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What is Rent Reasonableness?
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Once you have found a tenant your unit’s rent rate will be reviewed by someone at your Public Housing Authority (PHA) to determine weather the rent you are asking is reasonable. The proposed rent amount will be compared to the rent of other similar units in the area.
Although, there are no HUD “ceilings” for the rent an owner can charge, rents must still be approved as Reasonable when compared to those rents charged for similar non subsidized (non section 8) units in your local rental market. Often times the PHA will quote an owner a Payment Standard when asked for assistance in setting a rent price for their unit. The market is what determines the maximum rent you can charge (Rent Reasonableness) not the PHA’s payment standard.
The "payment standard," is the total rent and utility costs that the PHA will cover. The subsidized portion of the rent is the difference between 30% of the tenant's income and the payment standard. The PHA has the authority to modify the payment standard to within 90% and 110% of the Fair Market Rent (FMR) as published by HUD. It is possible for the market rent to be more or less than the PHA’s payment standard. Thus the Payment Standard should not be used to set a market rent rate.
GO8 TIP: A HCV Tenant’s income impacts the rent you can charge for your unit. The family you select can not pay more than the Payment Standard set by your local PHA if their share of the rent exceeds 40% of their adjusted monthly income. Because of this limitation market rent rates of a luxury nature are not suitable for the section 8 program.
In order to help guide you in setting a realistic market rent you can use the
Market Rent Summary feature to give you an Average rent rate for other units with the same number of bedrooms in the city and area surrounding your listing. Please keep in mind that this is just an average rent rate based on the number of bedrooms only. The average rent indicated here is not the market rent for your unit. Your unit may rent for more or less depending on its location, size, amenities, etc.
If you have other rental property that is leased to non-subsidized tenants then you can help make a case for the rent you are asking HUD to pay by entering comparable rented data into the GOsection8.com database. Simply, click on the Add Comparable link to provide your local PHA with comparable rental listings to help defend the rent you are asking for similar nearby housing units. These comparables do undergo a validation process by your PHA.
We hope you find this feature useful.
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