HUD Handbook 7465.1 § 5-3

a.      POLICY

            (1)   PHAs must have policies which will assure that
                  each of their projects will include families with
                  a broad range of income generally representative
                  of the range of income of lower income families in
                  the PHA's jurisdiction.

            (2)   The PHA must examine the income levels of:

                  (a)   all lower income families in the PHA's
                        jurisdiction (using census or other reliable
                        data);

                  (b)   tenants in occupancy in each project; and

                  (c)   applicants on the waiting list.

                  Using this information, the PHA must determine
                  what steps to take to attain occupancy by families
                  with a broad range of income in each project.

            (3)   In developing a strategy for achieving a broad
                  range of income, PHAs may not adopt policies which
                  would totally preclude the admission of families in
                  the lowest income range.

            (4)   PHAs may not allow vacancies to occur while
                  awaiting higher income tenants when lower income
                  tenants are available.

            (5)   PHAs must not develop income distribution policies

                  which would result in disparate treatment of
                  different racial or ethnic groups.

       b.   DISCUSSION

            (1)   Federal Requirement

                  (a)   Achieving a broad range of income is a
                        Federal requirement. PHAs must be sure that
                        the pursuit of local objectives does not
                        prevent them from attaining this goal.

                  (b)   The statute and HUD regulations do not define
                        "a reasonable period of time" for attaining a
                        broad range of income. The PHA must move
                        towards the goal while continuing to serve
                        qualified applicants from all income levels.

(c)   The broad range of income requirement applies
                        to all public housing projects, including
                        scattered site projects.

                  (d)   Although rental income will usually increase
                        as a result, the broad range of income
                        requirement is not intended to make projects
                        self-sufficient or avoid the need for
                        operating subsidy.

            (2)   Tenant Selection Preference

                  (a)   The policies a PHA develops to attain a broad
                        range of income often include a tenant
                        selection preference for applicants with
                        incomes within certain ranges. However, such
                        a preference is not necessary if the
                        objective can be achieved by other means,
                        such as getting a more representative income
                        mix among those on the waiting list.
                        Outreach can be very important in this
                        regard.

                  (b)   When it is necessary to achieve a broad range
                        of income through a tenant selection
                        preference, income range does not always have
                        to be the highest preference. A lot depends
                        on the extent to which the incomes of the
                        lower income population in each project fail
                        to reflect the incomes of the lower income
                        population in the PHA's jurisdiction, and the
                        extent to which the incomes of applicants on
                        the waiting list are unable to compensate for
                        the disparity. If the incomes in all of the

                        PHA's projects and on the waiting list are
                        only slightly off target, the PHA might be
                        able to achieve a broad range of income by
                        making income range a relatively low
                        consideration in the tenant selection
                        process.

                  (c)   PHAs usually have to select applicants from
                        different income ranges for some projects
                        than for others, depending on how the
                        project's current income mix varies from the
                        income mix objective the PHA is trying to
                        attain. The greatest effort should often be
                        focused on changing the occupancy patterns in
                        projects where the very lowest income
                        families are concentrated. However, the PHA
                        need not always select applicants from the
                        higher income ranges for these projects. It
                        is usually better to set up a system where
                        for every so many applicants admitted from a
                        higher income range an applicant from a lower
                        income range is admitted.

                  (d)   PHAs which have achieved a broad range of
                        income in all of their projects should
                        develop procedures to maintain this -nix in
                        filling future vacancies.

(3)   Keeping Ranges Simple

                  (a)   PHAs should be careful not to have too many
                        income ranges. Usually it is sufficient to
                        have three ranges.

                  (b)   PHAs may use different income ranges for:

                        o    different unit sizes or different family
                        sizes;

                        o   projects for the elderly - than they use
                            for general occupancy projects;

                        o    homeownership projects - than they use
                        for rental projects; and

                        o   projects that cannot admit families with
                            incomes over the very low income limit -
                            than they use for projects that can.

                        However, the PHA should consider the
                        difficulty of administering a system which is

                        fragmented in too many ways. The system
                        usually works best if it is kept simple.

            (4)   Relationship with Income Limits

                  (a)   For projects which can admit all lower income
                        families, PHAs may give a preference to
                        applicants with income within any range that
                        is below the lower income limit. For
                        projects which can admit only very low income
                        families, PHAs may give a preference to
                        applicants within any range that is below the
                        very low income limit.

                  (b)   PHAs which are interested in admitting higher
                        income applicants to projects which reached
                        DOFA on or after October 1, 1981, should be
                        aware that commitment to achieving a broad
                        range of income is a basis for requesting an
                        exception to admit lower income families
                        which are not very low income. PHAs should
                        not request an exception, however, unless
                        they already have higher income applicants on
                        their waiting list or are reasonably sure
                        that they can attract them.

                  (c)   PHAs may give a preference based on income
                        range to applicants that are to be admitted
                        under an approved exception.

(5)   Lowest Income Families

                  (a)   PHAs may not close their waiting list to
                        applicants within a certain income range,
                        such as the lowest income range, while
                        keeping it open for applicants in other
                        ranges. However, PHAs may want to recommend
                        other housing programs, such as Section 8
                        Existing or housing vouchers, to families
                        whose incomes are within a range that makes
                        it unlikely that they will be admitted to
                        public housing for a long time.

                  (b)   The broad range of income requirement in no
                        way condones denying admission based on
                        income source.

       c.   REFERENCES

            U.S. Housing Act of 1937, Section 6(c)(4)(A)

            24 CFR 960.205(c)