Affordable Housing Connections

NAHRO's 2022 Spring Conference

Every year, the Minnesota chapter of the National Association of Housing and Redevelopment Officials (NAHRO) connects industry professionals from across the housing sector to share best practices, lessons learned and provide expertise on the programs and services provided by housing authorities.

This year, the 2022 Spring Conference was unique as the North Central Regional Council (NCRC) of NHRO hosted the regional event featuring industry leaders and experts from the Upper Midwest. This conference included the eight-state region and had affordable housing professionals from the Upper Midwest including Illinois, Indiana, Iowa, Michigan, Minnesota, Nebraska, Ohio, and Wisconsin.

The May 24th – May 26th event was exceptional. It was held at the InterContinental Riverfront in Saint Paul. AHC had an excellent time networking and showcasing our affordable housing exhibit booth.


Networking Good meetings result in great partnerships. AHC had the opportunity to strengthen relationships while networking with NAHRO's Chief Executive Officer, Mark Thiele, and Patricia S. Wells, National President.	Conference Gifts Swag may not be the main reason for professionals to gather—but it sure can stir up delight, conversations, and juggling?	Juggling AHC's booth became quite the location for entertainment. This gentleman showed off his juggling skills with our stress ball swag!

Networking

Good meetings result in great partnerships. AHC had the opportunity to strengthen relationships while networking with NAHRO's Chief Executive Officer, Mark Thiele, and Patricia S. Wells, National President.

Conference Gifts

Swag may not be the main reason for professionals to gather—but it sure can stir up delight, conversations, and juggling?

Juggling

AHC's booth became quite the location for entertainment. This gentleman showed off his juggling skills with our stress ball swag!

Preserving Affordable Housing - Elliot Twin Towers

The Elliot Twin Towers are some of MPHA’s oldest high rises, built in 1961.

On Tuesday, June 14th, Minneapolis leaders assembled to celebrate the largest public housing renovation project in the state. The use of HUD’s “Rental Assistance Demonstration” (RAD) program allowed the housing authority to access additional sources of funding such as Low-Income Housing Tax Credits (LIHTC) issued by the City of Minneapolis to maintain, repair, and replace public housing units.

More information about HUD’s Rental Assistance Demonstration (RAD), as well as additional information about Minneapolis’s $27M upgrade of Elliot Twins’ historic public housing renovation, can be found on HUD’s website here.

Bryan Hartman, a past AHC Board member, and AHC’s newest employee attended the celebration where he was able to view the incredible renovation that included upgraded apartment features, additional disability-accessible units, new common areas, and amenities. AHC will monitor compliance with the LIHTC program on behalf of the City.

Please welcome our two new board members: Irene Ruiz-Briseño and Melissa Taphorn

Our current board is comprised of dynamic individuals who embody and advance AHC’s mission to protect private and public investment in affordable housing and to provide educational opportunities for those who aspire to leadership in our industry. We are implementing our Board succession strategy with, not one, but TWO new board members joining us this summer. Melissa Taphorn and Irene Ruiz-Briseño bring energy, enthusiasm, and experience to our policy governance board. We are so excited to welcome these stellar individuals. Read more about them and their professional journey below. View our entire Board of Directors on our website About Us: Board.

Melissa Taphorn

Melissa Taphorn, Executive Director of Washington County CDA, is responsible for implementing the agency’s vision and growing its portfolio of high-quality affordable housing for seniors and families. Her 25 years of experience in a public mission-based community role delivers a unique perspective as an organizational catalyst, infrastructure architect, and creative strategist.

Taphorn has worked for the Washington County CDA since 2011. Prior to that, she worked for the Dakota County CDA for nine years and for the housing and redevelopment authorities in Plymouth and Richfield.

When asked about serving on AHC’s board of directors, Taphorn said “I am really looking forward to contributing to the Policies Task Force. I’m a policy nerd! AHC has such a significant role to play in education, training, and compliance. I want to make sure that AHC continues to be a strong and healthy organization. Routine review of agency policies, with revisions where and when needed, can go a long way in anticipating and preparing the Board and staff for the future.”

Irene Ruiz-Briseño

Irene Ruiz-Briseño is passionate about reducing barriers and increasing access to resources so that all Minnesota communities are equipped to solve their local housing needs and can thrive. As the Program Manager for Greater Minnesota Housing Fund’s Emerging Developer of Color Program, Ruiz-Briseño is committed to implementing streamlined processes, delivering effective technical assistance, conducting outreach and engagement, and collaborating with community development partners to ensure housing programs can have the best possible delivery and impact.

Ruiz-Briseño was one of 22 students in the initial cohort to complete the AHC-ELC Leadership in Affordable Housing Certificate (LAHC) in 2021, taught by Barbara Dacy and Lyn Burton at Hamline University’s Center for Public Administration and Leadership. AHC recognized Ruiz-Briseño’s outstanding academic achievement in the Certificate program by her designation as the first Sherrill Oman Scholar. See the previous article in our March Newsletter.

