Payment Standards - 2014
November 21, 2013
Dear Lake MHA Landlord:
This communication is to inform you of important information involving your valued relationship and interest with the Lake Metropolitan Housing Authority (Lake MHA).
Payment Standards Reduced from 110% to 100%.
As you are aware, Lake MHA is primarily funded by the U.S. Department of Housing and Urban Development (HUD). Earlier this year, we were notified that both our Public Housing and Housing Choice Voucher (Section 8) programs would be funded at significantly reduced levels. To be exact, for this year we are receiving only 69% of eligible administrative fees for Section 8 and 94% of our eligible HAP funding. This historically low funding was further exacerbated by the mandatory federal sequestration that has crippled housing authorities across the nation.
Sequestration cut $96 million from the U.S. Department of Housing and Urban Development grants to assist with housing subsidy. The cuts in federal funding mean that our city and county housing authorities must reduce the number of families and individuals that we can assist. This is being done through attrition – not reissuing vouchers as other families leave the program.
Many housing authorities have had to rescind vouchers simply because there is no longer enough funding to continue serving the same level of families. I am pleased to report that we have not had to take back any vouchers yet. However, we have been forced to let our leasing number drop to approximately 1380 families out of the 1457 that we could be serving. In spite of our best efforts to balance leasing numbers with available reserves, we continue to pay out more subsidy than we are receiving.
After much discussion and consideration of the impact on the community, a decision has been made to lower our current payment standards from 110% to 100% of the recently published fair market rents (FMRs), effective January 1, 2014. Lowering our payment standards means that some families will be required to pay a higher portion of their rent. Our decision was between: (1) serving fewer and fewer families or, (2) paying less on behalf of current tenants which will allow us to increase the number of families served. Please note that housing authorities are permitted to establish their payment standards anywhere between 90% and 110%. To that end, we felt that lowering the payment standard all the way down to 90% would be too drastic for our families to absorb at one time.
While the effective date is set for January 2014, the process is gradual. For current program participants, Lake MHA must give a one year grace period before the new payment standard would affect their subsidy. For new program participants and those who request to move, the new rates will be effective immediately. Due to the grace period, there will not be a large number of families affected at one time, rather as each family goes through their annual recertification process during year 2015.
This change in payment subsidy will affect different families in different ways. While we are not, at this time, asking for a freeze on rental increases, we would truly appreciate your consideration and partnership to help us prevent any future loss in housing for the families we strive to serve.
This planned change will be open for a 30-day comment period beginning November 26 through December 26. Your feedback is welcomed and appreciated. You can provide feedback by submitting written comments to:
Lake Metropolitan Housing Authority
189 First Street
Painesville, OH 44077
Information received will help shape future decisions, as the outlook for 2014 funding and beyond remains uncertain for HUD.
Melissa Winfield, MBA, SPHR