This January, I watched with amazement as online amateur stock traders caused a “short squeeze,” massively increasing the value of GameStop, a struggling video game retailer. In one month, the price of GameStop went up more than 3,000 percent, with one short-selling hedge fund losing more than half of its value as a result.
One saying that this crass, motley crew of internet amateur traders developed was the need to have “Diamond Hands.” For someone to have “Diamond Hands” means that one must be willing to hold their stock position through extreme market volatility until the price has gone “to the moon.”
Advocacy also requires NAELA to have “Diamond Hands” of our own. In just over four years, we’ve gone from proposals to cut Medicaid by $1 trillion to expanding Medicaid home and community-based services by more than $400 billion — not to mention the devastating impact of COVID-19 in between. To succeed, NAELA must stay focused on its goals through massive political volatility.
Excluding SNT Distributions as Income for Section 8 Housing Calculations
One area that NAELA has maintained “Diamond Hands” is fighting to ensure that principal distributed from supplemental needs trusts (SNTs) do not count as income for the purposes of HUD Section 8 program eligibility. We’ve been fighting this since at least 2015 with quick starts and long pauses, waiting for opportunities to strike.
It began when NAELA submitted an amicus brief in Decambre v. Brookline Housing Authority. The case was a success: the U.S. First Circuit Court of Appeals agreed that distributions from Ms. Decambre’s SNT, which were funded from lump-sum payments from a legal settlement, should not count as income for Section 8 eligibility purposes.
From there, NAELA began advocating that the Department of Housing and Urban Development (HUD) adopt Decambre on a national basis. We tried and were rebuffed several times by the agency. By October 2016, we were working with a connection to meet with the “top floor” staff from the HUD’s Secretary office. With a change in Administration, we put the advocacy on pause.
At the same time, the Housing Opportunity Through Modernization Act of 2016 (HOTMA) had become law, setting a new asset limit and new income rules for all public housing programs. The new law was worrisome for our cause because it included this wording:
Any income distributed from the [irrevocable] trust fund shall be considered income…except in the case of medical expenses for a minor.
However, HOTMA left some room for NAELA to maneuver as it stated that the HUD Secretary could, through rulemaking, establish additional income exclusions as those listed in the statute.
NAELA continued to push the issue again in November 2019 when HUD issued its proposed rule to implement HOTMA.
Then silence until May 2021, when several HUD staffers reached out to NAELA in response to our comments. They were interested in how SNTs operated as a practical matter and the difference between first-party and third-party SNTs. It appears they were looking at the issue of excluding distributions as income seriously. A final rule is now imminent.
For this cause, we could be on the cusp of “going to the moon” like the GameStop internet amateurs or crashing like Pets.com during the 2000 tech bubble. Regardless, NAELA will keep charging forward earning “Diamond Hands” of its own.
For someone to have “Diamond Hands” means that one must be willing to hold their stock position through extreme market volatility until the price has gone “to the moon.”