CARH’S BROADCAST E-MAIL – Regulatory Update
November 16, 2023
In yesterday’s Federal Register, the Department of Housing & Urban Development published a Notice that establishes operating cost adjustment factors (OCAFs) for project-based assistance contracts issued under Section 8 of the United States Housing Act of 1937 and renewed under the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA) for eligible multifamily housing projects having an anniversary date on or after February 11, 2023. OCAFs are also annual factors used to adjust Section 8 rents renewed under Section 515 or Section 524 of MAHRA.
According to HUD, through this Notice HUD also seeks public input on two proposed technical changes to its OCAF calculation method as noted below.
Proposed Changes to OCAF Methodology:
HUD seeks public input on the following proposed technical changes to its OCAF calculation methodology.
- Vintage of data. Calculating the inflation factor for each of the nine cost components that comprise the OCAF, HUD will use year-over-year data, pulling data as of May of each year. Beginning with the 2024 OCAFs, HUD will begin to pull data in August of each year, to reduce the time lag between when OCAFs are calculated and when they go into effect.
- Insurance component data source. Calculating the inflation factor for the insurance component, HUD has in the past used the Bureau of Labor Statistics Consumer Price Index, Tenants, and Household Insurance Index. Beginning with the 2023 OCAFs, HUD will instead use the industry data for direct property and casualty insurers-commercial multiple peril insurance series from the Bureau of Labor Statistics, Producer Price Index, as officials believe it is the best metric for insurance costs for properties of leased rental housing.
Public comments or reevaluation requests, comments, or requests must be submitted as directed in the notice. HUD will consider all comments submitted no later than 30 days from the date of publication of this notice. Unless HUD receives comments that would lead to the reconsideration of these proposed changes, the changes will become effective on February 11, 2023. If HUD receives adverse comment that leads to reconsideration, HUD will notify the public via a revised notice issued immediately following the close of the comment period.
Please contact the CARH national office at email@example.com or 703-837-9001 should you have questions or concerns. For other news and information affecting the affordable rural housing industry, please visit the Newsroom on CARH’s website, www.carh.org.