Rental Increases: What it Means for Landlords and Tenants of the Housing Choice Voucher Program

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If you have been a tenant with the Housing Choice Voucher Program for any amount of time, you have likely gotten into a rhythm of keeping up with all of the requirements and changes that can take place. You have come to know what to expect. However, one thing you might not be expecting is a notice from the program letting you know that your rent amount is going to increase. Maybe it is even going to be more than you can afford.

No doubt, your first reaction is to think that it is likely an error. After all, HUD sets the requirement that your rent is affordable based on your income and your housing costs are not supposed to exceed 40% of your monthly income. So, this obviously can’t be right…Can it?

Well, actually, it can.

If you weren’t previously aware that this could happen, you probably have a lot of questions, such as:

  • Is my landlord allowed to do this?
  • What am I required to do?
  • What are my options?
  • What if I can’t afford it?

Here is what you need to know about rental increases and what that means for both the participants and landlords.

The Housing Choice Voucher Program is designed to be a hands-up program and not just a hand out.

I’m sure you have heard this before, but what exactly does it mean?

For starters, the Housing Choice Voucher Program was designed as a temporary solution for those needing assistance through hard times,with the expectation that the participants will eventually become completely self-sufficient and no longer require the assistance of the program. There are obviously some exceptions to this, but, wherever possible, it applies.

In the first year that you occupy a unit with HCV assistance, HUD regulations protect you, the participating family, from becoming rent burdened. Meaning that you are not allowed to pay any more than 40% of your gross monthly income towards rent and utilities. Therefore, in the first year you rent a unit with assistance through the program, the rent that the landlord requests is negotiated by the agency to ensure that it is affordable for the family based on income regulations. However, once your initial 12-month lease term is over, and each year after, those protections are lifted. This means the landlord can request an increase in the approved rent amount to match those rents of the private market, appropriate for the property, regardless of whether or not it is affordable for the tenant. The expectation of the program is that, at this time in the process, the family should be stabilized and seeking opportunities for self-sufficiency.

What are the tenant’s options if they cannot afford the increased amount of rent?

You are probably now wondering where all of this leaves you, the tenant, if you are unable to afford the increase in rent.

Firstly, if a rental increase is approved, there is nothing that can be done for you to fight that decision. There is no complaint to file or informal review that can be made. Your choice, at this time, is going to be to either stay in your current unit and make it work, or you choose not to renew your lease and can request to move to another unit. If you do request to move, you are guaranteed that the rent in your new unit will be affordable, but only for the first year, and then you could possibly find yourself in the same situation again once your initial 12-month lease is expired.

When making this decision you will need to take a few things into consideration.

Mainly, the expense of moving to another unit such as:

  • Utility deposits
  • Security deposits
  • Application Fees
  • Packing Supplies
  • Any charges for damages or repairs against your security deposit from your current landlord

You also need to consider the impact moving might have on your household such as:

  • Would children be required to change schools?
  • How easy will it be to find a new unit that suits your household needs?
  • Will you have to spend more time and money to commute to work or school each day?
  • If you don’t have a vehicle, will you have the necessary access to public transportation or be able to walk to wherever you need to go on a daily basis?
  • If you are a disabled household, will you have the necessary access to medical facilities?
  • What kind of impact will moving frequently have on your household?

You will want to carefully consider all of the options and determine the best course of action for your household.

What does the tenant need to know?

If the landlord requests an increase in rent and it gets approved, it is likely that your rent amount will go up. That is not always the case, but you should anticipate a rental increase every year. The landlord does not need the approval or agreement of the tenant to request an increase in rent, but they do need the approval of the local housing authority.

As a tenant, you are not required to pay any increase in rent unless and until you receive a notice from your local agency letting you know of the increase, the difference in the amount, and the effective date of the change. If you do receive a notice from your local agency, you are required to begin paying the increased amount of rent starting the effective date in the notice.

At the same time, you are not obligated to renew your lease with your current landlord. If you receive a notice of rental increase from the housing agency, and you choose not to renew your lease, you will need to follow all policies and procedures set by both the Housing Choice Voucher Program, and your lease agreement, for providing a notice to vacate to your landlord and requesting a Change of Dwelling from the agency. In the meantime, you are also required to pay the increased amount starting the effective date in the notice until you vacate the unit.

What does the landlord need to know?

Landlords are not required to continue to rent their property at the initial negotiated amount. Once the first year of tenancy with assistance is over, you are within your rights to request a rental increase to match the private market amounts for your location and property. Landlords are allowed to request a rental increase once per year to match the increase in fair market rent.

How is a Rental Increase requested?

  • The first step is for the landlord to submit a Rental Increase request to the local agency.Most agencies require the request to be submitted in writing 60 days prior to the date of the annual reexamination. Keep in mind that no rental increase will go into effect until it is approved by the housing authority and the tenant is properly notified and given an effective date for the change. It is a requirement that the tenant is given 30 days notice for any increase in rent.
  • The agency will then review the request and either approve or deny the request. The agency will do some research to make sure the requested amount of rent is fair for the property. While the amount does not have to be affordable for the tenant, it does have to be determined to be fair for the property size, type, location, and amenities. Therefore, not every rental increase request that is made is approved.
  • If the request is approved, a notice will be sent to both parties informing them of the change, the rental increase amount, and then also identifying an effective date for the increase to start. The tenants are not required to pay the increase unless and until they receive the notice from the local housing authority and until the effective date. If the request is denied, you are not authorized to increase the amount of rent you are charging the tenants and they are only required to continue paying the previously agreed-upon amount of rent.

Education is Key

“The only thing more expensive than education is ignorance.” – Benjamin Franklin

You have the power to impact your future and those of your family by educating yourself and making sure that you stay informed of the policies and procedures of the Housing Choice Voucher Program. It is the responsibility of each tenant and landlord to know what they are, what they mean for you and your family, and how you might be impacted by them. Never assume anything and don’t let yourself be caught off-guard by something that you could be prepared for.All of the policies and procedures of the program are readily available to you at any time. If you ever hear or receive something that you are unsure of, or have questions about, don’t hesitate to contact your local agency for clarification.

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