Know Your Rights: Public Housing Authorities May Not Deny Section 8 Rent Increases to Save Money

By Kimberly Rau, MassLandlords, Inc.

Local agencies that administer the federal Section 8 housing program may not deny owners rent increases that would otherwise be approved due to funding concerns, according to the Department of Housing and Urban Development (HUD). HUD administers the program, formally called the Housing Choice Voucher (HCV) program, on the federal level.

A lot of factors go into determining fair rent for Section 8 rentals, but local administrators cannot deny a rent increase just to save the program money. (Image: 123rf)

Public Housing Authorities (PHAs) are in charge of administrating the Section 8 program on a local level. The local PHA is tasked with determining the reasonable market rent for properties in their jurisdiction and approving rents based on those numbers for comparable properties participating in the program.

The manner in which PHAs determine rent is outlined in the housing assistance payment contract landlords enter into with HUD. There are a lot of factors that go into deciding what a property’s rent should be, but essentially, when market rents for non-participating properties go up, the rent on a comparable Section 8 property should increase as well. Similarly, if the market drops, the PHA may decrease the rent subsidy the landlord receives.

However, PHAs have been known to occasionally attempt to deny otherwise legitimate rent increases (those that would keep the property’s “reasonable rent” in line with the market) due to projected funding shortfalls within the program.

This is not appropriate, according to HUD, which issued a notice in 2011 that still stands today concerning cost-saving measures within the Section 8/HCV program. Some cost-saving measures are authorized, such as being vigilant about ensuring tenants’ incomes are accurately reported and factored into the subsidy amount. PHAs may also review owner rents at any time to determine if they are still reasonable compared to the rest of the market, or review utility allowances.

If a PHA is concerned about funding shortfalls, it may ask landlords to voluntarily accept a temporary rent reduction or defer a rent increase. However, HUD is clear that the landlord is under no obligation to agree to these requests.

“[A] PHA may not ‘freeze’ rents due to insufficient funding when an owner requests an increase, if the PHA determines the increased rent to be reasonable, and the owner does not agree to defer a rent increase,” the document states.

That doesn’t mean some PHAs won’t try to deny a rent increase, or heavily “encourage” landlords to accept a reduction or defer raising the rent. If this happens to you, you should contact HUD, and also let us know at hello@masslandlords.net