Agenda

Return

C.4

To:	Contra Costa County Housing Authority Board of Commissioners
From:	Joseph Villarreal, Housing Authority
Date:	July 14, 2020

Contra

Costa

County

Subject:

RATIFY AND APPROVE THE HOUSING CHOICE VOUCHER PAYMENT STANDARDS EFFECTIVE JUNE 1, 2020 IN RESPONSE TO COVID-19

Action of Board On: 07/14/2020

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, Commissioner
Candace Andersen, Commissioner
Diane Burgis, Commissioner
Karen Mitchoff, Commissioner
Federal D. Glover, 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: July 14, 2020
,

BY:	, Deputy

RECOMMENDATIONS

RATIFY and APPROVE the Housing Choice Voucher payment standards for the Housing Authority of the County of Contra Costa effective June 1, 2020 in response to COVID-19.

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 split into two different amounts. One payment standard was established for all cities located in East County and a second payment standard was established for the rest of the cities in HACCC's jurisdiction. This was done to give families greater access to housing opportunities in low poverty neighborhoods throughout the County and to limit the tendency for families to lease in high poverty areas concentrated in East County

The Board approved Payment Standards on September 24, 2019 that took effect October 1, 2019. These payment standards were based on revised FMRs published by HUD on August 3, 2019. Despite the strength of our rental market, HUD’s FMRs declined for some bedroom sizes. As a result, several of HACCC’s payment standards were lowered in order to stay within HUD’s range of 90% to 110% of the published FMR. Specifically, the studio through three bedroom payment standards outside of East County were all reduced.

Assuming rent, utilities and household income stay the same, a family whose payment standard is reduced will have to pay more for their rent and HACCC will pay less. In order to protect families from an immediate financial impact, HUD regulations require that whenever the payment standard is reduced, it will not be applied to a specific family's rent calculation until that family's second annual income certification. The first families impacted by the 2019 decrease in payment standards were scheduled to have their share of rent increase as of June 1, 2020. In order to prevent this during the COVID-19 pandemic, staff raised the payment standards for the families affected starting June 1, 2020. As stated above, the affected families are those living in studio, one, two or three bedroom units outside of East County. It is these payment standards that were increased effective June 1, 2020. All other payment standards were left the same since they were not going to have the same negative impact on families. The revised payment standards fall within HUD’s 90% to 110% range of the currently published FMR. Due to past decreases in HUD’s FMRs (despite a rental market that never really slowed), HACCC adjustment to the studio through three bedroom Payment Standards restores them to the amounts that were in effect on October, 2017.

The proposed payment standards are as follows:


EAST COUNTY - Antioch, Bay Point, Bethel Island, Brentwood, Byron, Discovery Bay, Knightsen, Oakley

	0-BR	1-BR	2-BR	3-BR	4-BR	5-BR	6-BR	7-BR
PS	$1,435	$1,723	$2,173	$3,017	$3,552	$4,085	$4,617	$5,150
% of FMR	96.44%	95.30%	97.05%	99.18%	95.48%	95.49%	95.47%	95.48%

All Other Cities in HACCC’s Jurisdiction:

	0-BR	1-BR	2-BR	3-BR	4-BR	5-BR	6-BR	7-BR
PS	$1,578	$1,895	$2,390	$3,318	$3,945	$4,537	$5,129	$5,721
% of FMR	106.05%	104.81%	106.74%	109.07%	106.05%	106.05%	106.06%	106.06%

FMR	$1,488	$1,808	$2,239	$3,042	$3,720	$4,278	$4,836	$5,394
110% of FMR	$1,636	$1,988	$2,462	$3,346	$4,092	$4,705	$5,319	$5,933

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