifetime, the home is subject to recovery by the state upon the beneficiary’s death to the extent of the costs paid by Medicaid.

Finally, it is important to look at who else might be living in the home. If the home is owned outright by a first party SNT, there may be complications if other family members also reside there. Distributions from first party SNTs are supposed to be for the sole benefit of the beneficiary, and this may be interpreted differently by various Social Security offices. Depending on the level of caregiving performed by family members, they may be required to pay rent in order to avoid affecting the beneficiary’s eligibility for government benefits. There may even be issues regarding what maintenance the trust should pay for.

Some trustees, seeking to avoid a first party trust payback, arrange for the SNT to purchase a life estate interest in the family residence. By paying a portion of the home’s value, the beneficiary has a right to live there, rent free, as long as he or she lives. In some states, however, this won’t avoid the Medicaid lien, and other family members residing in the home still may need to pay rent to avoid conflict with the sole benefit rule.

Running the Numbers

Of course, as attractive as the idea is, whether it is practical to plan to provide a house to an adult son or daughter with disabilities after you’re gone comes down to dollars.

Any time the purchase or transfer of ownership of a residence is begin considered, it is critical to prepare a detailed budget which takes into consideration things such as the cost of modifications needed for accessibility, long-term maintenance, utilities, taxes, insurance, and general upkeep. A common planning mistake is for people to create SNTs which purchase homes, only to have the housing costs consume such a large part of the available resources that other important purposes of the SNT are compromised, leading to deterioration of the property and forcing sale at a discounted price.

On occasion the solution may be as simple as finding a roommate. The trend today is for families to consolidate resources and purchase housing that provides for more than one adult. While there are some great examples of these types of arrangements, there are also many situations in which such plans simply don’t work. And many trustees are unwilling to deal with their complexity.

Beyond the numbers, persons with disabilities and their families should consider other pros and cons to homeownership, including whether the person may in the future want to live in a different neighborhood or area, the suitability of the home for future family configurations and the potential for aging in place.

Effect on Benefits

The ownership of property and the payment of housing expenses can impact the government benefits the individual may be receiving, including Supplemental Security Income (SSI) and Medicaid.

Notably, for persons who receive SSI, mortgage payments, property taxes, utilities and other housing costs paid on their behalf by an SNT are considered in-kind support and maintenance (ISM) and will reduce SSI. Good planning can often reduce the impact of these rules, but not always.

Likewise, depending on how a home is titled, the purchase or sale of a home can trigger interruptions or reductions in benefits in the months in which these events occur. While the home is an exempt asset for SSI and Medicaid benefits, the sale of the home in the future, if titled to the individual, will result in converting an exempt asset into countable resources. If the home is titled to the SNT, then the sale of the home would have no impact on eligibility.

Medicaid liens and other estate recovery claims are potential pitfalls when persons receiving benefits own their own homes, or have homes held in some SNTs. When a first party SNT owns the home, extra attention needs to be provided if other family members are living in the home and providing support to the beneficiary. When the beneficiary dies, Medicaid is reimbursed from the remaining assets in the first party SNT. If the Medicaid lien exceeds the balance of the assets in the first party SNT and the house is owned by the SNT, then the house may be lost. This can be a great hardship for some families who provide support and services to the beneficiary.

Conclusion

Housing is always a challenge in future planning for persons with disabilities. Arranging for a stable living environment is a high priority, but the considerations are many and complex, and families and their counselors are becoming increasingly creative as they struggle with the housing shortage. Whether an SNT can or should own a house involves a number of considerations, and families should seek advice from a qualified attorney to ensure that their objectives are met.

Amy Tripp is a member of the Special Needs Alliance, a national nonprofit dedicated to assisting individuals with disabilities, their families and the professionals who serve them. SNA is partnering with The Arc to provide educational resources, build public awareness and advocate for policies on behalf of people with intellectual/developmental disabilities and their families.