“AHC’s commitment to delivering high-quality monitoring along with consulting and education services deeply aligns with my passion for making affordable housing resources an option for local governments, property owners, and managers to use,” Ruiz-Briseño said when she was asked about joining AHC’s board.

IRS Increase Mileage Rate for Remainder of 2022

In recognition of recent gasoline price increases, the Internal Revenue Service announced an increase in the optional standard mileage rate for the final 6 months of 2022. The IRS provided legal guidance on the new rates in IRS Announcement 2022-13 – Optional Standard Mileage Rates. (For travel from Jan. 1 through June 30, 2022, owner/agents will use the rates set forth in Notice 2022-03 2022 Standard Mileage Rates).

For business expenses from January through June 2022, the standard mileage rate for transportation or travel expenses is 58.5 cents per mile. Starting July 1, 2022, the standard mileage rate for business travel is 62.5 cents per mile, up 4 cents from the rate effective at the start of the year.

For those of you working with residents who are self-employed or who earn gig income from organizations such as Uber, Door Dash, Care.com, TaskRabbit, etc., this new mileage amount will be used when calculating net income from a business. Remember, residents may use actual automobile expenses or mileage, but not both.

For medical mileage from January through June 2022, the standard mileage rate is 18 cents per mile for use of an automobile for medical care. The new rate for deductible medical expenses (mileage to and from medical treatment for residents and mileage to and from treatment for assistance animals) will be 22 cents for the remainder of 2022, up 4 cents from the rate effective at the start of 2022. This means that the expense increases by $4.00 for every 100 miles driven.

The 14 cents per mile rate for charitable organizations remains unchanged as it is set by statute.

The IRS normally updates the mileage rates once a year in the fall for the next calendar year. Midyear increases in the optional mileage rates are rare, the last time the IRS made such an increase was in 2011.

Ask AHC!

AHC welcomes questions from local housers or agency staff about specific housing policies, compliance challenges, as well as requests for technical support with program or policy implementation.

Please submit your inquiry using the form below. An expert will get back to you within 3-5 business days with more information.

*Please note that Affordable Housing Connections cannot provide legal advice or advocate on behalf of specific legislative or regulatory matters.

Submission requests are created using Google Documents, you will need a google login to proceed. Click HERE to Submit your Questions!

Those without Google Accounts can email inquiries to elc@ahcinc.net.

Compliance Clarification - HELP!

Question: I have a resident that started working as a Lyft driver on May 1, 2022. The resident’s Annual Recertification is due December 1, 2022. In the timeframe in which we work on this household’s Annual Recertification paperwork processing, they will not have filed a tax return (including Schedule C) for 2022. Tax returns for 2022 are not due until April 17, 2023. How do we effectively project this type of income?

Answer: The term “gig” is jargon for “temporary job.” A gig economy is a free market system in which temporary positions are common and organizations hire independent workers for short-term commitments. Traditionally, the term was used by musicians to define a performance engagement.

Gig work is a certain activity a resident does to earn income, often through an app or website (digital platform) like:

Driver (Uber, Uber Eats, PostMates, DoorDash, GrubHub, AmazonFlex, etc.)
Upwork
TaskRabbit
Fiverr
Only Fans
Twitch

NOTE: This list is not exhaustive of all types of gig work

It seems as if a lot of residents have embraced Ride Hailing organizations (E.g., Uber, Lyft, DoorDash, etc.) and similar companies as an opportunity to earn income. For LIHTC purposes, the income earned from a “gig” is considered self-employment income.

As a best practice, you may want to consider establishing a policy when addressing this type of income so that applicants/residents with gig income are treated the same. Your policy for verifying self-employment income should outline the request for copies of the most recent, concurrent, income statements showing eight (8) weeks of income (or you could use six weeks, or four weeks, just be sure you keep in mind the requirements of all housing programs at your property like HOME). You may also write in the policy to state that the resident must provide a copy of the Schedule C (from the tax return if the resident was required to file taxes) or copies of annual financial statements.

The following documents show income for the prior years and can be used to establish a history of income earned. Owners/Agents can use this information to see if the anticipated income reported by the applicant/tenant is in line with previous earnings.

IRS Tax Return, Form 1040, including any:

Schedule C (Small Business);
Schedule E (Rental Property Income); and
Schedule F (Farm Income).
An accountant’s calculation of depreciation expense, computed using straight-line depreciation rules. (Required when accelerated depreciation was used on the tax return or financial statement.)
Audited or unaudited financial statement(s) of the business
Loan Application listing income derived from the business during the previous 12 months
Applicant’s notarized statement or affidavit as to net income realized from the business during the previous years

Gig Proof of Income Assistance

Uber Drivers can obtain proof of income from Uber’s business website, instructions for downloading monthly account statements to share with your applicant or resident can be located here.

