AGENDA#4d
MEMORANDUM
FROM: W. Calvin Horton, Town Manager
SUBJECT: Flat Rents for the Public Housing Program
DATE: April 9, 2001
The attached resolution would approve flat rents for the public housing program.
In accordance with the Quality Housing and Work Responsibility Act of 1998 (the 1998 Act) of the U.S. Department of Housing and Urban Development, public housing agencies are required to establish flat rents for each of their public housing units. Flat rents are to be established based on the reasonable market value of the public housing units. In establishing reasonable market value, public housing agencies are required to survey the rents of comparable developments in the community.
Under the 1998 Act, public housing agencies must give public housing families options for paying rent. Families must be given a choice of either paying an income-based rent or a flat rent.
Currently, rents of Chapel Hill’s public housing program are based on 30% of the adjusted household income. Under the 1998 Act, public housing residents are given a choice of continuing to pay rent based on income or to pay rent based on the reasonable market value of the public housing apartment. Public housing residents may choose annually between paying an income-based rent or a flat rent.
The intent of flat rents is to create an incentive that would encourage increases in incomes of the public housing families and economic independence. However, residents who choose a flat rent but are unable to make monthly payments because of financial difficulties must be switched back to an income-based rent.
In December 2000, we engaged a consultant to conduct the study necessary to recommend flat rents for Chapel Hill’s public housing apartments. The flat rent analysis prepared by the consultant is attached.
In preparing the flat rent analysis, the consultant reviewed data on our public housing apartments and surveyed the public housing neighborhoods to obtain the following information.
· Security deposit requirements
· Agency paid utilities
· Amenities
· Services provided
· Condition of buildings and grounds
Next, private market rental developments were surveyed to obtain the above information and rent amounts. Some of the developments surveyed because of comparability to the Town’s public housing apartments and proximity to public housing neighborhoods are:
Development Location
Abbey Court Hwy 54 Carrboro
Chase Park 15-501 Bypass, Chapel Hill
Dobbins Hill Dobbins Drive, Chapel Hill
Elliott Woods Elliot Road, Chapel Hill
Estes Park Apartments Estes Drive, Chapel Hill
Below is a schedule of proposed flat rents for the public housing program.
|
Public Housing Neighborhood |
|
BEDROOM |
SIZE |
|
|
|
1 |
2 |
3 |
4 |
5 |
|
|
Craig/Gomains-Lindsay Street |
$389 |
$457 |
$571 |
$640 |
$736 |
|
North Columbia Street |
$363 |
$427 |
|
|
|
|
Trinity Court |
|
$457 |
$571 |
|
|
|
South Estes Drive |
|
$457 |
$571 |
$640 |
$736 |
|
Airport Gardens-S. Roberson-Pritchard Pk |
$389 |
$457 |
$571 |
$640 |
|
|
Colony Woods West |
|
$427 |
$533 |
$667 |
|
|
Eastwood-Church Street |
$389 |
$457 |
$571 |
|
|
|
Oakwood |
|
$427 |
$533 |
|
|
|
Rainbow Heights |
|
|
$762 |
|
|
Currently, there are about 10 public housing families who are paying monthly rents that are almost comparable to market values.
Although flat rents are to be established based on reasonable market values of the public apartments, the Council could establish lower flat rents. However, if lower flat rents are established and there is a reduction in rental income, HUD would not pay any additional operating subsidy.
As required by federal regulations, public housing residents were given an opportunity to review and comment on the proposed flat rents. The proposed flat rents were distributed to all public housing residences on March 9, 2001.
Questions received from residents of public housing were primarily about the reasons for flat rents and when would flat rents become effective. Housing staff responded by summarizing the requirements of the 1998 Act and explaining that the flat rents would become effective on May 1, 2001.
Following consideration by the Council, the flat rent policy would become effective on May 1, 2001, and would become an option for leases renewed after that date.
Housing and Community Development Advisory Board’s Recommendation: The Housing and Community Development Advisory Board reviewed the proposed flat rents for the public housing program on April 3, 2001. The members of the Board in attendance voted 2 to 0 to recommend that the proposed flat rents be approved. The members of the Board voted as follows:
For Against
Mary Winne Sherwood -
Tracey Dudley -
Manager’s Recommendation: That the Council adopt the attached resolution approving flat rents for the public housing program.
1. Flat Rent Analysis For the Chapel Hill Department of Housing (p. 5).
2. Federal Register Vol. 64 Rents in Public Housing (24 CFR 5.603, 5.614) Section 523 of the 1998 Act Amending Section 3(a) of the 1937 Act (p. 19).
A RESOLUTION APPROVING FLAT RENTS FOR THE PUBLIC HOUSING PROGRAM (2001-04-09/R-6)
WHEREAS, the U.S. Department of Housing and Urban Development requires that flat rents be established for public housing apartments in accordance with the Quality Housing and Work Responsibility Act of 1998; and
WHEREAS, the Quality Housing and Work Responsibility Act of 1998 requires that public housing residents be given a choice of either paying an income-based rent or a flat rent;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council hereby approves the following flat rents for the public housing program.
|
Public Housing Neighborhood |
|
BEDROOM |
SIZE |
|
|
|
1 |
2 |
3 |
4 |
5 |
|
|
Craig/Gomains-Lindsay Street |
$389 |
$457 |
$571 |
$640 |
$736 |
|
North Columbia Street |
$363 |
$427 |
|
|
|
|
Trinity Court |
|
$457 |
$571 |
|
|
|
South Estes Drive |
|
$457 |
$571 |
$640 |
$736 |
|
Airport Gardens-S. Roberson-Pritchard Pk |
$389 |
$457 |
$571 |
$640 |
|
|
Colony Woods West |
|
$427 |
$533 |
$667 |
|
|
Eastwood-Church Street |
$389 |
$457 |
$571 |
|
|
|
Oakwood |
|
$427 |
$533 |
|
|
|
Rainbow Heights |
|
|
$762 |
|
|
BE IT FURTHER RESOLVED that the Council authorizes the Town Manager to review the flat rents annually and make necessary revisions based on changes in reasonable market values.
This the 9th day of April, 2001.