Sunday, May 22, 2022

Monday Metro Supportive Housing Oversight Committee Testimony: Long Range Rental Assistance Could Provide Windfall to Owners, Up to 33%-50% More Rent Than HUD Housing Vouchers.

The packet for Monday's Metro Supportive Housing Services Oversight Committee is HERE. It includes on pages 25-28 my testimony with four issues and six recommendations.  [The agenda page has a Zoom link for the 9:30 meeting].

With the amount of tax revenue being collected and distributed for supportive services I was disappointed to see that my testimony was the only written testimony submitted prior to the 5 PM Friday deadline.

In my testimony, which I have also posted HERE, I call for several specific actions to increase transparency. The testimony is posted in a folder I created with other related supportive services documents. 

I also show that the RLRA permitted rent to owner could be not 20% higher than voucher rents, but 33%-50% higher than voucher rents. This creates inequality for HUD voucher holders, whose demographics are substantially the same as the population targeted by the Metro supportive services fund. 

With the current policy and tenant based RLRA it would be possible for owners to collect substantially higher rents for the same unit size in the same project compared to the HUD voucher payment standard constrained rents (which could be below HUD FMR).

I provide two options to remedy this inequity. One would keep the current 120% of FMR standard for the RLRA program but involve changes in payment standards to no less than 100% of FMR . This is timely since Home Forward has not adjusted their payment standards yet following the April 2022 HUD publication of FMR's following appeals from the Portland metro housing authorities and it is unclear when the latest payment standard update has occurred in Washington county.  

The other option would set the rent cap of 120% of the area voucher unit payment standard which is set by each housing authority. So if the housing authority set payment standard was 90% of FMR then the RLRA cap for that area would be 108% of the FMR (90% x 120%=108%). If the payment standard was set by the housing authority at 95% of FMR  the RLRA rent cap would be 114% of FMR (95%*120%=114%). And so on.  

Specific 1 Bedroom Examples: 

  • Multnomah: 1 Br RLRA Rent Currently Would Be Up To 64% /$709 A Month MORE Than The Housing Authority Determined HUD Voucher Payment Standard. 
  • Clackamas: 1 Br RLRA Rent Would Be Up To 26% /$378 A Month MORE Than The Housing Authority Determined HUD Voucher Payment Standard. 

I am pasting below a table [ not in my testimony as I completed over the weekend] that shows the current 1 BR FMR and the current payment standards for Clackamas county and Multnomah county, and Washington county. Note that Clackamas county payment standards are up to date while Multnomah county payment standards were published in December 2020; Home Forward is scheduled to update their payment standards by early July. 

In the table for Multnomah county/Home Forward you can see that the payment standard is as low as 73.5% of the CURRENT FY 2022 HUD FMR. This would mean that an owner with a RLRA unit in Gresham, Outer SE , and Outer NE could get a total of $1,814 in rent vs $1,105 for the HUD voucher program--that's $709/64% MORE than the voucher payment standard of $1,105

Not in the table: The current 1 BR voucher payment standard of $1,105 for Gresham, Outer SE, and Outer NE is  still only 83% of the $1,331 FMR for FY 2021

This was the FMR in effect from October 1, 2021 to April 2022. During that period an owner with a RLRA unit could get a total of  $1,597 in RLRA rent vs $1,105 for the HUD voucher program--that's $492/45% MORE than the voucher payment standard. 

These Multnomah county comparisons WILL change, and the gap will be reduced once Home Forward updates their payment standards. Note however that Home Forward does have authority to set payment standards as low as 80% of FMR. A payment standard at that level would mean that a RLRA rent would be 50% more than the payment standard (120%/80%-1=50%). 

For Clackamas county,  an owner with a 1 Bedroom RLRA unit in most of the county could get a total of $1,814 in rent vs $1,436  for the HUD voucher program--that's $378/26% MORE than the voucher payment standard of $1,436. This is the current difference as it reflects up to date payment standards. 

For Washington county I have been unable to yet locate their payment standards so was not  able to complete a similar calculation. 

When I get that data I will post payment standards for all three counties and revise that document once Home Forward revises and their payment standards (and perhaps Washington county also). 

Originally created and posted on the Oregon Housing Blog


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