Maximum Rents Cause Families to Be Cost Burdened
HUD published maximum rents for the national Housing Trust Fund (HTF) in July.
An NLIHC analysis reveals that, if HTF rents are set at the maximums allowed, in most counties in the country many extremely low income (ELI) households in HTF-supported homes will be cost burdened, spending more than 30% of their income on housing.
NLIHC urges advocates to continue pressing their states to ensure that rents in HTF projects are set at levels that do not cost-burden the lowest income households.
HTF maximum rents are based on a new definition of ELI households. Prior to the change, ELI households were defined as having incomes no greater than 30% of the area median income (AMI). The new ELI definition includes households whose incomes are no greater than the federal poverty guideline or 30% of AMI, whichever is higher.
The change broadened eligibility for the HTF to households who live in poverty but whose incomes are greater than 30% of AMI, a change NLIHC supported. HUD’s HFT interim rule went a step further and set maximum HTF rents at 30% of either the federal poverty guideline or 30% of AMI, whichever is higher.
HTF renters with household incomes at 30% of AMI or less will be cost-burdened whenever rents are set at 30% of the poverty level and where the poverty level exceeds 30% of AMI.
NLIHC’s analysis reveals that HTF maximum rents are set at 30% of the poverty level for rental homes with one or more bedrooms in a majority of metropolitan and non-metropolitan counties.
Maximum rents are set at 30% of the poverty guideline in 61%, 92%, 96%, and 98% of all counties for one-bedroom, two-bedroom, three-bedroom, and four-bedroom rental homes, respectively.
In NJ, at 30% Cumberland and Atlantic counties are cost burdened. At 20% of AMI all counties are cost burdened.
Neither the statute nor the regulations require states to use the maximum rent levels, however, and NLIHC strongly encourages state administering agencies, advocates, developers, and other stakeholders to press for the deepest levels of affordability in HTF-supported units.