Lord v. DHCD: EA "Flex Funds" Short-Term Subsidies Lawsuit Settled, New DHCD Flex Fund Procedures

In November 2010, MLRI, on behalf of Mass. Coalition for the Homeless and several individual plaintiffs, sued the Department of Housing and Community Development (DHCD) alleging that DHCD was violating the law by not having fair and duly promulgated rules governing the Emergency Assistance “Flex Funds” program, through which the agency is spending approximately $30M of EA funds in FY 11 on short-term subsidies for otherwise homeless families. The lawsuit is called Lord v. DHCD. After plaintiffs moved for a preliminary injunction in December, DHCD entered into settlement discussions with MLRI and MCH to resolve the major issues in the case, including new rules governing extensions and terminations of subsidies and rules governing when families whose Flex Funds subsidies end are eligible for emergency shelter. Today, a settlement agreement was signed by the parties under which DHCD is issuing substantially revised sub-regulatory policies in exchange for the dismissal without prejudice of the lawsuit.

The new policies are contained in: (a) an Amended Case Review Plan that is primarily directed to providers, (b) a new DHCD Housing Stabilization Notice 2011-01 primarily directed at DHCD workers who determine eligibility for EA and includes the form of notices that will be sent to families (Exhibits A-C), (c) the Uniform Flex Funds Rules applicable to families (and indirectly their providers), and (d) new Notices of Approval or Denial and of Termination or Extension Denial. All policies are to be posted on the DHCD website at www.mass.gov under the Division of Housing Stabilization,  and are attached here. The Settlement Agreement is also attached.

The key elements of the settlement/new policies are:

