Find Out How HUD’s Lawsuits Over ACC Funding Shortfalls Could Affect You

Tuesday, January 22, 2019

How this case mirrors a previous one where PHAs won hefty damages

If you feel like HUD has breached its contract with your public housing authority (PHA), don’t be afraid to seek out a legal remedy --- at least in this type of situation.

Problems Started with Insufficient Appropriations

Background: More than 500 PHAs filed a lawsuit against HUD, alleging that the Department had breached its annual contributions contracts (ACCs). Specifically, the claim argued that HUD didn’t comply with the regulations governing the allocation of operating subsidies in circumstances where there are insufficient appropriated funds available to pay them in full.

Congress gave authority to HUD to determine how much assistance it would provide to PHAs from the operating fund each fiscal year, and HUD exercised this authority by issuing regulations that set up an operating fund formula. The regulations also state: “in the event that insufficient funds are available, HUD shall have discretion to revise, on a pro rata basis, the amounts of operating subsidy to be paid to [PHAs].”

Congress failed to provide sufficient funding for the operating fund formula in 2012, and so HUD distributed that insufficient amount. HUD announced...


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