Lyft will provide drivers with proof of yearly earnings. Using Lyft, residents can receive an Annual Summary of their earnings using the “Tax Information” tab on the Lyft dashboard. Once there, the resident can click documents and then click download. Alternatively, residents can access weekly summaries by opening, Driving History on the Lyft Dashboard menu and downloading the selected week.

DoorDash has a location where third-party verifications can be submitted. For instructions, please click here.

Grubhub’s delivery workers are independent contractors and are not employed by Grubhub. Examples of proof of income can be found here.

When self-employment is a new job for the applicant/resident, get as much income information as you can. If the applicant/resident has been working for one week, get one week’s worth of income information. If the resident has been working for one month, get one month’s worth of income information.

If your resident made $877.00 per week for two weeks, the projected income is $45,604.

Please refer to HUD Handbook 4350.3, Revision 1, C4, Paragraph 5-13 B for guidance regarding documenting the file when 3rd party verification is not available. Document the file explaining why you did not/could not get the number of statements required by your policy and/or the program for which you are determining eligibility.

For Example: "Could not obtain eight statements because the resident has only worked for two weeks."

Remember, any valid business expenses can be deducted if the resident can provide receipts or other documents (e.g. mileage log, cell phone bill) to verify the projected expense.

AHC has created a fillable PDF Gig Income form that can assist with determining annual income. The Gig Income Self-Certification Form can be found here.

Question 1

Margret is an applicant moving from one state to another and has applied for a Low-Income Housing Tax Credit (LIHTC) unit. On the housing application, it is reported that Margret is currently unemployed, receiving unemployment benefits in the amount of $362 per week, and is in the process of finding a new job with the same annual income as her last job, $10,000. The verification from the unemployment agency states that Margret has 8 weeks of benefits remaining and is not entitled to any extensions. At the time of Margret’s application and again on move-in day, Margaret affirms through a self-affidavit, that while still looking for a new job like the one she had before, the when, where, and for how much is not known. How much income should be included as household income for Margaret?

(A.) $18,824

(B.) $12,896

(C.) $0

(D.) $2,896

Question 2

Ibrahim is 15 and lives with his mother. Ibrahim goes to school full-time, works at the local grocery store part-time, and earns $4,000 annually. The money Ibrahim earns from the grocery store is directly deposited into a high-interest savings account, where Ibrahim earns an additional $5 per month in interest. Ibrahim also receives $725 per month in Social Security benefits. How much income should be included from Ibrahim for this household?

(A.) $480

(B.) $8,700

(C.) $8,760

(D.) $12,760

Question 3

A household occupying an 800-sq. ft. 0-bedroom LIHTC unit, upon completing their March 1st recertification is determined to be over 140% of the current income limits, thereby triggering the Available Unit Rule (AUR). On March 31st, two (2) market-rate units in the same building became vacant; Unit #A and Unit #F. Unit #A is an 800-sq. ft. 0-bedroom unit. Unit #F is 1,200-sq. ft. 2-bedroom unit. What statement below would be most acceptable based on this scenario?

(A.) Unit #A can be rented to the next applicant who does not meet LIHTC requirements

(B.) You cannot lease any units until the household over the 140% income limit is compliant with the LIHTC requirements or moves out, whichever is first.

(C.) Lease unit #F to a household that does not meet the LIHTC requirements

(D.) None of the above

Answers to Compliance Checkup

Question 1:

Answer A. $18,824

Response: $362 x 52 weeks = $18,824

Per reference 4350.3 5-5 / 5-3 and 8823 Guide page 4-9, generally, the owner must use current circumstances to anticipate income. Even though the unemployment agency states Margret is not entitled to any extensions, the owner/agent calculates projected annual income by annualizing current income. Income that may not last for a full 12 months (e.g., unemployment) should be calculated assuming current circumstances will last a full 12 months. Furthermore, if the information is available on changes expected to occur during the year, use that information to determine the total anticipated income from all known sources during the year. Suballocator/State monitoring agencies may differ on these interpretations so be sure to check with your individual monitoring agency.

Question 2:

Answer C. $8,760

Response:

$725 x 12 months = $8,700

$5 x 12 months = $60

Annual Income: $8,760

See HUD 4350.3 5-8 / Figure 5-2: Whose Income Is Counted? Earned income, such as employment income, of minors/dependents (child under 18), is not counted, but benefits or other unearned income of minors, like income from assets (savings interest) and Social Security benefits, is counted.

Question 3:

Answer C. Lease unit #F to a household that does not meet the LIHTC requirements because it is the larger unit.

Response: For less than 100% tax credit properties, household income that is over 140% of the current income limit at recertification is "over-income". Over-income, households continue to qualify as Tax Credit households if the next available unit of the same or smaller size in the same building is rented to a qualified tax credit household. This continues until the applicable fraction is restored not counting the over-income households. Once the applicable fraction is restored, the household may be raised to market rent, but cannot be required to vacate the unit. For reference see the Suballocator HTC Program Compliance Manual, page 56.