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Housing Choice Voucher Program: Four things influence how much rent an owner can charge for a Section 8-subsidized unit: (1) the market rent; (2) SHA’s payment standard; (3) the unit’s utilities and (4) the tenant’s income. Different voucher holders will be able to pay different amounts of rent for the same unit because the amount a voucher holder can pay for a unit varies based on family income. But a voucher holder can never pay more than market rent for a unit (the amount an owner could get from an unassisted tenant). Market rent SHA is required to establish a "rent reasonable" amount for every Section 8 unit, both at the initial leasing of a new tenant, and also upon every rent increase requested by the owner over the life of the tenancy. In making the "rent reasonable determination" we take into account HUD-prescribed variables – location, size, type, quality, age of unit and amenities, plus any housing services, maintenance and utilities provided by the owner. We use information from our physical inspection of the unit and current market data provided by Dupre + Scott. This rent reasonable amount is the absolute maximum rent an owner can receive for a unit. If an owner believes the rent reasonable amount should be higher, he or she can provide us with documentation of rents for similar units in the immediate neighborhood. We may reconsider our decision. Voucher payment standards Every year SHA establishes a voucher payment standard for units of each bedroom size, which sets the maximum subsidy SHA will pay for a participant’s housing costs, including utilities (or an allowance for tenant-paid utilities). They’re based on HUD’s annually published Fair Market Rent (FMR) for the Seattle/King County/Everett area, adjusted for the local Seattle market. SHA’s payment standards are generally set at 105 percent to 110 percent of the HUD FMR for most bedroom sizes. Utilities Payment standards include an amount for utilities, so the more utilities that are paid by the tenant, the less subsidy is available for rent. SHA establishes a utility allowance for different types of energy (gas, electric, oil) in different combinations (electric heat, gas hot water heater, etc.) in different kinds of units (apartments, townhouses, single family houses). Tenant income Tenants may pay between 30 percent and 40 percent of their adjusted gross income for housing costs (rent and utilities) when they initially lease a unit. If they find a unit where the rent plus the applicable utility allowance equals SHA’s payment standard, they will only pay 30 percent of their income for housing costs. They may choose to pay a little more if the unit is in a location or has amenities they want, but they may not pay more than 40 percent of their income. The "40 percent affordability cap" applies only at initial leasing. After the first year, the only regulatory restraint on the rent is the rent reasonable calculation, and families – if they can – may choose to spend more than 40 percent of their income on rent and utilities. More information: |
