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To:	Contra Costa County Housing Authority Board of Commissioners
From:	Joseph Villarreal, Housing Authority
Date:	March 8, 2016

Contra

Costa

County

Subject:

Housing Choice Voucher Payment Standards Effective February 8, 2016

Action of Board On: 03/08/2016

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, Commissioner
Candace Andersen, Commissioner
Mary N. Piepho, Commissioner
Karen Mitchoff, Commissioner
Federal D. Glover, Commissioner
Jannel George-Oden, Commissioner

ABSENT:

Faye Nathaniel, Commissioner

Contact:

925-957-8028

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: March 8, 2016
,

BY:	, Deputy

RECOMMENDATIONS

RATIFY the Housing Choice Voucher payment standards for the Housing Authority of the County of Contra Costa effective February 8, 2016.

BACKGROUND

Payment standards are used to calculate the housing assistance payment (HAP), or subsidy, that a housing authority (HA) will pay on behalf of families leasing units under the program. Each HA must establish a schedule of payment standard amounts by bedroom size. The range of possible payment standard amounts is based on HUD’s published fair market rent (FMR) schedule for the FMR area within which the HA has jurisdiction. HACCC’s payment standards are based on the FMRs for the Oakland-Fremont, CA Metro area which includes all of Alameda and Contra Costa Counties. FMRs are based on the 40 ^th percentile of rents charged for standard housing in the FMR area. This is the dollar amount below which 40 percent of the standard-quality rental housing units are rented. HAs may set their payment standards amounts from 90% to 110% of the published FMRs without HUD approval. Payment standards can be set higher or lower than this basic range in response to market conditions with HUD approval.

BACKGROUND (CONT'D)

The level at which the payment standards are set directly affects the amount of subsidy a family will receive, and the amount of rent paid by program participants. If the payment standard amount is too low:

Families may need to pay more for rent than they can afford; or
Families may have a hard time finding acceptable units or units in more desirable areas; or
Housing choices will be narrowed and the HA’s efforts to affirmatively further fair housing will be undermined.

If the payment standards amounts are too high, owners may be encouraged to ask for higher than reasonable rents.

As approved by the Board on January 12, 2016, HACCC's payment standards were set at 95 to 105% of the FMRs for all cities located in East County and at 125% of the FMRs for all other cities in HACCC's jurisdiction. The 125% of FMR rate was the result of HUD-approved exception payment standards that were effective December 11, 2015. As discussed at the Board's September, 2015 and January, 2016 meetings, the FMRs for Alameda and Contra Costa Counties declined for the current federal fiscal year despite significant price increases in the rental market. As an interim measure, HUD approved the 125% exception payment standard to address the disparity between the market rents and the HUD published FMRs while HACCC and the other housing agencies in Alameda and Contra Costa counties completed a rent study designed to meet the statutory requirements to update the final FMR amounts for this federal fiscal year.

The study has been completed and approved by HUD. The results of the study show that rents in Alameda and Contra Costa Counties are over 33% higher than the rents published by HUD on December 11, 2015. On February 8, 2016, HUD published the newly revised FMRs for Contra Costa County using the data from the study.

A comparison of the initial FMRs and the newly revised FMRs is shown below.

Bedrooms	0	1	2	3	4	5	6	7
Initial FMRs December 11, 2015	$1,037	$1,249	$1,580	$2,202	$2,455	$2,823	$3,192	$3,560
Revised FMRs February 8, 2016	$1,380	$1,663	$2,103	$2,932	$3,268	$3,758	$4,248	$4,739
Percent Change	33.08%	33.15%	33.10%	33.15%	33.12%	33.12%	33.08%	33.12%

The proposed payment standards are shown below. They are based on the revised, HUD-approved FMRs. The proposed payment standards are also based on market data and an effort to minimize voucher concentration in East County while stemming the loss of vouchers in all other areas of HACCC's jurisdiction. The proposed payment standards for the East County cities of Antioch, Bay Point, Bethel Island, Brentwood, Byron, Discovery Bay, Knightsen and Oakley are set at 90% of the newly revised FMRs, the lowest point permitted by HUD without special permission. The proposed payment standards for the remaining portions of HACCC's jurisdiction are set at 105% of the FMRs.

Bedrooms	0	1	2	3	4	5	6	7
East County - 90%	$1,242	$1,497	$1,893	$2,639	$2,941	$3,383	$3,824	$4,266
105% PS	$1,449	$1,746	$2,208	$3,079	$3,431	$3,946	$4,460	$4,976

To minimize the number of cases that will have to be retroactively adjusted, the new payment standards only apply to new contracts processed with effective dates of February 8, 2016 or later. For all other annual certifications, the new payment standards will apply beginning on May 1, 2016.

FISCAL IMPACT

Funding for this program is provided by the U.S. Department of Housing and Urban Development (HUD). Funding for the proposed change is provided for in the Housing Authority of the County of Contra Costa's (HACCC) current budget.

CONSEQUENCE OF NEGATIVE ACTION