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RENT REFORM: THE TIERED SUBSIDY TABLE
The Housing Authority of the County of San Mateo
Moving To Work (MTW) SummitFebruary 4-5, 2014Washington DC
Question: What if you could . . .
Adjust your per unit voucher costs (during budget cuts), without holding back vouchers?
Question: What if you could . . .
Significantly control your HAP budget during an exploding rental market?
Question: What if you could . . .
Reach underserved populations in your community due to HAP savings
Control per unit costs to the point that you would be able to over lease and potentially earn additional administrative fees
Question: What if you could . . .
Better utilize staff time
Increase program integrity
Control program costs
With The Tiered Subsidy Table (TST) you CAN potentially . . .
Answer:
• Predict your agency’s maximum HAP expenditures each year
• Adjust your per unit costs without holding back vouchers
• Control your HAP costs during an exploding rental market
• Reach underserved populations due to HAP savings
• Earn additional administrative fees through over leasing
With The Tiered Subsidy Table (TST) you CAN potentially . . .
Answer:
• Better utilize staff time
• Increase program integrity
• Control program costs
AND:
• Provide participants with the information they need to make informed and smart housing choices
The HACSM TST Rent Reform Program
In this presentation we’ll discuss the following:
Key Objectives and Critical Success Factors
Development of the TSTUsing the TST as a communication and
education toolLessons LearnedHACSM Outcomes
MTW Program GoalsSan Mateo County (SMC) Priorities
Administrative Efficiency
Increased Housing Choice
Increase Self-Sufficiency of Program Participants
Increase TimelinessDecrease ComplexityIncrease Housing
OpportunitiesIncrease Self-Sufficiency
of ParticipantsSeek additional avenues
for providing housing assistance in SMC
Key Objectives
Community engagement through an extensive stakeholder process Partner organizations Legal advocates Current residents and
participants Current property owners HACSM staff
Community respect and resulting trust
Open Communication
Creation of a system that is intuitive and easy for the end user
Critical Success Factors
The Agency’s HAP Budget and the TST
Development and monitoring ofthe HAP budget and TST
• Original TST design based on the FMR and then current participant’s rent
• Cost neutral implementationoParticipant rent burden vs Affordability of the Housing
Authority
• Underlying motivation included developing a system where the system itself built in a participant’s desire to increase financial self-sufficiency without penalty
Development of the TST
“The Challenges”
Contract rents on the open market
Status quo and resistance to change
Program simplification and demystification
Development of the TST
Analysis
Agency budget
The participant’s status Voucher size vs. unit size
rented
% of AAI paid for tenant rent portion
Implementation impact analysis
Market trends
Development of the TST
Analysis of Potential Negative Impacts
Increased tenant rent burden
Increased cost to HACSMTechnology challengesImplementation and
transition challenges
Development of the TST
The TST is based on three factors:
The family’s annual adjusted income
The family’s voucher size
The agency’s HAP budget
Determining the Tenant Rent Portion
Essential Components
o Voucher Sizeo Unit Sizeo Tenant’s annual adjusted incomeo Maximum Subsidy (based on TST)o Contract Rent (rent reasonable)
Calculation Process: AAI and Tenant Rent
The Traditional ProcessStep 1 Step 2 Step 3
Factors included in Annual Adjusted Income and TTP
Calc
7 Potential Factors to determine HAP
Factors to determine Tenant Rent Portion
Employment Income Negotiated Contract Rent (including 40% affordability test)
Contract Rent
Asset Income Mixed Family Proration (minus) HAP
Excluded Income * Payment Standards Tenant Rent Portion
Child Care Expenses* Voucher Bedroom Size (Based on HA subisdy standards)
Medical or Disablility Expenses * Unit Size to be rented
Deduction for Minor/Dependent * Utility Allowance
Deduction for Eld/Dis Household Tenant TTP (30% of AAI)
Annual Adjusted Income (AAI) HAP
AAI divided by 12 (Monthly Adj Income)
Monthly Adjusted Income x 30%
Total Tenant Payment (TTP)
Traditional HCV Process
* Note: These areas/items are noted for being confusing, error prone, and oftentimes responsible for delays in the lease up process.
