How Will the New Flat-Rent Changes Affect You?

On September 8, HUD published an interim rule “Changes to Flat Rent Requirements – FY 2015 Appropriations Act. This interim rule amends the changes made to HUD’s flat-rent policy in the FY2014 HUD Appropriations Act, clarifies the new policies under the FY2015 HUD Appropriations Act, and offers guidance to PHAs in implementing them.

Although the rule will go into effect on October 8, 2015, HUD is accepting comments through November 9, 2015.

In 2014 HUD established a flat rent requiring PHA’s to set rents at 80% of FMR. Any rental amount over 35% would be phased in over time. CLPHA and others, however, expressed concern on Capitol Hill about some aspects of the flat rent.

For instance, CLPHA requested that market conditions be taken into consideration when calculating the flat rental rate. Under the FY2015 HUD Appropriations Act, Congress expanded PHAs ability to do just that.

Under the new interim rule, PHAs can:

  • Set flat rents at 80 percent of the applicable FMR.
  • Set flat rents that more accurately reflect local market conditions by basing the FMR on a market area that is geographically smaller than typically used.
  • Apply for an exception waiver allowing for a lower flat rental amount than available in the above two options.

The new rule also protects the requirement that rent increases of more than 35% must still be phased in over time.

Please let us at CLPHA know how the changes affect you. Also, please send us a copy of any comments you make to HUD by the November 9 deadline. You can find the notice here.

Return to: CLPHA Report-Sept. 16, 2015