Minimum Rent Requirement Could Triple
U.S. Department of Housing and Urban Development (HUD) Secretary Ben Carson announced a legislative package on Wednesday that proposes raising rents for those who participate in the agency’s assistance programs. If enacted, assisted households would be mandated to contribute 35 percent of their income toward rent, an increase from 30 percent.
“The system we currently use to calculate a family’s rental assistance is broken and holds back the very people we’re supposed to be helping,” said Carson in a statement. “HUD-assisted households are now required to surrender a long list of personal information, and any new income they earn is ‘taxed’ every year in the form of a rent increase. we begin a necessary conversation about how we can provide meaningful, dignified assistance to those we serve without hurting them at the same time.”
Currently, assisted households contribute 30 percent of their gross income toward rent, or a minimum monthly rent of up to $50 as determined by a public housing authority, with the government paying the remainder. If the proposal succeeds, the minimum could rise to $150, according to the agency.
In addition to the rent requirement, Carson’s proposal alters the annual income verification standard, extending it to every three years, with the aim to encourage growth in incomes without the burden of rents rising yearly. The proposal also creates “choice rents” for landlords and public housing authorities in an effort to “promote greater flexibility, local control and self-sufficiency,” according to an agency release, and gives them the authority to establish job requirements.
“HUD is seeking to reform decades-old rent policies that are confusing, costly and counterproductive, in that the incentives they create often fail to adequately support individuals and families receiving HUD rental assistance in increasing their earnings,” the release states.
According to the agency, assisted households often have “wildly different rents even though they have similar wages.”
The National Low Income Housing Coalition (NLIHC) opposed to the proposal, stating it “would force low-income families to cut back on investments in their future… not create the jobs and opportunities needed to lift families out of poverty.”
“Despite claims that these harmful proposals will increase ‘self-sufficiency,’ rent hikes, de facto time limits, and arbitrary work requirements will only leave more people without stable housing, making it harder for them to climb the economic ladder,” said Diane Yentel, CEO and president of the National Low Income Housing Coalition (NLIHC), in the statement. “Proposing these changes under the guise of saving the government money, just months after giving massive tax breaks to wealthy people and corporations, is the height of cruel hypocrisy.”
Carson’s changes would not apply to disabled or elderly (65-plus) households. The agency currently helps 4.7 million renters.
Stay tuned to RISMedia for more developments.
Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.