Calculation Process: AAI and Tenant Rent
The TST Rent Calculation Process
Step 1 Step 2 Step 3
Factors included in Annual Adjusted Income Calculation
2 Factors to Determine Tiered Subsidy
Factors to Determine Tenant Rent Portion and HAP
Employment Income Annual Adjusted Income Contract Rent
Asset Income Voucher Bedroom Size (minus ) Tiered Subsidy
Excluded Income Maximum Tiered Subsidy Tenant Rent Portion
Child Care Exp
Medical or Disability Exp
Deduction for Eld/Dis Household
Deduction for Minor/Dependents
Annual Adjusted Income
The HACSM Tiered Subsidy Table (TST) Process
Note:
For Mixed Family Households, the "Maximum Tiered Subsidy" amount is prorated based on the ratio of eligible to ineligible household members.
All families are required to pay at least $50 towards their rent. Based on this policy, in Step 3, if the Tenant Rent Portion is less than $50, their rent is automatically set to $50 and the HAP is adjusted accordingly.
Determining the Tenant Rent Portion
Example #1: (2 Bedroom unit) Housing Authority maximum subsidy: $1,000
The Contract Rent = $1400 (the rent that the owner is requesting) To figure out your rent,
$1400 (Contract Rent) - $1000 (HA Maximum Subsidy)
$400 (Your portion)
In this example: Your Portion = $400 Housing Authority Portion = $1000
Please read entire document before completing form. Fill in all blanks below. Type or print clearly. Voucher Number ---- SAMPLE ---- 1. Insert unit size in number of bedrooms. (This is the number of bedrooms for which the Family qualifies, and is used in determining the amount of assistance to be paid on behalf of the Family to the owner.)
1. Unit Size
22. Subsidy Amount: a) Maximum subsidy based on voucher size listed in box 1. b) b) Maximum subsidy if unit rented is a bedroom size smaller than the voucher size in box 1.
2a 2b
$1,000 $825
Tenant Rent Portion Determination
Example #2: (2 Bedroom unit) Housing Authority maximum subsidy: $1,000
The Contract Rent = $935 To figure out your rent, $935 (Contract Rent)
- $1000 (HA Maximum Subsidy) (-) $65 Because the Contract Rent is less than the Maximum subsidy from the HA, then you would be responsible to pay the $50 minimum rent.
In this example: Your Portion = $50 Housing Authority Portion = $885
Please read entire document before completing form. Fill in all blanks below. Type or print clearly. Voucher Number ---- SAMPLE ---- 1. Insert unit size in number of bedrooms. (This is the number of bedrooms for which the Family qualifies, and is used in determining the amount of assistance to be paid on behalf of the Family to the owner.)
1. Unit Size
22. Subsidy Amount: a) Maximum subsidy based on voucher size listed in box 1. b) b) Maximum subsidy if unit rented is a bedroom size smaller than the voucher size in box 1.
2a 2b
$1,000 $825
Communication ToolAbility to have a fact-based
discussionRemoval of the appearance of
“red tape” and/or unequal treatment
Education ToolProviding participants with the
information they need to make informed choices
Personal decision-makingPersonal empowermentIncreased self-sufficiency
Using the TST as a
tool
Lessons Learned
Keys ingredients for successful outcomes:Agency reputation in the community The political will of the agencyCommunity trust in agency’s integrityDetailed work plans, including software
conversion requirementsInternal staff understanding and buy-in Education of community partners and HUD
Field office
Outcomes
Simplification of: The program for the
end user The rent calculation
process The lease up process
Program Integrity Reduction in errors
Cost Saving Day-to-day
expenditures Staff Time
TST
Outcomes
Increased self-sufficiency
Change in Paradigms Staff – participant
relationship
Community perception of “Section 8”
Beginning of a change in view of “Section 8” participants
Increased collaboration with community For example:
Landlords who do not increase rent, or who choose to lower the rent, once they learn that the tenant would be responsible for the increase - - - not “the government”
Outcomes
Decreased time from homelessness to stable housing
Increase Self-Sufficiency
HAP savings used to implement other programs (CORA, Service League, HIP)
Outcomes
As of December 2013: Over 90% of
households pay less than 50% of AAI
Over 60% pay less than 40%
Over 30% pay less than 20%
Over 95% of participants are renting units that match their voucher size
Data from FY13 MTW Report
Contact Information
For additional information, contact:
Jennifer Rainwater, Planning and Program Innovation [email protected]