TITLE
Recommendation to adopt Utility Allowances for Affordable Rental Housing Programs, effective January 1, 2023. (Citywide)
DISCUSSION
The U.S. Department of Housing and Urban Development (HUD) requires all Public Housing Authorities to establish utility allowances, and annually review and adjust the allowances when there are rate changes of 10 percent or more. Most publicly subsidized affordable rental housing programs require the application of the local housing authority’s adopted utility allowances when determining the total rent charged for the subsidized unit. The established utility allowances are required deductions from the gross rent that tenants receive for the utilities they pay. The long-standing concept behind utility allowances is that “shelter rent” is to include rent and basic utilities. The establishment of utility allowances has always applied to HUD’s Public Housing, Housing Choice Voucher/Section 8, and HOME funded rental programs, and is often extended to other local, State, and federal housing programs such as the Low-Income Housing Tax Credit (LIHTC) program.
Staff have reviewed the proposed new schedules as prepared by Zappling and recommend increases to the Housing Authority’s current utility allowance schedule to be effective January 1, 2023 for annual certifications and upon approval for new contracts. Utility allowances for electricity, natural gas, sewer, trash collection and water have all increased over the past year. Residential baseline increases are as follows: electricity +120 percent, natural gas +24 percent, water +60 percent and trash collection +21 percent.
This matter was reviewed by Deputy City Attorney Richard F. Anthony on October 20, 2022 and by Budget Analysis Officer Greg Sorensen on October 25, 2022.
TIMING CONSIDERATIONS
Action on this item is requested on November 15, 2022, as the Housing Authority would like to implement the new utility allowance schedules for rent calculations effective upon approval for new contracts and January 1, 2023 annual certifications.
FISCAL IMPACT
There is no net fiscal impact to the City from the revised utility allowance schedules. Current appropriations in the Housing Authority Fund in the Health and Human Services Department are estimated to sufficiently cover the increase to the Housing Assistance payments. If needed, the Department will return to the City Council with a request to increase appropriations, fully offset by disbursements from HUD for Housing Assistance Payments. This recommendation has no staffing impact beyond the normal budgeted scope of duties and is consistent with existing City Council priorities. There is no local job impact associated with this recommendation.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
KELLY COLOPY
ASSISTANT EXECUTIVE DIRECTOR
APPROVED:
THOMAS B. MODICA
EXECUTIVE DIRECTOR