Supporting statement A

Supporting Statement for Paperwork Reduction Act Submissions

Procedures for Appealing Section 8 Rent Adjustments

OMB Control Number 2502-0446

A. Justification

1. Title II, Section 221, of the National Housing Act requires that the Department of Housing and Urban Development (HUD) regulate rents for certain subsidized rental projects. Under this legislation, HUD is charged with the responsibility of determining the method of rent adjustments and with facilitating these adjustments. Because rent adjustments are considered benefits to project owners, HUD must also provide some means for owners to appeal the decisions made by the Department or the Contract Administrator. This appeal process, and the information collection included as part of the process, play an important role in preventing costly litigation and in ensuring the accuracy of the overall rent adjustment process.

2. Owners of certain subsidized multifamily housing rental projects are allowed two appeals under the Section 8 rent appeal process. The first appeal is made to the local HUD Office or Contract Administrator that rendered the initial rent adjustment decision, and the second appeal may be made to the Hub Director, who will designate an official to review any appeal. Each appeal must include a letter explaining the owner’s disagreement and documentation outlining the requested rents, along with any other supporting documentation. This information must be submitted within 30 days of notification of denial of the rent adjustment request.

3. This information is not collected electronically and there are no plans to automate the process at this time because it requires either HUD staff or Contract Administrator staff to review the owner’s supporting documentation to justify the appeal and compare it to the owner’s original rent increase submission and determination of the rents by HUD or the Contract Administrator. At this time, automating this process is not feasible as it will not allow reviewers to adequately assess all pertinent materials due to the unique nature and project operation of every property while ensuring compliance with HUD regulations and guidelines as required by the business agreements.

4. No similar information is being collected.

5. Some project owners may be considered small businesses. The collection of this information is the same for all project owners. A project owner determines whether or not to submit the information. The two burden hours per submission are not considered significant.

6. If this information were not collected as required, HUD would be in violation of the statute. The information is collected, at the owner’s discretion, when they wish to appeal a rent decision. The information collection could not be conducted less frequently. Failure to collect this information would hinder the Department’s ability to provide owners with an opportunity to appeal rent adjustments.

7. The information must be submitted within 30 days of notification of denial of the rent adjustment request, as required by Section 516(c) of MAHRA.

8. In accordance with 5 CFR 1320.8(d), the agency’s notice soliciting public comments was announced in the Federal Register on ( Tuesday, August 23, 2011; _Vol; 76; No. 163; Page 52674.). No comments were received.

Industry contacts included:

Mr. Thomas Langston Director of Operations MFH Support Center Philadelphia Field Office 100 Penn Square East Philadelphia, PA 19107 (215) 861-7565

Mr. Michael Adamson Contract Renewal Manager Indiana Quadel Consulting 10 West Market Street – Suite 1750 Indianapolis, IN 46204 (317) 656-8809

Ms. Diane Lima Director, Project Management NY Multifamily Hub U.S. Department of H.U.D. 26 Federal Plaza New York, NY 10278 (212) 542-7774

Ms. Erin Ferguson

PBCA Contract Manager

Contract Management Services

345 6^th Street – Suite 200

Bremerton, WA 98337

(360) 616-7230

Two of the persons listed above (Mr. Adamson and Ms. Ferguson) represent Performance Based Contract Administrators (PBCAs), which is where owners/agents are required to submit their first appeal if they disagree with their Section 8 rent adjustment. Mr. Adamson has received 10 appeals and Ms. Ferguson has received 5 appeals. Ms. Lima, from the New York Multifamily Hub and Mr. Langston of the Philadelphia Field Office both reported 12 appeals in the last year. It has taken an average of 5.75 hours to process and close each appeal, according to our test group (above). It takes an owner no more than two hours to prepare an appeal letter to a Section 8 rent adjustment because all of the documentation needed to justify the appeal has previously been prepared; it just needs to be pulled together with a cover letter providing the justification for the appeal. Since there are fifty-two HUD Field offices and fifty-three Project Based Contract Administrators offices that would probably receive more than one appeal letter we allotted for 525 respondents.

9. No payments or gifts are provided to the respondents.

10. There are no assurances of confidentiality provided to respondents.

11. The letters do not contain questions of a sensitive nature.

12. Estimated Burden and Annual Cost to Respondents:

Information Collection	Number of Respondents	Frequency of Response	Responses Per Annum	Burden Hour Per Response	Annual Burden Hours	Hourly Cost Per Response	Annual Cost
Appeal Letter	525	1	525	2	1050	$35.00	$36,750

The hourly rate is based on a blended estimate of project owner’s and clerical annual salaries, averaging $72,800 annually.

13. There are no additional costs to the respondents.

14. Estimated Burden and Annual Cost to the Federal Government:

Information Collection	Number of Responses	Burden Hour Per Response	Annual Burden Hours	Hourly Cost Per Response	Annual Cost
Appeal Letter	525	5.75	3018.75	$43.00	$129,806

The hourly rate is based on the annual salary of a GS-13, step 1($89,033 annually).

15. This is an extension of a currently approved collection. That process encourages owners of eligible multifamily housing projects to restructure their FHA-insured mortgages and project-based assistance contracts before the year in which the contract expires. There is a slight increase in burden hours due to more HAP contracts being renewed under the Multifamily Assisted Housing Reform and Affordability Act (MAHRA).  This amount will level off as the remaining Multifamily portfolio has fully renewed under MAHRA. 

16. The results of this information collection will not be published.

17. HUD is not seeking approval to avoid displaying the expiration date.

18. There are no exceptions to the certification statement identified in Item 19 of the OMB 83-I.

B. Collections of Information Employing Statistical Methods

This collection of information does not employ statistical methods.

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OMB 83-I 10/95