1. All families with Flex Funds subsidies that ended on or before February 28, 2011 are immediately eligible for emergency shelter if they meet the basic categorical and financial EA eligibility rules in 106 CMR 309.020 and do not currently have feasible, alternative housing under 309.040(A)(2), with the exceptions discussed in 3 below.
2. An apartment that was but no longer is subsidized with Flex Funds does not qualify as feasible, alternative housing, under 309.040(A)(2) and does not render the family ineligible for shelter, unless the family still has access to the unit and the family is not required to pay more than 35% of its income for rent, heat and other utilities.
3. Families whose Flex Funds subsidies ended on or before February 28, 2011 are eligible for shelter if they meet the above rules, unless they left the unit before the subsidy ended or before a landlord told them they had to leave, or unless they had intervening safe, permanent housing since residing in the Flex Funds unit and lost that later housing for a disqualifying reason under 106 CMR 309.040(B). Otherwise eligible families whose subsidies ended before February 28 but who left the unit before the subsidy ended or before the landlord told them to leave are eligible for shelter as of the date their subsidy would have ended.
4. Notices are being sent to these families this week informing them of their right to return to shelter.
5. Families whose Flex Funds subsidies end after February 28, 2011 are eligible to return to shelter if they meet categorical and financial eligibility rules under 309.020 and 309.040(A) and apply within 30 days after their Flex Funds, including aid pending appeal, end, UNLESS THEIR FLEX FUNDS WERE TERMINATED OR NOT EXTENDED DUE TO VIOLATIONS OF NEW UNIFORM FLEX FUNDS RULES.
6. Families whose Flex Funds subsidies end after February 28, 2011, but who do not apply within 30 days after their Flex Funds, including aid pending appeal end, are eligible to return to shelter if they meet categorical and financial eligibility rules under 309.020 and 309.040(A) and did not have intervening housing that they lost for reasons that are disqualifying under 106 CMR 309.040(B), UNLESS THEIR FLEX FUNDS WERE TERMINATED OR NOT EXTENDED DUE TO VIOLATIONS OF NEW UNIFORM FLEX FUNDS RULES.
7. For these families too, an apartment that is no longer subsidized with Flex Funds does not qualify as feasible, alternative housing under 309.040(A)(2) and therefore does not render the family ineligible for shelter, unless the family still has access to the unit and the family is not required to pay more than 35% of its income for rent, heat and other utilities.
8. Under the Amended Case Review Plan, Flex Funds subsidies can be terminated or not extended beyond the initial 12 month period or beyond any additional 6-month extension period if: (A) the landlord simply does not want to continue to rent to the family; (B) the provider and family agree that it is best for the family not to extend the subsidy, e.g. because of conditions or safety issues; (C) the family is no longer eligible for Emergency Assistance under 106 CMR 309.020 and 309.040(A)(2)(feasible, alternative housing becomes available), or (D) the family has been found to have violated the Uniform Flex Funds Rules.
9. Only a termination or non-extension for violation of the Uniform Flex Funds Rules will have an adverse impact on future EA eligibility, in that families terminated or not extended for violating the Rules, after notice and opportunity to appeal, will be deemed to have not cooperated with housing assistance program services, pursuant to 106 CMR 309.040(A)(2)(c) and 309.040(B)(7) and barred from further assistance for 12 months from the end of the subsidy. In other words, the 12-month rule against receiving additional EA benefits for 12 months, under 106 CMR 309.040(A)(4), will run only from the date a family exists the emergency shelter system, except for families whose FLEX FUNDS WERE TERMINATED OR NOT EXTENDED DUE TO VIOLATIONS OF NEW UNIFORM FLEX FUNDS RULES. With respect to that category of families only, the 12-month rule will run from the last day that Flex Funds were paid for. (DHCD had been applying the 12 month rule from the end of the subsidy even to families whose subsidy was not extended or terminated for no fault reasons).
10. The new Uniform Flex Funds Rules take effect on March 1, 2011 or as soon as a family receives a copy of the Rules, whichever is later. Violation of the Uniform Flex Funds Rules without good cause can result in non-extension or termination of a Flex Funds subsidy and ineligibility for shelter for 12 months.
11. The Uniform Flex Funds Rules generally forbid: (1) criminal conduct by a household member; (2) criminal conduct by guests; (3) possession of a lawful firearms on the premises by a household member or guest; (4) destruction of property by a household member or guest; (5) failure to use the unit as the primary residence; (6) abandonment of the unit; (7) allowing unauthorized residents; (8) failure to accurately report relevant information; (9) rejection of an offer of safe, permanent housing; (10) nonpayment of rent; (11) noncompliance with lease requirements, including late payment of rent and utilities; and (12) noncompliance with a stabilization plan.
12. All of the Uniform Rules contain some exceptions and/or good cause provisions. For instance, there is good cause for nonpayment of rent under rule 10 if the family was required to pay and/or save more than 35% of its income for rent, utilities and to meet its savings requirement. Criminal conduct will not warrant termination if steps are taken to prevent the offender from returning and the remaining family members did not know or have reason to know about the conduct. A household cannot be terminated for violating Rules 11 and 12 unless there have been 3 or more instances of violations and the family has been given written notice of the prior violations within 30 days of each instance of the alleged conduct.
13. No conduct occurring before March 1, 2011 or the family’s receipt of the new Rules can be used as a basis for finding of Uniform Flex Funds Rules and thus conduct before March 1, 2011 cannot be used for not extending or terminating a Flex Funds subsidy or denying access to shelter based on lack of cooperation with housing assistance program services.
14. Notices are being sent this week to families who are currently in Flex Funds units about the Uniform Rules and their right to stabilization services. Notices are also being sent to all families in shelter about their eligibility for Flex Funds after they have been in shelter for 30 days.
15. Before denying a family an extension of Flex Funds for any reason, providers are required to give the family 60 days notice. All families whose subsidies will end within 60 days of March 1 are entitled to an automatic extension of their benefits, but subject to termination if disqualifying conduct or circumstances occur in the meantime.
16. Under the settlement, these families will receive the same 21 days to appeal and the right to aid pending appeal if they file within 10 days as other EA families. Prior to the filing of the lawsuit, DHCD was going to give families who were denied Flex Funds or whose Flex Funds were terminated or not extended only 7 days to appeal and to receive aid pending appeal. Flex Funds hearing officers will be independent of the Division of Housing Stabilization but may be employees of other divisions of DHCD, although no one is to interfere with their independence in making the Flex Funds appeal decisions.
17. All documents will be translated into Spanish in the next few weeks, beginning with the Uniform Rules which should be translated in the next 2 days. 18. DHCD must communicate with the Division of Hearings that it intends to be bound by these policies.

Questions will no doubt arise over the next weeks and months with regard to the application of these policies. Please do not hesitate to contact me with questions. Ruth A. Bourquin Mass. Law Reform Institute 99 Chauncy Street, Suite 500 Boston, MA 02111 617-357-0700 ext. 333