To: Contra Costa County Housing Authority Board of Commissioners
From: Joseph Villarreal, Executive Director
Date: September 12, 2023
Report Title: ADOPT AND APPROVE THE HOUSING CHOICE VOUCHER PAYMENT STANDARDS EFFECTIVE October 1, 2023
RECOMMENDATIONS:
ADOPT and APPROVE the Housing Choice Voucher payment standards for the Housing Authority of the County of Contra Costa effective October 1, 2023.
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 40th 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.
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 proposed payment standards are shown below. They are based on the revised FMRs published by HUD on August 31, 2023, and made effective on October 1, 2023. The results of the study indicated that FMRs for all bedroom-size units have gone up between 6.3% and 10.07%.
Since payment standards must be within a range of 90% to 110% of the FMR, HACCC was adjusted the Payments Standards to keep them from exceeding the maximum threshold range. The amount of the payment standards for the East County cities of Antioch, Bay Point, Bethel Island, Brentwood, Byron, Discovery Bay, Knightsen and Oakley will remain at the same percentage of the FMR as in FY2023. The new East County Payment Standards will be set at 100% of the FMRs and will result in an increased Payment Standard of $162 to $360, depending on the bedroom size. For FY2024, the rest of the County will have the payment standards set at approximately 110% of the FMRs. The increase in the Payment Standard will be between $179 and $396 depending on the bedroom size.
The changes will be effective October 1, 2023. All annual certifications that have already been processed will not have to be re-calculated since the implementation date of the new payment standards will be January 1, 2024. However, all new contracts and tenancies will begin to use the new Payment Standards on or after October 1, 2024.
The proposed payment standards and the new FMRs are attached.
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 adopt and approve the proposed payment standards, then HACCC will not be in compliance with HUD regulations and could be subject to financial sanctions or other penalties.
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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. |
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ATTESTED: |
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Joseph Villarreal, Executive Director |
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By: |