Section 8 “Fair Market Rents” drop: Housing Authority works to maintian current Benefit Payment Standards

HUD published the final Section 8 Housing Choice Voucher Program Fair Market Rents (FMR’s) effective October 1.  HUD made some changes in its methodology resulting in  widespread reductions in FMR’s across the country.  In Alameda County, with the exception of the 3-Br. FMR which didn’t change, FMR’s for all other bedroom sizes declined—by up to 9.0%.  The Housing Authority of the County of Alameda (HACA) appealed to HUD in an attempt to secure higher, more realistic FMR’s, but, unfortunately, the final published figures did not change.

FMR is the rent, including the cost of utilities (except phone and cable) that must be paid in the market area to rent modest housing that is decent, safe, and sanitary.  FMR’s are the basis for determining the Housing Authority’s Benefit Payment Standards (BPS) – the maximum rent it can pay for any unit.  The actual rent the Housing Authority pays for a particular unit is based on reasonable rent standards

Despite the decrease in FMR’s, HACA, in an attempt to keep contract rent payments in line with what is happening in the East Bay Market, carried over the payment standards set last year to the extent that it could under HUD regulations.  Modest changes were made in the following BPS as indicated:

  • Newark studio (decreased to $981) and 1-BR (decreased to 1,190);
  • Pleasanton studio (increased to $1,105);
  • San Lorenzo studio (increased to $915)
  • Dependent on HUD approval, Dublin payment standards have been increased because of a binding commitment for HACA to relocate residents of a demolished Dublin public housing project.

What does it mean for Alameda County Landlords?

  • Changes to the HUD FMRs and the HACA BPS do not affect Section 8 Housing Choice Voucher Program leases in force.
  • They do apply to Section 8 Housing Choice Voucher Program lease renewals and new leases.

While there are minimal changes to HACA’s existing BPS, the decrease in HUD FMRs decreases the total funding that HACA receives from HUD to pay landlords for Housing Assistance Payment Contracts.  Landlords will see no impact on their existing Section 8 contracts and, with the exception of the few BPS changes above, no impact on their individual Section 8 contract renewals.  However, as Section 8 tenants move off the program or out of the area, HUD’s reduced Section 8 funding will. likely, result in HACA not having the funds it needs to replace the Section 8 contracts lost to turnover.  Alameda County will, probably, see an incremental reduction in the total number of Section 8 leases over time.