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Access to Utility Service: 10.2.6.2 Section 236 Housing

Congress adopted the so-called section 236121 housing program in 1968 to replace the prior section 221(d)(3) program.122 Both programs were designed to reduce the interest-driven costs of developing new housing so that the rents would be more affordable to low-income families. Under the section 236 program, HUD provided a subsidy to the developer’s lender so that the developer’s effective interest rate would be 1%.

Access to Utility Service: 10.2.6.3 Project-Based Section 8

As noted in § 10.1.2, supra, there are no longer individual Section 8 certificates that provide subsidies to individual tenants who find their own apartments. All individual certificates have been converted to Housing Choice vouchers. However, there is still “project-based” Section 8 assistance of various types that are tied to the building, not the tenant.

Access to Utility Service: 10.4 Seasonal Utility Allowances and Carryover Credits

In 1996, HUD amended its regulations to provide that utility allowances “may provide for seasonal variations.”178 HUD went on to specifically exclude consumption for air conditioning from the utility allowances for retail-metered public housing tenants and directed public housing authorities (PHAs) to surcharge check-metered tenants for their use of optional air-conditioning equipment.179

Access to Utility Service: 10.5.1 Check-Metering Surcharges

PHAs that have check meters must adopt utility allowances and “establish surcharges for utility consumption in excess of the allowances.”188 The dollar amount of surcharges for check-metered tenants is based on “the PHA’s average utility rate” if the public housing authority (PHA) charge is based on a “straight per unit of purchase basis (e.g., cents per kilowatt hour of electricity) or [on] stated blocks of excess consumption.”189 The regulations do not authorize the PHA to include any addi

Access to Utility Service: 10.5.2 Master-Metering Surcharges

The regulations require PHAs to establish schedules of surcharges for tenant-owned major appliances or for optional functions of PHA-furnished equipment in master-metered units.195 The surcharge schedules must state the equipment or functions for which the surcharges shall be imposed and must list the amount of such charges.

Access to Utility Service: 10.6.4 Public Housing’s Performance Funding System Causes Some PHAs to Deliberately Keep Allowances Too Low

Under the performance funding system (PFS), PHAs receive an operating subsidy from HUD for the day-to-day management of the public housing. The subsidy is a major source of operating income for PHAs; their only other source of income, household rental contributions, is generally insufficient to cover operating expenses. The operating subsidy is calculated according to a formula under which the PHA receives the difference between the estimated expenses and the income the PHA expects to receive from the rents.231

Access to Utility Service: 10.7.1 Introduction

Over the past three decades, tenants have brought a number of cases against public housing authorities and other parties (including HUD) alleging that the utility allowances were set too low and in violation of applicable laws and regulations.

Access to Utility Service: 10.7.2 Public Housing Authority Defenses

PHAs have argued in the past that tenants have not stated a claim under 42 U.S.C. § 1983, have no implied right of action to enforce the Brooke Amendment and are not third-party beneficiaries of the ACC. HUD has argued that its actions with respect to utility allowances are committed to agency discretion and therefore not reviewable under the APA, that tenants have no implied right of action under the Brooke Amendment, that tenants are not third-party beneficiaries of the ACC and that PHAs, not HUD, are the proper defendants.256

Access to Utility Service: 10.7.3 Relief Obtained

The relief obtained by tenants both with and without litigation has been substantial. In one case, for example, tenants in Gadsden, Alabama, obtained a court order setting forth new utility allowances and requiring the PHA to update those allowances at least annually. The court ordered the PHA to increase the gas utility allowances for tenants who purchase their own gas. These allowances had formerly been set at $5 to $8 monthly, depending on the number of bedrooms, and were increased to $25 to $36.

Access to Utility Service: 10.8.1 Introduction

Advocating for tenants around utility allowance issues is a fact-intensive exercise. Unlike many other areas of law, the legal standard is quite clear. HUD regulations require that tenants in most subsidized units who pay their own utility bills (individually metered tenants) or who face surcharges if they use more than a specified amount of energy (check-metered tenants) be provided “reasonable” utility allowances.

Access to Utility Service: 10.8.2 Determining the Need for Weatherization

Many tenants have high and unaffordable bills because their buildings are poorly insulated and poorly maintained. Apartment units may have broken windows, old and inefficient appliances, or defective heating or cooling systems. If these or other factors are the cause of excessive utility charges, the PHA should be urged to seek out funds to insulate and make other necessary repairs.

Access to Utility Service: 10.8.3 Documents to Obtain

As noted above, to evaluate the “reasonableness” of the PHA’s utility allowance, the actual energy consumption by project tenants must be determined. For check-metered units, the PHA preferably would provide the actual utility bills.277 Alternatively, tenants can obtain Form 52722278 (Calculation of Utilities Expense Level) and the results from the utility expense level calculator279 if that was used by the PHA.

Access to Utility Service: 10.8.5 Using Utility Bills or Meter Readings to Analyze Consumption

In order to analyze the adequacy of current utility allowances, it is important to compare the average consumption for either check-metered or retail-metered units to the consumption assumed by the PHA in setting the allowances. The first step is to obtain the monthly utility bills or meter readings, sorted by building type and bedroom size (for example, sorted by one-, two- and three-bedroom high-rise units; one-, two- and three-bedroom row house units, and so forth). The next steps are as follows:

Access to Utility Service: 10.8.6 Using HUD Form 52722

For units that a PHA owns directly, the PHA must fill out Form 52722 (Calculation of Utilities Expense Level).284 Form 52722 can be very useful in efforts to represent check-metered clients.285 On Form 52722, the PHA reports actual consumption separately for sewerage and water, electricity, gas, and other fuels (wood, oil, coal, and so forth). The PHA also provides data over the prior three years, allowing advocates to track changes in consumption patterns over time.

Access to Utility Service: 10.8.7.1 General

When tenants pay for their own utilities, they may already have copies of their own bills available. Alternatively, almost every utility will produce, at the customer’s request, a billing history that covers at least the last twelve months of usage. Only in unusual cases will advocates need to use other means to estimate consumption by retail-metered tenants.

Access to Utility Service: 10.9.1 Allowances in General

Some tenants faced with inadequate utility allowances have negotiated with their public housing authority (PHA) to develop a plan to assist the local public housing authority in collecting and evaluating relevant data. Many PHAs lack the time and expertise to establish reasonable utility allowances, and they do not gather the relevant information because no one is “making them” do it.

Access to Utility Service: 10.9.2 Individual Relief

The regulations provide that PHAs may grant relief from allowances or surcharges “on reasonable grounds, such as special needs of elderly, ill or disabled tenants, or special factors affecting utility usage not within the control of the resident.”300 The PHA must establish “criteria” for granting such relief, as well as “procedures for requesting such relief.”301 Notice of the criteria, the procedures, as well as the name of the PHA representative from whom to request this relief must be pro

Access to Utility Service: 10.9.3 Using the PHA Plan Process

Federal law now requires PHAs to prepare one-year and five-year agency plans on an ongoing basis.304 The law requires each PHA to establish “1 or more resident advisory boards” which “shall assist and make recommendations regarding the development of the public housing agency plan.”305 While the required contents of the plan306 need not address utility allowances per se, the law is clear that PHAs “must consider” recommendations made by resid