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June 17 -- The Office of the Assistant Secretary for Housing—Federal Housing Commissioner, Office of the Assistant Secretary for Community Planning and Development, and Office of the Assistant Secretary for Public and Indian Housing, HUD request public comment by August 1, 2022 on proposed National Standards for the Physical Inspection of Real Estate (NSPIRE).

This request for public comment serves as a complementary document to the Economic Growth Regulatory Relief and Consumer Protection Act: Implementation of NSPIRE proposed rule. The proposed rule provided that HUD would publish in the Federal Register a set of NSPIRE inspection standards to consolidate and align housing quality requirements and associated inspection standards across programs. After developing and testing draft standards, HUD now seeks public review and comment on the proposed NSPIRE physical inspection standards which would accompany HUD's final rule. Additionally, HUD is proposing changes to the list of life-threatening conditions and incorporating them into the NSPIRE inspection standards in place of codifying the list which HUD proposed in the “Housing Opportunity Through Modernization Act (HOTMA) of 2016—Housing Choice Voucher (HCV) and Project Based Voucher Implementation: Additional Streamlining Changes” proposed rule. HUD will consider comments received in response to this request before publishing a final notice of standards in the Federal Register.

There are currently two inspection models used across the majority of HUD housing programs: Housing Quality Standards (HQS), developed in the 1970s and applicable to housing assisted under the Housing Choice Voucher and Project Based Voucher program, which are currently found at 24 CFR 982.401, and the Uniform Physical Condition Standards (UPCS) developed in the 1990s and applicable to the programs listed at 24 CFR 5.701, which are currently found at 24 CFR 5.703 with the dictionary of individual UPCS deficiencies contained in a Federal Register notice. The unified NSPIRE standards would be used to evaluate compliance with HUD's expectations of housing quality across the distinct programs governed by the regulatory alignment offered in the proposed rule.

On January 13, 2021, HUD published a proposed rule “Economic Growth Regulatory Relief and Consumer Protection Act: Implementation of National Standards for the Physical Inspection of Real Estate” (https://www.federalregister.gov/d/2021-00098) to implement one of NSPIRE's core objectives—the formal alignment of expectations of housing quality and consolidation of inspection standards across HUD programs.

As outlined within the proposed rule, HUD intends to publish updates to these standards through future Federal Register notices at least once every three years with an opportunity for public comment. This would provide further opportunity for the public to examine proposed changes, provide pertinent comments, and suggest the inclusion of industry best practices. The three-year standards development cycle aligns with the cycle used by standards development organizations in the model building codes and life safety industries. A three-year review cycle would also allow HUD to be more responsive to the ever-changing public and assisted housing portfolio and evolving needs in the field.
Throughout the development of NSPIRE, HUD has provided multiple avenues for industry and public input on the standards. In September 2019, HUD began publishing draft NSPIRE standards on HUD's website. The original and subsequent versions of the standards represent input from industry stakeholders and the public via workshops, webinars, and feedback received through HUD's NSPIRE website.

HUD's approach to standards development follows a defined set of core principles: people-centered design, a focus on efficiency, science-based rationales, continuous collaborative improvement, and streamlined operations. HUD's principles of standards development are designed to ensure that standards:

Are developed according to an evidence-based methodology that ensures reliability and defensibility;
Prioritize resident health, safety, and functionality of property features, ensuring that residents are living in habitable homes;
Promote iterative collaboration and feedback; and
Focus on streamlining inspections processes, ensuring that standards can be executed consistently across programs.

For each inspection standard, the definition, location, deficiency, deficiency criteria, health and safety determination, and correction timeframe have been listed. Further, HUD believes that housing standards must focus on habitability and the health and safety of residents. Each proposed standard contains “rationales,” or the reason the requirement is necessary. Rationales describe the potential harm that may result from a given deficiency if left uncorrected. Generally, rationales include the health, safety, and/or major functional or habitability issue, and illustrate why detection and remediation of the deficiency is critical to housing quality.

HUD will review the comments received on this request for comments, ongoing feedback received through the NSPIRE demonstration, and ongoing input from HUD partners, industry stakeholders, and the public for current and future development of the NSPIRE standards. HUD anticipates that future revisions to the standards may include such changes as:

Revisions to deficiency health and safety determinations or the associated time of repair;
Updated health and safety determinations, including pass/fail determinations for the Housing Choice and Project-based Voucher programs; or
Removal or addition of deficiencies based on public input.

FRN: https://www.federalregister.gov/d/2022-13251

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