LETTER | The Scout asked a question. The answer is 'yes'

The Dakota Scout published an article on its website on July 1, 2024, “Is a federal housing rule hurting rural South Dakota?” that highlighted the issues with the Housing and Urban Development’s rollout of new policies. The short answer is, yes, the new rule will hurt rural residents.

HOTMA or the Housing Opportunities through Modernization Act passed Congress in 2016. HUD’s implementation has dragged out eight years with another delay to mid-2025 or 2026, leaving many proposed rules outdated and agencies confused. 

I applaud the South Dakota Congressional delegation and industry leaders for examining HOTMA’s asset limitation impact on rural residents. Many farming families do not have social security or retirement funds, and transitioning those properties is a financial burden. Sen. Rounds’ idea to waive or create an exception is a good start, but may hurt other families by using a population limit. If a farm family from Webster needed assistance and proximity to medical facilities, that family could not move to Aberdeen. HUD needs to create a permanent waiver or exception for farmland or agricultural land.

This is not the only issue under the new asset rules. HUD wants clients and housing authorities to track vehicles and vehicle values. Clients that may have an extra vehicle will be penalized by HUD’s imputed asset interest rule.

South Dakota’s Congressional team should also be concerned about HUD’s tweaking of HOTMA with income rules. HUD plans to enforce strict asset rules, but let people receive housing assistance and make unlimited income without changes. Opening the door to no reporting or changes is just leaving the door wide-open to fraud. Client fraud is a reason why landlords do not want to participate with vouchers. HUD should investigate fraud like the agency investigates Fair Housing violations.

Housing Choice Vouchers are limited by Congressional budgets. Vouchers are there to help those in need and give them assistance. Congress created the program to be income based. Congress needs to crack down on HUD’s tactics that will hurt rural communities, families, service programs, and waste taxpayer funds. HOTMA should be reviewed and revised as it is already outdated and eliminating opportunities.

David Klein
Great Plains Housing Authority