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Working with sequestration in the public housing program: Tip #6

Posted by NMA on Apr 22, 2013 11:47:03 AM

Cara GilletteAs we know, public housing funding for April is at a 73% proration level. HUD plans to issue a second funding to bring the April proration level up to 79%.

The business of owning and managing affordable housing in decent, safe, and sanitary condition and in good repair remains our mission. PHAs need to plan more strategically than ever before. So, as all businesses must ask in tough times: How can we maximize dollars and cut costs?

Tip #6: Collect rents and other amounts owed by resident families.

Cash flow on a monthly basis is important. Collect your rents!

  • Examine your policies to ensure limited and specific flexibility (e.g., with documented family hardship, the rent due date will be extended for a maximum of an additional two weeks).
  • Enforce the lease. If your rent collection rate is below 98 percent, take a careful look at your rent collection policies and enforcement. Property managers may need to have meetings, both at the property and individually, to explain new initiatives to collect rents and other amounts owed.
  • Look at retroactive rents and toughen the requirements while still being reasonable. If retro rents have been weakly enforced, it's time to give families fair notice of stronger enforcement. Of course, you should avoid punitive policies.
  • On that note, make sure that your hearing decisions are based solidly on due process and preponderance of the evidence, with well-thought-out and articulated decisions. (Read more here about how to hold effective hearings.) It's costly to go to court and especially to lose.
  • Revisit your flat rents, especially in high-rent markets with low vacancy rates. Rents in the private market are going up in many areas. Are your flat rents set too low, or could they be increased without driving out your high-income families? Use a good methodology for setting flat rents. If your PHA uses GoSection8 for HCV rent reasonableness, it's perfect for your flat rent data.
  • Finally, what's your minimum rent? Do you want to consider establishing a minimum rent of $50 to at least slightly offset that utility reimbursement payment? Also, remember that if the minimum rent is waived due to long-term hardship, the total tenant payment (TTP) is then based on the next higher element of the TTP formula: 30 percent of monthly adjusted income, or 10 percent of monthly income.

Next: Working with sequestration in the public housing program: Tip #7

NMA senior associate Cara Gillette trains, consults, and provides technical assistance nationwide in fair housing, public housing management, hearings, economic self-sufficiency, and governing boards. Prior to joining NMA, Ms. Gillette served at the San Diego Housing Commission, administering its public housing and Section 8 waiting lists, serving as hearing officer, managing public housing, and overseeing resident economic development programs. She has previously written for the NMA blog about blended occupancy projects.

If you find that you need staffing help during sequestration, NMA can assist your agency with recertifications (done remotely), quality control, outsourced hearing officer services (done remotely), HQS inspections, and more. Email sales@nanmckay.com for more information.

Topics: Budget Cuts, Flat Rent, Hearing Officer, Rent Calculation, Rent Reasonableness, Sequestration, Utilities

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