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ADDRESSING TENANT complaints and MIScONcEPTIONS

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Title: ADDRESSING TENANT complaints and MIScONcEPTIONS


1
ADDRESSING TENANT complaints and MIScONcEPTIONS
2
What is the purpose of this session?
  • Three learning goals
  • (1) Understand IHCDAs role in answering tenant
    inquiries and investigating complaints related to
    Section 42 and HOME-assisted rental housing.
  • (2) Identify common types of tenant complaints
    and misconceptions
  • (3) Discuss what you as property
    management/compliance can do to diminish tenant
    misconceptions

3
IHCDAs role
4
WHAT IS IHcDAS ROLE?
  • As a Housing Finance Agency (HFA) / Participating
    Jurisdiction (PJ)
  • LEGAL/REGULATORY obligation to ensure program
    compliance
  • As a State Agency
  • MORAL obligation to respond to constituents and
    protect against mistreatment
  • In both roles
  • Interest in preserving the integrity/reputation
    of the program

5
What does ihcda do when an inquiry is received?
  • Intake information
  • Ask relevant questions
  • If matter cannot be immediately resolved, promise
    a future response
  • Conduct investigation- internal and external
  • Follow-up response to constituent
  • If needed- work with owner/manager on resolving
    issue
  • NOTE At all steps, IHCDA is mindful to
  • (1) never ASSUME anything
  • (2) remember there are two sides to every story

6
HOW FREQUENT ARE TENANT INQUIRIES?
  • Multiple inquiries are received each week. For
    example
  • Week of November 3, 2013 13 inquiries
  • Week of October 20, 2013 10 inquiries
  • Week of October 13, 2013 7 inquiries
  • Not all inquiries are complaints may be a
    general program question or someone simply
    looking for a list of housing opportunities

7
The good news
  • Most inquiries, including complaints, do not
    result in a finding of program noncompliance.
  • This is good but
  • Still exhausts staff time both for IHCDA and
    management
  • Even complaints that result in no finding can
    taint program reputation
  • Especially if directed through an elected
    official representatives office.
  • Think about what this means at these different
    levels
  • Local elected official
  • State legislators
  • Congress/ Senate
  • Root cause is a lack of program understanding

8
Common complaints and MIScONcEPTIONS
9
WHAT IS THIS PROGRAM?
  • Two factors are critical to understand the basic
    program concept
  • 1. The tax credit is not for the renter
  • 2. There is no subsidy from the program (i.e.
    Section 42 is not rental assistance)
  • These both seem basic or even obvious to program
    staff, but applicants to Section 42 housing often
    do not understand this.

10
ELIGIBILITY- PROGRAM REQUIREMENTS
  • Income eligibility
  • Applicants/tenants often disagree with the
    calculation methodology
  • Explain upfront
  • Types of income and assets that are included
  • Gross not net
  • Exact income will not affect rent (more on rent
    later)
  • At recertification explain this does not affect
    continued residency
  • Student eligibility
  • Student rules are complicated and often
    misunderstood
  • Explain upfront for tax credit purposes
  • Definition of full or part-time is based on the
    schools definition
  • Do NOT recommend that someone quits school as a
    solution
  • May still not qualify- 5 months of calendar year
    rule, income, other eligibility

11
ELIGIBILITY- SELEcTION REQUIREMENTS
  • Selection requirements include such items as
  • Criminal history
  • Credit history
  • Landlord reference
  • Occupancy size
  • Generally the most contentious type of complaint
  • Applicants/tenants associate this with
    discrimination
  • IHCDA cannot do much to defend except say
    management has discretion
  • You MUST
  • Have a strong written tenant selection plan (more
    on this later)
  • Apply this selection criteria consistently

12
rents
  • One of the most frequent program misconceptions
    is that rent is directly related to income. This
    causes three types of complaints
  • My situation changed, so change my rent
  • The nosy neighbor
  • The calculation argument

13
Rent scenario 1
  • My situation changed, so change my rent
  • Case Study 1
  • Mr. Johnson lives in Happy Meadows, a
    mixed-income tax credit project in which all
    program units are rent and income restricted at
    50. There is no other funding on the property.
    At recertification he has lost his job. He is
    outraged to hear management is not lowering his
    rent.
  • Case Study 2
  • Ms. Brown also lives at Happy Meadows. She is on
    a fixed income and her income did not change at
    recertification. Management is raising her rent
    by 20. Ms. Browns yelling is making things not
    so cheery at Happy Meadows.
  • How should you respond?

14
Rent scenario 1
  • My situation changed, so change my rent
  • In either scenario, we have a resident that
    believes Section 42 requires the tenant-based
    rent portion to be calculated based on actual
    household income in the same manner you would
    determine the tenant-paid portion for a rental
    assistance program.
  • When individuals move into the property, it is
    important to explain to them that this is not the
    case (i.e. that rent will not fluctuate with
    changes in their income) but that instead their
    unit has a designated rent restriction based on
    an area median income set-aside.

