Public Housing Rents

Summary

S. 462
Similar to the House bill, allows HAs to charge residents up to 30 percent of income for rent. The bill also allows HAs to set ceiling rents that reflect local market conditions but are not less than 75 percent of operating costs, and includes the same eighteen-month disallowance that is in the House legislation. Minimum rents of $25 are permitted.

H.R. 2
Changes current law by allowing housing authorities to charge residents up to 30 percent of income for rent (instead of a mandatory charge of 30 percent for most residents). The bill also requires that HAs devise other rents based on market/operating costs. Residents then get to select which rent (income or market-based) they want to pay. HAs are encouraged to add work incentives to their rent formulas. Additionally, the bill allows HAs to charge a $25-$50 minimum rent. Finally, it includes an eighteen-month income disallowance whereby a family's rent may not be increased as a result of new employment. After the expiration of the eighteen months, the disallowance would be phased-out over a three-year period. A more recent draft version of the bill omits the eighteen-month disallowance provision, as well as allowing housing authorities to set minimum rent levels of no more than $50.

PHADA position

• PHADA recommends total repeal of the Brooke Amendment, which requires that residents pay 30 percent of income for rent. Given that repeal is unlikely, PHADA supports provisions in the two bills letting HAs charge up to 30 percent.

• The eighteen-month disallowance is unfair because it only provides benefits to new working residents and not those already in the workplace. In addition, it will create unnecessary and burdensome administrative requirements for HAs. Both bills already permit HAs to design rents that will create incentives for families to enter and remain in the workforce, a factor benefitting both the HA and the resident. Thus, the disallowance is not needed.

• Opposes the rental choice option in H.R. 2. Instead of diminishing HA workloads consistent with the bill's intent, this provision will actually increase them. Moreover, it is unnecessary since HAs will be allowed to set flat and ceiling rents as long as those rents do not exceed 30 percent of a family's income.

• Supports the flexibility in S. 462 on ceiling rents. However, references to "operating costs" should be removed.

• Supports the House language on minimum rents, which lets HAs charge between $25 and $50. This is consistent with current law.

Suggested action
Delete the eighteen-month disallowance and the rental choice option. Impose a minimum rent of $25 - $50 at the HA's discretion and let HAs set rents up to 30 percent of income.