Rent changes upset some

In keeping with a provision of the national Appropriations Act of 2014, the Altoona Housing Authority has changed the way it calculates rent for 106 tenants, most of whom will pay more – with one category slated eventually to pay an additional $286 a month.

The tenants are those who pay flat rents, which the Department of Housing and Urban Development introduced in 1999 as an alternative to the standard rental payment of 30 percent of household income.

Those optional flat rents were designed to remove the rental-increase penalty for rising household incomes, a penalty that had become an obstacle for tenants to better themselves.

By HUD rules, the flat rents were to be based on comparable unsubsidized rentals, as determined by individual authorities.

But there was enough flexibility in the guidelines that flat rents for some tenants of some authorities remained inordinately low, compared to those tenants’ incomes, making the flat rents hard to justify – especially in an era of tight federal spending, according to HUD spokesman Brian Sullivan.

Altoona Housing Authority Executive Director Cheryl Johns doesn’t think any of her flat rent tenants – there are 91 in the downtown towers and 15 at Fairview – are paying too little.

She fears that some, especially elderly ones, won’t be able to afford the new amounts.

The new, more rigid guidelines require housing authorities to set flat rents no lower than 80 percent of fair market rent.

Fair market rent is at the 40th percentile for rental prices in an area, according to Sullivan.

“Eighty percent of the 40th percentile – still well below the average [market] rent,” Sullivan said.

Those flat rents include utility costs, according to HUD publications.

The new flat rents would be phased in if necessary, so as not to rise more than 35 percent per year for any tenant.

Flat renters would revert to income-based rent, if that would be less expensive than the new flat rent amounts.

Unhappy tenants

Still, the change could be a problem, according to a couple of local authority residents.

Howard and Corinda Ermin of Fairview Hills currently pay $617 a month, the flat-rent amount for a three-bedroom apartment in one of the Fairview complexes.

When it’s time to renew their lease, they’ll pay $103 more.

“We’re going to be able to manage it, but it’s going to be difficult,” Ermin said. “It’s a big jump.”

They’ll need to be careful when shopping for groceries and will need to find ways to trim their utility bills, Ermin said.

“I understand that they need to raise the rent,” Ermin said. “But I don’t understand why it has to be that drastic.”

Green Avenue Tower efficiency apartment resident Ned Shoenberger pays $312 a month – an amount the Social Security disability recipient is comfortable with.

An authority chart indicates he’ll be paying $421 after the change – an increase limited by the 35 percent rule.

That’s “a little steep,” Shoenberger said, reserving further comment until he hears the news directly from authority officials.

His rent would go up to $428 the following year, based on the chart.

It’s hard for people dependent on Social Security to get a modest cost-of-living raise, then lose it all and more with increased expenses like the rental hike, Shoenberger said.

It’s frustrating to see high government officials meanwhile getting “the big bucks” and “the best hospitalization,” he said.

Some pay flat rate

About 140,000 of the 1 million public housing residents nationally pay flat rents, which began in 1999, according to Sullivan.

Under the old guidelines, authorities were to base flat rents on “the market rent charged for comparable units in the private, unassisted rental market,” according to a HUD web page.

Authorities were to consider “at a minimum, the following items: location, quality, size, unit type, age of the unit, amenities, housing services, maintenance, and utilities provided by the PHA,” the web page stated.

“[Flat rents should be] equal to the estimated rent for which the PHA could promptly lease the unit,” the guidelines further stated.

Johns reset the old flat rents for the Altoona authority annually by looking at “comparables” – generally local subsidized housing developments run by agencies like Improved Dwellings for Altoona.

HUD permitted the use of such comparables, despite the guideline that speaks of using the private market for comparison, she said.

Johns also looked at private rentals in figuring the flat rents, she said.

And she made allowances for the cost of utilities.

The flat rents were approved each year by an auditor, Johns said.

“We asked them to do comparable rent studies,” Sullivan said. “So [they could set] a reasonable flat rent that makes sense for them.”

There was no minimum rental amount under the old flat rent guidelines, he said.

Equity questions

Flat rents were designed initially to eliminate “the perverse incentive to keep people from seeking work,” Sullivan said.

But some tenants’ incomes grew so high they would no longer have been eligible for public housing – had they needed to apply to re-enter, according to Sullivan.

Some were earning that kind of money while paying rents no higher than those paid by extremely poor tenants, Sullivan said.

“There were equity questions that could no longer be sustained in this budget environment,” Sullivan said.

“Not that extreme examples should guide public policy,” Sullivan said. “But there were extreme examples.”

Those included households with incomes 50 percent higher than median income, even 80 percent, he said.

HUD doesn’t require authorities to evict tenants whose incomes grow beyond the current income eligibility.

It can benefit housing authorities to have higher-income tenants for the “income diversity” they provide – a preventive for a “deep concentration of extremely low income families living all together,” Sullivan said.

But the disadvantages – which include their continuing to occupy housing that would otherwise be available to needier families – ultimately prevailed, and it became necessary to tie flat rents to the marketplace, Sullivan said.

Housing authorities “really ought to have been doing it in some fashion all along,” Sullivan said.

Mirror Staff Writer William Kibler is at 949-7038.