Sunday, April 6, 2008

Last 10 Years: Oregon OCAF vs. Voucher FMR Increases.

My recent post on state OCAF [Operating Cost Adjustment Factor] increases got me thinking that I didn't know how those Oregon [expense] increases compared to HUD Oregon housing voucher annual rent increases. I went back and pulled HUD 2 bedroom fair market rent increase data over the last 10 years and created the attached 3 page PDF tables and graph HERE which show those comparisons. Some observations:
  1. OCAF % increases (used for some project based assistance rent adjustments) were higher than voucher fair market rent % increases in all of the areas of Oregon that I studied.
  2. Just because OCAF % adjustments were higher than voucher FMR % increases does NOT mean that the RENT increases in projects where OCAF was used were higher than were voucher rent increases. OCAF is only applied to the non debt service portion of project expenses and if that expense base was less than the voucher FMR than the resulting project based rent increase could be less than the voucher rent increase even if the OCAF % was the same or higher than the FMR % increase.
  3. Voucher landlords likely refinanced their loans during the 10 year period, and this coupled with property tax increase limitations mean the growth in annual expenses was slowed. Along with weak market conditions, this meant that vouchers and modest voucher rent increases were relatively more attractive to landlords over the last 10 years.
  4. HUD will announce proposed FY 09 fair market rents sometime this spring. Depending on what those are, how HUD vouchers are funded in the coming year, the movement of families away from homeownership, and the extent of actual market based rent increases now being reported will all impact how useful vouchers continue to be in local housing markets in Oregon.

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