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To: Contra Costa County Housing Authority Board of Commissioners
From: Joseph Villarreal, Housing Authority
Date: September  15, 2015
The Seal of Contra Costa County, CA
Contra
Costa
County
Subject: HOUSING CHOICE VOUCHER PAYMENT STANDARDS EFFECTIVE OCTOBER 1, 2015
Action of Board On:   09/15/2015
APPROVED AS RECOMMENDED OTHER
Clerks Notes:

VOTE OF SUPERVISORS

AYE:
John Gioia, Commissioner
Candace Andersen, Commissioner
Mary N. Piepho, Commissioner
Karen Mitchoff, Commissioner
ABSENT:
Federal D. Glover, Commissioner
Fay Nathaniel, Commissioner
Aqueela Bowie, 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:     September  15, 2015
,
 
BY: , Deputy

 

RECOMMENDATIONS

APPROVE the proposed Housing Choice Voucher payment standards for the Housing Authority of the County of Contra Costa effective October 1, 2015.

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 FMR 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 May 12, 2015, HACCC's payment standards are currently set at 95% of FMR for all areas of the County except for Danville, El Cerrito, Lafayette, Pleasant Hill, San Ramon and Walnut Creek. Payment standards are set at 110% of the FMRs for these cities in order to minimize future loss of vouchers there and also in an effort to minimize voucher concentration in other parts of the County.  
  
The existing FMRs and payment standards (PS) are shown below.  
Bedrooms 0 1 2 3 4 5 6 7
Existing FMR/Month $1,039 $1,260 $1,585 $2,213 $2,716 $3,123 $3,531 $3938
95% PS $987 $1,197 $1,506 $2,102 $2,580 $2,967 $3,354 $3,741
110% PS $ 1,142 $ 1,386 $ 1,743 $ 2,434 $ 2,987 $ 3,435 $ 3,883 $ 4,331
  
HUD publishes fair market rents annually. The proposed federal fiscal year 2016 FMRs (effective October 1, 2015) for HACCC’s jurisdiction were just published. Surprisingly, given the Bay Area's rental market, the proposed FMRs are a decrease from the current ones. The proposed FMRs along with the percent decline for each are shown below.  
Bedrooms 0 1 2 3 4 5 6 7
Proposed FMR/Month $1,025 $1,235 $1,562 $2,177 $2,427 $2,791 $3,155 $3,519
Decrease -1.3% -2.0% -1.5% -1.6% -10.6% -10.6% -10.6% -10.6%
  
HACCC and other housing agencies in Alameda and Contra Costa Counties are discussing the new FMRs with HUD staff and are trying to determine if they can be changed in order to reflect the current rental market. However, if this issue is not resolved by the beginning of October (or whenever HUD says to start using the new FMRs), HACCC will have to start implementing payment standards based on HUD's proposed FMRs at that time. This is because one or more of HACCC's existing payment standards will fall outside of the basic range (90% to 110%) of HUD's proposed FMRs.  
  
Therefore, if HUD's proposed FMRs for the Oakland-Fremont, CA Metro FMR become effective on October 1, 2015 (or another date if specified by HUD), staff propose that HACCC will use the following payment standards:  
Bedrooms 0 1 2 3 4 5 6 7
95% PS $974 $1,173 $1,484 $2,068 $2,306 $2,651 $2,997 $3,343
110% PS $1,127 $1,358 $1,718 $2,394 $2,669 $3,070 $3,470 $3,870
  
The 110% payment standards will be used for the Cities of El Cerrito, Danville, Lafayette, Pleasant Hill, San Ramon, and Walnut Creek. The 95% rate will be used for all other areas of HACCC's jurisdiction
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

Should the Board of Commissioners not approve the proposed payment standards, or others that are in the 90% to 110% of FMR range approved by HUD, then HACCC would not be in compliance with HUD regulations and would be subject to financial sanctions or other penalties.
CLERK'S ADDENDUM

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