15
Rent scenario 2
  • The nosy neighbor
  • Case Study 3
  • Matt and Scott are neighbors at a tax credit
    property for seniors. One night while having a
    few beers together on the patio, Scott finds out
    Matt pays 400 a month for rent.
  • The next day Scott confronts the property
    manager. He is furious that he is also paying
    400 a month for his rent. He says he knows Matt
    has more income and even has assets! He says
    management is mistreating him by charging him the
    same rent when he has less money.
  • How should you respond?

16
Rent scenario 2
  • The nosy neighbor
  • Managements knee jerk reaction is often to tell
    the complainer that he/she doesnt in fact know
    his/her neighbors income and that that
    information is none of his/her business. Maybe
    he/she does know, maybe he/she doesnt. Either
    way that response does not address the issue, as
    it in fact leads him/her to continue to believe
    that rent and income are still connected.
  • The correct response here is to inform the
    resident that the reason they are both paying the
    same rent is because they are living in units of
    the same bedroom size that are both assigned the
    same rent set-aside.

17
Rent scenario 3
  • The calculation argument
  • Case Study 4
  • IHCDA recently had an individual file a complaint
    because he believed management was
    over-calculating his income by around 240 at
    annual recertification. He believed his income
    was being reported higher to justify a higher
    rent rate. The manager told the tenant he just
    didnt understand the program and that if he
    didnt sign his TIC she would evict him.
  • IHCDA investigated and discovered that management
    was in fact performing due diligence by using a
    year-to-date calculation for income which ended
    up being slightly higher than the calculation
    based on base pay rates.
  • How should the manager have handled this issue?

18
Rent scenario 3
  • The calculation argument
  • Management should have explained that
  • the tenant rent portion is not based on the
    income calculation and
  • they are using a conservative calculation
    methodology and taking the maximum possible
    income to show that there is no doubt he income
    qualifies (since this case was a recert he was
    already qualified for occupancy anyway).

19
Privacy concerns
  • Types of privacy concern complaints
  • Why are they asking for this information?
  • What will be done with this information?
  • Why and who is coming into my unit for an
    inspection?
  • Note Think about how your office organization
    may contribute to concerns?
  • Are verification documents out on display?
  • Are tenant files easily accessible?
  • Would the organization in the leasing office lead
    an applicant or resident to have concerns about
    the security of confidential information?

20
Housing for older persons
  • Different possible definitions of housing for
    older persons leads to confusion and often
    complaints, especially if there are children at
    perceived elderly housing
  • The key is to properly define the restrictions at
    your property and to correctly explain this both
    verbally and in writing.
  • 100 at 62 or
  • 80 at 55
  • If so what about the 20?
  • If so what about the other household members?
  • This all needs defined

21
what can I do?
22
Inform the applicant
  • Do not assume the applicant is unwilling or
    incapable of understanding the basics of the
    program.
  • During application intake, give brief explanation
    of eligibility and rent structure
  • Walk through tenant selection policy
  • Explain process and anticipated timeline
  • Explain documentation and retention
  • During lease signing explain lease terms
  • IHCDA has created documents for applicants/tenant
    resources
  • 1 pagers what is HOME rental housing what is
    Section 42 rental housing
  • Program summaries (about 8 pages each) on each
    program

23
Strong tenant selection plan
  • A well-written tenant selection plan can prevent
    many complaints or questions about the
    application process
  • Policy should include
  • Program and selection eligibility factors
  • Occupancy size restrictions
  • Application process, waiting list process, denial
    process, and appeal process
  • Explanation of transfer policies
  • Explanation of any special preferences or
    set-asides in place
  • BIGGEST PITFALL
  • Vague language, especially about selection
    factors such as criminal and credit
  • Explain specifics of what is evaluated and what
    constitutes a denial

24
Strong lease language
  • A well-written lease can prevent some of the
    complaints related to management practices and
    rules
  • A good lease should include, for example
  • Clear language about rent requirements
  • Due dates
  • Late fees
  • Method of payment
  • Language addressing program compliance such as
    cooperation with recertifications and physical
    inspections
  • Lease renewal and termination process

25
miscellaneous final thoughts
26
Look at policies and procedures
  • Revisit your internal policies and procedures
  • Questions to ask
  • Which policies are not mandated by regulation or
    IHCDA requirement? (caution be mindful of
    investor or owner mandated requirements)
  • Are these policies effective and purposeful or
    just red tape?
  • Selection criteria often have a strong purpose
    and are justified
  • Extra verification requirements or especially
    conservative calculation procedures are often
    over-kill
  • Extra burden on staff
  • Possibly considering qualified applicants as
    unqualified
  • Remember the purpose of the program

27
Use indianahousingnow.org
  • The 1 inquiry received by IHCDA is for
    assistance locating housing options
  • IHCDA (in conjunction with Social Serve)
    maintains a housing database entitled Indiana
    Housing Now (www.indianahousingnow.org).
  • Free to list
  • Newer Section 42 properties are required per QAP
  • Recommended for all properties
  • Now part of monitoring review
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