PHAs Given Great Flexibility to Calculate Rent Payments to Meet Increased Rental Demand
To expand housing options for families displaced by Hurricane Sandy, the U.S. Department of Housing and Urban Development (HUD) has announced that it is giving public housing agencies greater flexibility in calculating rent payments in areas experiencing increased demand for rental housing.
This is one of several actions HUD is taking to cut red tape to help families who were forced from their homes and require alternative housing.
HUD is allowing local housing agencies to increase a payment standard up to 120% of the published “Fair Market Rent” thereby giving low-income families more options to find available housing in tight rental markets.
HUD Secretary Shaun Donovan, who President Obama recently appointed to oversee long-term disaster redevelopment in the disaster region said:
“We understand that in the wake of a disaster like Sandy, available rental housing becomes increasingly difficult to find, especially for lower income families. Simply by giving local housing authorities greater flexibility in calculating rental assistance to these families can make all the difference in finding a suitable home or not. This is just one more example of how the Obama Administration is cutting red tape to make our programs work better following a disaster.”
Local housing agencies use HUD’s annual Fair Market Rents (FMR) to determine how much rental subsidy low-income families are eligible for through HUD’s Housing Choice Voucher Program. Currently housing agencies are allowed to set this payment standard up to 110 percent of an area’s FMR. However, in Presidentially Declared Disaster Areas, housing agencies can request a waiver to temporarily establish a payment standard up to 120 percent of the current FMR.
For example, the FMR for a 2-bedroom unit in Union County, N.J. is $1,202. Housing of this size in the area could rent for more or less than that amount, but under HUD’s Housing Choice Voucher program the local housing authority can set a payment standard anywhere from 90 to 110 percent of the FMR.
At the 110% payment standard, the maximum monthly rental assistance would be $1,322. However, under this special waiver of HUD regulatory requirements, housing agencies can increase the payment standard to 120%, which in this example, would mean the maximum monthly subsidy could increase to $1,442.