HUD Reports HCV Utilizations Drop; PHAs Develop Strategies to Bolster Rates

Date Published: 
February 24th, 2022

Skyrocketing Rents and Low Vacancy Rates Cause Delay in Lease-Ups

On February 16, HUD’s Office of Public and Indian Housing (PIH) held an industry call to report that in recent months Housing Choice Voucher (HCV) budget utilization rates amongst non-Moving to Work (MTW) public housing authorities (PHAs) has dropped to 95.9%, compared to 99.3% in November 2020. HUD PIH estimates that because of reduced HCV budget utilization rates, PHAs can provide housing assistance for 130,000 additional units and has established a department-wide strategic goal to reach 100% HCV budget utilization by September 2023. HUD PIH also reported concerns that Housing Assistance Payment (HAP) reserves have increased by $1 billion since the end of 2020, making these funds a target for a potential offset.

Following the meeting, CLPHA met with the Tenant-Based Housing Assistance Committee to discuss HUD PIH’s reporting and learned that despite PHAs efforts to issue thousands of vouchers (115,000 issued as of November 2021), many families need more than 180 days to secure an affordable, quality housing unit because of skyrocketing rents and record low vacancy rates. According to the Joint Center for Housing Studies (JCHS) of Harvard University’s annual report, America’s Rental Housing 2022, rents dropped modestly in 2020 but rebounded quickly and rose by 10.9% in the third quarter of 2021, the fastest they have risen in 20 years. Vacancy rates have also dropped to 5.8 percent, their lowest level since the mid-1980s. In some metropolitan areas, CLPHA members report vacancy rates as low as 2-3%, making it extremely difficult for families to find an affordable housing unit within a year in some instances.

Despite these challenges, CLPHA members are deploying many strategies to increase their HCV budget utilization rates, including:

  • Extending initial voucher search times to 120 days upfront with lenient voucher extension policies
  • Expanding Project-Based Voucher (PBV) portfolios to serve vulnerable populations
  • Increasing payment standards beyond 110 percent of the Fair Market Rent (FMR) (See PIH Notice 2021-34 for guidance on how to request an expedited waiver to allow payment standards from 111 to 120 percent of the FMR).
  • Providing housing mobility and navigation services

However, CLPHA members report additional flexibilities to reset payment standards with housing market fluctuations, funding for housing mobility and navigation services, and the ability to use HAP funding to provide security deposit payments are critical to support their efforts to house more families. CLPHA will keep HUD updated on PHAs’ voucher utilization problems that are beyond their control and encourage solutions that allow PHAs greater flexibility to help voucher holders secure affordable housing units in difficult market conditions. 


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