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HUD Housing Programs: Tenants’ Rights (The Green Book): 4.8.1 Overview

Tenants often experience problems with the recertification process or the duty to report certain changes in income and family composition. Those problems typically fall into the following categories: (1) failure to complete the recertification process, (2) failure to report interim changes as required, or (3) errors or discrepancies in the information provided. Each of these is reviewed in turn below.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.8.4.1 Overview

Tenants and applicants often encounter problems that stem from errors in the information reported by the tenant or how that information is recorded or handled by the PHA or owner. These problems break down into three general areas: errors by the owner or PHA; unintentional errors by the tenant or cases where the tenant obtained no benefit from the error; and intentional misrepresentation or fraud to obtain benefits.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.8.4.3 Inadvertent Error or Omission by Tenant, or No Benefit

Since both rent calculation and reporting requirements can be complicated, tenants can often make mistakes in reporting necessary information. In all cases involving tenant error, the initial inquiry should be whether the error resulted in any excessive subsidy being paid, or any other additional benefit flowing to the household. If the tenant received no additional benefit from the error, there is nothing to be repaid, and thus certainly the tenant should not lose assistance or be evicted.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.8.4.4 Intentional Fraud or Misrepresentation by Tenant

In some cases, owners and PHAs will allege that the tenant actions constituted “fraud and abuse” and that either the subsidy should be terminated and the rent increased to market or the tenant should be evicted.817 To establish such claims, the PHA or owner should be required to show that the tenant conduct meets the elements of the regulatory or other legal definition of fraud, including a false representation or omission in reference to a material fact made with knowledge of its falsity and with intent to deceive, and with action taken in

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.9.1 Overview

This section reviews the overall rent charged for a unit under various HUD housing programs, an amount which often includes both the tenant portion and the subsidy. It also covers the process for increasing total unit rents. Because Voucher unit rents and adjustments are governed by distinct rules that have a direct impact on the amount of the tenant contribution, they are discussed elsewhere.828

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.9.2 Adopting and Revising Public Housing Flat Rent Schedules

In the public housing program, there is still no total rent concept for each unit, because the cost of any debt service and operating expenses are paid for the PHA’s entire inventory, not by unit, and these costs are paid from separate subsidy streams.832 Initially, HUD made annual contributions to a PHA to pay off bonds issued by the PHA to finance the construction or acquisition,833 later retiring this debt with capital grants in 1984.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.9.3.1 Overview

Properties with HUD-subsidized mortgages do have total rents broken down by unit size. Many tenants face project-wide rent increases annually. The regulations allow owners to pass on rising operating costs and property taxes directly to tenants through rent increases, resulting in diminished affordability for many properties and tenants. This section briefly reviews the budget-based rent increase process.841

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.9.3.4 Preparing Comments on the Rent Increase Request

Because of the difficulty in obtaining judicial review of the substance of HUD’s determination,862 challenges to the merits of project-wide rent increases have better prospects in the administrative forum. Although the 30-day time period may not allow for in-depth review, tenants should take full advantage of the regulatory notice-and-comment process to review the proposal and its supporting documentation to determine if the proposed rent increase is warranted.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.9.3.6 Alternatives to Rent Increases

Proposed rent increases can be mitigated by finding additional sources of revenue for the development. There are three kinds of available funds: (1) additional rent subsidies designed to reduce the tenant’s share of the overall rent; (2) other funds, in the form of grants, loans or owner contributions, to reduce certain expenses or correct certain deficiencies; and (3) project reserves that can be tapped for certain improvements or to reduce expenses. Because availability for a specific property depends on many factors, advocates should explore those sources appearing most promising.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.9.4 Project-Wide Rent Increases In HUD-Owned Multifamily Housing

Several factors affect what rents are charged in HUD-owned multifamily developments. First, the “unit rent” is set by HUD (whether as Mortgagee in Possession (MIP) or as owner), in accordance with the requirements of the development’s mortgage insurance or direct loan program that is in effect, or was in effect immediately prior to foreclosure.932 Second, more complicated rules determine how much of the unit rent is paid by the tenant.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.9.5 Project-Based Section 8: Contract Rents and Annual Rent Adjustments

Project-Based Section 8 properties have HUD-approved total unit rent levels known as “contract rents,” which are established under rules applicable at the time the original contract or renewal contract was executed. Subsequently, contract rents may be increased, usually annually, according to specific formulas, or on a budget basis, under provisions applicable to the specific subprogram involved. Contract rents reflect the maximum chargeable by the owner, with a portion paid by the tenant under the statutory formula and the remainder covered by the housing assistance payment from HUD.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.9.6 Project-Wide Rents in Unsubsidized HUD-Insured Housing

Rents at these developments are generally not below-market, although tenants may benefit from an additional rental assistance program. As a result of original program structure or deregulatory efforts in the early 1980s, most unsubsidized HUD-insured developments are no longer subject to federal rent regulation. However, advocates will occasionally represent low-income tenants of these developments that should still be subject to rent restrictions providing some level of below-market affordability.

HUD Housing Programs: Tenants’ Rights (The Green Book): 4.9.7 Other HUD-Assisted and HUD-Supported Developments: Contract Rents and Annual Rent Adjustments

Apart from Project-Based Section 8, many developments also have other forms of rental assistance that, in combination with tenant’s income-based contributions, support the total contract rent for the unit. Notable among these programs are Rent Supplement, Section 236 RAP, Section 202 or 811 Project Rental Assistance Contracts (PRAC or PAC), and Project-Based Vouchers.