INTRODUCTION

The purpose of this memorandum is to recommend updated flat rents for the public housing program. The proposed flat rents have been updated based on the reasonable market value of the public housing apartments as required by the U.S. Department of Housing and Urban Development. The proposed flat rents would become effective on May 1, 2003.

The attached resolution would establish updated flat rents for the pubic housing program.

BACKGROUND

The U.S. Department of Housing and Urban Development (HUD) requires that public housing agencies 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 rental developments in the community. Flat rents must be comparable to rent charged for similar apartments on the private market.

In accordance with the Quality Housing and Work Responsibility Act of 1998, public housing residents are given a choice of paying rent based on income or paying rent based on the reasonable market value of their public housing apartment. Public housing residents may choose annually between paying an income-based rent or a flat rent.

Current Flat Rents

The current flat rents for the public housing program were adopted by the Council on August 27, 2001. Below is a chart of the current flat rents for the public housing program. Currently, there are 7 public housing families paying flat rents.

Current Flat Rents

Public Housing Neighborhood		Bedroom	Size
	1	2	3	4	5
Airport Gardens		$457	$571
Caldwell Street	$389	$457
Colony Woods West		$427	$533	$667
Craig/Gomains	$389	$457	$571	$640	$736
Eastwood		$457	$571
Lindsay		$457	$571
North Columbia Street	$363	$427
Oakwood		$427	$533
Pritchard Park		$457	$571	$640
Rainbow Heights			$762
South Estes Drive		$457	$571	$640	$736
South Roberson	$389	$457
Trinity Court		$457	$571

The U.S. Department of Housing and Urban Development requires that flat rents be updated annually.

DISCUSSION

In October 2002, we engaged National Facility Consultants, Inc. to conduct an analysis as required by HUD, to update the flat rents. This is the same firm that conducted the analysis for the current flat rents.

In preparing the analysis necessary to update the flat rents, the consultant collected data and conducted site visits of all the public housing neighborhoods. Data was also collected and site visits were conducted of 8 comparable private market rental developments. The private market rental developments included in the analysis are:

Development Location

Abbey Court Jones Ferry Rd., Carrboro

Arbor Meadows Hwy.54, Carrboro

Colony Apartments Ephesus Church Rd., Chapel Hill

Dominion Ramsgate Hwy.54, Carrboro

Estes Park Apartments North Estes Dr., Chapel Hill

Glen Lennox Cottages Hamilton Rd., Chapel Hill

Kingswoods Apartments Hwy.54, Chapel Hill

Pinegate Apartments Pinegate Cir., Chapel Hill

Proposed Flat Rents

Below is a schedule of proposed flat rents for the public housing program that are based on the analysis prepared by the consultant. The complete flat rent analysis prepared by the consultant is attached (please see Attachment 1).

Proposed Flat Rents

Public Housing Neighborhood		Bedroom	Size
	1	2	3	4	5
Airport Gardens		$414	$518
Caldwell Street	$356	$419
Colony Woods West		$414	$518	$580
Craig/Gomains	$356	$419	$524	$587	$675
Eastwood		$445	$556
Lindsay Street		$511	$639
North Columbia Street	$335	$394
Oakwood		$435	$543
Pritchard Park		$511	$639	$716
Rainbow Heights			$614
South Estes Drive		$394	$492	$551	$634
South Roberson	$330	$389
Trinity Court		$389	$486

The proposed flat rents would result in a decrease from the current amounts in all of the public housing neighborhoods except Lindsay Street and Pritchard Park. Lindsay Street and Pritchard Park are the only neighborhoods were there would be an increase in flat rents.

Resident Participation Process

The Residents’ Council was actively involved in the process for developing the flat rents. Housing staff met with representatives of the Residents’ Council and solicited their input in selecting the private market rental complexes the consultants used in the analysis. In addition, the consultant met with representatives of the Residents’ Council to fully explain the process that would be used to establish the flat rents.

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 3, 2003. Questions received from residents of public housing were primarily about what affect the flat rents would have on their current rent and whether all residents would have to change to the flat rents.

On March 28, 2003, the Residents’ Council submitted a letter expressing support of the proposed flat rents. The Residents’ Council also expressed concern in the letter about market rate rents in a university town (please see Attachment 2).

CONCLUSION

We believe the proposed rents as prepared by the consultant reflect reasonable market values of the public housing apartments as required by the U. S. Department of Housing and Urban Development. The proposed flat rents for the public housing program have been established in accordance with federal regulations and are based on a detailed survey analysis. Following consideration by the Council, the updated flat rents would become effective on May 1, 2003, and would become an option for leases renewed on or after that date.

RECOMMENDATIONS

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 March 25, 2003. The members of the Board voted 4 to 0 to recommend than the proposed flat rents be approved.

Manager’s Recommendation: That the Council adopt the attached resolution approving flat rents for the public housing program.

ATTACHMENTS

1. March 28, 2003 letter from the Residents’ Council (p. 6).

2. Flat Rent Analysis for Chapel Hill Department of Housing (p. 8).

A RESOLUTION APPROVING FLAT RENTS FOR THE PUBLIC HOUSING PROGRAM (2003-04-28/R-4)

WHEREAS, the U.S. Department of Housing and Urban Development requires that flat rents be established for the 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; and

WHEREAS, the U.S. Department of Housing and Urban Development requires that flat rents be updated annually;

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
Airport Gardens		$414	$518
Caldwell Street	$356	$419
Colony Woods West		$414	$518	$580
Craig/Gomains	$356	$419	$524	$587	$675
Eastwood		$445	$556
Lindsay Street		$511	$639
North Columbia Street	$335	$394
Oakwood		$435	$543
Pritchard Park		$511	$639	$716
Rainbow Heights			$614
South Estes Drive		$394	$492	$551	$634
South Roberson	$330	$389
Trinity Court		$389	$486

BE IT FURTHER RESOLVED that the Council hereby authorizes the Town Manager to review the flat rents annually and make necessary updates based on changes in reasonable market values of the public housing apartments in accordance with federal regulations.

This the 28^th day of April, 2003.