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Maximizing lease-up to maximize fees in the HCV program: Part III

Posted by NMA on Mar 12, 2012 10:55:45 AM

In these times of reduced budgets, it's more important than ever to understand our funding, learn how to maximize our earnings, and share ideas on how we can do more with less. Follow our four-part series on HCV administrative fees.

Part I: How did we get here? A brief history of changes in admin fee allocations, and how circumstances created the "perfect storm" for housing authorities

Part II: Why it's so important to manage our leasing to voucher allocations

Part III: What agencies can do to better lease to voucher allocations

Part IV: Streamlining operations to reduce the strain on admin fees

What agencies can do to better lease to voucher allocations

When you're building a plan to better lease to voucher allocations, there are two important issues you'll want to address.

First, you'll need to take a look at reducing per unit costs. Although it isn't an easy task, agencies can take certain actions to reduce the average PUC. It must be acknowledged that none of these actions are going to have immediate impact, and that some of these actions may not apply to your agency. Here are two examples of actions your agency might take to reduce PUC.

Action #1: Reduce payment standards

  • The payment standard represents the highest possible subsidy the agency will pay on behalf of the family.
  • The payment standard used is the bedroom size on the voucher or the actual bedroom size of the unit, whichever is lower.
  • If an agency decreases a payment standard, the new, lower payment standard is not used until the second annual reexamination after the payment standard has been reduced. This rule does not apply to new admissions or moves, or when the voucher size changed (regardless of whether the change was due to a family composition change or because the agency changed their subsidy standards).

We do often hear, "Families can't find units to lease, so higher payment standards are needed."

Consider: Is this fact? Or is it perception based on what families tell you?

Even if reducing payment standards does increase the family share, you might decide to assist more families with less assistance, vs. helping fewer families with more assistance.

Look at rent paid by local unassisted families. Gather information and analyze. Require families to complete and turn in housing search logs, then contact the listed owners to query if the unit rent really was too high. Compile vacancy rate data from your community. Use your rent reasonableness comparability data to determine what rents are really like within your community.

NMA has been advised that HUD has waived the "Payment Protection Standard" rule for some agencies that have demonstrated they can't afford to lease up all allocated vouchers if required to wait to until the annual reexamination to apply the lower payment standard.

Action #2: Revisit occupancy standards

This is a good time to review your occupancy standards with fresh eyes to ensure that they aren't too generous. Although you can set them as strict as "two people per bedroom, regardless of age, gender, or relationship (except for reasonable accommodation)," most agencies will consider multi-generational households and age/gender when establishing their occupancy standards.

We recommend that you be neither too strict nor too generous. Also, be sure to run software reports to see what the HAP impact will be if you change occupancy standards.

If you need to lease up, don't hesitate. Develop and implement a leasing plan as quickly as possible. Include a look at administered port-in vouchers to determine if you wish to absorb, but build a solid, measurable plan. Each month that you fall behind in housing will only make your problem worse.

NMA senior consultant Teri Robertson is nationally recognized as a leading expert in HCV and public housing rent calculation, including HUD RIM review requirements. She specializes in helping agencies improve program utilization to maximize funding.

Topics: Budget Cuts, HCV utilization, Occupancy, Onsite Lease-Up, Reasonable Accommodation, Rent Reasonableness

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